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Appeal No. 127 of 1976. (Appeal by Special Leave from the Judgment and Order dated the 20.8.1975 of the Allahabad High Court (Lucknow Bench) at Lucknow in Civil Writ Petition No. 1062 of 2974). G.N. Dikshit and S.K. Bisaria, for the Appellant. D. Goburdhan, for the Respondent. The Judgment of the Court was delivered by GUPTA, J. This appeal by special leave arises out of a proceeding under the Uttar Pradesh Urban Buildings (Regula tion of Letting, Rent and Eviction) Act, 1972 (referred to hereinafter as the Act). On September 11, 1973 the appel lant applied under section 16(1)(a) for allotment of a part of house No. 98, Lokmanganj, Lucknow. He was in fact in occupation of this portion of the building when he made the application: according to the appellant he had been inducted as a tenant by a person representing that he was the owner of the house,though really he was himself a tenant. On November 24, 1973 the first respondent also applied for alloting the house to him. Subsequently there were two more applicants for the house. The Area Rationing Officer (Rent Control) by his order dated June 4, 1974 allotted the accom modation to the first respondent. The appellant before us preferred an appeal to the District Judge, Lucknow, who on August 7, 1974 allowed the appeal, set aside the order of allotment made in favour of the first respondent and remand ed the case to the Area Rationing Officer (Rent Control) to be decided afresh in accordance with law. The District Judge pointed out that the Area Rationing Officer (Rent Control) had ignored altogether rule 11 of the Rules framed under the Act which required that in the matter of allotment the principle "first come first served" should be followed. The District Judge overruled a contention raised on behalf of the first respondent that the appel lant 's application for allotment was not maintainable as he was an unauthorised occupant within the meaning of the Act of the building in question. The appellate authority held that there was no provision in the Act which bars an unau thorised occupant from applying for an allotment. On a writ petition filed by the first respondent, the Allahabad High Court quashed the order of the District Judge and restored the order made by the area Rationing Officer (Rent Control) alloting the house to the first respondent on the view that rule 11 requiring "first come first served" prin ciple to be followed was applicable only to persons similar ly situated, and an unauthorised occupant could not be "placed in the same situation as others who were in need of accommodation". According to the High Court the princi ple "first come first served" was" not intend to be applied mechanically and not in such a manner as to frustrate the object of the Act". The correctness of the view taken by the High Court is in challenge before us. It is necessary to refer briefly to the relevant provi sions of the Act and the rules framed thereunder. The Act, as its long title shows, is a statute "to provide, in the interest of the general public, for the 10 1458SCI/76 130 regulation of letting and rent of, and the eviction of tenants from, certain classes of buildings situated in urban areas, and for matters connected therewith". Chapter III of the Act which contains provisions regulating letting in cludes section 11 to section 19. Section 11 lays down that No. person shall let any building except in pursuance of an allotment order issued under section 16. Section 12 states inter alia that a landlord or a tenant of a building shall be deemed to have ceased. to occupy the building or part thereof if he has allowed it to be occupied by any person who. is not a member of his family. The appellant and the tenant of the building who inducted him there axe not members of the same family. Section 13 provides that no person shall occupy a building or part thereof which a landlord or tenant has ceased to occupy except under an order of allotment made under section 16 and that if a person "so purports to occupy" he shall be deemed to be an unauthorised occupant such building or part. Under section 16(1)(a) the District Magistrate may make an order requiring the landlord to let any building which is or has fallen vacant or is about to fall vacant or a part of such building to any person specified in the order. An order made by the District Magistrate under this provision is called an allot ment order. 'District Magistrate ' as defined in section 3(c) includes an officer authorised by the District Magis trate to exercise all or any of his powers under the Act. An order under section 16 is appealable under section 18. Section 41 authorises the State Government to make rules to carry out the purposes of the Act. Rule 10 of the Rules framed under the Act prescribes the procedure for allotment. The District Magistrate is required to maintain a register of applications for allotment of buildings. The applica tions are to be classified according to the priority catego ries specified in rule 11 and they must be registered in the order they are received. The register is prepared afresh for every calendar year and applicants who are unable to secure allotment by the end of an year and whose applica tions were not rejected as not maintainable are entitled to apply by the 15th of January of the succeeding year for renewal of their applications and they retain their original relative priority. Sub rule (5) of rule 10 provides that no building shall ordinarily be. allotted to the persons or for the purposes specified in clauses (a), (b) and (c) of the sub rule. Sub rule (6) lays down inter alia that a person who is deemed to have ceased to occupy a building within the meaning of section 12(1)(b) shall not be allotted that or any other residential building for a period of two years from the date of such deemed cessation. Rule 11 which fixes the order of priorities in allotment of residential buildings states in sub rule (1) that: "In making allotment of a residential building, .the following order of priorities shall be observed: Firstly, for public purposes; Secondly, for accommodating a person against whom an order has been passed for eviction under Section 21, not being a tenant referred to in Explanation (1) to Section 21(1), or a decree has been passed in a suit filed with the permission of the District Magistrate under section 3 of the old Act (or such suit or application is pending) and who or 131 members of whose family do not own or hold as tenants any other residential building in the same city, municipality, town 'area or notified area; Thirdly, for accommodating others; and in each of the above categories subject to the provisions of sub rule (2), the principle "first come, first served" shall be followed. " As intending allottees the appellant and the first re spondent both come within the third category. If the principle 'first come first served ' is to be followed in choosing between them, the appellant 's applica tion for allotment being earlier in point of time should have preference unless there is any valid ground for reject ing his claim. We are not concerned in this appeal about the existence of any such ground; the District Judge had remitted the case to the Area Rationing Officer (Rent Con trol) for a fresh decision in accordance with law following the 'first come first served ' principle. The High Court thought that the appellant being in unauthorised occupation of the building within the meaning of section 13 was not entitled to apply for allotment of the premises to him. It does not however appear from the Judgment of the High Court that there is any provision in the Act which disentitles such unauthorised occupants from applying for allotment. The appellant is not one of the persons to whom no building is ordinarily to be allotted under sub rules (5) and (6) of rule 10. The High Court refers to sub rules (4) and (5) of rule 11 to show that the principle first come first served ' does not apply in all circumstances. Sub rule (4) gives overriding powers to the District Magistrate to make an allotment out of turn in favour of a person who in occupy ing any accommodation proposed to be requisitioned under the Uttar Pradesh Temporary Accommodation Requisition Act, 1947 and to whom alternative accommodation is required to be provided under that Act. Sub rule (5) which is expressly made subject to the other sub rules of rule 11 states that it should be ensured that no person shall be allotted a building which carries so little rent that he is able to get a residence on payment of rent which is less than ten per cent of his salary or other income, after taking into con sideration the house rent allowance allowed by his employer. Both these sub rules are quite irrelevant for the present purpose. Therefore, assuming that sub rules (4) and (5) are exceptions to the 'first come first served ' principle, the appellant 's application for allotment cannot be thrown out unless there was some provision prohibiting unauthorised occupants from applying for allotment. The High Court thinks that an unauthorised occupant cannot be "placed in the same situations as others who are in need of accommoda tion" and that the principle 'first come first served ' "has to be applied amongst person of the same category who are similarly situated". The High Court has not mentioned any provision of the Act to justify the view it has taken, nor any such provision has been referred to by counsel for the first respondent which disables an unauthorised occupant from applying for an allotment. The disability, the High Court infers from the object of the Act. The 132 object of the Act has to be gathered from its provisions and we have not found anything in the Act which disentitles an unauthorised occupant to ask for an allotment. In our opinion the High Court was in error in quashing the order of the District Judge. The appeal is accordingly allowed. The judgment of the High Court is set aside and that of the District Judge dated August 7, 1974 is restored. There will be no order as to costs. P.H.P. Appeal allowed.

In September, 1973, the appellant applied under section 16(1)(a) of the U.P. Urban Buildings (Regulation of letting, rent and eviction) Act, 1972 for the allotment of a part of a house, which was actually occupied by him. According to the appellant, he was included as a tenant by a person representing himself to be the owner but who in fact was a tenant. In November, 1973, the first respondent also ap plied for allotment of the said premises. The Area Ration ing Officer allotted the premises to the first respondent. The District Judge allowed the appeal filed by the appel lant, set aside the order of allotment in favour of the first respondent and remanded the case to the Rationing Officer to be decided afresh in accordance with law. The District Judge pointed out that the Area. Rationing Officer had ignored altogether rule 11 of the Rules framed under the Act which required that in the matter of allotment the principle 'first come first served ' should be followed. The District Judge also negatived the contention of the first respondent that the appellant 's application was not main tainable since he was an unauthorised occupant. The Court held that there was no provision in the Act which bars an unauthorised occupant from applying for an allotment. In a wit petition filed by the first respondent the High Court quashed the order of the District Judge and restored the order made by the Area Rationing Officer. Section 11 of the Act provides that no person shall let any building except in pursuance of an allotment order issued under section 16. Section 13 provides that no person shall occupy a building or part thereof which a landlord or tenant has ceased to occupy except under an order of allotment made under section 16. Under section 16 the District Magistrate is empowered to make an order requiring the landlord to let any building which is or has fallen vacant or is about to fall vacant or a part of such building to any person specified in the order. An order under sec tion 16 is appealable under section 18. In exercise of powers conferred by section 41 of the Act, the rules have been framed by the State Government. Rule 10 prescribes the procedure for allotment. It provides that the application should be entered in the register after classifying them according to the priority of the categories. Rule 10 further provides that a building shall not.be allotted to a person who is deemed to have ceased to occupy a building for a period of two years from the date of such deemed cessation. Rule 11 fixes order of priorities in allotment of residen tial buildings and it further provides that in each of the categories the principle 'first come first served ' shall be followed. Al1owing the appeal, HELD: (1) The High Court in its judgment has not men tioned any provision in the Act which dissentitles unautho rised occupants from applying for allotment. Rules 10(5) & (6) provide that certain persons should not ordinarily be allotted a promises; the appellant does not fall within those categories. [131D E] 2. The High Court infers the disability of an unautho rised occupant from applying for an allotment from the object of the Act. The object of the Act has to be gathered from its provisions. There is nothing in the Act which disentitles an unauthorised occupant from applying for an allotment. [131H, 132A] 129

Civil Appeal No. 19 of 1954. Appeal from the judgment and decree dated April 8, 1949 of the Patna High Court, in Appeal from Original ]Decree No. 116 of 1947, arising out of the judgment and decree dated the February 28, 1947, of the Sub Judge at Begusarai in Title Suit No. 14/14 of 1944/45. L. K. Jha and B. K. Sinha, for the appellant. G. section Pathak, B. Sen, B. K. Saran and R. C. Prasad, for respondent No. 1. section D. Sekhri, for respondents Nos. 3 and 4. 1959. September 7. The Judgment of the Court was delivered by DAS GUPTA J. Though a member of questions, some of fact and some of law were originally raised in this suit for pre emption, the main question for consideration in this appeal from the judgment of the 665 High Court of Patna, reversing the decree for preemption granted by the Trial Court, the Subordinate Judge of Monghyr, is the question on which the High Court based its decision of reversal. That question is whether the ceremonies essential for exercising the right of pre emption were properly performed. Issue No. 9 in which this question was raised is in these words: " Did the plaintiff perform the ceremonies of Talab E Mowasibat and Talab E Ishtashad as required by law ?" The plaintiff Radha Prasad Singh brought this suit for pre emption in respect of 5 items of property described in Schedule B of the plaint which along with certain other properties were sold by the Defendant 2nd Party Mst. Jogeshwari Kumari alias Jageshwari Kumari widow of Babu Ganga Prasad Singh deceased and daughter of Babu Narsingh Prasad Singh by a deed executed on November 18, 1943, at Moghra and registered on November 23, 1943, at Monghyr. The Trial Court held that the plaintiff had failed to prove that he was a co sharer in respect of Item 2 of Schedule B. As regards the other 4 Items of properties he held that the plaintiff was a co sharer and as already indicated he gave the plaintiff a decree for pre emption in respect of these 4 Items. The sale deed is in favour of the defendant first party, Gajadhar Singh. It is no longer disputed, however, that Gajadhar Singh was a mere Benamidar and the real purchaser by this deed was Babu Lakshmi Prasad Singh, his son Satya Narayan Singh and others. A dispute was raised as to whether 4 annas 5 gandas odd share of Mauza, Majhaul Kilan Shri Ram, was sold or the entire 8 annas odd share of the vendor was sold. It has been held by both the Courts below that the plaintiff 's original case that the 4 annas 5 gandas odd share of Majhaul Kilan Shri Ram was sold is not correct and that really 8 annas odd share, the entire interest of the vendor in this property was sold by the deed, but that after the registration of the sale deed it was tampered with and by an act of forgery the 666 8 annas odd share was altered fraudulently to 4 annas 5 gandas. It was after the defendant 's pleading in the written statement that 8 annas odd gandas of this Mauza was sold and not 4 annas odd gandas as mentioned in Schedule B, that the plaintiff prayed for and obtained an amendment of the plaint by which an alternative prayer for pre emption in respect of 8 annas odd share of this Mauza was made. But for this amendment it is obvious the prayer for pre emption could not be granted as being only for a partial pre emption, once it has been found that 8 annas odd gandas were sold and not 4 annas odd gandas. One question which was therefore raised whether the amendment was rightly granted by the Trial Court. The question that the suit as brought was for partial pre emption was also raised from another aspect, viz., that though the sale of this Mauza, Majhaul Kilan Shri Ram, was of all villages Asli Mai Dakhili, i.e., original with dependencies, there is no prayer for pre emption in this suit in respect of Dakhili villages. As already indicated, however, the main question in controversy was whether the essential ceremonies required in law, i.e., Talab E Mowasibat and Talab E Ishtashad, were performed in accordance with law. A regards this the plaintiff 's case is that he came to know of this sale by his co sharer Jogeshwari for the first time on January 2, 1944, at about 11 a.m. when Jadunath Singh, a resident of Majhaul, informed him of this and that he at once completed the formality of Talab E Mowasibat in the presence of some persons and that shortly after this he went to the properties of Tauzis 1130, 4201, and 1136, and also Mauza Bugurgabad and performed Talab E Ishtashad, that he went then to the residence of the purchaser Gajadhar Singh at Matihani on January 3, 1944, and again performed the Talab E Ishtashad ; and that very day he started for the residence of the vendor and performed the Talab E Ishtashad there on January 4, 1944. The defence was that the story of any such ceremonies having been performed is wholly untrue and that, in fact, the plaintiff had knowledge of the sale 667 from long before January 2, 1944, he having been a rival bidder for the purchase of those very properties. A detailed story of a proclamation by beat of drums of the proposed sale by Bindeshwary and the plaintiff 's attempt to secure the property at the sale was set out by the defendant in the written statement and was sought to be proved by his witnesses. The Trial Court disbelieved the. defendant 's story on this point. He also rejected the defence allegation that the plaintiff was himself responsible for the forgery that was committed in respect of the deed of sale by altering the statement of the share in Majhaul Kilan Shri Ram that was sold, from 8 annas odd gandas to 4 annas odd gondas. On these findings he held the plaintiff 's suit was not barred by estoppel. Proceeding then to the consideration of the question whether the plaintiff 'came to know of the sale in favour of the first defendant for the first time on January 2, 1944, from Jadunath as alleged, the learned Judge has accepted the evidence given by the plaintiff and Jadunath on this point and held that the plaintiff 's case that he received information for the first time on that day was true. He also accepted the evidence of the plaintiff as regards the requisite ceremonies having been duly performed. The very important question that arose for the decision of the Court was whether the plaintiff 's story that he came, to know of the sale for the first time from Jadunath on January 2. 1944, is true. The Trial Court held that it was true. On this point the High Court came to a, contrary conclusion. The learned judges of the High Court were of opinion that the evidence of witness Jadunath was wholly unacceptable and that the plaintiff 's evidence that he came to know of the alleged sale on January 2, 1944, could not be accepted. After pointing out that the whole basis of the plaintiffs claim that he performed 'the ceremonies of Talab E Mowashibat and Talab E Ishtashad was without substance, they examined the evidence as regards the performance of the ceremonies and held that this evidence was also not acceptable, 668 The question in dispute before us is thus a pure question of fact, viz., whether the plaintiff came to know of the sale for the first time on January 2, 1944, and thereupon performed the ceremonies of Talab E Mowasibat and Talab E Ishtashad. The main contention raised by Mr. Jha, who appeared in support of the appeal is that in considering this question of fact the High Court approached the question from a wrong point altogether and was not justified in reversing the judgment of the Trial Court on that point. The question as to what should be the right approach for a Court of Appeal in deciding a question of fact already decided in one way by the Judge in the Court of the first instance has often engaged the attention of the courts, though the views expressed have not been uniform. Emphasis has been laid in some cases on the importance of the Court of Appeal deciding for itself the question of fact when the appeal is on facts, though remembering that it should not lightly do so not having had the advantage which the Trial Judge had of seeing the witnesses. , More emphasis has been laid in other cases on the importance of not reversing the Trial Judge 's findings of fact without compelling reasons. All the Courts in all the cases have stressed the rule which the courts of appeal should observe for themselves: that a Judge sitting on appeal not having had the opportunity of seeing and hearing the witnesses should think twice and more than twice before reversing the findings of fact arrived at by the Trial Court who has had that opportunity. To say that however is not to say that the Court of Appeal will never reverse a finding of fact of the Trial Court. In Shunmugaroya Mudaliar vs Manikka Uudaliar (1), Lord Collins pointed out that: "It is always difficult for judges who have not seen and heard the witnesses to refuse to adopt the conclusions of fact of those who have; but that difficulty is greatly aggravated where the Judge who heard them has formed the opinion, not only that their inferences are unsound on the balance (1) (1909) L.R. 36 I.A. 185. 669 of probability against their story, but they are not witnesses of truth. " In the same judgment Lord Collins referred approvingly to the judgment delivered by Lindley, Master of the Rolls, in the Court of Appeal in the case of Coghlan vs Cumberland (1) which set out the limitations of the rule : " even where the appeal turns on a question of fact, the Court of appeal has to bear in mind that its duty is to rehear the case, and the Court must reconsider the materials before the Judge with such other materials as it may have decided to admit. The Court must then make up its own mind, not disregarding the judgment appealed from, but carefully weighing and considering it; and not shrinking from overruling it if on full consideration the Court comes to the conclusion that the judgment is wrong. When, as often happens, much turns on the relative credibility of witnesses who have been examined and cross examined before the Judge, the Court is sensible of the great advantage he has had in seeing and hearing them. It is often very difficult ' to estimate correctly the relative credibility of witnesses from written depositions and when the question arises which witness is to be believed rather than another; and that question turns on manner and demeanour, the Court of Appeal always is, and must be, guided by the impression made on the Judge who saw the witnesses. But there may obviously be other circumstances, quite apart from manner and demeanour, Which may shew whether a statement is credible or notand these circumstances may warrant the Courtin differing from the Judge, even on a question offact turning on the credibility of witnesses whom the Court has not seen. " Almost the same view was expressed by Lord Thankerton in Watt (or Thomas) vs Thomas (2 ) : " I. Where a question of the fact has been tried by a Judge without a jury and there is no question if misdirection of himself by the Judge, an appellate (1)(1898) 1 Ch. 704. (2) (1947) I All E.R. 582. 85 670 court which is disposed to come to a different conclusion on the printed evidence should not do so unless it is satisfied that any advantage enjoyed by the Trial Judge by reason of having seen and heard the witnesses could not be sufficient to explain or justify the trial judge 's conclusions. The appellate Court may take the view that, without having seen or heard the witnesses, it is not in a position to come to any satisfactory conclusion on the printed evidence. The appellate Court, either because the reasons given by the Trial Judge are not satisfactory, or because it unmistakably so appears from the evidence, may be satisfied that he has not taken proper advantage of his having seen and heard the witnesses, and the matter will then become at large for the appellate court. It is obvious that the value and importance of having seen and heard the witnesses will vary according to the class of case, and, it may be, the individiual case in question. " These observations were cited with approval by Lord Reid in Bonmax vs Austin Motor Co., Ltd., (1). (See also the observations of Mokerjee, J., in Laljee Mahomed vs Girlder (2). This question of the proper approach of the Court of Appeal to decisions on questions of fact arrived at by the Trial Court was considered by this Court in Sarju Pershad vs Raja Jwaleshwari Pratap Narain Singh(3). Mukherjea, J., while delivering the judgment of the Court observed: " In such cases, the appellate court has got to bear in mind that it has not the advantage which the trial Judge had in having the witnesses before him and observing the manner in which they deposed in Court. This certainly does not mean that when an appeal lies on facts, the appellate court is not competent to reverse a finding of fact arrived at by the trial judge. The rule is and it is nothing more than a rule of practice that when there is conflict of oral evidence of the parties on any matter in issue and the decision hinges upon the credibility of (1) (1955) I All E.R. 326. (2) Cal. (3) [1950]S.C.R.781,784. 671 the witnesses, then unless there is some special feature about the evidence of a particular witness which has escaped the trial judge 's notice or there is a sufficient balance of improbability to displace his opinion as to where the credibility lies, the appellate court should not interfere with the finding of the trial Judge on a question of fact. " The position in law, in our opinion, is that when an appeal lies on facts it is the right and the duty of the Appeal Court to consider what its decision on the question of facts should be; but in coming to its own decision it should bear in mind that it is looking at the printed record and has not the opportunity of seeing the witnesses and that it should not lightly reject the Trial Judge 's conclusion that the evidence of a particular witness should be believed or should not be believed particularly when such conclusion is based on the observation of the demeanour of the witness in Court. But, this does not mean that merely because an appeal court has not heard or seen the witness it will in no case reverse the findings of a Trial Judge even on the question of credibility, if such question depends on a fair consideration of matters on record. When it appears to the Appeal Court that important considerations bearing on the question of credibility have not been taken into account or properly weighed by the Trial Judge and such considerations including the question of probability of the story given by the witnesses clearly indicate that the view taken by the Trial Judge is wrong, the Appeal Court should have no hesitation in reversing the findings of the Trial Judge on such questions. Where the question is not of credibility based entirely on the demeanour of witnesses observed in Court but a question of inference of one fact from proved primary facts the Court of Appeal is in as good a position as the Trial Judge and is free to reverse the findings if it thinks that the inference made by the Trial Judge is not justified. Turning now to the instant case we find that the Trial Judge having seen and heard Jadunath and the plaintiff, believed their evidence on the point of information being given to plaintiff by Jadunath about the 672 sale on January 2, 1944, at about II a.m. It does not, however, appear that the learned Trial Judge arrived at his conclusion on the basis of the demeanour of these witnesses having created a favourable impression on his mind as to their credibility. In scrutinising the evidence of the plaintiff and of Jadunath it must be borne in mind that the case of the plaintiff is that on January 2, 1944, certain information having been received by him, he performed the formalities. There is no case that the formalities were performed on any other date. Therefore, if the story of the communication of information on January 2, 1944, is not established then the whole case of the plaintiff must fail. Jadunath 's evidence on this point was: " On 2 1 44 I told Radha Babu at his house in Manjhaul that Maghrawalli Jugeshwari Kumari had sold away her Milkiat to Gajadhar Rai of Matihani, this was about 11 a.m. Radha was startled to hear this and standing up said: "Jo jo jaidad Babu Gajadhar Singh hath (then says Maghrawalli Mussammat Jageshwari Kumari ne jo jo jaidad Babu Gajadhar Singh ka liath becha hai uske kharidne ka haq mere. Ham Kharida, Ham Kharida, Ham Kharida. Talab Mowashibat karte hain. Babu Jagdamba Prasad aur Babu Narayan Prasad gabah rahie. I came to know from a man of Chitral, I kos from Matihani that gajadhar had a marriageable grandson.". Mention should be made in this connection also of the evidence of Jagdambi Prasad: "On 2 1 44 I had been to plaintiff 's house at 10 30 a.m. Babu Narayan Prasad Singh, a pleader of Samastilpur was at plaintiff 's house at the time . Jadunath Singh told Radha Prasad that Musanimat Jagesliwari Kumari of Maghra had sold away her property in Manjhaul to Gajadhar Singh of Matihani. As soon as Jadunath Singh said this Radha Prasad Singh was startled, stood up and said: I have a right to purchase this property. I have purchased; I have purchased; I have purchased. 673 You Jagdamba Prasad Singh, you Narayan Prasad Singh and you Jadunath Singh, bear witness to this fact. He uttered these words thrice." In deciding the question whether the information from Jadunath was the first information received by the plaintiff the Trial Judge had necessarily to consider whether the story that Jadunath came to know of the sale and brought this information on to the plaintiff on January 2, 1944, at about 11 a.m. was true or not. In arriving at a decision on the point it was necessary for him to consider the probabilities of the story, of Jadunath having gone to Gajadhar 's house in search of a bridegroom and that there Gajadhar Singh informed him of the sale and then of the probability of the story that he would be taking upon himself the task of going to the plaintiffs house immediately on return to his village to convey this information, the probability of the story as to how the plaintiff reacted to the account and also the question of discrepancy. It does not appear that the learned Trial Judge took any of these matters into consideration. All that he says about Jadunath 's credibility is that his evidence had been criticised on the ground that he was one of plaintiff 's witnesses in the previous suit brought by him against Satya Narain Singh 's ancestors and that is in his opinion was not a valid ground for discarding the evidence of Jadunath Singh. We agree with the learned Judge that the mere fact that Jadunath was one of the plaintiff 's witnesses in the previous suit brought by him against Satya Narain Singh 's ancestors about 33 years ago would not by itself be a valid reason for discarding his testimony. The fact that this was not a valid reason for discarding his testimony does not, however, absolve the Court of the duty of testing the witness 's testimony on the touch stone of probability. The learned judges of the High Court applied that touch stone and came to the conclusion that Jadunath was not a witness of truth. It is clearly a case where the words used by Lord Thankerton that the Trial Judge had not taken proper advantage of his having seen and heard the witnesses, and the matter would become at large for the appellate 674 court, should apply. Here was a witness who could not be considered to be wholly independent. For, on his own showing he took the trouble of going to plaintiff 's house after what may be taken to be an arduous country in an unsuccessful search for a bridegroom, to inform the plaintiff of a matter in which he himself had no interest a witness who had figured, though many years ago, in a pre emption suit brought by the same person. These facts made close scrutiny of the witness 's account necessary before the Judge could say just by looking at him that he was a witness of truth. That scrutiny is conspicuous by its absence. Taking his evidence as a whole we find that his story that after coming to know of the sale in question he went to the house of Gajadhar, the first defendant, at village Matihani to make enquiries about a marriage proposal in respect of his daughter with his grandson and that it was in that connection that Gajadhar spoke to him about his purchase. But it is curious that in his examination in chief this witness came straight to his account of 'coming to the plaintiff 's house on January 2, 1944, and informing him about the sale by Jogeshwari of her Milkiat to Gajadhar without saying a word as to his visit to Gajadhar 's house, to the purpose of his visit and the manner in which Gajadhar gave him the information, or even the detailed nature of the information. It was in cross examination that he disclosed that he went to Gajadhar 's house for "barthuari". It is in vain that we look into his evidence, whether in examination in chief or in cross examination, for the exact information given by Gajadhar. It has to be remembered in this connection that it is no longer disputed that Gajadhar himself had no interest in these properties and was a mere Benamidar. Even if Gajadhar 's own account that he was completely in the dark about these transactions be left out of account it was necessary for the Court to consider how far it was probable that Gajadhar would put on Jadunath a false story of purchase by himself of properties. It was urged that this Gajadhar did with a view to raise the Tilak which he could thus obtain. 675 Jadunath himself has not said anything about the negotiations about Tilak but one Mahabir Ray has said that when he was going to the fields Gajadhar called him and there lie heard Gajadhar demanding a higher Tilak stating that he had recently purchased properties at Majhaul from Mussammat. Jadunath himself does not mention having seen this Mahabir at Gajadhar 's house. Jadunath claims to have gone to his house with a servant. Mahabir has not mentioned the presence of this servant. The question whether a man like Mahabir who was a total stranger to the plaintiff would be called by Gajadhar to hear such talks also requires the serious consideration of the Court. The Trial Judge does not appear to have given the slightest consideration to this aspect of the matter. The learned judges of the High Court thought that there was no reason that Gajadhar would go out of his way to convey the information to Jadunath that he had purchased the Milkiat of Jogeshwari, the defendant No. 2. It is difficult not to agree to this estimate of probability. Even more important was the question of probability as regards the story of the plaintiff 's reaction when the information is said to have been given to him. Both Jadunath and Jagdambi say that the plaintiff was startled on getting information of the sale and at once uttered the words which have been set out already of the Talab E Mowsibat. What would a man of ordinary prudence not to speak of the man of property and with experience of previous litigation like the plaintiff would do under such circumstances ? There cannot be any two opinions on this question. He may consider it unwise to ask his informant any further question before making the first Talab, i.e., Talab E Mowasibat. Once that was completed he would ply his informant with questions as to where he got this information, what the information exactly was, what properties had been sold, what the consideration was, and other connected questions. In this case, according to the evidence of Jadunath no such questions were asked by the plaintiff. In his examination in chief, Jadunath says: 676 " He (plaintiff) asked his syce to bring his tandom. He told Jagdamba Babu that he would go to make talab e isthashad and asked him to accompany him. While they were boarding the tandom Jai Prakash Narayan came that way. Radha Babu asked him also to accompany him. The same night Radha Babu met us at my house at 8 p.m. He asked me where I had obtained the information about the sale. " From this evidence it is clear that though Jadunath was at the place until the Tandom bad been brought and the plaintiff and Jagdamba got into the Tandom and Jai Prakash Narayan also arrived, no question was put by the plaintiff to Jadunath in this behalf. It has to be noted that the plaintiff went to Jadunath 's house the same night at 8 p.m. and the only question which was asked was: Where he had obtained the information about the sale and nothing was asked about what properties had been sold or for how much had they been sold. In cross examination Jadunath made the further statement in these words: " When I broke the news Radha Prasad did not ask me where I had received the information, or who had purchased the properties; what properties had been purchased or what the consideration was. " Such conduct on the part of Jadunath is incredible and any Judge of facts with experience of normal human conduct could have no hesitation in coming to the conclusion that things could not have happened in the way Jadunath has described. Mr. Jha, the learned Counsel for the appellant, urged that it would be unfair to base any conclusion on the supposed improbability or unnaturalness of such silence on the part of the plaintiff without having given him an opportunity to explain why be acted in this peculiar manner. It has to be noticed, however, that Jadunath had been examined and cross examined on January 9, 1947, and when the plaintiff was put in the Witness Box on the following day, i.e., January 10, 1947, the lawyer who examined him had before him the fact that Jadunath 's evidence had brought out this strange silence on the part of the plaintiff after he had been informed of the 677 sale. It was his duty to obtain from Radha Prasad an explanation of such conduct. But he put no questions to Radha Prasad about this. The obvious reason is that Radha Prasad had no explanation to offer and the lawyer knowing this kept quiet. It appears to us that the learned judges of the High Court of Patna were right in attaching great importance to this conduct of the plaintiff and were justified when they thought that this was an improbable story and rejected, in disagreement with the Trial Judge Jadunath 's evidence altogether. Mention has to be made of another circumstance which was noticed in the High Court judgment. That is as regards the exact information which is said to have been given by Jadunath. Jadunath 's own account in the examination in chief is that he "told Radha Babu at his house in Majhaul that Maghrawalli Jugeshwari Kumari had sold away her Milkiat to Gajadhar Rai of Motihani. In his cross examination he first said : " The information I gave was in these terms: Maghrawali Musammat apni Jaidad Babu Gajadhar Singh Motihani wale ke chan bech dia." and then correcting himself said: " Babu Gajadhar Singh ne kaha ki Maghrawali Musammat ki jaidad kharid kia. " It is not possible for anybody to remember exactly the words used by himself many years ago and it is reasonable to say that there was no substantial difference between the account given by him of this matter in his examination in chief and in cross examination. It is interesting to remember, however, that in paragraph 4 of the plaint, it was stated that the information that Jadunath gave was: " That the defendants 2nd and 3rd parties had sold the properties entered in Schedule B of this plaint, along with other properties to the defendant 1st party, under a registered deed of sale. " According to Jadunath 's evidence he does not appear to have mentioned the defendant 3rd parties as the sellers nor gave any details to show that the properties 86 678 entered in Schedule B were covered by the sale nor that there was a registered deed of sale. Turning to the evidence on the plaintiff and Jagdamba as regards the information said to have been given by Jadunath we find that Jagdamba says: " Jadunath Singh told Radha Prasad that Musammat Jogeshwari Kumari of Maghra had sold away her property in Majhaul to Gajadhar Singh of Motihani. " According to the plaintiff himself the information which Jadunath gave was that Gajadhar Singh had purchased the Majhaul properties from the Maghrawali Musammat. An examination of Schedule B shows that while the first 3 items were properties in Mauza Majhaul, the 4th item is a property in Buzurgabad while the 5th item is a property in Mauza Dundit. There appears to be no reason to think that these properties 4 and 5 could be even loosely be considered to be properties in Majhaul or Majhaul Properties. Commenting on Jagdamba 's evidence on this point Mr. Justice Sinha, who delivered the leading judgment stated : " Plaintiff 's witness No. 2 has stated that Jadunath told the plaintiff that the second defendant had sold her property in Majhaul to the first defendant. If that is so, it is a little difficult to under. stand how they went to Bugurgabad or to the other items of property to perform the ceremonies, if they ever did so. " It is strange that there should be such discrepancy between the evidence of Jadunath himself and the plaintiff and Jagdamba as to what actually was said. But if Jagdamba 's account such as is supported by the plaintiff himself, is true then there is no acceptable explanation as to why the plaintiff could think of going to Bugurgabad at all as he and his witnesses say, he did. It was the duty of the Trial Judge to take into account these several considerations in testing the credibility of the account given by Jadunath, the plaintiff and Jagdambi that Jadunath informed the plaintiff on January 2, 1944 about the sale. He did not do so, The learned judges of the High Court as a 679 Court of Appeal were in duty bound to consider these questions before accepting the decision of the learned Trial Judge. The criticism that the approach of the learned judges of the High Court was wrong is therefore wholly without foundation. The learned judges of the High Court rightly took these matters into consideration and the decision they arrived at on these considerations that the Trial Judge 's assessment of the evidence was wrong and that Jadunath was not a witness of truth and that the account given by the plaintiff that the information was conveyed to him by Jadunath on January 2, 1944, should not be accepted is clearly right. Once this decision is reached it is unnecessary to consider the further question whether any ceremonies were performed at all on 2nd, 3rd or 4th January, 1944, as stated by the plaintiff and his witnesses. Even if they were, they would be of no assistance to the plaintiff as the plaintiff had failed to show that it was on January 2, 1944, that he received the information about the same. It is unnecessary for us therefore to decide the further question that appears to have been raised, viz., that even if the evidence as regards the performance of the two Talabs i. e., Talab E Mowashibat and Talab E Ishtashad is accepted at its face value the requirements of the law have not been fulfilled. The High Court held that the plaintiff had failed to prove that the words used by him at the time of the making of the second demand of Talab E Ishtashad were sufficient to draw the attention of the witnesses to the specific properties in respect of which he was demanding his right of pre emption. We express no opinion whether this view of the learned judges of the High Court is correct or not. We also express no opinion on the two other questions, viz., whether the Trial Court acted in accordance with law in granting leave to the plaintiff to amend his plaint so as to include the alternative prayer for pre emption in respect of 8 annas odd share of Tauza No. 1130 instead of 4 annas odd share as originally claimed and also whether the suit was bound. to fail because there was 680 no prayer for pre emption for the Dakhili villages of Tauza No. 1130. In our opinion the plaintiff having failed to prove that the information of the sale was conveyed. to him by Jadunath on January 2, 1944, the suit 'was rightly dismissed by the High Court. This appeal is, therefore, also dismissed with costs.

Although it is well settled that a court of appeal should not lightly disturb a finding of fact arrived at by the trial judge who had the opportunity of observing the demeanour of the witnesses and hearing them, that does not mean that an appellate court hearing an appeal on facts can never reverse such a finding. Where the decision on a question of fact depends on a fair consideration of matters on record, and it appears to the Appeal Court that important considerations have not been taken into account and properly weighed by the trial judge, and such considerations clearly indicate that the view taken by the trial judge is wrong, it is its duty to reverse the finding even if it involves the disbelieving of witnesses believed by the trial court. Where again the trial judge omits to properly weigh or take into account 664 important considerations bearing on the credibility of witnesses or the probability of their version, which point the other way, it is the duty of the court of appeal to reverse the findings of the trial Court. If the question of fact does not solely depend on the credibility of witnesses for its determination, but is one of inference from proved facts, on a consideration of probabilities, the court of appeal stands in the same position as the trial court and is free to reverse its findings. Shunmugayoya Mudaliay vs Manikka Mudaliar, (1909) L.R. 36 I.A. 185; Coghlan vs Cumberland, (1898) i Ch. 704; Wall (Thomas) vs Thomas, (1947) i All E.R. 582; Bonmax vs Austin Motor Co. Ltd. (1955) i All E.R. 326; Sayju Pershad vs Raja jwaleshwari Pratap Narain Singh, (195I) I.L.R. and Laljee Mohomet vs Girlder, , referred to. Consequently, where, as in the present case, the plaintiff brought a suit for pre emption and the question for determination was one of fact, namely, whether the plaintiff had performed the essential ceremonies of Talab E Mowasibat and Talab E Ishtashad, and the trial court believed his witnesses, not because it had been impressed by their demearour, and the High Court in appeal disbelieved them in the light of the probabilities of the case and reversed the decision of the trial court. Held, that it was not correct to contend that the way in which the High Court had approached the case was wrong or that its decision was not justified.

Civil Appeal No. 1867 of 1970. From the judgment and order dated the 18th February, 197() of the Gujarat High Court in Letters Patent Appeal No. 6/60. section section Sheth, Ravinder Narain, J. B. Dadachanji, O.C. Mathur and Mrs. Anjali K. Verma for the Appellant. Gautham Philip, P. H. Parekh and Mrs. Vineeta Sen Gupta for the Respondent. The Judgment of the Court was delivered by MISRA, J. The present appeal by certificate is directed against the judgment of the High Court of Gujarat at Ahmedabad in 169 Letters Patent Appeal No. 6 of 1966 dated the 18th of February, 1970 decreeing the suit for redemption. The property in dispute, situated in Baroda City, originally belonged to Motibhai Bapubhai Shibandi Baxi (for short Motibhai). He created a mortgage with possession of the disputed property in favour of one Nanaji Balwant Pilkhanewala (for short Nanaji) in 1871 for a sum of Rs. 800. In 1890 a second mortgage was created in favour of the same mortgage and the amount secured by this second mortgage was Rs. 375. Somewhere between 1890 and 1912 the original mortgagee Nanaji died leaving behind his two sons Hari and Purshottam as his heirs and legal representatives. The two sons of Nanaji sold the entire mortgagee rights and interest to one Ganpatram Mugutram Vyas (for short Ganpatram) on 4th of July, 1912. Ganpatram in his turn sold the mortgagee rights in a part of the mortgaged property, viz., common latrine, to one Vamanrao Laxmanrao Nirkhe (for short Vamanrao). Ganpatram died and his son Chhotelal Ganpatram (for short Chhotelal) sold away his rights as a mortgagee in possession in respect of the rest of the properties which still remained with him, to Chhaganlal Keshavlal Mehta (for short Chhaganlal Mehta.) Mortgagor Motibhai. also died leaving behind his son Chimanrai Motibhai Baxi (for short Chimanrai). Chimanrai died leaving behind his widow Chhotiba and a daughter Taralaxmibai. On September 12, 1950 Taralaxmi sold her right, title and interest in the suit property to one Shantilal Purshottamdas Dalia (for short Shantilal). Later on Shantilal conveyed his right, title and interest in the property to the plaintiff, Narandas Haribhai Patel (for short Narandas). It appears that during the life time of Chimanrai Ganpatram the mortgagee had sent a notice, Ext. 77, dated 15th of April, 1913 to Chimanrai informing him that the mortgaged property was in a dilapidated condition and required repairs. He had already spent some amount towards repairs but still substantial repairs were needed and the same should be got done by him or he should pay the mortgage amount and redeem the property. On receipt of this letter Chimanrai made the following endorsement: "During the lifetime of my father, I had become separated from him without taking any kind of the moveable or immovable property belonging to him and even 170 after his death, I have not taken any kind of his properties nor have I kept my right over the said properties and so I am not in any way responsible for your any transaction whatsoever in connection with his properties. Be it known to you. And while giving you a definite assurance to that effect I have made attestation on the aforesaid document in respect of purchase of the mortgagee 's rights, which may also be known to you." Long after the death of Chimanrai, Chhotelal, son of Ganpatram, gave a similar notice, Ext. 28, dated 6th of October, 1933 to Chhotiba, the widow of Chimanrai calling upon her to Redeem the mortgage in question. On this notice similar endorsement on behalf of Chhotiba was made on 10th of October, 1933 by Lomeshprasad Hariprasad Desai (for short Lomeshprasad). her daughter 's son, as had been made by Chimanrai earlier on the notice given by Ganpatram. Yet another notice, Ext. 78 dated 21st of September, 1933 was sent by Chhotalal to Taralaxmibai, daughter of Chimanrai to the same effect. In her reply, Ext. 73, dated 3rd of October, 1933 to the notice, Taralaxmibai stated inter alia that her father Chimanrai had foregone all rights whatsoever in the property of his father, Motibhai, during his lifetime and hence she had no concern with the property of Motibhai. It was further stated that her own mother Chhotiba was alive (in October 1933) and, Therefore, she had no concern whatsoever with the property of Motibhai or the liabilities arising out of the dealings of Motibhai. Narandas after the purchase of the mortgagor 's rights from Shantilal filed a suit for redemption impleading both the assignees For the mortgagee 's rights, Chhaganlal Keshavlal Mehta, as the 1st defendant, and Vamanrao Laxmanrao Nirkhe, as the 2nd defendant. The claim was resisted by. the 1st defendant on grounds that the plaintiff had no right to redeem inasmuch as his predecessor in interest, Chimanrai, his widow Chhotiba and his daughter Taralaxmibai on their own admission had no subsisting right, title and interest in the mortgaged property. The plaintiff who is only a transferee from Taralaxmibai could not rank higher, that Ganpatram, the predecessor in interest of defendant No. 1 was not in possession of the property as a mortgagee but as an absolute owner thereof. The defendant No. 1, who claims through Ganpatram 's son Chhotalal, was also an absolute owner and continued to remain in possession from 1933 34 as such. As an abso 171 lute owner he carried out repairs to the mortgaged property. He also obtained permission from the municipality and built the house afresh after incurring heavy expenditure and in doing so he had spent about Rs. 3374 2 0. He also denied that Shantilal, purchaser of the equity of redemption was the plaintiff 's benamidar. Indeed, the plaintiff had falsely created the evidence of benamidar to bring the present suit, and the suit was barred by limitation and estoppel. In the alternative he pleaded that he should be paid the sum of Rs. 5099 2 0 if the plaintiff 's suit for redemption was to be decreed. The trial court came to the conclusion that the plaintiff had no right to redeem the mortgaged property as he had failed to prove that he had purchased the property benami in the name of Shantilal and that afterwards Shantilal had passed deed of conveyance or mutation in his favour. In view of this finding it was not necessary for the trial court to decide other issues but all the same the trial court recorded findings on the remaining issues also in order to complete the judgment. It found that Chimanrai, Chhotiba or Taralaxmibai never relinquished their right, title and interest in the suit property, that the suit was within limitation, and that the suit was not barred by estoppel. As regards the amount spent on repairs the court came to the conclusion that the defendant No. I had spent Rs. 3374 2 O and, therefore, if the plaintiff was to be allowed to redeem the property he would have to pay that amount in addition to the mortgage consideration. The suit was dismissed by the trial court on the ground that the plaintiff had no right to redeem. Feeling aggrieved the plaintiff went up in appeal, and the defendant No. 1 filed a cross objection against the finding that went against him. The appeal and the cross objection were allowed by the Assistant Judge by his judgment dated 31st of March, 1956 on the finding that the plaintiff had purchased the equity of redemption benami in the name of Shantilal and that Shantilal had executed a deed of conveyance, Ext. 66, in favour of the plaintiff and, therefore, he was entitled to redeem the property. He further found that the endorsements made by Chimanrai, his widow Chhotiba and his daughter Taralaxmibai did not amount to relinquishment of their right, title and interest in the property. He set aside the decree of the trial court and remanded the case for deciding the remaining points after allowing the parties to lead fresh evidence on those issues. The defendant No. I challenged the remand order by 172 filing an appeal in the High Court. His complaint was against the direction given by the appellate court while remanding the case. The High Court allowed the appeal in part and modified the direction of the lower appellate court asking the trial court to decide other issues afresh after allowing further evidence, except issues Nos. 1 and 4. Consequent upon the order of remand the Joint Civil Judge, Jr. Division, decided other issues against the plaintiff. He held that Chimanrai, his widow Chhotiba and his daughter Taralaxmibai had relinquished their right, title and interest in the suit property and, therefore. Taralaxmibai had no subsisting interest or title to transfer to the plaintiff or his predecessor in interest. He further held that the suit was barred by time and estoppel, and that defendant No. I had spent a substantial amount on repairs. On these findings he again dismissed the suit by his judgment dated 21st of August, 1958. The plaintiff again took up the matter in appeal, It appears that during the pendency of the appeal Vamanrao, defendant No. 2 died in August, 1958. His heirs were, however, not brought on the record. A question arose whether the appeal abated as a whole or only as against defendant No. 2. The District Judge by his separate order dated 25th of September, 1959 held that the appeal abated only so far as defendant No. 2 was concerned but it could proceed as against the surviving defendant No. 1. The appeal was eventually allowed by the Assistant Judge, Baroda against defendant No. 2 by his judgment dated 12th of November, 1959 holding that the appellant was entitled to redeem the mortgaged property on payment of Rs. 4724 2.0 on account of the mortgage money as well as the expenditure incurred by defendant No. 1 on repairs and that the suit was neither barred by time nor by estoppel. The appeal was, however, dismissed as against defendant No. 2. The defendant No. 1 challenged the judgment and decree of the Assistant Judge before the High Court and only two contentions were raised before it: (1) that the mortgage cannot be split up and must be treated as one and indivisible security and since the right to redeem against one of the two co mortgagees had become extinguished because of abatement of the suit against Vamanrao and his heirs, the suit against defendant No. 1, the other co mort 173 gagee, must be dismissed; and (2) that the suit was barred by estoppel inasmuch as Chimanrai, the heir of the original mortgagor and after him his widow Chhotiba and daughter Taralaxmibai having relinquished their right in the disputed property which she could have conveyed to Shantilal by sale. Consequently, Shantilal in his turn could not pass a better title to the plaintiff. In the result the plaintiff had no right to file the suit for redemption. A learned Single Judge who heard the appeal repelled the first contention but accepted the second one. Accordingly, he allowed the appeal and dismissed the plaintiff 's suit. The plaintiff undaunted took up the matter in a Letters Patent Appeal and the defendant also filed a cross objection. A Division Bench of the High Court allowed the appeal and decreed the suit reversing the finding of the learned Single Judge that the plaintiff had no right to sue. The Division Bench, however, granted a certificate of fitness for appeal to this Court. The learned counsel for the appellant was raised the same two contentions before us. We take up the first point first. The first contention is based on the principle of indivisibility of the mortgage. Section 60 of the Transfer of Property Act deals with the rights and liabilities of a mortgagor. It confers a right of redemption. There is, however, a rider to the right of redemption in the section itself, which provides : "Nothing in this section shall entitle a person interested in a share only of the mortgaged property to redeem his own share only, on payment of a proportionate part of the amount remaining due on the mortgage, except only where a mortgagee or, if there are more mortgagees than one, all such mortgagees, has or have acquired, in whole or in part, the share of a mortgagor." A perusal of this provision indicates that a co mortgagor cannot be permitted to redeem his own share of the mortgaged property only on payment of proportionate part of the amount remaining due. In other words the integrity of the mortgage cannot be broken. Order 34, rule I of the Code of Civil Procedure deals with the parties to suits for foreclosure, sale and redemption. It provides: "Subject to the provisions of this Code, all persons having an interest either in the mortgage security or in the 174 right of redemption shall be joined as parties to any suit relating to the mortgage. " It has already been pointed out that defendant No. 2 was the purchaser of mortgagee rights in respect of common latrine while defendant No. I is the purchaser of the mortgagee rights in respect of the remaining mortgaged property, viz., the houses. When the plaintiff filed the suit he impleaded both the mortgagees as defendants Nos. 1 and 2. Before the Assistant Judge a statement was made on behalf of the original plaintiff that he was prepared to pay the entire mortgage amount for redemption of the mortgaged property to the 1st defendant. A similar statement was made by Mr. Oza, counsel for the plaintiff in the High Court who further stated that in no event hereafter would the plaintiff seek any relief against the property in possession of defendant No. 2, viz., the right to the common latrine in which mortgagee rights had been transferred to defendant No. 2 by Ganpatram. Besides, the severance of the two properties by Ganpatram was recognised by the mortgagor and hence the severance was with the implied consent of the mortgagor. It is a well recognised principle that even if all the mortgagees are not before the court in a suit filed by the mortgagor for redemption of the property, but the mortgagor is prepared to pay the entire amount due at the foot of the mortgage to such mortgagees as are before the court and gives up his right under the mortgage as against those mortgagees who are not before the court, the court can pass a decree for redemption directing that the entire mortgage amount should be paid to the mortgagees who are actually before the court. This principle was recognised in a Full Bench decision in Motilal Yadav v Samal Bechar.(1) If one of the defendants in a suit dies and his heirs are not brought on record the suit certainly would abate as against that party. The suit, however, could not abate as against the other surviving defendants. A question may arise whether the suit is maintainable against the surviving defendants. In the instant case the suit abated as against defendant No. 2 in respect of the common latrine. But there is no difficulty in the suit proceeding against the surviving defendant No. 1 if the plaintiff is prepared to pay the entire mortgage consideration. It may, however, be pointed out that defendant No. 2 never contested the suit. He was impleaded as a party it was incumbent on the plaintiff to have impleaded all the mortgagees as a party. But if the defendant did not contest the suit at any stage, 175 will he be a necessary party in an appeal ? A person may be A a necessary party in a suit but he 'may not be a necessary party in the appeal. The Division Bench of the High Court was fully justified in holding that the suit against the surviving defendant No. I was maintainable despite the abatement of the suit against the 2nd defendant. We fully endorse the view taken by the Division Bench of the High Court. This takes us to the second point. This contention is based on the aforesaid various endorsements made by Chimanrai. his widow Chhotiba and his daughter Taralaxmibai on the notices sent by the mortgagee. The question is whether these endorsements amount to relinquishment of their rights and interest so as to estop them from transferring the property in suit ? The notice by Ganpatram to Chimanrai and the notices by his son Chhotalal to Chhotiba and Taralaxmibai and their respective endorsements thereon have been referred to in the earlier part of the judgment. Whether these endorsements amount to relinquishment of their rights and title and if so whether the same amounts to estoppel within the meaning of section 115 of the Evidence Act ? In our opinion the endorsements have to be read not in isolation but with reference to the notices sent. So read, the endorsement only indicate that the heirs of the mortgagor were not prepared to bear the expenses on repairs of the mortgaged property. The property cannot remain in vacuum even for a single moment. It must vest in somebody. Accordingly, after the death of Motibhai his property vested in his son who was the sole heir. The endorsement of Chimanrai, his widow Chhotiba and daughter Taralaxmibai on the notices at the most would amount to an admission. The contention raised on behalf of the defendant appellant is that he would not have purchased the mortgagee rights from Ganpatram if such a statement had not been made by Chimanrai, his widow Chhotiba and his daughter Taralaxmibai and, therefore, they would be estopped from taking up a different stand from the one taken by them earlier. In substance, the question is whether the endorsements would amount to estoppel. The difference between admission and estoppel is a marked one. Admissions being declarations against an interest are good evidence but they are not conclusive and a party is always at liberty to withdraw admissions by proving that they are either mistaken or untrue. But estoppel creates an absolute bar. In this state of 176 the legal position, if the endorsement made by Chimanrai or by his widow, Chhotiba or his daughter Taralaxmibai amounts to an estoppel they or their transferees would be prevented from claiming the property. It may be pointed out that estoppel deals with questions of facts and not of rights. A man is not estopped from asserting a right which he had said that he will not assert. It is also a well known principle that there can be no estoppel against a statute. After the death of Motibhai his son Chimanrai succeeded in law. To bring the case within the scope of estoppel as defined in section ] I 5 of the Evidence Act: t I ) there must be a representation by a person or his authorised agent to another in any form a declaration, act or omission; (2) the representation must have been of the existence of a fact and not of promises de futuro or intention which might or might not be enforceable in contract; (3) the representation must have been meant to be relied upon; (4) there must have been belief on the part of the other party in its truth; (5) there must have been action on the faith of that declaration, act or omission, that is to say, the declaration, act or omission must have actually caused another to act on the faith of it, and to alter his former position to his prejudice or detriment; (6) the misrepresentation or conduct or omission must have been the proximate cause of leading the other party to act to his prejudice; (7) the person claiming the benefit of an estoppel must show that he was not aware of the true state of things. If he was aware of the real state of affairs or had means of knowledge, there can be no estoppel; (8) only the person to whom representation was made or for whom it was designed can avail himself of it. A person is entitled to plead estoppel in his own individual character and not as a representative of his assignee. None of these conditions have been satisfied in the instant case, for example, no representation was made to defendant No. 1. Therefore, he cannot plead estoppel. Secondly, the representation was not regarding a fact but regarding a right of which defendant No. I or his predecessor in interest had full knowledge or could have known if he had cared to know. It is difficult to say that defendant No. I has moved his position on account of the representation made by the mortgagor or his heirs or assignees. On the facts and circumstances of this case it is not possible to hold that 177 ingredients of section 115 of the Evidence Act have been fulfilled. The view taken by the Division Bench of the High Court is fully warranted by law. For the foregoing discussion we find no force in this appeal. It is accordingly dismissed with costs. S.R. Appeal dismissed.

Motibhai created two mortgages in respect of the same property in the years 1871 and 1893 in favour of one Nanaji who died somewhere between 1 890 and 1912 leaving behind his two sons Hari and Purushottam as his heirs and legal representatives. They both sold the entire mortgagee rights and interest to one Ganpatram on 4th July, 1912, who in his turn sold the mortgagee rights in a part of the mortgaged property, namely, common latrine to one Vamanrao. Ganpatram died and his son Chhotalal sold away his rights as a mortgagee in possession in respect of the rest of the properties which still remained with him, to Chhaganlal Keshavlal Mehta, the appellant defendant No. 1. Mortgagor Motibhai also died leaving behind his son Chimanrai. Chimanrai died leaving behind his widow Chhotiba and a daughter Taralaxmibai. On September 12, 1950 Taralaxmibai sold her right, title and interest in the suit property to one Shantilal who later on conveyed his right, title and interest in the property to the respondent plaintiff Narandas Haribhai Patel. During the life time of Chimanrai, Ganpatram, the mortgagee had sent a notice, Exhibit 77 dated 15th April, 1913 informing him that the mortgaged property was in a dilapidated condition and required repairs. He further called upon Chimanrai to pay the amount already spent by him towards the repairs to get further repairs done or in the alternative pay up the mortgage amount and redeem the property. Chimanrai, denied his responsibility. After the death of Chimanrai Chhotalal gave a similar notices, Exhibits 68 and 78, dated 21st of September, 1933 and 6th October 1933 to Taralaxmibai daughter of Chimanrai and to Chhotiba, the widow to the same effect. Both Chhotiba and Taralaxmibai denied their liabilities. Narandas after the purchase of the mortgagor 's rights from Shantilal filed a suit for redemption impleading both the assignees of the mortgagee 's rights, namely, Chhaganlal Keshavlal Mehta, the appellant as defendant No. I and Vamanrao as defendant No. 2. The suit was dismissed by the trial court on the ground that the plaintiff had no right to redeem In this view of the matter it was not necessary to decide other issues but the trial court recorded findings on other issues also including the issue of estoppel. The appeal and the cross objection filed by the parties were 167 allowed by the Assistant Judge holding that plaintiff had purchased the equity of redemption and so he was entitled to redeem and that the suit was not barred by estoppel. He however remanded the case for deciding the remaining issues. On remand the Joint Civil Judge held that Chimanrai, his widow Chhotiba and his daughter Taralaxmibai relinquished their right, title and interest in the suit property and, therefore, Taralaxmibai had no subsisting interest or title to transfer to the plaintiff or his predecessor in interest. He further held that the suit was barred by time and estoppel, and that defendant No. 1 had spent a substantial amount on repairs. On these findings the suit was dismissed once again. During the pendency of the appeal by the respondent, Vamanrao died in August, 1958. His heirs were, however, not brought on the record. The appeal was allowed as against defendant No. I but dismissed as abated against defendant No. 2 and it was held that the respondent was entitled to redeem the mortgaged property on payment of the mortgaged money as well as the expenditure incurred on repairs, and that the suit was neither barred by time nor by estoppel. On further appeal to the High Court a learned single Judge reversed the Judgment and decree of the lower appellate Court and dismissed the suit. The respondent plaintiff took up the matter in the letters patent appeal and the appellant defendant No. 1 also filed a cross objection. A Division Bench of the High Court allowed the appeal and decreed the suit reversing the finding of the learned Single Judge that the respondent plaintiff had no right to sue. The Division Bench, however, granted a certificate of fitness of appeal to the Supreme Court. Dismissing the appeal, the Court ^ HELD: 1. Under section 60 of the Transfer of Property Act, a co mortgagor cannot be permitted to redeem his own share of the mortgaged property only on payment of proportionate part of the amount remaining due. In other words, the integrity of the mortgage cannot be broken. [173 G] 2. It is, however, a well recognised principle that even if all the mortgagees are not before the court in a suit filed by the mortgagor for redemption of the property, but the mortgagor is prepared to pay the entire amount due at the foot of the mortgage to such mortgagees as are before the court and gives up his right under the mortgage as against those mortgagees who are not before the court, The court can pass a decree for redemption directing that the entire mortgage amount should be paid to the mortgagees who are actually before the court. [174 D F] Motilal Yadav vs Samal Bechar , approved. If one of the defendants in a suit dies and his heirs are not brought on record, the suit certainly would abate as against that party. The suit, however, G could not abate as against the other surviving defendants. A question may arise whether the suit is maintainable against the surviving defendants. In the instant case, the Suit abated as against defendant No. 2 in respect of the common latrine. But the suit may proceed against the surviving appellant defendant No. 1 if the respondent plaintiff is prepared to pay the entire mortgage consideration. [174 F G] 3:2. A person may be a necessary party in a suit but he may not be a necessary party in the appeal. [175 A] 168 4:1. To bring the case within the scope of estoppel as defined in section 115 of the Evidence Act: (i) there must be a representation by a person or his authorised agent to another in any form a declaration, act or omission; (ii) the representation must have been of the existence of a fact and not of promises de futuro or intention which might or might not be enforceable in contract: (iii) the representation must have been meant to be relied upon; (iv) there must have been belief on the part of the other party in its truth; (v) there must have been action on the faith of that declaration, act or omission, that is lo say, the declaration, act or omission must have actually caused another to act on the faith of it, and to alter his former position to his prejudice or detriment; (vi) the mis representation or conduct or omission must have been the proximate cause of leading the other party to act to his prejudice; (vii) the person claiming the benefit of an estoppel must show that he was not aware of the true state of things. If he was aware of the real state of affair or had means of knowledge, there can be no estoppel; (viii) only the person to whom representation was made or for whom it was designed can avail himself of it. A person is entitled to plead estoppel in his own individual character and not as a representative of his assignee. [176 C F] 4:2. The difference between an admission and estoppel is a marked one. Admissions being declarations against an interest are good evidence but they are not conclusive and a party is always at liberty to withdraw admissions by proving that they are either mistaken or untrue. But estoppel creates an absolute bar. Estoppel deals with questions of facts and not of rights. A man is not estopped from asserting a right which he had said he would not assert It is also a well known principle that there can be no estoppel against a statute. [175G, H 176 B] 4:3. In the instant case (i) the ingredients of section 115 of the Evidence Act have not been fulfilled. No representation was made to defendant No. 1, therefore, estoppel cannot be pleaded; (ii) the representation was not regarding a fact but regarding a right of which defendant No. I or his predecessor in interest had full knowledge or could have known if he had cared to know lt is difficult to say that defendant No. ] has moved his position on account of the representation made by The mortgagor or his heirs or assignees, [176 G H]

Appeals Nos. 300 302 of 1964. Appeals from the judgment and order dated March 16, 1962, of the Punjab High Court in Civil Writ Nos. 1194 to 1198 of 1961. WITH Writ Petition No. 126 of 1964. Under article 32 of the Constitution of India for enforcement of the fundamental rights. N.C. Chatterjee, V. section Sawhney, section section Khanduja, section K. Manchanda, B. R. Kohli and Ganpat Rai, for the appellants (in the appeals) the petitioner (in the Writ Petition). J. N. Kaushal, Advocate General for the State of Punjab, B. K. Khanna and R. N. Sachthey, for the respondent (in all the appeals and the writ petition). The Judgment of WANCHOO, HIDAYATULLAH, SHAH and SIKRI JJ. was delivered by WANCHOO, J. MUDHOLKAR J. gave an inde pendent judgment. Wanchoo, J. These three appeals are against the judgment of the Punjab High Court on certificates granted by that Court. The writ petition has been filed by Uma Shankar appellant in this Court and raises the same question as in the appeals, namely, whether section 14(e) of the Punjab Municipalities Act, No. III of 1911 (hereinafter referred to as the Act) is unconstitutional inasmuch as it violates article 14 of the Constitution. The appeals and the writ petition will therefore be dealt with together. We may add that we are not concerned in these appeals with section 14 (a) and (b) and that part of section 14 (e) which provides for recall at the request of the majority of the electors, and express no opinion in that behalf. The question arises in this way. The appellants were elected to the Municipal Committee, Batala in elections held on January 22, 1961. The result of the elections was notified in the Punjab Government Gazette on February 27, 1961. The new members took oath on March 16, 1961 and began functioning from that date. On August 4, 1961, notifications dated July 26, 1961 860 were issued in which it was stated that the Governor of Punjab for reasons of public interest was pleased to direct that the seats of the three appellants shall be vacated from the date of the publication of the notifications in the State Gazette and to direct further that under sub section (3) of section 16 of the Act, the three appellants shall be disqualified for election for a period of one year from the date specified. No notice was issued to the appellants to show cause why their seats be not vacated and no hearing was given to them before the action in question was taken by the Governor of Punjab. The appellants ' case was that after the notifications vacating their seats and disqualifying them had been issued, they came to know that these notifications had been issued on the basis of a resolution passed by the out going municipal committee on March 13, 1961 to the effect that the appellants had taken part in a demonstration on March 10, 1961 and had broken some glass panes of the municipal building. The appellants ' further case was that the outgoing municipal committee had been dominated by members belonging to the Congress Party; but these members had mostly been defeated in the fresh elections held on January 22, 1961 and it was in consequence that the resolution was passed mala fide by these persons in order to harm the appellants. A number of grounds were taken in the petitions filed before the High Court challenging the order of the Governor of Punjab. Now however we are only concerned with one ground, namely, that the provision contained in section 14(e) was discriminatory and hit by article 14 of the Constitution. It appears however that this ground was not urged before the High Court and that is why the writ petition has been filed in this Court specifically raising this point again, and thus in the present appeals and the writ petition we are only concerned with the question whether section 14 (e) of the Act is bad as it violates article 14 of the Constitution. We are of opinion that the appeals must succeed on this point. it is necessary in this connection to refer to section 14(e), section 16 and section 24(3) of the Act. The relevant part of section 14(e) with which we are concerned provides that notwithstanding anything in the foregoing sections of Chapter III, which deals with constitution of committees, appointment and election of members, term of office of members of municipal committees, the State Government may, at any time, for any reason which it may deem to affect the public interest, by notification, direct that the seat, of any specified member, whether elected or appointed, shall be vacated on a given date, and in such case, such seat shall be 861 vacated accordingly, notwithstanding anything in the Act or in the rules made thereunder. Further sub section (3) of section 16 provides that "a person whose seat has been vacated under the provisions of section 14 (e) may be disqualified for election for a period not exceeding five years. " There is no provision for giving notice to a member against whom action is taken under section 14(e) and he is not 'entitled to any hearing before action is taken against him. Further action can be taken against a member for any reason which the State Government may deem to affect the public interest. Section 16 is another provision which gives power to the State Government to remove any member of a municipal com mittee. This power is exercised for reasons given in cl. (a) to cl. (g) of section 16 (1). The proviso to section 16 (1) lays down that "before the State Government notifies the removal of a member under this section, the reasons for his proposed removal shall be communicated to the member concerned, and he shall be given an opportunity of tendering an explanation in writing. " The proviso therefore requires a hearing before the State Government takes action under section 16 (1). Sub section (2) of section 16 provides for disqualification and says inter alia that any person removed under section 16 (1) shall be disqualified for election for a period not exceeding five years. There is a slight difference here inasmuch as under this provision there must be disqualification for some period not exceeding five years, though if a members seat is vacated under section 14 (e) the disqualification is entirely in the discretion of the State Government and is not imperative. That however has no effect on the question whether the relevant part of section 14 (e) is unconstitutional as it is hit by article 14. Reference may now be made to section 24 on which reliance has been placed on behalf of the State. Section 24 (1) inter alia prescribes the oath before a member can begin to function. Section 24(2) lays down inter alia that if a person omits or refuses to take the oath as provided in sub section (1) within three months of the date of the notification of his election or within such further period as the State Government may consider reasonable, his election becomes invalid. Sub section (3) of s.24 provides inter alia that where the election becomes invalid under sub section (2), a fresh election shall be held. The Proviso to sub section (3) on which stress has been laid on behalf of the State lays down inter alia that the State Government may refuse to notify the election as member of any person who could be 862 removed from office by the State Government under any of the provisions of section 16 or of any person whom the State Government for any reason which it may deem to affect the public interests may consider to be unfitted to be a member of the committee, and upon such refusal the election of such person shall be void. The argument on behalf of the appellants is that section 16 which gives power to the State Government to remove a member pro vides that before that power can be exercised, reasons for the removal have to be communicated to the member concerned and he is to be given an opportunity of tendering his explanation in writing. So it is urged that before action can be taken to remove a member under section 16, the proviso thereof requires that the member concerned is to be given a hearing as provided therein. The argument proceeds that the relevant part of section 14(e) also provides in effect for the removal of a member though it actually says that the seat shall be vacated and that this removal has to be for any reason which in the opinion of the State Government affects the public interest. It is urged that when section 16 (1) provides for removal for reasons given in cls. (a) to (g), that removal also is in the public interest. Therefore there are two provisions in the Act for removal of a member in the public interest, one contained in section 14(e) and the other in section 16. Where the State Government takes action under section 16(1), it has to give a hearing in terms of the proviso thereof to the member concerned, but if for exactly the same reason the State Government chooses to take action under section 14(e) it need not give any opportunity to the member to show cause why he should not be removed. Further it is submitted that though section 14 (e) may be said to be wider inasmuch as cls. (a) to (g) may in a conceivable case not completely cover all that may be included in the term "public interests", the removal for reasons given in cls. (a) to (g) in section 16(1) is inpublic interest and therefore what is contained in section 16(1) is certainly all covered by section 14(e). In consequence there are two provisions in the Act for removing a member, one contained in section 16 where the State Government cannot remove the member without giving him a hearing in the manner provided in the proviso, and the other in section 14(e) where no hearing is to be given and the member is not even called upon to show cause. Finally it is urged that it depends entirely on the State Government to use its powers either under section 14(e) or under section 16(1), where the two overlap and therefore there is clear discrimination, as the provision in section 14(e) is more drastic and does not even provide for hearing the member concerned. 863 We are of opinion that these contentions on behalf of the appellants are correct. There is no doubt that the removal contemplated in section 16(1) for reasons in cls. (a) to (g) thereof, as their content shows, is in the public interest and the proviso to section 16(1) provides for a hearing in the manner indicated therein. On the other hand section 14(e) which also provides for removal in the public interest makes no provision for hearing the member to be removed. Even if section 14 (e) is wider than section 16(1), there is no doubt that all the reasons given in cls. (a) to (g) are in the public interest and therefore even if the State Government intends to remove a person for any reasons given in cls. (a) to (g) it can take action under section 14(e) and thus circumvent 'the provisions contained in the proviso to section 16(1) for hearing. Thus there is no doubt that section 14(e) which entirely covers section 16(1) is more drastic than section 16(1) and unlike section 16(1) makes no provision for even calling upon the member concerned to explain. In this view of the matter it is clear that for the same reasons the State Government may take action under section 16(1) in which case it will have to give notice to the member concerned and take his explanation as provided in the proviso to section 16(1); on the other hand it may choose to take action under section 14(e) in which case it need not give any notice to the member and ask for an explanation from him. This is obviously discriminatory and therefore this part of section 14(e) must be struck down as it is hit by article 14 of the Constitution. Reliance in this connection is placed on behalf of the State on the proviso to section 24(3). Section 24(1) to (3) inter alia provides for what happens where a member omits or refuses to take oath as provided therein. Then comes the proviso to section 24 (3), which gives power to the State Government to refuse to notify the election of a person elected on any of the grounds mentioned in section 16(1). It is not necessary for us to decide whether the State Government can take action under this proviso read with section 16(1) without giving notice as provided in the proviso to section 16(1). That question may have to be decided in a case where the State Government takes action under this part of the proviso to section 24(3) without giving notice to the person concerned under the proviso to section 16(1) and without giving him any opportunity of hearing as provided therein. The proviso to section 24(3) further provides that the State Government may refuse to notify the name of any person elected if in its opinion he is unfit to be a member of a municipal committee on ground of public interest. It is urged that there is no provision in this con 864 nection for notice and. hearing of the person elected. That seems to be so, but again the question may arise in a proper case whether this provision would be constitutional. We see no connection between the proviso to section 24 (3) and the provision contained in section 14(e). The proviso to section 24(3) is complete in itself and deals with a situation where the State Government refuses to notify the election of a person who has been elected. Section 14(e) on the other hand provides for vacation of the seat of a member after he has taken the oath of office. Therefore the constitutionality or otherwise of section 14(e) will depend upon its contrast with section 16 (1) which also provides for removal of a member. As we have already indicated on comparing the two provisions both of which provide for removal of a member in public interest we find that the provision contained in section 14(e) as compared to the provision in section 16(1) is more drastic and arbitrary and denies the member concerned an opportunity being heard as provided in section 16(1) by the proviso thereof. Consequently we are of opinion that this part of section 14(e) is discriminatory and must be struck down as unconstitutional under article 14 of the Constitution. In this connection our attention is drawn to Shri Radeshyam Khare vs The State of Madhya Pradesh(1) on which reliance is placed on behalf of the State. In that case this Court was concerned with sections 53A and 57 of the C.P. and Berar Municipalities Act which to a certain extent were held to overlap. The argument under article 14 did not really arise in that case because the two provisions dealt with two different situations. Under section 57 the State Government had the power to dissolve a committee after giving it a reasonable opportunity to furnish its explanation. Under section 53A the committee was not dissolved, but the State Government had the power to appoint an executive officer and confer upon him such powers of the committee, its president, vice president or secretary as it thought fit, though the reason for taking action under section 53A (1) apparently overlapped the reasons for dissolving a committee under section 57(1). Because of this difference in the scope of the two provisions contained in sections 53A and 57, there could be no question of application of article 14 to that case. In the present case, however, section 16(1) which deals with removal of a member for reasons given in cls. (a) to (g) is completely covered by section 14(e) which deals with vacation of a seat (1) 865 in the public interest, and it is open to the State Government either to proceed under one provision or the other for exactly the same reasons. One of the provisions provides for notice and hearing while the other does not and is therefore more drastic and arbitrary. In these circumstances there is in our opinion a clear discrimination in view of article 14 and the State Government cannot take advantage of the decision in Shri Radeshyam Khare 's case(1). We therefore allow the appeals as well as the writ petition and declaring section 14(e) insofar as it gives power to the State Government to vacate a seat on the ground of public interest to be unconstitutional, set aside the notifications vacating the seats of the appellants. The direction as to disqualification therefore also fails. The appellants will get their costs from the State throughout. One set of hearing fee. No costs in the writ petition. Mudholkar, J. I have read the judgment prepared by my brother Wanchoo and while I agree with him that the appeals must be allowed I would prefer to give my own reasons for that conclusion. The appellants in these three appeals were elected to the Municipal Committee, Batala in the elections held on January 22, 1961. On August 4, 1961, that is, after these persons started functioning as members of the Municipal Committee the Government of Punjab issued a notification under section 14, cl. (e) of the Punjab Municipalities Act, 1911 in which it was stated that the Governor of Punjab for reasons of public interest was pleased to direct that the seats of these appellants shall be vacated from the date of publication of the notification and further stated that they would be disqualified for election for a period of one year from the date specified. This notification is challenged by the appellants on the ground that the provisions contained in section 14(e) of the Act under which it was issued being discriminatory were rendered void by article 14 of the Constitution. Section 14 of the Act as it now stands runs thus "Notwithstanding anything in the foregoing sections of this chapter, the State Government may at any time for any reason which it may deem to affect the public interests, or at the request of a majority of the electors, by notification, direct (1) 866 (a) that the number of seats on any committee shall be increased or reduced; (b) that any places on a committee which are required to be filled by election shall be filled by appointment, if a sufficient number of members has not been elected; (e) that the seat, of any specified member, whether elected or appointed, shall be vacated on a given date, and in such case, such seat shall be vacated accordingly, notwithstanding anything in this Act or in the rules made thereunder. " It would be clear from a perusal of the above provision that powers conferred by section 14 can be exercised by the State Government (i) for any reason which it may deem fit to affect the public interest or (ii) at the request of the majority of the electors. We are not concerned in this case with the second circumstance and, therefore, it is unnecessary to consider whether that part of section 14 which enables the State Government to take action at the request of a majority of electors is valid or not. Similarly we are not concerned in these appeals with the powers exercisable by the State Government under cls. (a) and (b). AR that arises for consideration before us is whether the conferral of power upon the State Government to require that the seat of any specified member of the Committee shall be vacated "for any reason which it may deem to affect the public interest" is valid. The expression "public interest" is of wide import and what would be a matter which is in the public interest would necessarily depend upon the time and place and circumstances with reference to which the consideration of the question arises. But it is not a vague or indefinite ground, though the Act does not define what matters would be regarded as being in the public interest. It would seem that all grounds set out in section 16, which confers upon the State Government the power to remove any member of a Committee and sets out a number of grounds upon which this could be done, would be in the public interest. Section 14, however, apart from the fact that the power it confers upon the State Government is not limited to matters set, out under section 16, confers upon the Government the power to determine not merely what is in the public interest but also what "for any reason which it may deem to affect the public interest. " This would suggest that the power so 867 conferred would extend to matters which may not be in the public interest. For, that would be the effect of introducing the fiction created by the words "for any reason which it may deem". There is no guidance in the Act for determining what matters, though not in public interest, may yet be capable of being deemed to be in the public interest by the State Government. In the circumstances it must be held that the power which conferred upon the State Government being unguided is unconstitutional. For this reason I hold that section 14 in so far as it confers power on the State Government to require a seat of a member of a committee to be vacated for any reason which it may deem to affect public interest as violative of article 14 of the Constitution and, therefore, unconstitutional. In the result each of the appeals is allowed with costs and I accordingly do so. Appeals allowed.

The appellants, who had been elected members of the Municipal Committee, Batala, challenged the Notification issued under section 14(e) of the Punjab Municipalities Act (III of 1911) directing their removal and disqualifying them from election for a period of one year. It was contended on their behalf that there were two provisions in the Act, i.e. section 14(e) and section 16(1) clauses (a) to (g) under which a member could be removed in the public interest; and whereas action could only be taken under section 16(1) after notice and an opportunity for a hearing to the member concerned there was no such requirement in the case of section 14(e). This sec tion was therefore hit by Article 14 and consequently the Notifications were invalid. HELD : (per Wanchoo, Hidayatullah, Shah and Sikri, JJ.) If the State Government intended to remove a person for any of the reasons given under section 16(1) cases (a) to (g) it could take action under section 14(e) and thus circumvent the provision in section 16(1) for a hearing. The relevant part of section 14(e) entirely covered section 16(1) but was more drastic. It was therefore obviously discriminatory and violative of article 14 of the Constitution. [863 C E] Shri Radeshayam Khare vs The State of Madhya Pradesh , distinguished. No assistance could be derived by the respondent State from the fact that under the proviso to section 24(3), the State Government had power to refuse to notify the election of a person elected on any of the grounds mentioned in section 16(1) and there was no provision in this connection for notice and hearing of the person elected. Apart from the question of the constitutionality of this provision, there was no connection between the proviso to section 24(3) and the provision contained in section 14(e). The proviso to section 24(3) was complete in itself and dealt with a situation where the State Government refused to notify the election of a person who had been elected. Section 14(e) on the other hand provided for the vacation of the seat of a member after he had taken the oath of office. Therefore the constitutionality or otherwise of section 14(e) would depend upon its contrast with section 16(1) which also provided for the removal of a member. [864 A C Per Mudholkar, J. The power conferred by section 14 upon the State Government to require that the seat of any member shall be vacated "for any reason which it may deem to affect the public interest" is unconstitutional. The expression 'public interest ' is of wide import and what would 859 be a matter which is in the public interest would necessarily depend upon the time and place and circumstances with reference to which the consideration of the question arises. But it is not a vague or indefinite ground. There is no guidance in the Act for determining what matters. though not in public interest may yet be capable of being deemed to affect the public interest. [866 E G; 867 A C]

Criminal Appeal E No. 289 of 1978 were Cri. Appeal No. 403 of 1978. From the Judgment and Order dated 10.5.1978 of the Allahabad High Court in Criminal Appeal No. 213 of 1973. S.K. Dhingra and K. B. Rohtagi of the Appellant inn Crl. A. No. 289 of 1978. R.K. Jain, Rakesh Khanna and R.P. Singh for the Appellant in Crl. A. No. 403 of 1978. Prithvi Raj Singh and Dalveer Bhandari for the Respondent. PG NO 247 The Judgment of the Court was delivered by JAGANNATHh SHETTY, J. This appeal by Special leave is from a Judgment of the Allahabad High Court dated 10 May 1978 dismissing Criminal Appeal No. 1 13 of 1973. The appellants were convicted and sentenced under Section 302,364 and 210 IPC by the trial Judge. On appeal, the High Court maintained the said conviction and sentence of appellant No. (1), but reduced the same of appellant No. (2) to one under Section 201. The prosecution case in brief is as follows: lslam, the deceased, is the younger brother of Shabbir (PW 1). They were not living together. The former used to live with his mother. Islam had his own share of lands measuring 16 Bighas. He was separately cultivating the same. The appellants were once his close associates. They were of bad character. So mother and brother advised lslam to part company with them. So lslam did and went on minding his own work. He was unmarried. The appellants had an evil eye on the property of Islam. They got executed a fraudulent sale deed (exhibit Ka. 12). The deed Was dated 15 February. One Ahsan who has been examined as PW 1 ' has impersonated Islam before the Sub Registrar. They deed purports to transfer that agricultural land of Islam in favour of the wife of appellant No. ( 1). It is said that the appellants in order to eliminate the possibility of this fraud being detected. murdered Islam. Shabbir suspecting foul play of the appellants lodged a report on 21 April, 1971. Zakir Ali appellant No, (1) was first arrested. He pointed out a dead body on IX July, 1971. It wits recovered from a place deeply burried in a water logged pond. However, it was said to be identified as that of islam. The identification was based on a shirt (exhibit 1) and a tahmad (exhibit 2.). Upon the post mortem. the Doctor was unable to give his opinion regarding the cause of death or its duration. The evidence against appellants is purely circumstantial: (i) motive for the crime (ii) the evidence as to last seen (iii) recovery of the body at the instance of Appellant No. (2), and (iv) identification of the clothes with which the dead body was found. PG NO 248 We will first examine whether the motive which is of course relevant in this case has been satisfactorily established. exhibit Ka. 12 is the sale deed by which the properties belonging to Islam were said to have been sold to the wife of Sardar Hussain, appellant No. (1). Usman Ali (PW 11), who is the scribe of the sale deed, has deposed to its contents. He has stated that one Sarfaraz (PW 20) along with the accused came to him with a request to draft the sale deed. They gave the particulars. He has written the sale deed of which the executant was Islam. In the Court, he has identified Ahsan (PW 12) as the person who impersonated Islam and put his thumb impression. He has also identified Zakir Ali appellant No. (2) who affixed his thumb impression to the sale deed as a witness. But when Sarfaraz Hussain was examined as PW 20 in the Court. nothing was elicited about the sale deed or the persons who accompanied him to PW 1 1. No question was put to him as to the contents of sale deed exhibit Ka. 12 or to the identification of persons who affixed the thumb impressions thereon. PW 12 has, no doubt deposed that he had put his thumb impression on exhibit Ka. But the prosecution has not sent the thumb impression of the executant of exhibit Ka. 12 with the admitted thumb impression of PW 12 for expert opinion. There is, therefore, no satisfactory evidence that the sale deed exhibit Ka. 12 was executed by somebody impersonating Islam. As to identification of the dead body, the evidence on record is equally unsatisfactory. Shabbir (PW 1) has deposed that about 14 months before, Islam was taken by Sardar Hussain and Yasin. Yasin is the father in law of Sardar Hussain. He has also stated when Islam went with them, he was wearing a Shirt of green check and a black striped tahmad. Islam was taken on the pretext that they would get him married. He has further stated that Mian Jan (PW 1) and,Sadiq (PW 3) and one other person called Majid had seen Islam going with the Sardar Hussain and Yasin. But Main Jan (PW 2) and Sadiq (PW 3) did not speak anything about the dress which Islam was wearing when he was taken by Sardar Hussain and Yasin. Secondly, how could Shabbir see all that he had stated. Islam and Shabbir were living separately. Islam was not taken after a meeting with Shabbir. It is not the case of Shabbir that Islam came to him and told him about the purpose of his going with the accused. If the purpose was to get Islam married. why did he allow Islam to go with the accused. Islam had by then parted company with them at the instance of Shabhir and mother, because they were of bad character. Is it understandable that such bad characters should arrange the marriage without the assistance or approval of Shabbir and mother? It is difficult to believe Shabbir in the circumstances. PG NO 249 Islam was said to have disappeared on 12 Aprial, 1971. PW 1 lodged the report on 21 April, 1971. The dead body was recovered on 18 July, 1971. The post mortem was done on 20 July, 1971. It was more than three months from the date of alleged disapearance of Islam. Dr. D.P. Manchanda (CW 1) who conducted the post mortem was not able to give the cause of death. He has stated that it was a skeleton of a young adult male. According to him, it would be difficult to tell correctly as to when the death of the deceased had taken place. There was no flesh left in the body. The eye balls were missing. The Vertabrae was not found attached to the skull. With this condition of the skeleton the Doctor could not have given any better opinion. Gulab Singh (PW 7) is a Panch witness for the recovery of the dead body. He has deposed that when the body was removed, the tahmad and shirt were intact and they were taken out by Sub Inspector. Man Singh (PW 8) is another Panch witness. He has also stated that the shirt and tahmad were removed by the Sub Inspector. washed, packed and sealed. The Panch witnesses could not identify the shirt and tahmad as belonging to the deceased. That clothes are said to have been identified by Shabbir and his wife Smt. Bhoori (PW 13) . The identification was conducted by Ramakant Dube (PW 9). He had mixed up the said clothes with five like clothes resembling with each other. He has stated that Shabbir and Smt. Bhoori correctly identified them and did not commit mistake. But if one carefully peruses his evidence, the identification was nothing but farce. The dead body was not recovered in the presence of Shabbir. He was called to tbe Court of the Magistrate only for the identification of the clothes and the body. He has stated that the dead body by appearance looked like that of his brother. We have earlier seen that the Sub Inspector had removed the clothes, washed dried and packed them separately with the seal of the panchas. Shabbir could not have seen the dead body with the clothes. The shirt (exhibit 1) and tahmad (exhibit 2) were no doubt mixed up with other similar clothes for the purpose of identification as deposed by PW 9. But the witness identified exhibit 1 because there was paper chit pasted on it. He identified exhibit 2 because it had a knot. That is why we said earlier that the identification was a farce. We are surprised that the Courts below should rely upon this kind of evidence. The circumstantial evidence in the case thus falls short of the required standard on all material particulars. We are, therefore, unable to sustain the conviction of the appellants. PG NO 250 In the result, these appeals are allowed. The conviction and sentence passed against the appellants are set aside. They are acquitted of all the charges. They be set at liberty if they are in custody, and if they are not required in any other case. N.P.V. Appeals allowed.

The prosecution case was: the appellants, who were of bad character, had an evil eye on the lands belonging to the younger brother of PW 1, in furtherance of which they got a fraudulent sale deed executed and murdered him in order to eliminate the possibility of the fraud being detected. Suspecting foul play of the appellants, PW 1 lodged an FIR. At the instance of appellant No. 2, who was first arrested, a dead body was recovered from a water logged pond and was identified to be that of PW 1 's younger brother, on the basis of a shirt and a tahmad. The doctor; who conducted the post mortem. could not give the cause of death or its duration. The appellants were convicted and sentenced under sections 302, 364 and 210 IPC by the trial Judge. On appeal, the High Court maintained the conviction and sentence of appellant No. I but reduced the same of appellant No. 2 to one under section 201. Allowing the appeals, HELD: The evidence against the appellants is purely circumstantial. But the circumstantial evidence falls short of the required standard on all material particulars. The conviction of the appellants cannot. therefore, be sustained. [247H, 2490A] There is no satisfactory evidence that the sale deed in question was executed by somebody impersonating the deceased. Though PW 12, who was identified by PW 11, scribe of the sale deed, as the person who impersonated the deceased, deposed that he had put his thumb impression an the sale deed, the thumb impression of the executant and the admitted thumb impression of pW 12 were not sent for expert opinion. Nothing could be elicited from, nor any question was put to PW 20 to corroborate the version of PW II, as to PG NO 245 PG NO 246 the contents of the sale deed or the identity of the persons who accompanied him to PW 11 or those who put the thumb impression on the sale deed. [248B D] The evidence on record is equally unsatisfactory as to identification of the dead body. Post mortem was done more than three months from the date of alleged disappearance of the deceased. The doctor who conducted the post mortem stated that it was skeleton of a young adult male and was unable to give the cause of death or when the death took place owing to the condition of the body. The two panch witnesses for the recovery of the dead body could not identity the clothes recovered from the dead body as belonging to the deceased. Though clothes were said to have been identified by PW 1 and his wife, a perusal of PW 1 's evidence would indicate that the identification was nothing but farce. The body was not recovered at his instance. He could not have seen the dead body with the clothes, as these were removed, washed, dried and packed separately with the seal of the panchas. He was called to the Court only for the identification of the clothes and body. lie stated that the dead body by appearance looked like that of his brother. He could identify the clothes by a chit and a knot on them. The witnesses, who were stated to have seen the deceased going with the appellant No. 1 and his father in law did not speak anything about the dress which the deceased was wearing at that time. PVI: Is evidence could not be believed since he and the deceased were living separately and he could not have seen all that he had stated in evidence. [24E, G H,249A B, D H] Conviction and sentence of appellants set aside. They are acquitted of all charges. [250A]

N: Criminal Appeal No. 144 of 1992. From the Judgement and Order dated 27.9.1991 of the Karnataka High Court in W.P. No. 113 of 1991. WITH Writ Petition (Crl.) No. 1394 of 1991. C.S. Vaidyanathan and P.K. Manohar for the Appellant. K.T.S. Tulsi, Addl. Solicitor General, P. Parmeswaran, A.K. Srivastava, M. Veerappa and Kh. Nobin Singh (For the State of Karnataka) for the Respondents. The Judgment of the Court was delivered by section RATANAVEL PANDIAN, J. Leave granted. The appellant/petitioner K.P.M. Basheer by the above appeal is challenging the correctness and legality of the order dated 27th September 1991 made by the High Court of Karnataka dismissing the Writ Petition filed by the appellant challenging the legality and validity of the order of detention dated 7.1.1991 passed by the State of Karnataka. The first respondent in the appeal, namely, the State of Karnataka in exercise of the powers conferred by the Section 3(1) of the (hereinafter 1077 referred to as `the Act ') passed the impugned detention order on 7th January 1991 with a view to preventing him from engaging in keeping and transporting smuggled goods falling within the mischief of Section 3(1)(iii) of the Act. The appellant was directed to be detained and kept in the custody of the central prison, Banglore. The brief facts of the case which led to the passing of the impugned order can be summarised as follows: On 12.11.1990 the Superintendent of Central Excise on information interrogated the appellant at the Balgaum bus stand on his arrival from Bombay in the presence of some panchas and recorved two gold pellets with foreign markings each weighing ten tolas, wrapped in a paper packet from his front side right watch pocket of his pant. The appellant was not having any valid permit and also was not able to give any satisfactory explanation for possessing the gold pellets. Therefore, the Superintendent entertaining a reasonable belief that they were smuggled gold pellets recorded the statement of the appellant. The State Government on the information passed on by the sponsoring authority passed the impugned order on 7.1.1991 on being subjectively satisfied of the necessity of passing the impugned order on the materials placed before it. The detention order was served on the detenu only on 28.6.1991 from which date onwards he has been detained. Challenging the detention order, the petitioner filed a Writ Petition No. 113/91 before the High Court of Karnataka and raised several contentions; those being (1) the order of detention is based on a solitary incident; (2) there has been an undue and prolonged delay in serving the order on the detenu; and (3) the materials placed before the detaining authority were not sufficient for drawing the requisite satisfaction for passing the impugned order. The High Court rejected all those contentions and dismissed the Writ Petition. Hence this appeal. Before this Court the petitioner has filed a separate Writ Petition under Article 32 of the Constitution of India raising certain additional grounds. Those grounds are: (1) The detenu made a request to the detaining authority to forward a copy of his representation to the Central Government and that the detaining authority has not forwarded the same to the Central Government as requested by him. Even assuming that it has been forwarded, his represe tation has not been disposed of in time and as such there is violation of Article 22(5) of the Constitution of India. 1078 (2) The normal criminal process which would be adequate to take care of the possession of the gold has not been followed; and (3) The first respondent in the Writ Petition (Union of India) has failed in its duty to inform the petitioner regarding the Government instruction issued to the sponsoring agencies not to make an order of detention in cases where the value of the smuggled goods is less than Rs.1 lakh. In the Writ Petition both the State Government as well as the Central Government have filed their counter affidavits refuting all the additional grounds. Before scrutinising the additional grounds raised in the Writ Petition, we shall now examine the contentions raised in the appeal and find out whether the order of the High Court warrants interference. Mr. C.S. Vaidyanathan, the learned counsel appearing on behalf of the appellant contends that the delay of more than five months in executing the order of detention is not only an inordinate and unreasonable one but also stands un explained and on that ground the High Court ought to have set aside the order of detention. According to him, the High Court has not gone deep into that question but summarily disposed of the same holding "The explanation offered by the 1st respondent, in para 9 of the statement of objection is quite acceptable. " Of course, this contention has not been specifically taken in the Memorandum of Appeal, but there can be no bar to advance a legal argument in a case of this nature and especially when such a contention has been raised before the High Court. We want through the explanation given in para 9 of the counter affidavit filed on behalf of the first respondent by the then commissioner and Secretary to Government, Home Department. It is not denied that the detention order was executed after a period of 5 months and 11 days. What the first respondent states is that various efforts were taken to trace the detenu at Tellicherry at the address given in the grounds of detention as well as in the Bombay address, but he could not be secured. Further it has been stated that though the arresting officers attempted to secure him at the Court of Chief Judicial Magistrate at Belgaum on 6.3.91, 28.3.91 and 14.5.91 on which dates the criminal case aS against him stood posted before that court, the officers could not do so as the appellant did not appear before the court for hearing. Further it is mentioned that though COFEPOSA Section in the office of the Collec 1079 torate of Customs requested the State Government on 19.4.91 to initiate action under Section 7(1)(b) of the Act it was not done so because the seizing unit was asked to make one more attempt to trace out and detain the appellant. This explanation is not a satisfactory and reasonable one for the following reasons : (1) No sufficient cause is shown for not taking any action under Section 7 of the Act. (2) It appears from the paragraph 9 of the counter that the officers came to know of the correct address of the appellant at Bombay, but they could not trace him. It may be pointed out that the Bombay address at which place the appellant detenu was attempted to be secured is not given in the counter. Had it been given, the Court would have been in a position to verify the averments made in the grounds of detention stating that the address at Bombay given by the appellant was a fictitious one. In paragraph 17 of the Writ Petition filed before the High Court, the appellant has asserted that he appeared before the Asstt. Collector of Customs, Marine Lines, Bombay on 6.2.91 and 20.2.91 but no attempt was made to arrest and detain him. This specific averment is not all denied in the counter. This indicates that the arresting officers did not take any real and genuine effort to secure and detain the appellant. The explanation now offered stating that the appellant was fugitive, eluding the dragnet of the detention order cannot be accepted, because during the alleged period of search he has appeared before the Assistant Collector of Customs, Bombay on two occasions during Feb. 1991, that is after passing of the detention order. All the above points show that no serious and sincere effort appears to have been taken by the arresting officers and that there was only exchange of correspondence between the Department and the arresting officers. It is incomprehensible as to why no effort has been made to secure the appellant/detenu during the two days, namely, on 6th and 20th February when he appeared before the Assistant Collector of Customs. No supporting affidavits or documents are filed to substantiate the averments made in the counter. Incidentally, it may be mentioned that though the two gold pellets (the contrabans) were seized from the appellant on 1080 12.11.90 the authorities concerned passed these orders only on 7.1.1991, i.e. nearly after two months. Under these circumstances, we are of the view that the order of detention cannot be sustained since the `live and proximate link ' between the grounds of detention and the purpose of detention is snapped on account of the undue and unreasonable delay in securing the appellant/detenu and detaining him. As we have now come to the conclusion that the order of detention is liable to be set aside on this ground alone we are not dealing with other contentions raised in the Memorandum of Appeal as well as in the Writ Petition. Hence for the reasons stated above we allow the appeal, set aside the order of the High Court and quash the impugned detention order and direct the detenu to be set at liberty forthwith. In view of the order in this present appeal, no order is necessary in the Writ Petition. R.P. Appeal allowed.

The appellant, on 12.11.1990, was found carrying two gold pellets with foreign markings each weighing ten tolas, without any valid permit. The order of detention under S.3(1) of the conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974 was passed on 7.1.1991. The detention order was served on him on 28.6.1991. The Writ Petition challenging the detention order, inter alia, on the ground of undue and reasonable delay in its execution was dismissed by the High Court. The detenu filed the appeal by special leave against the High Court 's order as also the writ petition under Article 32 of the Constitution before this Court. Allowing the appeal and disposing of the writ petition, this Court, HELD: 1.1 The order of detention cannot be sustained since the `live and proximate link ' between the ground of detention and the purpose of detention is snapped on account of the undue and unreasonable delay in securing the appellant/detenu and detaining him. The order of detention is liable to be set aside on this ground alone. [p. 1080A B] 1.2 Though the two gold pellets (the contrabands) were seized from the appellant on 12.11.1990, the order of detention was passed on 7.1.1991, and the detention order was executed after a period of 5 months and 11 days. {pp. 1078F; 1079G H; 1080A] 1076 2.1 No sufficient cause is shown for not taking any action under s.7 of the COFEPOSA Act. The explanation that though COFEPOSA section in the office of the Collectorate of Customs requested the State Government on 19.4.1991 to initiate action under s.7(1) (b) of the Act it was not done so because the seizing unit was asked to make one more attempt to trace out the appellant is not satisfactory and reasonable one. [pp. 1078G H; 1079A B] 2.2 No serious and sincere effort was taken by the arresting officers: There was only exchange of correspondence between the Department and the arresting officers. It is incomprehensible as to why no effort was made to secure the appellant/detenu during the two days, namely, on 6th and 20th Feb.91, when he appeared before the Assistant Collector of Customs. 1079F G]

Civil Appeal No. 12 of 1955. Appeal from the judgment and decree dated September 10, 1953, of the Calcutta High Court (Original Side) in I. T. Reference No. 8 of 1947. C. K. Daphtary, Solicitor General for India, G. N. Joshi and B. H. Dhebar, for the appellant. K. P. Khaitan, Rameshwar Nath, section N. Andley and J. B. Dadachanji, for the respondents. April 24. The Judgment of the Court was delivered by VENKATARAMA AIYAR J. This appeal raises a question of importance as to whether amounts shown by an insurance company as reserves for unexpired risks on pending policies are liable to be deducted under r. 2 of Sch. II to the Excess Profits Tax Act (XV of 1940) hereinafter referred to as the Act. The respondent is a company carrying on life, fire, marine and general insurance business, and the present dispute relates to the assessment of excess profits tax on its income from business other than life insurance for the chargeable accounting periods ending December 31, 1940, and December 31, 1941. To appreciate the contentions raised, it is necessary to state that the policies of insurance with which these proceedings are concerned, are, unlike life insurance policies, issued in general for short periods or ad hoc in relation to a specified voyage or event. To take the most important of them, fire insurance policies, they are issued normally for one year, and the whole of the premium due thereon is received when the policies are actually issued. In any given year, while the premiums due on the policies would have been received in full, the risks covered by them would have run only in part and a, part will be outstanding for the next year. The companies have to prepare annual statements of profit and loss for the purpose of ascertaining their profits and distributing their dividends. They have also to prepare revenue statements to be sent to the authorities under the provisions of the . The method 1004 adopted by the respondent in preparing the above statements has been that while the premiums received are all of them included in the assets of the year, a certain proportion ' thereof, usually 40 per cent., is treated as the reserve for unexpired risks, and that is shown as a liability. To take a concrete example, if in the year 1939 the respondent issued annual fire insurance policies and received a sum of Rs. 1,00,000 as premiums thereof, the whole of it would be shown as income in the statement for the year 1939, and a sum of Rs. 40,000 will be shown as a reserve for unexpired risks. In the profit and loss statement, the former will be shown as part of the assets and the latter as liability, and it is only the balance that will be included in the net profits. In 1940, the policies issued in 1939 would all of them have expired, and the sum of Rs. 40,000 shown as reserve in 1939 would be treated as part of the assets in 1940. There will, of course, be fresh policies issued in 1940, and in the statement of that year, the premiums received on those policies would be shown as part of the income, and 40 per cent. thereof would be set apart as reserve for unexpired risks. This ' method of account keeping is what is 'usually adopted by insurance companies, and is in accordance with well recognised and approved practice of accountancy. Now, the question is whether in the illustration given above, the sum of Rs. 40,000 which is set apart in 1939 as reserve for unexpired risks is liable to be deducted under r. 2 of Sch. II to the Act from out of the capital employed in business for that year, which would, of course, include the whole of Rs. 1,00,000 received as premiums. The contention of the appellant is that if all the premiums received are to be treated as capital under r. 1, Sch. 11, then the sums which represent the outstanding liability in respect of the unexpired period of the policies in the illustration given above, Rs. 40,000 should be deducted as a liability under r. 2 of Sch. The respondent, while claiming that all the premiums received mu ,it be treated as capital, maintains that the provision for unexpired risks is a contingent liability, and that that 1005 is not within r. 2 of Sch. The Tribunal decided the question against the respondent, but on reference under section 66(1) of the Indian Income tax Act read with section 21 of the Act, the High Court of Calcutta answered the question adversely to the appellant, but granted a certificate under section 66 A, and that is how the appeal comes before us. The relevant statutory provisions may now be noticed. Under section 4 of the Act, the charge is on the " amount by which the profits during any chargeable accounting period exceed the standard profits ". I Standard profits ' are defined in section 6, sub section (1), and the respondent having exercised his option under the second proviso thereto, they have to be calculated "by applying the statutory percentage to the average amount of capital employed in the business during such chargeable accounting period Schedule II enacts rules for the determination of the average capital employed. Under r. 1(c), the capital employed will include the value of all assets "I when they became assets of the business ". Rule 2(1) enacts that any borrowed money and debts shall be deducted from out of the value of the assets. There is a further provision in r. 2(1), which is what is material for the purposes of the present appeal, and it runs as follows: " The debts to be deducted under this sub rule shall include any such sums in respect of accruing liabilities as are allowable as a deduction in computing profits for the purposes of excess profits tax ; and the said sums shall be deducted notwithstanding that they have not become payable. " For this clause to apply, two conditions must be satis fied. The sums to be deducted should be allowable as a deduction in computing the profits for the purposes of the Act, and further they should be in respect of accruing liabilities. Rule 1 of Sch. 1 enacts that, " The profits of a business . . during any chargeable accounting period . . shall, subject to the provisions of this Schedule, be computed on the principles on which the profits of a business are computed for the purposes of income tax under section 10 of the Indian Income tax Act, 1922. " 1006 Section 10(7) of the Indian Income tax Act provides that, " Notwithstanding anything to the contrary contained in sections 8, 9, 10, 12 or 18, the profits and gains of any business of insurance and the tax payable thereon shall be computed in accordance with the rules contained in the Schedule to this Act. " Rule 6 of the Schedule provides: "The profits and gains of any business of insurance other than life insurance shall be taken to be the balance of the profits disclosed by the annual accounts, copies of which are required under the , to be furnished to the Controller of Insurance after adjusting such balance so as to exclude from it any expenditure other than expenditure which may under the provisions of section 10 of this Act be allowed for in computing the profits and gains of a business. " It is common ground that the statements furnished to the Controller of Insurance by the respondent for the relevant periods did disclose 40 per cent. of the premiums received as reserve for unexpired risks on the outstanding policies and that the same has been treated as a liability in its profits and loss statements and allowed in the assessment of income tax. Thus, one of the conditions required by r. 2 has been satisfied. The whole controversy between the parties relates to the other condition whether the reserve of 40 per cent. can be regarded as a sum in respect of accruing liability. The contention of the learned Solicitor General is that it must be so regarded, and his argument in support of it may thus be stated: A contract of insurance is complete as soon as the policy is issued. From that time, the risk begins to attach to it, and there is a liability incurred. Rule 2 does not require that the liability should have actually accrued; it is sufficient that it is accruing. Liability under a policy must be held to be accruing so long as the policy is in force, because it can ripen into actual liability at any time during the life of the policy on the happening of the specified event. When the assessee shows a certain amount as the value of that 1007 liability, it is a sum in respect of an accruing liability and must be deducted under r. 2. In support of this contention, the decision in Sun Insurance Office vs Clark (1) was relied on. The facts of that case were as follows: A fire insurance company which had been following the practice of entering in its annual statements 40 per cent. of the total premium receipts as reserve for unexpired risks claimed a deduction therefor in the assessment of its annual profits. The validity of the claim having been disputed, the question as to its admissibility was referred to the decision of the court. Bray J., who heard the reference, held that the amounts reserved for unexpired risks should be deducted firstly on the ground that the premium which had been paid in respect of a risk for a whole year could not be said to have been wholly earned, when a portion of the period covered by the policy was still to run, and that the reserve therefore was not income earned, and secondly and in the alternative, on the ground that as the premium had been received burdened with a liability which had been only partially discharged in the year of account, the portion of the liability still outstanding should be valued on the analogy of unpaid price due in respect of property purchased and included in the trading assets. This decision was taken in appeal, and was reversed by the Court of Appeal, the learned Judges holding that though the reasoning of Bray J. was sound, the question was concluded against the assessee by the decision of the House of Lords in The General Accident Fire and Life Assurance Corporation vs McGowan (2 ). The case came on further appeal before the House of Lords which agreed with Bray J.that the deduction was admissible, and distinguished the decision in The General Accident Fire and Life Assurance Corporation vs McGowan (2 ) as one turning on the facts of that case and as not laying down that, as a matter of law, the deduction could not be made. Lord Haldane stated the ground of his decision thus: ". . the case is analogous to one in which if goods are bought their value cannot be treated as (1) ; ; (2) 1008 profit without deducting the value of the liability to pay for them which the buyer has incurred." Lord Alverstone expressed the reasoning on which he based his conclusion as follows: "Premiums are not profits or gains, they are receipts which must be brought into account and out of which, after proper deduction for losses, profits will accrue." Lord Atkinson also rested his decision on the same ground, and observed: " That case (Gresham Life Assurance Society vs Styles) (1) clearly decided that the receipts of a business are not in themselves profit and gains within the meaning of the Income Tax Acts, but that it is what remains of those receipts after there has been deducted from them the cost of earning them which constitute the taxable profits and gains. Now what is the service which a Fire Insurance Company renders to each insurer in consideration for the premium it receives ? It is only, by rendering this service in each case it earns these receipts. The service consists in indemnifying the insurer against loss by fire during the continuance of his policy. . Yet until that time has expired the service for which the Company has been paid has not been completely performed. If the accounts of the Company are to be rendered before the date of expiry, then some division of the premium must be made, and the proportion to be appropriated to the service which is to be performed thereafter. I think the description 'unearned premium ' which has been used to describe this latter portion is a very appropriate and accurate description. " It is also material to note that one of the authorities relied on for the Crown was the decision in Scottish Union and National Insurance Company V. Smiles (2) wherein, discussing how the reserve for unexpired risk in fire policies is to be dealt with in computing the profits, the Lord President observed: " Seeing that fire insurance policies are contracts for one year only, the premiums received for the year (1) (2) 1009 of assessment, or on an average of three years, deducting losses by fire during the same period and ordinary expenses, may be fairly taken as profits and gains of the Company without taking into account or making any allowance for the balance of annual risks unexpired at the end of the financial year of the Company." Referring to this and to another decision, Lord Haldane observed that they " are not, when carefully examined in the light of what appears to be the true principle, reliable as authorities for the proposition which would run counter to the practice and good sense of the commercial community. " On the strength of the observations quoted above, the argument has been advanced by the learned Solicitor General that the obligation which an insurance company contracts when it issues a policy is to be treated, in computing its profits for the purposes of taxation, as a liability in praesenti. Mr. K. P. Khaitan, learned counsel for the respondent, disputes the correctness of this contention. He argues that whatever the position under the English law, a contract of insurance is under the Indian Contract Act merely a contingent contract, that until the event specified in the policy happens, there is no enforceable liability, and that accordingly unexpired risks in pending policies cannot be treated as present liabilities. He also urges a further contention based on the history of the enactment of r. 2 of Sch. II to the Act. That rule as originally passed mentioned only borrowed money and debts, and it was by section 10 of the Excess Profits Tax (Amendment) Act (XLII of 1940) that accruing liabilities were brought within that rule. And when they were brought in, they did not come as something independent of and distinct from borrowed money and debts. They came in under a provision, which enacted that the debts to be deducted under the rule included sums in respect of accruing liabilities. Relying on this circumstance, counsel for the respondent contends that however liberally the expression " accruing liabilities " might be construed, it cannot be interpreted so as to take in liabilities which do not bear the character of debts, and that a liability under a contract of 130 1010 insurance where under risk had not materialised, cannot be held to be a debt, and is therefore not an accruing liability within the rule. In support of this position, he relies on the decisions in Webb vs Stenton (1) and Israelson vs Dawson (Port of Manchester Insurance Co., Ltd., Garnishees) (2). In Webb vs Stenton (1), the question was whether a sum which was payable to the judgment debtor under a trust deed but which had not become due could be attached in the hands of the trustees as a debt owing or accruing within 0. 45, R. 2 of the English Rules of Practice. In holding that it could not be, Lindley L.J. observed: " I should say, apart from any authority, that a debt legal or equitable can be attached whether it be a debt owing or accruing; but it must be debt, and a debt is a sum of money which is now payable or will become payable in the future by reason of a present obligation, debitum in praesenti, solvendum in futuro. An accruing debt, therefore, is a debt not yet actually payable, but a debt which is represented by an existing obligation. " Israelson vs Dawson (Port of Manchester Insurance Co., Ltd., Garnishees) (2) was again a decision on 0. 45, R. 2, the Court holding that the amount which became payable under a policy as the result of the accident specified therein having occurred was, nevertheless, not a debt which could be attached under this rule, before the compensation had been determined by the arbitrator in accordance with the conditions of the policy. The argument of the respondent based on the above decisions is that until the risk specified in the policy materialises and, consequent thereon, the compensation payable thereunder is ascertained, there is only a contingent liability and not a debt, and that such liability is not within r. 2 of Sch. II to the Act. In answer, the learned Solicitor General contends that the decisions quoted above are not in point, they having been given on a different statute, that the decision in (1) , 527. (2) 1011 Sun Insurance Office vs Clark(1) which dealt with the question of assessment for purposes of taxation was directly applicable, and that according to that decision, the amounts reserved for unexpired risks would be sums in respect of accruing liabilities. That a contract of insurance is a contingent contract does not admit of argument. That is so under section 31 of the Indian Contract Act, and that is also the law in England where it is termed " conditional contract". (Vide Pollock on Contracts, 13th Edn., p. 222). This, however, is not material for the purpose of the present discussion which is how such contracts are to be dealt with in assessing, the taxable profits of an insurance company. That is a matter which must be determined on the provisions of the taxing statutes and their application to the facts found with reference to the particular assessment. And it is in this view that the decision in Sun Insurance Office vs Clark (1) becomes important. Now, what is the ratio of this decision? The law is well settled that a liability which is purely contingent cannot be allowed as a deduction in computing the profits of a business. And in holding that unexpired risks in respect of pending policies could be estimated and deducted out of the gross premium receipts, the House of Lords must be held to have decided that the obligation of an insurer under such risks was a liability in praesenti. Reference might be made in this connection to the recent decision of the House of Lords in Southern Railway of Peru Ltd. vs Owen (2). There, the appellant Company operated a railway in Peru under a statutory scheme under which its employees were entitled to receive from it a lump sum payment on retirement, death or other termination of service. The Company claimed that it was entitled to value this liability in accordance with "accountancy practice" and to deduct the same from out of its annual profits. And support for this contention was sought in the decision in Sun Insurance Office vs Clark (1). In rejecting this claim it was observed by the House of Lords that the accountancy valuation was not necessarily the correct (1) ; ; (2) ; 1012 valuation for purposes of income tax, and that the real point for decision was whether the claim was to be regarded as an essential charge against the trade receipts during the year. In distinguishing the decision in Sun Insurance Office vs Clark (1), Lord Oaksey made the following observations, which are pertinent to the present discussion: " Reliance was placed, during the argument, on Sun Insurance Office vs Clark (1), in which this House held that a percentage of the premium income of an insurance company might be deferred as a receipt to a future year because it was paid as consideration for future liability, but the principle of that decision is not, in my opinion, applicable to the present case. The premium income was only deferred and would suffer tax in a future year, whereas, in the present case, if the appellant is permitted to deduct compensation, Which it has not paid and which it may never have to pay, that compensation will escape tax altogether. There is, in my opinion, a fundamental distinction between a contingent liability and a payment dependent on a contingency. When a debt is not paid at the time it is incurred its payment is, of course, contingent on the solvency of the debtor but the liability is not contingent. Similarly, the liability in Sun Insurance Office vs Clark (1) was not, in my opinion, contingent but remained in force throughout the period of the insurance, though payment in pursuance of that liability might, or might not, have to be made. " The decision in Sun Insurance Office vs Clark (1) and the observations in Southern Railway of Peru, Ltd. vs Owen(1) quoted above do support the contention of the appellant that in computing the profits of an insurance company for purposes of income tax, the unexpired risks are to be treated as a present liability. But even so, on the footing that r. 6 in the Schedule to the Indian Income tax Act has adopted the law as laid down in Sun Insurance Office vs Clark (1), the question still, remains whether unexpired risk in an outstanding policy is an accruing liability within r. 2 of Sch. II to the Act. It is contended for the (1) ; (2) ; 1013 appellant that if that liability is a present liability for purposes of assessing the taxable profits for purposes of income tax, it must logically be the same for purposes of excess profits tax, and must therefore be deducted under r. 2 of Sch. II to the Act. That would be so, if the scheme and framework of the Excess Profits Tax Act were the same as those of the Income. tax Act. But the fact is that the Excess Profits Tax Act differs, in material respects from the Income tax Act, and the principles applicable in the assessment of profits under section 10 of the latter enactment cannot necessarily be held to be applicable in the ascertainment of the capital employed under rr.1 and 2 of Sch. II to the former Act. The object of the Excess Profits Tax Act is to tax profits of a business when they overflow a certain level. That level is determined thus: A certain,period called the standard period is taken; the capital invested and the profits made in the business during that year are ascertained, and the standard profits are worked out in relation to those two factors. Then, the capital actually employed in business during the chargeable accounting period is ascertained. If the capital is the same as that employed in the standard period, then there is no further problem; but if it is more, then the standard profits are increased, and if it is less, they are reduced pro tanto. Thus, the whole scheme of the Act is to tax profits above a certain level, and that level will move upwards or downwards as the capital employed may be more or less. It is this that constitutes the distinguishing feature of the Excess Profits Tax Act, and it is the determination of the capital actually employed in business that forms one of the most important and arduous tasks in the ascertainment of taxable profits under the Act. Rule 1 of Sch. II to the Act enumerates three categories of properties, which are to be included in the computation of capital. It is to be noted that this rule does not adopt any legalistic or conventional notion of what is technically termed 'capital '; but it proceeds on a factual basis to include whatever is utilised in business, :whether it be tangible property or intangible 1014 property. The object of the provision is clearly to confer a benefit on the assessee by enabling him to retain at least in part the profits realised by him by investment of additional capital. Then there is r. 2, which provides for certain deductions being made out of capital. Omitting for the present "accruing liabilities", which form the subject of the present controversy, the other two items mentioned therein are borrowed money and debts, and the reasons for their exclusion from capital falling within r. 1 would appear to be this: Money borrowed and debts incurred for the purpose of the business must have been utilised in it, and would be included in the capital employed as defined in r. 1. The policy of the law being to give some relief to an assessee who invests additional capital in his business, the reason of it requires that that should be limited to capital contributed by the assessee himself. Otherwise, the benefit intended to be given to him might be abused, and the object of the legislation defeated by large scale employment of borrowed capital. Borrowed money and debt are therefore to be deducted out of what is capital within r. 1. We now come to the expression "accruing liabilities". What does it precisely import ? To decide that, we must have regard to the scope and purpose of rr. 1 and 2 of Sch. II to the Act and to the context and setting of the expression. It has been already pointed out that the object of the Act is to tax profits which overflow a certain line indicated by what is termed " standard profits ", that the location of that line varies with the capital employed, that the scheme of r. I is on a factual basis to treat as capital all assets tangible and intangible which are thrown into a business and contribute to the earning of profits and to exclude therefrom under r. 2 that part of it which came in as a result of borrowing. Now, obviously. a deduction under r. 2 can only relate to what is capital under r. 1, and that must be a really profit earning asset, whether tangible or not . Borrowed money to be deducted under r. 2 is money borrowed for the purpose of the business, and which has gone to swell the capital under r. 1. That is also the position as regards debts. And 1015 accruing liabilities which are liable to be deducted under r. 2 must also be of the same character as borrowed money and debts with which they are associated on the principle of noscitur a sociis. They must be such as can be said to have been utilised in the business and formed part of the really effective trading assets during the chargeable accounting period. If that is the correct approach, as we conceive it is, the question to be considered is neither, on the one hand, whether the liability amounts in law to a debt for if it is capable of being utilised in business and is so utilised, it will fall under r. 2, even though it is not strictly speaking a debt; nor, on the other hand, whether it is a liability which has been treated as one for the purpose of assessing income tax. In assessing income from business under section 10 of the Income tax Act, what is allowed as a deduction is any liability incurred solely and exclusively for the purpose of the business, and when that has not matured, its value is to be determined according to rules of accountancy and deducted. But when a deduction is claimed under r. 2, what has to be seen is whether the obligation is such that it could be regarded as an asset used in the business, such as could conceivably contribute to its profits. If that is not established, then it cannot be included as capital under r. 1, and cannot be deducted therefrom under r. 2 as an accruing liability. It should not be overlooked that a deduction under section 10 of the Income tax Act and that under r. 2 of Sch. 11 to the Act proceed on totally different lines and have different objects in view. Under section 10, the deduction is claimed by the assessee, and that has the effect, when allowed, of reducing the taxable profits. Under r. 2, it is claimed by the department, and if allowed, it will enhance the liability of the assessee by reducing the capital under r. 1. Incidentally, how inappropriate the principle laid down in Sun Insurance Office vs Clark (1) would be if it is applied for determining the question of capital employed in business for the purpose of Excess Profits Tax Act will be seen from (1) ; ; 1016 the fact that one of the grounds on which the decision therein was based was that 40 per cent. of the premiums received and set apart as reserve for unexpired risks was unearned income, and could not therefore be regarded as profits for the purpose of the Act. If that were the true position under the Excess Profits Tax Act, then the reserve could not be included in the capital of the business, and, indeed, that was one of the contentions urged by the learned Solicitor General. But that was not the stand taken by the department before the Tribunal and that is directly opposed to the plain language of r. I of Sch. II, under which all the premiums thrown into the business would be capital employed in the business. That clearly shows how unsafe it will be to adopt the principles laid down for the purpose of assessing business profits under the Income tax Act to a determination of the question of the capital employed under the Excess Profits Tax Act. In this view, is the reserve for unexpired risks an "accruing liability " within r. 2 ? The decision in. Sun Insurance Office vs Clark(1) that it should be allowed as a deduction was based on two grounds. One was that it should be regarded as " unearned income ", and for the reasons already stated, it cannot avail when the question is one of determining capital under the Act. And the other was that the reserve represents a liability in the nature of unpaid price of property included in the trading assets. But apart from the fact that we have to strain the analogy in applying it to the present situation, can that liability be held to be of the character contemplated by r. 2 ? Can it be said that the reserve for unexpired risk was, like borrowed money and debt, part of the real trading assets of the business ? The answer must clearly be in the negative. The reserve liability could not factually be said to have contributed to the running of the business or the earning of profits. It was some. thing in the air, and could have had no effect in the working of the concern, during the chargeable accounting period. It cannot therefore be held to be an is accruing liability " within r. 2 of Sch. 11 to the Act. (1) ; ; 1017 A case very much in point is the decision in Northern Aluminium Co. Ltd. vs Inland Revenue Commissioners(1). There, the question arose whether a conditional liability under a contract was an " accruing liability " within the corresponding provision in the English Excess Profits Tax Act. The facts were that on December 16, 1939, an agreement was entered into between the Ministry of Aircraft Production and a company engaged in manufacturing aluminium products and supplying them to manufacturers of aircraft for the Government, wherein it was provided that the prices which the latter was then charging to its customers should be reduced for the period July 1, 1939, to June 30, 1940, and that the amount by which the prices paid to the company were in excess of the reduced prices should be paid by the company to the Ministry. The agreement further provided that negotiations should be started not later than June 30, 1940, for determining the rates to be charged for the periods following June 30, 1940. The agreement was, in fact, concluded only on October 12, 1942, whereby the prices to be charged by the company were fixed for the years 1941, 1942 and 1943. In accordance with the agreement entered into on October 12, 1942, a sum of pound 2,743,469 was repaid by the company to the Ministry in 1943 being the difference between the price paid by the customers and that fixed in the agreement. This amount was actually allowed as a deduction in the assessment of the business income for purposes of income tax, and the dispute related to the question whether it could be deducted in assessing the excess profits tax as an "accruing liability" of the company for the chargeable accounting period which was January 1 to December 31, 1941. It was held by the Court of Appeal that there was, in fact, no agreement between the parties during the chargeable accounting period, and that therefore no liability was incurred. In the alternative, it was held that even if the agreement dated December 16, 1939, could be construed as amounting to a conditional agreement for the period subsequent to June 30, 1940, the obligation created thereby could not be (1) , 554. 1018 regarded as an accruing liability within the rule in question. Lord Greene M.R. stated the reason thus: " A purely conditional liability, which may or may not mature, is not one which falls within that language, for this reason: Quite apart from the actual words, it would be contrary to the whole conception underlying these capital provisions because a purely conditional liability, which may or may not eventuate, is not a thing which affects a company 's capital position, any more than a conditional receipt can affect its capital position. A receipt which may or may not be received, according as some event does or does not happen, is not a thing with which you can earn profits. It is the possibility of earning profits on your real capital that these capital provisions are concerned with. Therefore, in my opinion, even if one could spell such a hypothetical and conditional contract out of these words, the result would not give rise to an accruing liability within the meaning of the section. " This decision was taken in appeal to the House of Lords and was affirmed. Vide Inland Revenue Commissioners vs Northern Aluminium Co. Ltd. (1). This decision establishes that a conditional liability under a concluded contract it is on that footing that the second point arose for decision was not an accruing liability for the purposes of the Excess Profits Tax Act, as the same had no effect on the actual capital position of the company, and the fact that it was allowed for purposes of income tax did not affect the position under the Excess Profits Tax Act. The learned Solicitor General sought to distinguish this decision on the ground that it did not relate to an insurance business, whereas it was contended that Sun Insurance Office vs Clark (2 ) directly dealt with the question now under consideration whether reserves for unexpired risks in pending policies were liabilities which could be deducted. We do not see how it makes any difference in the construction of r. 2 of Sch. II to the Act that the liability sought to be deducted arises under an insurance policy and not under some other contract. (1) (2) ; ; , 1019 We are of opinion that the principles laid down in Northern Aluminium Co., Ltd. vs Inland Revenue Commissioners (1) and Inland Revenue Commissioners vs Northern Aluminium Co., Ltd. (2 ) are applicable to the decision of the present case, and that a contingent liability in respect of unexpired risk is not an "accruing liability" within r. 2 of Sch. II to the Act. The decision appealed from is correct, and this appeal must accordingly be dismissed with costs. Appeal dismissed.

The respondent was a company carrying on life, fire, marine and general insurance business, and the question for determination related to the assessment of excess profits tax on its income other than life insurance. The method adopted by the company with respect to fire insurance policies was that while the premiums received were all of them included in the assets of the year, a portion thereof, 40 per cent., was treated as reserve for unexpired risks on the outstanding policies, and shown as a liability. The appellant, the Commissioner for Excess Profits Tax, claimed that the sum set apart as reserve for unexpired risks was liable to be deducted under r. 2 of Sch. II of the Excess Profits Tax Act, 1940, from out of the capital employed in business for that year. The respondent, while maintaining that all the premiums received must be treated as capital under r. 1 of Sch. II to the Act, contended that the provision for unexpired risks was only a contingent liability and that a liability under a contract of insurance where under risk had not materialised could not be held to be a debt and was therefore not an accruing liability within r. 2 of Sch. II to the Act. Held, that the reserve liability for unexpired risk, unlike borrowed money and debts, cannot be treated as part of the real trading assets of the business so as to have an effect on the running of the business or the earning of profits, and consequently, as it cannot be included as capital under r. i, it cannot be deducted as an accruing liability within r. 2 of Sch. II of the Excess Profits Tax Act, 1940. Sun Insurance 0Office vs Clark; , and Southern Railway of Peru Ltd. vs Owen, (1956) 2 All E.R. 728, distinguished. Northern Aluminium Co., Ltd. vs Inland Revenue Commis sioners, and Inland Revenue Commissioners vs Northern Aluminium Co. Ltd. (1947) 1 All E. R. 608, relied on. 1003

Appeal No. 161 of 1959. Appeal by special leave from the judgment and order dated the 31st January 1956 of the Labour Appellate Tribunal at Calcutta in Appeal No. Cal. 301 108 of 1954, arising out of the Award dated the 20th October 1954, of the Second Industrial Tribunal, West Bengal. B. Sen and section N. Mukherjee, for the appellants. D. N. Mukherjee, for the respondents. May 7. The Judgment of the Court was delivered by WANCHOO J. This is an appeal by special leave in an industrial matter. The appellant is the Graham Trading Co. (India) Ltd. (hereinafter called the company). There was a dispute between the company and its workmen about bonus, which was referred by the Government of West Bengal by its order of December 17, 1953, to the Second Industrial Tribunal. Though the order of reference did not specify the year for which the bonus was in dispute, it is common ground between the parties that the dispute was for bonus for the year 1953. The case of the workmen, who are respondents before us, was that the company had been paying one month 's bonus invariably from 1940 to 1950. In 1951, one month 's bonus was paid in October and half a month 's further bonus was paid in December. In 1952 one month 's bonus was paid. The demand that the workmen made in their letter of August 27, 1953, was for three month 's bonus. The company replied that payments in past years had been entirely ex gratia and as there was loss in 1953 it was not possible to make any ex gratia payment that year. The workmen then contended in their letter of September 21, 1953 that the sole object of bonus which had, been granted upto that year was to meet puja expenses and that the payment of this bonus had become customary and a term of employment. The matter could not be settled between the parties and that is how the dispute was referred for adjudication. The company 's case was that payment of bonus had all along been ex gratia depending upon profits except in a few years. But in those years it was also made clear that the payment was ex gratia and without creating any precedent for future. Therefore, there was neither a term of employment nor any custom, 109 which put any obligation on the company to pay any bonus in a year of loss. The question was considered by the Industrial Tribunal from three aspects. Firstly, it considered whether any bonus was payable for this year as profit bonus, on the basis of the Full Bench formula evolved in The Mill Owners ' Association, Bombay, vs The Rashtriya Mill Mazdoor Sangh, Bombay (1) and it came to the conclusion that there was no available surplus of profit to justify such bonus. It then considered the remaining two aspects, namely, whether puja bonus could be awarded either as an implied term of employment according to the decision in Mahalakshmi Cotton Mills Ltd., Calcutta vs Mahalakshmi Cotton Mills Workers ' Union (2) or on the basis of custom. It seems to have mixed up the discussion on these aspects and having come to the conclusion that puja bonus could not be awarded in this case on the basis of an implied term of employment it proceeded to dismiss the claim on the basis of custom also. The workmen then went up in appeal to the Labour Appellate Tribunal, which allowed the appeal. The decision of the Appellate Tribunal has also mixed the two aspects of puja bonus, namely, whether it is based on an implied term of employment or on custom; but it came to the conclusion that there was sufficient evidence to establish custom and therefore ordered payment of one month 's basic wages as puja bonus. It was also inclined to the view that the company 's accounts showing loss were not reliable and there might even be a case for profit bonus; but eventually it granted one month 's basic wages as customary puja bonus. Thereupon the company filed an application for special leave to appeal to this Court, which was allowed; and that is how the matter has come up before us. Puja is a special festival of particular importance in Bengal; and it has become usual with many firms there to pay their employees bonus to meet special puja expenses. Disputes have arisen with respect to this bonus which were adjudicated upon by various tribunals. As (1) (2) 110 for back as 1949, in a dispute between The Bengal Chamber of Commerce, Calcutta and Its Employees (1), the Industrial Tribunal, which adjudicated upon the dispute, observed that Durga Puja was a national festival in Bengal and it was customary to make presents to near and dear ones and to relatives at that time. As it was difficult for poorly paid employees to make savings out of the monthly income for this purpose, it, therefore, had become traditional and customary in Bengal for employers to make a monetary grant at the time of the pujas. The Bengal Chamber of Commerce had not been slow in appreciating this and had been granting bonus equivalent to one month 's pay, and the tribunal had been assured that there was no intention to discontinue it. Later the matter was considered in Mahalaxmi Cotton Mills case (2), where certain tests were laid down which would justify the inference that there was an implied term of employment for payment of bonus at the time of the annual Durga Puja. That case, however, was concerned with puja bonus as an implied term of employment and not as a matter of tradition or custom in Bengal. It is, however, clear that puja bonus which is usually paid in Bengal is of two kinds; namely, (1) where it is paid as an implied term of employment as explained in Mahalaxmi Cotton Mills case (2) and (2) where, it is paid as a customary and traditional payment as stated in the Industrial Tribunal 's award referred to above. We have considered the tests to be applied where it is a case of payment on an implied term of employment in Messrs. Ispahani Ltd. vs Ispahani Employees ' Union (3) and we need not repeat what we have said there. In the present case it has been pointed out by the company that payments which had been made in the past years from 1940 to 1952 could not be considered as based on an implied term of employment in the circumstances of this cash. This contention, in our opinion, is correct. An implied term of employment cannot be inferred in this case, for right from (1) Publication of Government of West Bengal, I Awards made by the Tribunals for the quarter ending March (2) (3) [1960](1)1 S.C.R. 24. 111 1948 to 1952, the company whenever it paid this bonus, made it clear that it was an ex gratia payment and would not constitute any precedent for future years. In the face of such notice year by year it would not be possible to imply a term of employment on the basis of an implied agreement, for agreement postulates a meeting of minds regarding the subjectmatter of an agreement; and here one party was always making it clear that the payment was ex gratia and that it would not form a precedent for future years. In dealing with the question of an implied term of the condition of service, it would be difficult to ignore the statement expressly made by the employer while making the payment from year to year. The question, however, whether the payment in this case was customary and traditional, still remains to be considered. 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 (1) 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 somewhat 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 (1) [1960(1)] S.C.R. 24. 112 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. Let us now see whether these tests are satisfied in the present case. The practice in the present case began in 1940 and was unbroken upto 1950. In between there was an adjudication in 1948 to which the company was a party. At that time it was said on behalf of the company before the industrial tribunal that some bonus was being paid and that there was no intention to discontinue It and consequently the tribunal did not adjudicate upon the matter, which shows that the company recognised the traditional and customary nature of the payment and it assured the tribunal that there was no intention then to discontinue the payment. The payment was continued from 1949 to 1951. In 1952, there was some dispute and originally the company paid one month 's wages as advance of pay and not as bonus. Some of the workmen, however, accepted the payment while others did not, because they were not satisfied with the amount being paid as advance of pay. The chairman of the board of directors of the company visited Calcutta in 1952 and then on the representation of the workmen the advance was converted into one month 's bonus and even those workmen who had not accepted the advance were allowed to draw the bonus. It cannot therefore be said that there was any break in the payment of bonus from 1940 to 1952, for if the chairman had not converted what was advance of pay into bonus in December 1952, the workmen might have raised the dispute even in that year and then 113 there would have been no break up to 1951. So there has been unbroken payment and the period has been sufficiently long to justify an inference of customary and traditional bonus. It was pointed out that in four years during this period the payment was made in November and December and not about the time of the pujas; and, therefore, it could not be said that this was traditional and customary puja bonus. The delay in payment is not in our opinion material in this case, for one of the directors of the company, who appeared as a witness, stated as to this one month 's bonus that it was paid by the company to help its staff during pujas. The condition that the payment should have been made in years of loss also to exclude the hypothesis that it was paid only because profits had been made, has also been satisfied, for the evidence is that payments were made in at least two years of loss. Lastly, the condition that payment should have been at a uniform rate has also been satisfied because one month 's basic wage is the quantum of bonus from 1940 right up to 1952 without any change. It is true that in December 1951 further bonus for half a month was paid; but that year was a year of profit in which cloth bonus for half a month was specially paid. Thus the rate so far as the puja bonus is concerned has always remained uniform at one month 's basic wage. It is true that the workmen pitched their demand too high for three month 's bonus in 1953. But that doe, , not in our opinion detract from the inference to be drawn from the facts proved in this case. All the conditions, therefore, of a customary and traditional bonus are satisfied in this case and there is no reason to interfere with the order of the Appellate Tribunal, though we should like to make it clear that we do not agree with the observations of the Appellate Tribunal in connection with the profit bonus aspect of the matter. The appeal therefore fails and is hereby dismissed. As this question has arisen for the first time in this Court as a distinct issue and was not clearly considered before by the Appellate Tribunal, we order the parties to bear their own costs.

The appellant had been paying puja bonus to its workmen continuously from 1940 to 1952 at the rate of one month 's wages. From 1948 to 1952, the appellant whenever it paid this bonus, made it clear that it was ex gratia payment and would not constitute any precedent in future years. The dispute arose regarding the payment of bonus in 1953. The workmen claimed that the sole object of bonus which had been granted to them upto that year was to meet puja expenses and that the payment of this bonus had become customary and a term of employment. The appellant contended that payments in the past years had been entirely ex gratia and as there was loss in 1953 no ex gratia payment could be made in that year. Held, that the workmen were not entitled to puja bonus as an implied term of employment for an implied agreement could not be inferred when the appellant had made it clear that the payments from 1948 to 1952 were ex gratia; but they were entitled to puja bonus on the basis that it was a customary and traditional payment. In determining whether the payment was customary and traditional the following circumstances have to be established : (i) that the payment has been made over an unbroken series of years ; (ii) that it has been for a sufficiently long period, the period has to be longer than in the case of an implied term of employment; (iii) that it has been paid even in years of loss and did not depend on the earning of profits; and (iv) that the payment has been made at a uniform rate throughout. The fact that the employer made the payment ex gratia made no difference; nor did unilateral declarations of one party inconsistent with the course of conduct adopted by it matter.

ppeals Nos. 1457 to 1459 of 1958. Appeals from the judgment and order dated August 21, 1964 of the Madras High Court in T.C. No. 75 of 1962 (Reference No. 50 of 1962). M. C. Chagla and T. A. Ramachandran, for the appellant (in all the appeals). section K. Aiyar add B. D. Sharma, for the respondent (in all the appeals). The Judgment of the Court was delivered by Shah, J. Ramanathan Chettiar his son Muthiah Chettiar called hereinafter for the sake of brevity, Muthiah and Ramanathan, Annamalai and Alagappan, sons of Muthiah, constituted a Hindu undivided family. The family owned a 3/5th share in M.R.M.S. Firm, Seramban in Malaya. The firm was assessed under the Indian income tax Act, 1922, in the status of a firm resident within the taxable territories. On September 16, 1950, Muthiah separated from the family taking his 1/5th share in the M.R.M.S. Firm. On April 13, 1951 the status of the family became completely disrupted and the three sons of Muthiah took in equal shares the remaining 2/5th share the grandfather Ramanathan taking no share in the M.R.M.S. Firm. For the assessment year 1952 53 Muthiah submitted a return of his income as an individual and stated under the head business income "Kindly ascertain his (assessee 's) share of profit and remittances from the Income tax officer, Second Additional Circle I, Karaikudi, in F. 6098 m/1952 53". In Part III of the return Muthiah supplied the following information about his partners Name and address of Name of each partner Share the firm including assessee Messrs. R.RM.S. Firm 1. Assessee (Muthiah Chettiar) 60/303 Seramban, F. M.S. 2. M. RM. M. Ramanathan Chettiar (minor). 40/303 3. M. RM. M. RM. M. Alagappan Chettiar (minor). 40/303 4. M. RM. M. RM. M. Annamalai Chettiar (minor) 40/303 6. M.S.S. 60/303 7. Charity 3/303 717 For the assessment year 1953 54 in column 3 in section B of the return Muthiah stated : "Kindly ascertain the remittances from the Income tax Officer, Fifth Additional, Karaikudi in F. 6098 m", and at p. 3 of the return in column 3 of Section F it was stated "Assessee has 60/303 share in Messrs. Joint Seramban (Malaya). Kindly ascertain share of profit or loss from the Income tax Officer, Fifth Additional, Karaikudi in F. 6098. " In Part III of the return he set out the names of the partners as, were mentioned in the return for 1952 53. Against the names. of Ramanathan Chettiar, Alagappan Chettiar and Annamalai Chettiar it was not disclosed that they were minors. For the assessment year 1954 55 at the foot of page 1 of the return Muthiah stated : "The assessee has a remittance of Rs. 6,188 12 0 from R.R.M.S. Firm, Seramban. His share of income may be taken from the firm 's file. ', and in Part III the names of seven partners as mentioned in 1952 53 return were set out Ramanathan, Alagappan, were not shown as minors. Ramanathan, Alagappan and Aannamalai the three minor sons of Muthiah represented by their mother and guardian also filed returns of their respective income for the years 1952 53, 1953 54 and 1954 55 and disclosed therein their shares in the profit from the 2/5th share in the M.RM.S. Firm. For the assessment years 1952 53, 1953 54 and 1954 55 the Income tax officer completed the assessments separately on the firm, on Muthiah as an individual and on the three minors represented by their mother and guardian. Muthiah was assessed in respect of his share in the income of the firm and from other sources. In his returns muthiah had not disclosed the share received by his minor sons and the Income tax officer did not in making the assessments include shares of the minors from the firm under section 16 (3) (a) (ii) of the Indian Income tax Act, 1922. The Income tax Officer issued notices of reassessment to Muthiah under section 34(1) (a) of the Income tax Act, 1922 for the years 1952 53 and 1953 54 and under section 34(1) (b) for the year 1954 55. Muthiah, filed returns under protest declaring the same income as originally assessed. In the view of the Income tax Officer Muthiah had not furnished in Part III clause (c) of the return full facts regarding the other parties and in column 2 he had merely disclosed that Ramanathan, Alagappan and Annamalai were minors: that "information was not full in the sense that he had not stated that L10Sup./69 11 718 they were minors sons" of Muthiah. Accordingly the Income tax Officer held that the income of the sons of Muthiah which should have been included under section 16 (3) (a) (ii) of the Income tax Act had escaped assessment in Muthiah 's hands and he brought that income to tax. The Appellate Assistant Commissioner confirmed the order made by the Income tax Officer. In appeal to the Tribunal it was contended by Muthiah that he had fully and truly disclosed all the particulars he was required to disclose in the returns of his income for the three years in question, and "section 34 (a) (a) had no application to the assessment years 1952 53 and 1953 54 and for 1954 55 the reopening was based only on a change of opinion". Muthiah also contended that section 40 of the Income tax Act was mandatory and since the Income tax Officer had made separate assessments on the minors represented by their mother, no further ' assessment under section 16(3) could be made, the two sections being mutually exclusive. The Tribunal observed that for the first two years section 34 (1) (a) applied, that in respect of the year 1954 55 there was no change of opinion but the assessment was made on information received within the meaning of section 34 (1 ) (b) of the Income tax Act and that separate assessment of the minors did not stop the Income tax Officer from assessing the income received by the minor sons in the hands of Muthiah. The Appellate Tribunal accordingly confirmed the order of the Appellate Assistant Commissioner. At the instance of Muthiah the following questions were referred to the High Court of Madras : (i) Whether on the facts and in the circumstances of the case, the re assessment made on the assessee under section 34 of the Act is valid in law for 1952 53 to 1954 55 ? (ii)Whether on the facts and in the circumstances of the case, the inclusion of the share income of the minor in the hands of the assessee by invoking the provisions of section 16(3) of the Act is valid in law notwithstanding that an assessment is made on the minor represented by his guardian ?" The answer to the second question must, in view of the recent judgment of this Court in C. R. Nagappa vs The Commissioner of Income tax, Mysore(1), be in the affirmative. In considering the first question it is necessary to refer to certain provisions of the Income tax Act, 1922. By section 3 (1) 719 the total income of the previous year of every individual, Hindu undivided family, Company and local authority and of every firm and other association of persons or the partners of the firm or the members of the association individually was charged to tax for that year in accordance with, and subject to the provisions of the act at any rate or rates prescribed by the Finance Act. "Total income" was defined in section 2(15) as meaning "total amount of income, profits and gains referred to in sub section (1) of section 4 computed in the manner laid down in this Act." Section 4(1) set out the method of computation of total income : it enacted (1) Subject to the provisions of this Act, the total income of any previous year of any person includes all income, profits and gains from whatever source derived which (a) are received or are deemed to be received in the taxable territories in such year by or on behalf of such person or (b) if such person is resident in the taxable territories during such year, (i) accrue or arise or are deemed to accrue or arise to him in the taxable territories during such year, or Section 22 by sub section (1) required the Income tax Officer to give notice by publication in the press in the prescribed manner, requiring every person whose total income during the previous year exceeds the maximum exempt from tax, to furnish a return in the prescribed form setting forth his total income. Sub sectian (2) authority the Income tax Officer to serve a notice upon a person whose income in the opinion of the Income tax Officer exceeded the minimum free from tax. Section 23 dealt with the assessment. It conferred power upon the Income tax Officer to assess the total income of the assessee and to determine the sum payable by him on the basis of such return, submitted by him. Rule 19 framed under section 59 of the Income tax Act, 1922, required the assessee to make a return in the form prescribed thereunder, and in Form A applicable to an individual or a Hindu undivided family or an association of persons there was no clause which required disclosure of income of Any person other than the income of the assessee, which was liable to be included in his total income. The Act and the Rules accordingly imposed no obligation upon the assessee to disclose to the Income tax Officer in his return information relating to income of any other person by law taxable in his hands. 720 But s ' 16 sub section (3) provided that in computing the total income of any individual for the purpose of assessment there shall be included the classes of income mentioned in cls. (a) and (b). Sub section (3) (a) (ii) in so far as it is material provided "In computing the total income of any individual for the purpose of assessment, there shall be included: (a) so much of the income of a wife or minor child of such individual as arises directly or indirectly (i) (ii) from the admission of the minor to the benefits of partnership in a firm of which such individual is a partner;" The assessee was bound to disclose under section 22(5) the names and addresses of his partners, if any, engaged in business, profession or vocation together 'with the location and style of the principal place and branches thereof and the extent of the shares of all such partners in the profits of the business, profession or vocation and any branches thereof, but the as was not required in making a return to disclose that any income was received by his wife or minor child admitted to the benefits of partnership of a firm of which he was a partner. Counsel for the Commissioner contended that in the forms of returns prescribed in the "Notes of Guidance" for drawing up the return were printed, and thereby the assessee was informed that he had to disclose the income received by his wife and minor children from a firm of which the assessee was a partner. Counsel has however not placed before the Court the forms of return in vogue in the relevant year of assessment. In the Income Tax Manual published under the authority of the Central Government in 1945 under cl. (3) printed at p. 185 theassessee is advised to include the return under the appropriate headcertain classes of income which are liable to be included in theassessment of an individual under section 16, and income liable to betaxed under sections 41D, 44E and 44F. This instruction was repeated in the Manual Parts II and III at pp. 344 and 345 in the 10th Edition published in 1950. But in the 11th Edition of the Manual published in 1954 no such instructions were printed. About the date on which the instructions were deleted Counsel for the Commissioner was unable to give any information. Assuming that there were instructions printed in the Forms of return in the relevant years ', in the absence of any head under which the income of the wife or minor child of a partner whose wife or a minor child was a partner in the same firm, could be shown, by not showing that income the tax payer cannot be deemed to have failed or omitted to disclose fully and truly all material 721 facts necessary for his assessment. Section 16(3) imposer, an obligation upon the Income tax Officer to compute the total income of any individual for the purpose of assessment by including the items of income set out in cls. (a) (i) to (iv) and (b), but thereby no obligation is unposed upon the tax payer to disclose the income liable to be included in his assessment under section 16(3). For failing or omitting to disclose that income proceedings for reassessment cannot therefore be commenced under section 34 (1) (a) Section 22(5) required the assessee to furnish particulars of the names and shares of his partners, but imposes no obligation to mention or set out the income of the nature mentioned in section 16(3). In the relevant years there was no head in the form under which income liable to be assessed to tax under section 16(3) (,a) and (b) could be disclosed. We are in the circumstances unable to agree with the High Court that section 34 imposed an obligation upon the assessee to disclose all income includable in his assessment by reason of section 16(3) (a) (ii). Section 34(1) (a) sets out the conditions in which the power may be exercised : it did not give, rise to an obligation to disclose information which enabled the Income tax Officer to exercise the power under section 16(3) (a) (ii), nor had the use of the expression "necessary for his assessment" in section 34(1)(a) that effect. The High Court did not consider the question whether in the year 1954 55 the notice under section 34(1) (b) was properly issued against Muthiah. The Tribunal in their judgment observed: "There is no basis for the argument that the Income tax Officer had only changed his opinion and reopened the assessment. " We agree with that view. The order of re assessment was made well within four years from the date of the last day of the year of assessment 1954 55. The notice was therefore competently issued by the Income tax Officer. The order passed by the High Court,, in so far as it relates to the years 1952 53 and 1953 54 is set aside and the answer in the negative is recorded. For the year 1954 55 the answer recorded by the High Court is confirmed. There will be no order as to costs throughout. Y.P. Appeal partly allowed.

The assessee and his minor sons separately held shares in a resident firm. For assessment years 1952 53 to 1954 55, the assessee filed returns as an individual and therein stated under the head business income that the profit should be ascertained from the Income tax Officer assessing the firm. The names of the partners were stated, but it was not stated in the return that some of the parties were his minor sons. The minors, through their mother as guardian, also filed returns for these assessment years, and they were assessed to tax. The assessee was also assessed as an individual, in respect of his share in the income of the firm and other sources, but the assessment order did not include the share of the minors from the firm. The Income tax Officer issued notices of reassessment to the assessee under section 34(1) (a) of the Indian Income tax Act, 1922 for the years 1952 53 and 1953 54 and under section 34(1) (b) for the year 1954 55. The Income tax Officer took the view that the assessee had not disclosed the fact that his sons were minors and the income of the sons which should have been included under section 16(3) (a) (ii) had escaped assessment in the assessee 's hands and accordingly he brought that income to tax. The Appellate Assistant Commissioner confirmed this order. The Appellate Tribunal, in appeal held that for the first two, years section 34(1) (a) applied, that in respect of the third year there was no change of opinion but the assessment was made on information received within the meaning of section 34(1) (b) and that the income of the minors could be assessed in the hands of the assessee 'notwithstanding the separate assessments already made on the minors. On reference, the High Court answered the questions against the assessee. In appeal, this Court, HELD : Section 16(3) of the Act imposed an obligation upon the Income tax Officer to compute the total income of any individual for the purpose of assessment by including the items of income set out in cls. (a)(i) to (iv) and (b), but thereby no obligation was imposed upon the tax payer to disclose the income liable to be included in his assessment under section 16(3). For failing or omitting to disclose that income proceedings for reassessment could not be commenced under section 34(1) (a). Section 22(5) required the assessee to furnish particulars of the names of the shares of the partners but imposed no obligation to mention or set out the income of the nature mentioned in section 16(3). In the relevant years there was no head in the form of return prescribed under the rules under which income liable to be assessed to tax under section 16(3) (a) & (b) could be disclosed. These assessments under section 34(1) (a) for the years 1952 53 and 1953 54 could not, therefore be upheld. [721 A] (ii) The income of a minor can be included in the hands of an assessee under section 16(3) of the Act, notwithstanding that an assessment has been made on the minor represented by his guardian. [718 G H] 716 C.R. Nagappa vs Commissioner of Income tax, Mysore, , followed. (iii) In respect of the assessment years 1954 55, there was no basis for the argument that the Income tax Officer had only changed his opinion. The order of re assessment was made well within four years from the date of the last day of that assessment year. The notice was, therefore, competently issued by the Income tax Officer. L721 F]

No. 139 of 1957. Petition under article 32 of the Constitution of India for enforcement of Fundamental rights. R. V. section Mani, for the petitioner. 689 C. K. Daphtary, Solicitor General of India, B. Sen and R. H. Dhebar, for respondent No. 2. 1961. March 30. The Judgment of the Court was delivered by WANCHOO, J. This petition challenges the constitutionality of a provision in the Constitution (Application to Jammu and Kashmir) Order, 1954 (hereinafter called the Order), made by the President under article 370(1) of the Constitution. The case of the petitioner is that he is registered as an elector in the Parliamentary Constituency of Delhi. As such he has a right to stand for election from any Parliamentary constituency in India. Six seats are allotted to the State of Jammu and Kashmir in the House of the People (Lok Sabha). Ordinarily, the election to these seats should have been by direct election from the territorial constituencies in the States as provided by article 81(l); but the President modified that Article in so far as it relates to the State of Jammu and Kashmir by Para. 5(c) of the Order in these words: "Article 81 shall apply subject to the modification that the representatives of the State in the House of the People ,hall be appointed by the President on the recommendation of the Legislature of the State." The petitioner contends that the President had exceeded his powers when he made this modification, for he thereby substituted direct election to the House of the People by nomination which he could not do. This, it is said, was alteration in article 81 as applied to the State of Jammu and Kashmir and was not justified as a modification under article 370(l). He therefore prays that the modification made may be declared unconstitutional and a writ of quo warranto be issued against the persons nominated to the House of the People on the recommendation of the Legislature of the State of Jammu and Kashmir prohibiting them from acting as members of Parliament. Apart from the question whether the petitioner has any fundamental right to maintain this petition under 87 690 article 32, we are of opinion that there is no force in it. The relevant part of article 370 with which we are concerned is in these words: "Notwithstanding anything in this Constitu tion, . . . . . . . (d) such of the other provisions of this Constitution shall apply in relation to that State (i.e., the State of Jammu and Kashmir) subject to such exceptions and modifications as the President may by order specify. " Article 370 clearly recognises the special position of the State of Jammu and Kashmir and that is why the President is given the power to apply the provisions of the Constitution to that State subject to such exceptions and modifications as the President may by order specify. The President thus has power to say by order that certain provisions of the Constitution will be excepted from application to the State of Jammu and Kashmir and 'on such order being made those provisions would not apply to that State. Besides this power of making exceptions by which certain provisions of the Constitution were not to apply to that State the President is also given the power to apply the provisions of the Constitution with such modifications as he thinks fit to make. The contention on behalf of the petitioner is that the modification envisaged in article 370(l) did not mean amendment of the Constitution for the purpose of application to that State and would not certainly include such amendment as would make a radical alteration in the provisions of the Constitution. In this connection he relies on the observations of Kania, C.J., and Mahajan, J., in In re The (1). Kania, C.J., after dealing with the meaning of the word " modify" seems to have held that the word "modify" as used in the context in which he was speaking only implied alteration without radical transformation. Mhajan, J., also said that the word "modification" Use in the context before him did not involve "any material or substantial alteration". The petitioner therefore urges (1) ; 691 that as the Order substituted direct election by nomination there has been a radical alteration in article 81 by the President in its application to the State of Jammu and Kashmir and therefore is not justified by the word 'modification" used in article 370(l) and the President had exceeded his power under that Article in making this radical alteration. Before we consider what the word "modification" means in the context of article 370(l), let us see what the President has actually done in the matter of modification of article 81. The modification prescribes that the six seats in the House of the People from the State of Jammu and Kashmir would be filled by nomination by the President on the recommendation of the Legislature of that State. Now in form the seats will be filled by nomination by the President; but in reality what the modification provides is indirect election in place of direct election to these seats in the House of the People. The modification lays down that the President will nominate members to these six seats on the recommendation of the Legislature of the State. The President must therefore nominate only those who have been recommended by the Legislature of the State, which is elected on adult suffrage. Now the only way the Legislature can make a recommendation for this purpose is by voting. Therefore, in effect the modification made by the President is that the six seats to the House of the People from the State of Jammu and Kashmir will be filled by indirect election and not by direct election. The element of election still remains in the matter of filling these seats, though it has been made indirect. In these circumstances it may not be possible to say that there has been a radical alteration in article 81 by the modification effected by the Order. But even assuming that the introduction of indirect election by this modification is a radical alteration of the provisions of article 81(l), the question still remains whether such a modification is justified by the word "modification" as used in article 370(1). We are here dealing with the provision of a Constitution which cannot be interpreted in any narrow or pedantic sense 692 The question that came for consideration in In re Delhi Laws Act case( ') was with respect to the power of delegation to a subordinate authority in making subordinate legislation. It was in that context that the observations were made that the intention of the law there under consideration when it used the word "modification" was that the Central Government would extend certain laws to Part C States without any radical alteration in them. But in the present case we have to find out the meaning Of the word "modification" used in article 370(l) in the context of the Constitution. As we have said already the object behind enacting article 370(l) was to recognise the special position of the State of Jammu and Kashmir and to provide for that special position by giving power to the President to apply the provisions of the Constitution to that State with such exceptions and modifications as the President might by order specify. We have already pointed out that the power to make exceptions implies that the President can provide that a particular provision of the Constitution would not apply to that State. If therefore the power is given to the President to efface in effect any provision of the Constitution altogether in its application to the State of Jammu and Kashmir, it seems that when he is also given the power to make modifications that power should be considered in its widest possible amplitude. If be could efface a particular provision of the Constitution altogether in its application to the State of Jammu and Kashmir, we see no reason to think that the Constitution did not intend that he should have the power to amend a particular provision in its application to the State of Jammu and Kashmir. It seems to us that when the Constitution used the word "modification" in article 370(l) the intention was that the President would have the power to amend the provisions of the Constitution if he so thought fit in their application to the State of Jammu and Kashmir. In the Oxford English Dictionary (Vol. VI) the word 'modify" means inter alia "to make partial changes in; to change (as object) in 693 respect of some of its qualities; to alter or vary without radical transformation". Similarly the word "modification" means "the action of making changes in an object without altering its essential nature or character; the state of being thus changed; partial alteration". Stress is being placed on the meaning "to alter or vary without radical transformation" on behalf of the petitioner; but that is not the only meaning of the words "modify" or "modification". The word "modify" also means "to make partial changes in" and "modification" means "partial alteration". If therefore the President changed the method of direct election to indirect election he was in essence making a partial change or partial alteration in article 81 and therefore the modification made in the present case would be even within the dictionary meaning of that word. But, in law, the word "modify" has even a wider meaning. In "Words and Phrases" by Roland Burrows, the primary meaning of the word "modify" is given as "to limit" or "restrict" but it also means " 'to vary" and may even mean to "extend" or "enlarge". Thus in law the word "modify" may just mean "vary", i.e., amend; and when article 370(l) says that the President may apply the provisions of the Constitution to the State of Jammu and Kashmir with such modifications as he may by order specify it means that he may vary (i.e., amend) the provisions of the Constitution in its application to the State of Jammu and Kashmir. We are therefore of opinion that in the context of the Constitution we must give the widest effect to the meaning of the word 'modification" used in article 370(l) and in that sense it includes an amendment. There is no reason to limit the word "modifications" as used in article 370(1) only to such modifications as do not make any "radical transformation". We are therefore of opinion that the President had the power to make the modification which he did in article 81 of the Constitution. The petition therefore fails and is hereby dismissed with costs. Petition dismissed.

Six seats are allotted to the State of Jammu and Kashmir in the House of People (Lok Sabha) and election to those seats should ordinarily have been by direct election under article 81(1) of the Constitution but the President modified that Article under article 370(1) by Para. 5(c) of the Constitution (Application to Jammu and Kashmir) Order, 1954, to the effect that "the representatives of the State in the House of People shall be appointed by the President on the recommendations of the Legislature of the State". The petitioner who claimed to be a registered elector and as such eligible for election from any Parliamentary constituency in India contended that the President had exceeded his powers when he made this modification for he thereby substituted direct election to the House of People by nomination which he could not do, and that the said modi fication amounted to radical alteration in article 81 and was not justified under article 370(1). Held, that the word "modification" used in article 370(I) must be given the widest meaning in the context of the Consti tution and in that sense it includes an amendment and it cannot be limited to such modifications as do not make any "radical transformation". The modification lays down that the President will make the nomination on the recommendation of the State Legislature which can do so only by voting, and in effect it provides that the seats will be filled by indirect election and not direct election. The element of election being thus still present there was no radical alteration in article 81 and the President had the power to make the modification which he did. In re ; , , distinguished.

N: Criminal Appeal No. 692 of 1983. From the Judgment and order dated 29th November, 1983 of the Punjab & Haryana High Court at Chandigarh in Criminal Writ Petition No. 516 of 1983. K. Parasaran, Attorney Genl. of India, Bhagwant Singh, Advocate General (Punjab), Gurmukh Singh, Addl Adv. of Punjab, D.S. Brar, Asstt Adv. General, G.S. Mann. Deputy Adv. General, R.D. Aggarwal, Govt. Advocate, Miss A. Subhashini and S.K. Bagga for the Appellants. Hardev Singh, G.S. Grewal, N.S Das Behl, R.S. Sodhi and J.S. Sandhawalia, for the Respondent. The Judgment of the Court was delivered by CHANDRACHUD, C. J. This is an appeal by special leave against the judgment dated November, 29 1983 of a learned Single Judge of the High Court of Punjab and Haryana in Criminal Writ Petition No. 516 of 1983. That Writ Petition was filed by the respondent. Shri Jagdev Singh Talwandi, to challenge an order of detention passed by the District Magistrate, Ludhiana, on October 3, 53 1983 whereby the respondent was detained under section 3 (3) read with section 3 (2) of the . The respondent was arrested in pursuance of the order of detention on the night between October 3 and 4, 1983. He was first lodged in the Central Jail, Patiala and from there he was taken to Ambala, Baroda and Fathegarh (U.P.). He filed a Writ Petition (No.463 of 1983) in the High Court to challenge his transfer and detention in a place far away from Ambala. He withdrew that petition on an assurance by the Government that he will be sent back to Ambala, which the Government did on October 28. The grounds of detention were served on the respondent on October 6, 1983. Those grounds show that the petitioner was detained on the basis of two speeches allegedly made by him: one on July 8, 1983 at Nihang Chhowani, Baba Bakala, District Amritsar and the other on September 20, 1983 at Gurdwara Manji Sahib, Amertsar. The grounds furnished to the petitioner read thus: "(1) That you in a Shaheedi Conference which was held from 11 a.m. to 4.45 p.m. on 8 7 1983 at a place known as 'Nihang Chhowani ' at Baba Bakala, District Amritsar, delivered a provocative speech to a Sikh gathering comprising about 2000/2200 Persons wherein you made a pointed reference to the incident dated 2 7 1983 of encounters between Nihangs and police at Baba Bakala and Taran Taran and stressed that in order to take revenge Sikhs would kill their (Police) four persons in lieu of the two Nihangs who had been killed in the said encounters. (2) That while addressing a conference convened by the AISSF (All India Sikh Students Federation) on 20 9 1983 at Gurdwara Manji Sahib at Amritsar and attended by about 7000/8000 Sikh students, you made a provocative speech wherein you said that all efforts made for the success of the Akali Morcha having failed, it was still time to establish in Punjab a Government parallel to the Central Government and that you are in a position to form such a Government. You further exhorted that the establishment of Khalsa Raaj was the only solution to the problems. You also made a suggestion that the Government 54 will not accept any demand unless it was compelled by force to do so. This statement was also published in the various newspapers. A case F.I.R. No. 295 dated 27 9 1983 under section 124 A Indian Penal Code, and section 13 of the , was registered at Police Station 'E ' Division, Amritsar, which is under investigation. " The detaining authority stated in the last paragraph of the detention order that the respondent was being supplied the grounds of detention in Punjabi (Gurmukhi script) together with an English translation thereof and the "supporting material forming the base of the grounds of detention". The "supporting material", by which is meant particulars of the grounds of detention, was supplied to the respondent along with the grounds. These particulars consist of what is alleged to be a report of the speeches made by the respondent, as recorded by the C.I.D. branch of the Punjab Police. The particulars, of which an English translation was produced in the High Court at exhibit A1, read thus: "While speaking he said that on July 2 by bringing B.S.F., Punjab Police and other police the unarmed Nihangs were fired at. There is no count as to how many of them were killed, because no rollcall is taken of the Sikhs; how many came and how many went. Further said that in Punjab hundreds of innocent Sikhs have been made the target of bullets. The Government has seen that the Sikhs go away after paying homage to the martyrs. Now we will have to decide as to what steps should be taken. The beloved army of Guru (Nihangs) have protected our dress and scriptures. It is true that some of them do commit mistakes also. They should be punished. We should see that we should kill as many police man as they kill ours, otherwise they will slowly finish us. The new Inspector General of Police Mr. Bhinder, has stated that there are no extremist in Darbar Sahib. Further said that Congress wants to finish self respect among you. The Morcha, which is launched by Akali Dal, is to save the Sikh appearance. The awards have been given to police, have they won any war? Such a big attack upon the Nihangs was 55 on a pre planned programme. I say if they have killed our two men, then you should kill four. If they come to kill me like this, then I will die after killing them. I will never go back. Further said that if we get a judicial enquiry made, it becomes meaningless. Nothing comes out of them. Now the judicial power has been given to Executive Officers. They may kill any body and they complete the enquiry and fill the file. " One of the grounds on which the order of detention was challenged in the High Court was that the State Government had failed to discharge its obligation under Article 22 (5) of the Constitution by denying to the respondent an effective opportunity to make a representation to the Advisory Board against the order of detention. On being asked by the learned Judge "to be more specific", counsel for the respondent stated in the High Court that the State Government had not supplied to the respondent the supporting material on which Ground No. 1 of the grounds of detention was based. Shri Hardev Singh, who appears on behalf of the respondent, adopted that contention by clarifying that the case of the respondent is that the relevant facts stated in the 1st ground of detention are totally absent from the supporting material supplied to him and, therefore, no reasonable person could have possibly passed the detention order on the basis of that material. The learned counsel urged that the order of detention was bad either because the detaining authority did not apply its mind to the material before it or, in the alternative, because there was some other material on the basis of which the detention order was passed and that material was not supplied to the respondent. For the purpose of focussing attention on the true nature of the respondent 's contention and the prejudice said to have been caused to him, the learned Judge of the High Court resorted to an ingenious device. He coined a conversation between the detaining authority and the detenu on the subject of their rival contentions in this case. That imaginary conversation may be reproduced, at least for the merit of its novelty: "(The detaining authority and the detenu come face to face.) Detaining authority: (After reading out Ground No. 1 to the detenu) : You had made that objectionable speech. 56 Detenu: Sir, you seem to have been wrongly informed. I did not deliver any speech, provocative or otherwise, in a Shaheedi Conference at any such time, date or place known as 'Nihang Chhowni ' at Baba Bakal, District Amritsar, before a Sikh gathering of 2000/2200, as read out by you from ground No. 1. Detaining authority: (Being cock sure of its facts, takes out the C.I.D. report and puts it in the hands of the detenu.): Go through this C.I.D. report carefully, as ground No. 1 is based on that report. Detenu: Sir, this report does not refer to any speech being made by me in a Shaheedi Conference at a given time, on a given date, at a given place, at Baba Bakala and before a Sikh gathering numbering 2000/2200. Detaining authority: (Taking back the report from the detenu 's hand and subjecting it to a close scrutiny, says somewhat wryly): Yes, you are right. The vital data which finds a mention in ground No. 1 is missing from the supporting materail. (Regaining quickly his repose, the detaining authority continues): Never mind if the given vital facts are missing from the supporting material. The supporting material at least reveals that you did utter the objectionable words somewhere, sometime, on some date and before some persons. Detenu: Sir, but that was not the speech on which you were going to act. You were going to take action against me on the basis of the speech mentioned in Ground No. 1. Detaining authority: Very well. (So saying, the detaining authority orders the detention of the detenu on two grounds by adding one more ground on the basis of another speech. The detaining authority serves the order of detention upon the detenu, containing two grounds of detention. Simultaneously, the detaining authority supplies the supporting material to the detenu.") 57 We must mention in order to put the record straight and in fairness to the learned Judge, that he has narrated this conversation in a manner which is slightly different in so far as the form, but not the substance; is concerned. He has narrated the conversation in a running form. We have reproduced it like a dialogue in a play, without adding anything of our own. Indeed, we have taken care not to make any changes at all in the fictional conversation imagined by the learned Judge because, the questions and answers which suggested themselves to him are, in a sense, the heart of the matter and, in any case, constitute the essence of his judgment. With respect to the learned Judge, the basic error of his judgment lies in an easy, unexamined assumption which he has made on a significant aspect of the matter. The detenu reminded the detaining authority that the C.I.D. report did not refer to any speech made by him "in a Shaheedi Conference at a given time, on a given date, at a given place at Baba Bakala and before a Sikh gathering numbering 2000/2200". The detaining authority could have not possibly replied to that question by saying merely that the detenu was right. The detenu was right only formally or technically. That is because, the C.I.D. report was supplied to him along with the grounds of detention with the express stipulation that it formed "the base of the grounds of detention". The grounds mention every one of the details which need have been mentioned. The C.I.D. report was furnished to the detenu as forming the source of information leading to the conclusion that he had made a speech which necessitated his detention in the interests of public order. In the circumstances, the grounds and the material furnished to the detenu have to be read together as is the material in the form of the C.I.D. report was a continuation of the grounds of detention. The unqualified reply given by the detaining authority to the detenu, as imagined by the learned Judge, betrays considerable unfamiliarity with the true legal position of the part on the detaining authority. Not only that, but it shows that the detaining authority forgot that the particulars and the grounds were expressed to be interlinked, the former being the base of the latter. The detaining authority should have explained to the detenu that though the particulars supplied to him did not mention those various details, the particulars were supplied to him along with the grounds, that it was expressly clarified contemporaneously that they related to the facts stated in the grounds, that the two had to be read together and that the grounds contained the necessary facts with full details. The dialogue should 58 have ended there and the curtain rung down. Indeed, the dialogue, though carefully improvised by the learned Judge, assumes what is to be decided, namely, whether the particulars furnished to the detenu suffer from the infirmity alleged. Nevertheless, we will examine independently the argument of the respondent that he could not make an effective representation against the order of detention because the material supplied to him, that is to say, the C.I.D. report of the speech alleged to have been made by him at the Shaheedi Conference, did not contain the material particulars which formed an important constituent of the grounds served upon him. His grievance is that the C.I.D. report of his speech does not mention that: (1) the Conference was held on July 8, 1983; (2) it was held at Nihang Chhowani; (3) it was held between the hours of 11. A.M. and 4.45 P.M. (4) it was a "Shaheedi Conference"; (5) there was a gathering of 2000 to 2200 persons at the Conference; and that, (6) the speech made by him referred to an encounter at Baba Bakala and Tarn Taran. Article 22 (5) of the Constitution, around which the argument or the respondent revolves, reads thus: "When any person is detained in pursuance of an order made under any law providing for preventive detention, the authority making the order shall, as soon as may be, communicate to such person the grounds on which the order has been made and shall afford him the earliest opportunity of making a representation against the order." This Article has come up for consideration before this Court in a large number of cases. One of the earliest judgments of this Court on the interpretation of this Article is reported in Dr. Ram krishna Bhardwaj vs The State of Delhi,(1) in which Patanjali Sastri, C.J. observed that under Article 22 (5) of the Constitution, the detenu has the right to be furnished with particulars of the grounds of his detention, "sufficient to enable him to make a representation which, on being considered, may give relief to him". Khudiram Das vs The State of West Bengal, 2 is a judgment of a four Judge Bench of this Court in a case which arose under the Main 59 tenance of Internal Security Act, 1971. One of us, Bhagwati, J., who spoke for the Court, surveyed the decisions bearing on the question of the obligation of the detaining authority and explained the nature of that obligation thus: "The basic facts and material particulars, therefore, which are the foundation of the order of detention, will also be covered by 'grounds ' within the contemplation of article 22 (5) and section 8 and are required to be communicated to the detenu unless their disclosure is considered by the authority to be against the public interest. This has always been the view consistently taken by this Court in a series of decisions. " In Mohammad Yousuf Rather vs The State of Jammu & Kashmir,(1) Chinnappa Raddy, J., in a concurring judgment, dealt with the implications of Article 22 (5) of the Constitution thus: "The extent and the content of Article 22 (5) have been the subject matter of repeated pronouncements by this Court (Vide State of Bombay vs Atmaram (2), Dr. Ramkrishna Bhardwaj vs State of Delhi (1) Shibbanlal Saxena vs State of Uttar Pradesh (3) Dwarkadas Bhatia vs State of Jammu & Kashmir (4). The interpretation of Article 22, consistently adopted by this Court, is, perhaps, one of the outstanding contributions of the Court in the cause of Human Rights. The law is now well settled that a detenu has two rights under Article 22 (5) of the Constitution . (1) To be informed, as soon as may be, of the grounds on which the order of detention is based, that is, the grounds which led to the subjective satisfaction of the detaining authority and (2) to be afforded the earliest opportunity of making a representation against the order of detention, that is, to be furnished with sufficient particulars to enable him to make a representation which on being considered may obtain relief to him." In Khudiram Das vs The State of West Bengal,(2) it was observed that these two safeguards "are the barest minimum which must be 60 observed before an executive authority can be permitted to preventively detain a person and thereby drown his right of personal liberty in the name of public good and social security". The question which we have to consider in the light of these decisions is whether sufficient particulars of the first ground of detention were furnished to the respondent so as to enable him to exercise effectively his constitutional right of making a representation against the order of detention. The obligation which rests on the detaining authority in this behalf admits no exception and its rigour cannot be relaxed under any circumstances. Having given our anxious consideration to this question, it seems to us impossible to accept the view of the High Court that sufficient particulars of the first ground of detention where not furnished to the detenu so as to enable him to make an effective representation to the detaining authority, that is to say, a representation which on being accepted may give relief to him. This is not a case in which the ground of detention contains a bare or bald statement of the conclusion to which the detaining authority had come, namely, that it was necessary to pass the order of detention in order to prevent the detenu from acting in a manner prejudicial to the interests of public order. The first ground of detention with which we are concerned in this appeal, mentions each and every one of the material particulars which the respondent was entitled to know in order to be able to make a full and effective representation against the order of detention. That ground mentions the place, date and time of the alleged meeting. describes the occasion on which the meeting was held, that is, the 'Shaheedi Conference '. It mentions the approximate number of persons who were present at the meeting. Finally, it mentions with particularity the various statements made by the respondent in his speech. These particulars mentioned in the grounds of detention comprise the entire gamut of facts which it was necessary for the respondent to know in order to make a well informed representation. The inadequacies from which the supplementary particulars furnished to the respondent along with ground No. 1 suffer, cannot affect that position because, they do not introduce any obscurity in the facts stated in that ground or detract from the substance of the allegations mentioned in that ground. The argument of the respondent that he could not make an effective representation in behalf of ground No. 1 because of the inadequacy of data in the particulars supplied to him, has therefore to be rejected. However, we are somewhat surprised that in a matter of this nature, 61 the detaining authority should have adopted a somewhat casual and unimaginative approach to his task. We asked the learned Attorney General to produce before us the original version of the C.I.D. report of which an extract was supplied to the respondent by way of particulars. The original version contains almost every one of the material details pertaining to the meeting which are mentioned in ground No. 1 The detaining authority needlessly applied his scissors excising the data which mentioned the date, the place, the time and the occasion of the meeting. It is this lack of thoughtfulness on the part of the detaining authority which furnished to the respondent the semblance of an argument. This Court has observed in numerous cases that, while passing orders of detention, great care must be brought to bear on their task by the detaining authorities. Preventive detention is a necessary evil but essentially an evil. Therefore, deprivation of personal liberty, if at all, has to be on the strict terms of the Constitution. Nothing less. We will utter the of given warning yet once more in the hope that the voice of reason will be heard. Shri Hardev Singh contended, in the alternative, that the order of detention suffers from a total non application of mind because, that order could not have been passed on the basis of the C.I.D. report which does not refer to any of the facts which are mentioned in the order of detention. It is undoubtedly true that the case of the appellants is that the order of detention is founded upon the report of the C.I.D., relating to the speech made by the respondent at the Shaheedi Conference. But the argument of the learned counsel overlooks that what was furnished to the respondent was an extract from the C.I.D. report and not the whole of it. However, that has not caused any prejudice to the respondent since the grounds and the particulars were served upon him simultaneously and ground No. 1 mentions every conceivable detail which it was necessary to mention in order to enable the respondent to make a proper representation against the order of detention. Evidently, the detaining authority had before it the whole of the C.I.D. report on the basis of which it passed the order of detention. What was omitted from the extract furnished to the respondent was incorporated in ground No. 1. It is therefore not possible to accept the argument that the order of detention is bad because the detaining authority did not apply its mind to the question as to whether there was material on the basis of which the respondent could be detained. It was further argued by the learned counsel that the detaining authority should have disclosed the evidence on the basis of which 62 the order of detention was passed because, in the absence of knowledge of such evidence, the respondent could not have made an effective representation against the order of detention. There is no substance in this contention. It is not the law that the evidence gathered by the detaining authority against the detenu must also be furnished to him. In Beni Madhob Shaw vs The State of West Bengal,(1) it was argued on behalf of the detenu that the details of the activities attributed to him were not disclosed to him, as a result of which his right to make a representation to the Government was seriously prejudiced. It was held by this Court that since the activities forming the grounds of detention were disclosed to the detenu in clear terms and since such disclosure furnished adequate information to the detenu to enable him to make an effective representation against his detention, the non disclosure of sources of information or the exact words of the information which formed the foundation of the order of detention could not be complained of. In Her Jas Dev Singh vs State of Punjab,(2) it was held that the conclusions drawn from the available facts constitute 'the grounds ' and that the ground must be supplied to the detenu. The Court observed that the detenu is not entitled to know the evidence nor the source of the information: What must be furnished to him are the grounds of detention and the particulars which would enable him to make out a case, if he can, for the consideration of the detaining authority. In Vakil Singh vs State of Jammu and Kashmir, (3) it was held that since the basic facts, as distinguished from factual details were incorporated in the material which was supplied to the detenu, nothing more was required to be intimated to him in order to enable him to make an effective representation. These cases show that the detenu is not entitled to be informed of the source of information received against him or the evidence which may have been collected against him as, for example, the evidence corroborating that the report of the C.I.D. is true and correct. His right is to receive every material particular without which a full and 63 effective representation cannot be made. If the order of detention refers to or relies upon any document, statement or other material, copies thereof have, of course, to be supplied to the detenu as held by this Court in Ichhu Devi Choraria vs Union of India.(1) That question does not arise here since no such thing is referred to or relied upon in the first ground of detention. Indeed the furnishing of the C.I.D. report, of which a truncated extract was furnished to the respondent, was a superfluous exercise in the light of the facts of the instant case. Shri Hardev Singh relied upon the following passage in the judgment in Khudiram in support of his contention that the entire material which was before the detaining authority, including the evidence gathered by him, must be furnished to the detenu: "But if the grounds of detention are not communicated to him how can he make an effective representation ? The opportunity of making a representation would be rendered illusory. The communication of the grounds of detention is, therefore, also intended to sub serve the purpose of enabling the detenu to make an effective representation. If this be the true reason for providing that the grounds on which the order of detention is made should be communicated to the detenu, it is obvious that the 'grounds ' mean all the basic facts and materials which have been taken into account by the detaining authority in making the order of detention and on which, therefore, the order of detention is based. " These observations cannot be construed as meaning that the evidence which was collected by the detaining authority must also be furnished to the detenu. As the very same paragraph of the judgment at page 839 of the report shows, what was meant was that the basic facts and the material particulars which form the foundation of the order of detention must be furnished to the detenu since, in the true sense, they form part of the grounds of detention and without being apprised of the same, the detenu cannot possibly make an effective representation. Shri Hardev Singh found serious fault with the fact that in answer to the writ petition filed by the respondent in the High Court, the counter affidavit was sworn by Shri K.C. Mahajan, Deputy Secretary in the Home Department of the Government of Punjab, and 64 not by the District Magistrate, Ludhiana, who had passed the order of detention. We are not prepared to dismiss this submission as of no relevance or importance. In matters of a routine nature, if indeed there are any matters of a routine nature in the field of detention, a counter affidavit may be sworn by a person who derives his knowledge from the record of the case. However, in sensitive matters of the present nature, the detaining authority ought to file his own affidavit in answer to the writ petition and place the relevant fats before the Court which the Court is legitimately entitled to know. In Shaik Hanif vs State of West Bengal, the counter affidavit on behalf of the State of West Bengal was filed by the Deputy Secretary (Home), who verified the correctness of the averments in his affidavit on the basis of the facts contained in the official records. The District Magistrate; who passed the order of detention, did not file his affidavit and the explanation which he gave for not doing so was found to be unsatisfactory. Following an earlier judgment in Naranjan Singh vs State of Madhya Pradesh, it was held by this Court that, in answer to a Rule issued in a habeas corpus petition, it is incumbent upon the State to satisfy the Court that the detention of the petitioner is legal and is in conformity not only with the mandatory provisions of the Act under which the order of detention is passed but is also in accord with the requirements implicit in Article 22(5) of the Constitution. Sarkaria, Jobserved on behalf of the Court: "Since the Court is precluded from testing the subjective satisfaction of the detaining authority by objective standards, it is all the more desirable that in response to the Rule Nisi, the counter affidavit on behalf of the State should be sworn to by the District Magistrate or the authority on whose subjective satisfaction the detention order under s.3 was passed. If for sufficient reason shown to the satisfaction of the Court, the affidavit of the person who passed the order of detention under section 3 cannot be furnished, the counter affidavit should be sworn by some responsible officer who personally dealt with or processed the case in the Government Secretariat or submitted it to the Minister or other Officer duly authorised under the rules of business framed by the Governor under Article 166 of the Constitution to pass orders on behalf of the Government in such matters. " 65 After reviewing certain other decisions, the Court held that the failure to furnish the counter affidavit of the District Magistrate who had passed the order of detention, was an impropriety though in most of the cases it may not be of much consequence, especially if there was no allegation of mala fides against the detaining authority. In the result, the absence of the affidavit of the District Magistrate was held not to vitiate the order of detention. In this case too, there are no allegations of mala fides against the District Magistrate and so, his failure to file a counter affidavit will not vitiate the order of detention. We cannot, however, leave this subject without emphasising once again the importance of the detaining authority filing his own affidavit in cases of the present nature. There are degrees of impropriety and the line which divides grave impropriety from illegality is too thin to draw and even more so to judge. Conceivably, there can be cases in which such impropriety arising out of the failure of the detaining authority in filing his own affidavit may vitiate the order of detention. Finally, Shri Hardev Singh has contended that the respondent was unable to give proper instructions to his counsel when the matter was heard by the Advisory Board. Counsel says that the respondent was transferred from place to place and ultimately. he was produced before the Advisory Board an hour or so before the commencement of proceedings before the Board. That left no time for him to instruct his counsel. We do not see any substance in this grievance. The respondent was represented by an advocate before the Advisory Board. The learned advocate argued the case of the respondent along with the cases of two other detenus. It does not appear that any grievance was made by him that he was not able to obtain instructions from the respondent so as to be able to represent his case effectively before the Advisory Board. For these reasons, we allow the appeal and set aside the judgment of the High Court. As desired by counsel for the respondent, we remand the matter to the High Court for disposal of the remaining contentions raised by the respondent in his Writ Petition. We would like to take this opportunity to point out that serious difficulties arise on account of the practice increasingly adopted by the High Courts, of pronouncing the final order without a reasoned judgment. It is desirable that the final order which the High Court intends to pass should not be announced until a reasoned judgment 65 is ready for pronouncement. Suppose, for example, that a final order without a reasoned judgment is announced by the High Court that a house shall be demolished, or that the custody of a child shall be handed over to one parent as against the order, or that a person accused of a serious charge is acquitted, or that a statute is unconstitutional or, as in the instant case, that a detenu be released from detention. If the object of passing such orders is to ensure speedy compliance with them, that object is more often defeated by the aggrieved party filing a special leave petition in this Court against the order passed by the High Court. That places this Court in a predicament because, without the benefit of the reasoning of the High Court, it is difficult for this Court to allow the bare order to be implemented. The result inevitably is that the operation of the order passed by the High Court has to be stayed pending delivery of the reasoned judgment. It may be thought that such orders are passed by this Court and therefore there is no reason why the High Courts should not do the same. We would like to point out respectfully that the orders passed by this Court are final and no appeal lies against them. The Supreme Court is the final Court in the hierarchy of our courts. Besides, orders without a reasoned judgment are passed by this Court very rarely, under exceptional circumstances. Orders passed by the High Court are subject to the appellate jurisdiction of this Court under Article 136 of the Constitution and other provisions of the concerned statutes. We thought it necessary to make these observations in order that a practice which is not very desirable and which achieves no useful purpose may not grow out of its present infancy.

The respondent challenged the order of his detention passed by the District Magistrate, Ludhiana on October 3,1983 under section 3 (3) read with section 3 (2) of the , through Criminal Writ Petition No. 516 of 1983. According to the petitioner respondent, the grounds of detention served on him on Oct. 6, 1983 showing that he was detained on the basis of two speeches made by him on 8.7.1983 and 20.9.1983 as recorded by the Crime Investigation Department of the Punjab Police contained certain particulars, which were totally absent from the supporting material and therefore no reasonable person could have possible passed the detention order on the basis of such material. The High Court accepted the contention and made the rule absolute. Hence the appeal by the State after obtaining special leave. Allowing the appeal and remanding the matter to the High Court of Punjab, the Court ^ HELD: 1:1. While passing orders of detaining great care must be brought to bear on their task by the detaining authorities. Preventive detention is a 51 necessary evil but essentially an evil. Therefore, deprivation of personal liberty, if at all, has to be on the strict terms of the Constitution. Nothing less. [61 B C] 1:2. In the instant case, the detaining authority should not have adopted a somewhat casual and unimaginative approach to his task. The original version contains almost every one of the material details pertaining to the meeting, which are mentioned in ground No.1. The detaining authority needlessly applied his scissors excising the data which mentioned the date, place, the time and the occasion of the meeting. It is this lack of thoughtfulness on the part of the detaining authority which furnished to the respondent the semblance of an arguments. [61 A B] 2. The contention of the respondent that he could not make an effective representation in behalf of ground No.1 because of the inadequacy of data in the supporting particulars supplied to him is incorrect. The inadequacies from which the supplementary particulars furnished to the respondent along with ground No.1 suffer, cannot affect that position because, they do not introduce any obscurity in the facts stated in that ground or detract from the substance of the allegations mentioned in that ground. The first ground of detention mentions that the detenu was right only formally or technically. That is because, the C.I.D. Report was supplied to him along with the grounds of detention with the express stipulation that it formed "the base of the grounds of detention. " The grounds mention every one of the details which need have been mentioned. The C.I.D. report was furnished to the detenu as forming the source of information leading to the conclusion that he had made a speech which necessitated his detention in the interests of public order. In the circumstances, the grounds and the material furnished to the detenu have to be read together as if the material in the form of the C.I.D. report was a continuation of the grounds of detention. [57 C E, 60 F H] Dr. Ramakrishna Bhardwaj vs The State of Delhi, ; , Khudiram Das vs The State of West Bengal, ; , @ 838 & 840; Mohammed Yusuf Rowther vs The State of J & K, ; @ 268, 269; State of Bombay vs Atmaram, ; Shibbanlal Saxena vs State of Uttar Pradesh, ; ; Dwarkadas Bhatia vs State of Jammu & Kashmir, ; ; referred to. The detenu is not entitled to be informed of the source of information received against him or the evidence which may have been collected against him as for example, the evidence corroborating that the report of the C.I.D. is true and correct. His right is to receive every material particular without which a full and effective representation cannot be made. If the order of the detention refers to or relies upon any document, statement or other material, copies thereof have, of course, to be supplied to the detenu. It is not the law that evidence gathered by the detaining authority against the detenu must also be furnished to him. [62 G H; 63 A B] Beni Madhob Shaw vs The State of West Bengal, A.I.R. Har Jas Dev Singh vs State of Punjab, ; @ 288; Vakil Vakil Singh vs State of Jammu & Kashmir, A.I.R. 1974 2337 @, 2341; Icchu Devi Choraria vs Union of India; , @ 650; referred to. The failure to furnish the counter affidavit of the District Magistrate who had passed the order of detention, was an impropriety though in most of the cases 52 it may not be of much consequence, especially if there was no allegation of mala fides against the detaining authority. There are no allegations of mala fides against the District Magistrate and so, his failure to file a counter affidavit will not vitiate the order of detention. [65 A B] Shaik Hanif vs State of West Bengal, [1974]3 SCR 258; Naranjan Singh vs State of Madhya Pradesh, A.I.R. 1972 S.C. 2215, referred to. [The Court emphasised the importance of the detaining authority filing his own affidavit in cases of the present nature and observed that "There are degrees of impropriety and the line which divides grave impropriety from illegality is too thin to draw and even more so to judge. Conceivably, there can be cases in which such impropriety arising out of the failure of the detaining authority in filing his own affidavit may vitiate the order of detention.] [65 C D] 5. It is desirable that the final order which the High Court intends to pass should not be announced until a reasoned judgment is ready for pronouncement. If the object of passing such orders is to ensure speedy compliance with them, that object is more often defeated by the aggrieved party filing a special leave petition in this Court against the order passed by the High Court. That places this Court in a predicament because, without the benefit of the reasoning of the High Court it is difficult for this Court to allow the bare order to be implemented. The result inevitably is that the operation of the order passed by the High Court has to be stayed pending delivery of the reasoned judgment. [65 H; 66 A C]

Civil Appeal No. 50 of 1988. From the Judgment and order dated 14.8.87 of the Punjab & Haryana High Court in Civil Revision No. 2836 of 1982. Dr. Meera Aggarwal for the Petitioner. 347 A.B. Rohtagi, Mukul Rohtagi, Atul Tewari and Ms. Bina Gupta for the Respondent. The Judgment of the Court was delivered by SABYASACHI MUKHARJI, J. This appeal by special leave is directed against the judgment of the High Court of Punjab and Haryana dated 14th August, 1987. The appellant took on rent the premises in dispute from the respondent at a monthly rent of Rs. 120 and executed a rent note in his favour on 19th April, 1975. Clause 4 of the said rent note provided, inter alia, as follows: "That the tenant will run the business of English Liquor Vend in the shop will do sale of Liquor. " The landlord, respondent herein filed a petition under section 13 of the Haryana Urban (Control of Rent & Eviction) Act, 1973 (hereinafter called 'the Act ') against the appellant on the ground of arrears of rent from 1.4.1979 to 31.8.1979 and change of user from Liquor Vend business to that of general merchandise at the shop in dispute by the appellant. The appellant tendered the entire arrears of rent at the first date of hearing and thereafter he contested by filing written statement. The appellant submitted that after March, 1979, the licence of liquor vend in his favour was not renewed and he had to discontinue that business of liquor vend at the shop in dispute and had to start the business of general merchandise. According to the appellant the purpose of the user still remains commercial and that in the rent note there was no clause prohibiting the appellant to change any other business in the shop in dispute. The Rent Controller held that the appellant had changed the user of the shop in dispute and he was liable for eviction under the Act. There was an appeal to the Appellate Authority and the Appellate Authority dismissed the said appeal. The appellant went in civil revision to the High Court of Punjab and Haryana. The High Court dismissed the civil revision and upheld the eviction. Hence this appeal. The question is, whether a ground for eviction was made out under clause (b) of section 13(2)(ii) of the Act. The said Act was passed to control the increase of rent of certain buildings and rented land situated within the limits of urban areas, and the eviction of the 348 tenants therefrom. Section 13(2)(ii)(b) of the Act reads as follows: "13(2) A landlord who seeks to evict his tenant shall apply to the Controller, for direction in that behalf. If the Controller, after giving the tenant a reasonable opportunity of showing cause against the application is satisfied: (i) XX XX XX (ii) that the tenant has after commencement of 1949 Act, without the written consent of the landlord (a) XX XX XX (b) used the building or rented land for a purpose other than that for which it was leased. " The High Court of Punjab and Haryana has relied on a Full Bench decision of the said High Court in Sikander Lal vs Amrit Lal, [1984] Punjab Law Reporter 1. That was a case under the East Punjab Urban Rent Restriction Act of 1949. The Full Bench of the Punjab and Haryana High Court in the facts and circumstances of that case held that it was a common ground that the premises was originally leased for the business of handlooms. Thereafter it was used for small carding machine not occupying a space of more than 4 feet x 4 feet which converted cloth into thread. It was held that there was no change of user. The Full Bench, however, observed that it emerged from the long line of authorities that where the subsequent use of the premises is merely ancillary to the specific original purpose then it would imply no change of user within the meaning of the statute. If by custom or convention or on the finding of the Court it could be held that the added use of the premises was ancillary to the main original purpose then in the eye of law it would be deemed to have been within the terms of the original lease. It was further held that both on principle and on binding precedent it emerged that the specified original purpose could not be, according to the Full Bench, extended by adding to it any and every purpose thereto, and the same must be confined within the limitation of being either a part or parcel of, or ancillary to, the original purpose. There the Court was concerned with section 13(2)(ii)(b) of the Act which is an identical provision as the present one. So far as the High Court held in that case that allied business would not amount to change of user but for a business which is not allied for the business for which it was let out would amount to change 349 of user come within the mischief of clause (b) of section 13(2)(ii) of the Act, the same must be read with reservation. Our attention was drawn to a decision of this Court in Maharaj Kishan Kesar vs Milkha Singh and others, (Civil Appeal No. 1086 of 1964 decided on 10th of November, 1965. That was a decision under the East Punjab Urban Rent Restriction Act, 1949. There on the facts the Court found that selling petrol was an allied business of the workshop and as such it is a part of the business. The Court held that there is no evidence to show that in the trade a petrol pump is not regarded as a part of motor workshop business. The sale of petrol is an allied business and would not amount to conversion to a different business or change of user. There is nothing in the said decision which would give any assistance to the respondent in this case. The business purposes must be adjudged in the light of the purposes of the Rent Act in question which is to control the eviction of tenants therefrom. In the expanding concept of business now a days and the growing concept of departmental stores, we are of the opinion that it cannot be said that there was any change of user in the facts of this case which would attract the mischief of the provisions of section 13(2)(ii)(b) of the Act. The building was rented for purpose of carrying on a business, using it for another business, it will not in any way impair the utility or damage the building and this business can be conveniently carried on in the said premises. There was no nuisance created. Our attention was drawn to the observations of Lord Diplock in Duport Steels Ltd. and others vs Sirs and others, at 541. That was a decision in respect of the Trade Disputes Act 1906. Lord Diplock said: "My Lords, at a time when more and more cases involving the application of legislation which gives effect to policies that are the subject of bitter public and parliamentary controversy, it cannot be too strongly emphasised that the British Constitution, though largely unwritten, is firmly based on the separation of powers: Parliament makes the laws, the judiciary interpret them. When Parliament legislates to remedy what the majority of its members at the time perceive to be a defect or a lacuna in the existing law (whether it be the written law enacted by existing statutes or the unwritten common law as it has been expounded by the judges in decided cases), the role of the judiciary is confined to ascertaining from the words that Parliament 350 has approved as expressing its intention what that intention was, and to giving effect to it. Where the meaning of the statutory words is plain and unambiguous it is not for the judges to invent fancied ambiguities as an excuse for failing to give effect to its plain meaning because they themselves consider that the consequences of doing so would be inexpedient, or even unjust or immoral. In controversial matters such as are involved in industrial relations there is room for differences of opinion as to what is expedient, what is just and what is morally justifiable. Under our constitution it is Parliament 's opinion on these matters that is paramount. While respectfully agreeing with the said observations of Lord Diplock, that the Parliament legislates to remedy and the judiciary interpret them, it has to be borne in mind that the meaning of the expression must be found in the felt necessities of time. In the background of the purpose of rent legislation and in as much as in the instant case the change of the user would not cause any mischief or detriment or impairment of the shop in question and in one sense could be called an allied business in the expanding concept of departmental stores, in our opinion, in this case there was no change of user which attract the mischief of section 13(2)(ii)(b) of the Act. The High Court, therefore, was in error. In that view of the matter this appeal is allowed and the order of eviction is set aside. The parties will pay and bear their own costs. N.V.K. Appeal allowed.

% The appellant tenant took on rent the suit premises from the respondent landlord on a monthly rent of Rs.120 and executed a rent note in his favour on 19th April, 1975. Clause 4 of the rent note provided that the tenant was to run the 'business of English Liquor Vend, and do sale of liquor in the shop. ' The respondent filed a petition for eviction under section 13 of the Haryana Urban (Control of Rent & Eviction) Act, 1973 against the appellant on the ground of ground of rent from 1st April, 1979 to 31st August, 1979 and change of user from liquor vend business to that of general merchandise. The appellant tendered the entire arrears of rent at the first date of hearing, and contested the eviction petition by filing a written statement contending that after March, 1979 the licence of liquor vend in his favour was not renewed, and he had to discontinue that business at the suit premises, and had to start the business of general merchandise. It was, further, contended that the purpose of user still remained commercial and that there was no clause in the rent note prohibiting the appellant to change to any other business. The Rent Controller held that the appellant had changed the user of the shop in dispute and that he was liable for eviction under the Act. 346 The Appellate Authority dismissed the appeal. The High Court also dismissed the Civil Revision and upheld the order of eviction. Allowing the Appeal, this Court, ^ HELD: 1. The business purposes must be adjudged in the light of the purposes of the Rent Act in question which is to control the eviction of tenants therefrom. [349C] 2. In the expanding concept of business nowadays and the growing concept of departmental stores, it cannot be said that there was any change of user in the instant case, when the tenant converted the use of the building from liquor vend business to that of general merchandise. The building was rented for the purpose of carrying on a business. It was used for another business which would not in any way impair the utility or damage to the building, and the business could be conveniently carried on in the said premises. No nuisance was also created. The case would, therefore, not attract the mischief of section 13(2)(ii)(b). [349D, 350E] 3. So far as the High Court of Punjab and Haryana held in the Full Bench decision in Sikander Lal vs Amrit Lal, (1984 Punjab Law Reporter 1) that allied business would not amount to change of user but for a business which is not allied for the business for which it was let out would amount to change of user come within the mischief of clause (b) of section 13(2)(ii) of the Act, the same must be read with reservation. [348H, 349A] 4. When Parliament legislates to remedy a defect or a lacuna in the existing law, and the judiciary interprets them, it has to be borne in mind that the meaning of an expression must be found in the felt necessities of time. [349G H, 350C D] Duport Steels Ltd. & others vs Sirs and others, at 541. referred to.

Criminal Appeal No. 206 of 1979. From the Judgment and Order dated 27.9. 1978 of the Punjab and Haryana High Court in Criminal Appeal No. 17 13 of 1975. 494 A.S. Sohal and S.K. Jain for the Appellant. Mahabir Singh and A.G. Prasad for the Respondent. The Judgment of the Court was delivered by FATHIMA BEEVI, J. Raj Kumari (20), the daughter of Ishar Dass. was married to the appellant Baldev Raj a year before her tragic death in February, 1975. It appears that all was not well with the couple. Raj Kumari left for her parents house in village Raison 75 Kms. away from her matrimonial home in village Urlana Khurd. She stayed with her parents for some days complaining ill teatment by the husband. On the assurance of the father in law, she was sent back with her husband hardly a couple of months before the incident on 14.2. On that fateful day, it is said that Raj Kumari took meals to the appellant who was working in the wheat field near his tubewell. ' Raj Kumari did not return home. Her dead body was discovered in the drain on 16.2. Multiple injuries were seen on her person. Complaint was lodged at the police station on February 16, 1975 at about 5.30 P.M. against the appellant who was finally chargesheet ed for the offence under section 302 and 201, I.P.C. The learned Sessions Judge convicted the appellant under section 302, I.P.C., and sentenced him to undergo imprisonment for life. The High Court dismissed the appeal against the con viction and sentence. This appeal by special leave is di rected against the judgment of the High Court. The conviction of the appellant is based on circumstan tial evidence only. The main item of the evidence consists of the extrajudicial confession stated to have been made by the appellant in the presence of Ishar Dass (PW 3). Ramji Dass (PW 4) and Satnam Dass (PW 5) at the panchayat on 16.2. besides the recovery of incriminating articles at the instance of the appellant and the motive as spoken to by Ishar Dass. According to the prosecution, on 15.2.1975 the appellant 's father Hakam Chand contracted Ishar Dass when Raj Kumari was found missing from 14.2. Ishar Dass arrived at village Urlana Khurd accompanied by Satnam Dass, Sarpanch of his village, and others. At the panchayat held in the presence of Ramji Dass, Nand Lal, Satnam Dass and others, the appellant stated that he killed his wife in the wheat field and threw the dead body in the drain at night after removing her ornaments. PWs 3, 4 and 5 testified the fact but Nand Lal (DW I) did not support the prosecution version. It is also the prosecution case that the appellant was handed over to and arrested by the police at the time the complaint was lodged after the 495 discovery of the dead body and that the appellant had pro duced the kassi and the gold ornaments concealed in the hut near the tubewell. PW 10. the Sub Inspector of Police, deposed to having interrogated the appellant and effected the recovery on the basis of the statements made by the appellant. Ishar Dass (PW 3) narrated the events that pre ceded the occurrence and also proved the letter he had received from the appellant 's father when Raj Kumari was staying with him. He also stated the circumstances under which he happened to be at the panchayat on 16.2. 1975 along with the others after being informed by Hakam Chand. PWs 4 and 5 fully corroborated the evidence of PW 3 in that the appellant had confessed his guilt in their presence. The evidence was accepted by the trial court and the High Court to sustain the conviction against the appellant. The argument on behalf of the appellant that the medical evidence is conflicting with the prosecution case was re jected by the High Court finding that the ante mortem in juries found on the body of Kumari could have been caused with the weapon recovered even on the statement made by the Doctor (PW 1). The recovery of the bloodstained earth from the wheat field near the tubewell, recovery blood stained kassi and the ornaments worn by Raj Kumari by PW 10 in the opinion of the High Court lent assurance to the statement mad,: by the appellant before the panchayat. The High Court was of the view that the various circumstances conclusively proved the guilt of the appellant beyond reasonable doubt. The main contention advanced on behalf of the appellant before us is that the High Court failed to appreciate the inherent infirmities in the prosecution evidence and that there is no legal evidence to support the findings. It was maintained that the testimony of PWs 3, 4 and 5 relating to the extra judicial confession is discrepant and incredible, that the confession even if true, was not voluntary but induced and the same having been retraced cannot form the basis for a conviction in the absence of any material cor roboration. The learned counsel for the appellant contended that the High Court had refused to give benefit of doubt to the accused despite facts apparent on the face of the record any interference is called for. The extra judicial confession, according to the learned counsel, being a very weak piece of evidence, could not have been accepted as true or voluntary in view of the admission made by the prosecution witnesses and improvement in the story given by Ishar Dass. He pointed out that at the panchayat the appellant was induced to make a statement on the 496 promise that he would be pardoned and therefore the confes sion is unacceptable. Normally this Court does not interfere with the concur rent findings of the facts of the courts below in the ab sence of very special circumstances or gross errors of law committed by the High Court and violation of the well estab lished principles of the appreciation of circumstantial evidence, which results in serious and substantial miscar riage of justice to the accused. We heard the learned coun sel at length. We find that the High Court was right in its conclusion and there is no good ground for interference. The first information was lodged by Ishar Dass at the police station where the appellant was also present. In the first information report itself Ishar Dass has narrated the story of the panchayat having been held in the presence of PWs 4 and 5 and the appellant having made the confession. PW 5 accompanied Ishar Dass from village Raison. It is difficult to hold that these persons hailing from another village would have been in a position to influence the local people against the appellant and foist a case against him. PW 4, Lambardar (Ramji Dass) substantially supported the prosecution case. The courts below have carefully analysed the evidence and accepted the same. As rightly pointed out by the High Court, we find no merit in the submission that the medical evidence is not in consonance with the prosecu tion case. The facts that the autopsy was held nearly 72 hours after the injuries were caused and the witnesses were examined long after the weapon was recovered are relevant in appreciating the evidence of the medical witness. The evi dence of this witness read as a whole is only consistent with the case that the injuries could have been caused with the weapon. The fact that the appellant made the confession is proved by cogent evidence. The circumstances that his father was present throughout and the appellant himself did not protest when he was present at the police station nega tives the suggestion of inducement or threat. The discovery of the dead body from the drain through the wheat field, presence of blood in the field, recovery of gold ornaments from, the roof of the hut and blood stained kassi from its premises near the tubewell are material circumstances pro viding connecting links in the chain of circumstantial evidence. The appellant when examined did not offer any explanation except to deny his involvement. Ishar Dass testified to the fact that Raj Kumari had complained about the ill treatment by her husband. In the light of such evidence, it is preposterous to maintain that the deceased may have been assaulted by some unidentified assailant somewhere in the fields and the appellant 497 had been falsely implicated in the offence. The confessional statement is not a long narration. The substance of the statement is that the appellant killed his wife and threw the dead body in the drain. PW 4 is the Lambardar of village Urlana Khurd and PW 5 the Sarpanch of Gram Panchayat of village Raison. The fact that a panchayat was held at village Urlana Khurd is admitted even by the hostile witness Nand Lal (DW I). Ishar Dass when informed by Hakam Chand at his village that Raj Kumari was found missing entertained suspicion. He met his villagers and proceeded to the appellant 's village the next day, along with the Sar panch and other persons. The panchayat was held there on 16.2. The appellant and his father were brought before the panchayat. The appellant was questioned and was asked to speak the truth and then the appellant with folded hands said that he murdered his wife in the wheat field when she came there with meals and later threw the dead body in the drain. The prompting by the panchayat does not amount to inducement or threat and the circumstances under which the statement was made leave no room for doubt that the confes sion was voluntary. An extra judicial confession, if voluntary, can be relied upon by the court along with other evidence in con victing the accused. The value of the evidence as to the confession depends upon the veracity of the witnesses to whom it is made. It is true that the court requires the witness to give the actual words used by the accused as nearly as possible but it is not an invariable rule that the court should not accept the evidence, if not the actual words but the substance were given. It is for the court having regard to the credibility of the witness to accept the evidence or not. When the court believes the witness before whom the confession is made and it is satisfied that the confession was voluntary, conviction can be rounded on such evidence. Keeping these principles in mind, we find that the confession has been properly accepted and acted upon by the courts below and there is no scope for any doubt regarding the complicity of the appellant in the crime. The confession of the appellant was voluntary. The testimony of PW 4 and PW 5 being responsible persons could not be doubted in the absence of any material to show that they had been motivated to falsely implicate the appellant. The very presence of the appellant and his father with the party of Ishar Dass throughout the operation upto lodging of com plaint at the police station dispel any suspicion against the prosecution case and clearly point to the truthfulness of the same. We are, therefore, unable to find any infirmity in the confession which has been accepted and relied upon by the courts below. 498 The circumstances proved are conclusive of the guilt of the appellant and incapable of being explained on any other reasonable, hypothesis. Conviction has therefore to be maintained. The appeal is accordingly dismissed. The appel lant who is on bail shall surrender to custody to undergo the sentence of imprisonment. P.S.S. Appeal dismissed.

The appellant was convicted under section 302 IPC for murder ing his wife. The prosecution case was that on the fateful day the deceased had taken meals to the appellant while he was working in the field near his tubewell. Her dead body was recovered two days later in a nearby drain. He made an extra judicial confession the same day at the panchayat in the presence of PWs 3, 4 and 5 to the effect that he had killed his wife in the wheat field and threw the dead body in the drain at night after removing her ornaments. The FIR was lodged thereafter in the presence of the appellant and the fact of his statement was recorded therein. The weapon of offence, the kassi, and the ornaments were recovered from the hut near the tubewell at his instance. PW 3 narrated the events that preceded the occurrence. PWs 4 and 5 fully corroborated the evidence of PW 3 in that the appellant had confessed his guilt in their presence. The evidence was accepted by the trial court. The High Court sustained the conviction on the view that various circumstances conclusively proved the guilt of the appellant beyond reasonable doubt. In the appeal it was contended for the appellant that the extrajudicial confession even if true, was not voluntary but induced on the promise that he would he pardoned and the same having been retracted could not form the basis for a conviction in the absence of any material corroboration. Dismissing the appeal, HELD: 1. The High Court was right in its conclusion and there was no ground for interference. 2.1 An extra judicial confession, if voluntary can be relied upon by the court alongwith other evidence in con victing the accused. The 493 value of the evidence as to the confession depends upon the veracity of the witnesses to whom it is made. Though the court requires the witness to give the actual words used by the accused as nearly as possible but it is not an invaria ble rule that the court should not accept the evidence, if not the actual words but the substance were given. It is for the court having regard to the credibility of the witness to accept the evidence or not. When the court believes the witness before whom the confession is made and it is satis fied that the confession was voluntary, conviction can be rounded on such evidence. 2.2 In the instant case, the fact that the appellant made the confession is proved by cogent evidence. He and his father were brought before the panchayat held in the presence of PWs 3, 4 and 5. He was questioned and was asked to speak the truth. This prompting by the panchayat does not amount to inducement or threat. The testimony of PW 4, a lambardar, and PW 5, the Sarpanch being responsible persons could not be doubted in the absence of any material to show that they had been motivated to falsely implicate the appel lant. The circumstances under which the statement was made leaves no room for doubt that the confession was voluntary. 2.3 The discovery of the dead body from the drain through the wheat field, presence of blood in the field, recovery of gold ornaments from the roof of the hut and blood stained kassi from the hut near the tubewell were material circumstances providing connecting links in the chain of circumstantial evidence. The appellant when exam ined did not offer any explanation except to deny his in volvement. PW 3 had testified to the fact that the deceased had complained about the illtreatment by her husband. In the light of such evidence, it is preposterous to maintain that she may have been assaulted by some unidentified assailant somewhere in the fields and the appellant had been falsely implicated in the offence. The circumstances thus proved were conclusive of the guilt of the appellant and incapable of being explained on any other reasonable hypothesis. Conviction has, therefore, to be maintained.

N: Criminal Appeal No. 615 of 1981. 356 Appeal by Special leave from the Judgment and Order dated the 6th May, 1981 of the Punjab & Haryana High Court in Criminal Revision No. 562 of 1979. Uma Datta, T.C. Sharma and A.D. Malhotra for the Appellant. R.N. Poddar for the Respondent. This appeal by special leave is directed against the judgment of the Punjab and Haryana High Court, dismissing Criminal Revision Case No. 562 of 1979 which was filed by the appellant against the judgment of the Additional Sessions Judge, Gurgaon who affirmed the judgment of the Chief Judicial Magistrate, Gurgaon sentencing the appellant to rigorous imprisonment for six months and a fine of Rs. 1,000 under section 16 (1) (c) of the as amended from time to time. We dismissed the appeal and confirmed the conviction and sentence on 5.4. 1983 for reasons to be giving later. We hereby give the reasons. The charge against the appellant was that when the Food Inspector, Gurgaon, Sant Lal Anand (P.W.2) went to the appellant 's grocery shop at Farrukh Nagar at about 4 p.m. on 27.8.1976 he prevented P.W.2 from taking a sample of dhania from the stock kept for sale by slipping away from the shop under some pretext. The case of prosecution was that when the Food Inspector (P.W.2) visited the appellant 's grocery shop accompanied by Dr. Aggarwal, Medical officer Incharge, Primary Health Centre, Farrukh Nagar (P.W.1) and Dr. Yadav, Chief Medical Officer (Health), Gurgaon (P.W.3). The appellant was found to have stored 6 kgs. of dhania for sale in his shop. P.W. 2 disclosed his identity to the appellant and demanded a sample of the dhania for analysis and sought to serve the notice Ex P/B and tendered Rs. 4.80 as the price of 600 gms. of dhania asked for. The appellant went away from the shop under the pretext of passing urine without accepting the notice exhibit P/B or the sum of Rs. 4.80 tendered by P.W.2 and he did not come back to the shop though P.Ws. 1 to 3 waited there for about 11/2 hours. There after P.W.2 took a sample from the shop in the absence of the appellant and prepared the spot memo exhibit P/A in the presence of P.Ws. 1 and 3 and subsequently filed the complaint exhibit P/C in the Court of the Chief Judicial Magistrate, Gurgaon against the appellant for contravention of s.16 (1) (c) of the Prevention of Food Adulteration as amended, by preventing him from taking a sample of the article of food. After the examination of P.Ws. 1 to 3 a charge was framed against the appellant for the offence punishable under section 16 (1) (c) of the Act and he pleaded not guilty to the charge and claimed to be tried. The prosecution relied on the evidence of P.Ws. 1 to 3 who deposed to the facts mentioned above. The appellant stated when examined under section 313 Criminal Procedure Code, that he is running a cloth business at Delhi and had casually visited his father 's grocery shop at Farrukh Nagar on 27.8.1976 when P.Ws. 1 to 3 came there and he went to call his father Uggar Sain (D.W. 1) and came back to the shop alongwith D.W. 1 after about 6 or 7 minutes and that P.Ws. 1 to 3 had gone from the shop by that time. The appellant examined his father as D.W. 1 in his defence. The learned Chief Judicial Magistrate, Gurgaon who tried the case rejected the evidence of D.W. 1 as being interested and unreliable and accepted the evidence of P.Ws. 1 to 3 of whom P.W. 1, however, could not identity the appellant as the person who went away from the shop without accepting the notice and cash tendered by P.W 2 and found following judgment of the Punjab and Haryana High Court in Krisha Lal & Ors. vs State of Haryana(1) that the appellant was guilty of having prevented the Food Inspector (P.W. 2) from taking a sample of the article of food by going away from the shop without accepting the notice and cash tendered by P.W. 2. Accordingly, the learned Magistrate convicted the appellant and sentenced him to undergo rigorous imprisonment for six months and to pay a fine of Rs. 1,000 under section 16 (1) (c) of the Act. The conviction and sentence were confirmed on appeal by the learned Additional Sessions Judge, Gurgaon who found that the appellant was more than 18 years of age at the time of commission of the offence and was therefore not entitled to the benefit of section 360 Cr. P.C. in view of section 20 AA of the Act according to which section 360 Cr. P.C. is not applicable to the case of the accused who was more than 18 years of age at the time of commission of the offence. The Criminal Revision Case filed by the appellant in the Punjab and Haryana High Court against the judgment of the learned Additional Sessions Judge, Gurgaon was dismissed by S.S. Dewan, J. who confirmed the conviction and sentence. Hence, this appeal by special leave. 358 The prevention of Food Inspector from taking a sample of an article of food as authorised by the Act is an offence punishable under section 16 (1) (c) with imprisonment for a term which shall not be less than six months but which may extend to three years and with fine which shall not be less than on thousand rupees. Mr. Uma Datta, appellant 's learned counsel invited our attention to paragraph 10 of the judgment of the learned Additional Sessions Judge, Gurgaon where it has been found that the Food Inspector (P.W. 2) had in fact taken a sample in the presence of P.Ws. 1 and 3. But this must be noted that this was done after the appellant went away from the shop under the pretext of passing urine and did not return for about 1 1/2 hours, during which period P.Ws. 1 to 3 waited for him at the shop. The finding of fact that the appellant went away from the shop under the pretext of passing urine when the Food Inspector (P.W. 2) tendered the notice exhibit P/B and the cash of Rs. 4.80 for purchasing a sample of dhania and did not return for about 1 1/2 hours, during which period P.Ws. 1 to 3 waited at the shop for him cannot be canvassed in this appeal. The learned counsel for the appellant invited our attention to two decisions and submitted that the mere disappearance of the appellant from the shop after the sample was asked for by the Food Inspector without anything more did not amount to prevention of the Food Inspector from taking the sample. The first of those decisions is of C.P. Sen, J of the Madhya Pradesh High Court in Jagannath vs State of Madhya Pradesh(1) where the facts found were that when the accused was taking 5 litres of milk in his kothi for sale the Food Inspector stopped him as he suspected the milk to be adulterated and asked him to accompany him to the Municipal office for taking a sample and that on reaching the Municipal office the accused bolted away leaving the kothi of milk, and the learned Judge held that the accused did not prevent the Food Inspector from taking a sample simply because he bolted away from the spot and that the Food Inspector was free to take the sample from the kothi of milk left behind by the accused even in the absence of the accused. In holding so the learned Judge differed from the view taken in Municipal Board, Sambhal vs Jhamman Lal(2) where it has been held that the disappearance of the seller from the shop amounts to prevention of the Food Inspector from taking the sample and that over act on the part of the seller is not necessary to constitute an offence under section 16 (1) (b) of the Act as it then stood which corresponds to the present section 16 (1) (c). The second decision 359 relied upon by the learned counsel of the appellant is of the Full Bench of the Rajasthan High Court in Narain Prasad vs State of Rajasthan & Anr.(1) where Shrimal, J., speaking for the bench has observed: "Thus the consensus of the opinion of almost all the High Court barring a few on the point is that section 16 (1) (b) of the Act makes a person liable to punishment, who prevents the Food Inspector from taking the sample as authorised by the Act. Section 10 (1) (a) (i) gives the Inspector power to take sample of article of food from any person selling such article. Sub sec. (2) of Sec. 10 gives the Food Inspector power to enter any place where the article of food is exposed for sale. Sub sec. (4) of Sec. 10 provides for seizure of adulterated food. The Inspector has also power to break open the door or any package in which the article of food is kept. For all the purposes the Inspector has power to exercise the power of search and seizure of a police officer under the Crl. The Food Inspector is also authorised to exercise powers of a police officer under Section 57 of the Code i.e. to arrest an offender, if he refuses to tell his name and residence. Section 11 prescribes the procedure to be followed by the Food Inspector while taking sample. Therefore, the Food Inspector can follow one of the two modes; one where the vendor co operates, the other when he refuses to co operate. To prevent the Food Inspector from taking a sample, the accused must do something which makes it impossible for him to take the sample. " The learned Judges of the Full Bench appear to have held that some overt act on the part of the seller apart from mere refusal to sell the article of food to the Food Inspector is necessary to constitute an offence of prevention of the Food Inspector from taking the sample. On the other hand, Mr. R. N. Poddar, learned counsel appearing for the State of Haryana, invited our attention to two decisions and submitted that the conduct of the appellant in slipping 360 away from the shop when the Food Inspector disclosed his identity and asked for sale of a sample of dhania from his grocery shop, amounts to prevention of the Food Inspector from taking the sample as per the provisions of the Act. The first of those decisions is to H.C.P. Tripathi, J. in Mamchand vs State(1) where the learned Judge has observed: "The sample had to be taken in accordance with the provisions of the Act and Rules thereunder. As soon as the owner of the milk disappeared from the scene the Food Inspector could not have obtained the sample as required under law. By running away from the place the applicant did prevent the Food Inspector from taking sample as required under the Act though not from taking away the entire quantity of the milk which the Food Inspector could do in exercise of his powers under Section 10 (iv) of the Act. In the case of Municipal Board, Sambhal vs Jhamman Lal (AIR 1961 AII. 103), it was held by a Division Bench of this Court that if a person selling article leaves the shop he prevents Food Inspector from taking sample as authorised by the Act. In the instant case, the applicant left the milk, which he was exposing for sale, and thereby prevented the Food Inspector from taking its sample. " A learned single Judge of the Madhya Pradesh High Court has taken a similar view in Habib Khan vs State of Madhya Pradesh.(2) In that case a milk vendor on being accosted by the Food Inspector kept his milk can in the canteen and bolted away, and it has been held that the milk vendor prevented the Food Inspector from taking the sample and thus committed an offence under section 16 (1) (b) of the Act as it stood than. The learned Judge has observed in his judgment thus: "The power of taking the sample has been conferred on the Food Inspector so that he may prosecute the person found selling adulterated food stuff or found in possession thereof for the purposes of sale. Now, if a person bolts away and thus his identity remains undis 361 closed, the whole purpose of the exercise of the power conferred under section 10 on the Food Inspector is defeated. In such a case, it will have to be held that in bolting away the person prevented the effective exercise of the power by the Food Inspector. If this is so, it is difficult to see how the same action on the part of a known person would make any difference. If he bolts away, an additional burden will be cast on the Inspector if he decides to prosecute him for selling or keeping for sale adulterated food articles, to prove that the person who bolted away was the accused and that the article left by him was in his possession. Witnesses may not be available at the nick of the time and here, again, the result would be the same. This is why it is necessary to interpret the two expressions "prevents" and "in exercise of the powers under the Act" in the manner interpreted by the Allahabad High Court in Municipal Board, Sambhal vs Jhamman Lal (supra)", We are of the opinion that the view of the Allahabad High Court expressed in Municipal Board, Sambhal vs Jhaman Lal (supra) reiterated in Mamchand vs State referred to above and taken by the learned single Judge of Madhya Pradesh High Court in Habib Khan vs State of Madhya Pradesh (supra) and the Punjab and Haryana High Court in the judgment under appeal in this case is the correct view and that appellant in this case who bolted away from the shop under the pretext of passing urine when the Food Inspector (P.W. 2) went to his shop alongwith P.Ws. 1 and 3 and disclosed his identity and tendered the notice exhibit P/B and cash of Rs. 4.80 and asked for a sample of the dhania kept for sale in his grocery shop without accepting the notice and the cash prevented the Food Inspector (P.W. 2) from taking a sample in accordance with the provisions of the Act and the Rules made thereunder and that no other overt act is necessary on the facts of this case to constitute the offence for which the appellant has been convicted and sentenced and that he has been rightly convicted and sentenced by the Court below under section 16 (1) (c) of the Act. We accordingly, dismiss the appeal and confirm the conviction of the appellant and the sentence awarded to him. P.B.R. Appeal dismissed.

A Food Inspector visited the appellant 's grocery shop and demanded a sample of dhania for analysis. Leaving the shop on a false pretext, the appellant did not return to the shop for quite a long time. Thereupon after following the requisite procedure the Food Inspector took a sample of dhania in the absence of the appellant. On a charge under Section 16(1)(c) of the that the appellant had prevented the Food Inspector from taking a sample of the article of food, the trial court convicted and sentenced him. The conviction and sentence were affirmed on appeal. The High Court dismissed his criminal revision petition. In appeal to this Court it was contended that mere disappearance from the shop after the sample was demanded by the Food Inspector, without anything more, did not constitute an offence of prevention of the Food Inspector from taking a sample. Dismissing the appeal. ^ HELD: The appellant had been rightly convicted and sentenced under section 161(1) (c) of the Act. The appellant 's disappearance from the shop for a long time, amounted to prevention of the Food Inspector from taking a sample in accordance with the provisions of the Act and the Rules. No other overt act is necessary to constitute the offence. [361 F H] Municipal Board. Sambhal vs Jhaman Lal, AIR 1961 All. 103; Mam Chand vs State, ; Habib Khan vs State of Madhya Pradesh, , approved. Jagannath vs State of Madhya Pradesh, 1977 Crl. L.J. 974; Narain Prasad vs State of Rajasthan, AIR overruled.

ON: Civil Appeal Nos. 156164 of 1989. From the Judgment and Order dated 24.7.1987 and 7.4.1988 of the Patna High Court in C.W.J.C. Nos. 253, 266, 262,255,260 265, 555,254 of 1986 and C.W.J.C. No. 17 of 1988 respectively. Dr. Y.S. Chitale and Pramod Swarup for the Appellants. N.R. Choudhary and L.R. Singh for the Respondents. The Judgment of the Court was delivered by OZA, J. Leave granted. These special leave petitions have been filed against the judgment of the High Court of Patna by which several writ petitions were disposed of. All these special leave petitions have been preferred in this Court aggrieved by that judgment. The common question which arises in all these SLPs is that under the agreement arrived at between the consumers and the Bihar State Electricity Board there is a clause 171 Of payment of minimum guarantee which indicates that even if the consumer does not consume electricity above the minimum guarantee that it will be incumbent upon the consumer to pay charges for energy which is the annual minimum guarantee provided in the agreement pertaining to Industrial units. The relevant facts are that for the years 1973 74 to 1982 83 the bills for annual minimum guarantee were served on the appellants by the Electricity Supply Division, Forbesganj and on receipt thereto the appellants filed their claims as provided under clause 13 of the agreement on the ground that appellant was not liable to pay any such charges because the appellant did not supply constant electricity as provided in the agreement during the period in question and there were tripping, load shedding, and power cut which resulted in a great loss to the petitioners and as the supply was not in accordance with the agreement liability to pay annual minimum guarantee bills could not be fastened on the consumer. The Chief Engineer who was the authority under the agreement negatived the claim and so they filed writ petitions in the High Court. The High Court by the impugned judgment came to the conclusion that under clause 1 of the agreement it was incumbent for the Electricity Board to supply constant electricity and the consumer will be liable to pay annual minimum guarantee charges only if in spite of the fact that the Board supplies power as contemplated in the agreement and the consumer does not utilise the power then the liabil ity to pay annual minimum guarantee charges will arise and on this basis the High Court quashed the demands made for these years on the basis of annual minimum guarantee as it found that power was not supplied according to the agree ment. Learned counsel appearing for the Electricity Board contended that clause 1 of the agreement does not in any manner mean that there should be a continuous supply. The term used in clause 1 of the agreement only talks of con stant supply of electrical energy at the pressure of volts, cycles, 3 phase, 3 wire etc. but it does not talk of contin uous supply without any break and it therefore could not be contended that if there was no supply for a few minutes it will amount to failure on the part of the Electricity Board to provide constant supply. It was contended that the con stant supply cannot mean continuous supply. It was also contended that clause 4 of the agreement clearly talks of the payment of annual minimum guarantee charges and there fore it could not be said that because of the power cut or situations beyond the 172 control of the Electricity Board if the power could not be supplied for all the 24 hours every day the respondent consumer can deny the liability to pay annual minimum guar antee bills. It was also contended that in view of clause 13 of the agreement which provides that if there was shortage of supply and that shortage resulted in short supply then the consumer was entitled to a proportionate reduction of the annual minimum guarantee bill as determined by the Chief Engineer, Bihar State Electricity Board and consequently the respondent in this case went to the Chief Engineer who ultimately decided on the basis of facts that respondents were not entitled to any proportionate reduction and it was because of this that the petitions were filed before the High Court. It was contended that the learned Judges of the High Court have failed to appreciate clause 13 of the agree ment. Learned counsel also placed reliance on the decisions in Amalgamated Electricity Co. Ltd. vs Jalgaon Borough Municipality, ; ; M/s Northern India Iron & Steel Co. etc. vs State of Haryana & Anr. , ; M/s Man Industrial Corporation vs Rajasthan State Electrici ty Board and others, AIR and Mukand Iron and Steel Works Ltd. vs Maharashtra State Electricity Board and another, AIR 1982 Bombay 580. Learned counsel for the respondents on the other hand contended that clause 1 provides for constant supply of power, the variations permitted have been indicated in this clause itself and it is contended that it is only where the electricity Board discharges its duty to supply power as contemplated in clause 1 and the consumer because of his difficulties is not able to utilise power even upto the level of minimum guarantee that the liability to pay annual minimum guarantee bills could be fastened on the consumer but if the Board fails to discharge its responsibilities as contemplated in clause 1 of the agreement it could not compel the consumer to pay the annual minimum guarantee. It was frankly conceded that in the petition itself originally relief sought was proportionate reduction of the annual minimum guarantee bills but in view of the interpretation of clauses 1, 4 and 13 the High Court came to the conclusion that there is no liability on the consumer to pay annual minimum guarantee bills as the Electricity Board has failed to supply power as contemplated in clause 1 of the agree ment. Learned counsel however contended that the Chief Engineer in his order has misunderstood the whole situation but before the High Court the facts were not disputed and in each case average hours of supply per year during the dis puted period have been stated which have not been disputed by the Electricity Board and if at all the High Court judg ment is not maintained the respondents are entitled to 173 proportionate reduction of the annual minimum guarantee bills in the light of the hours of supply per year which have been stated in the High Court judgment and is not disputed. Clause 1 of the agreement reads as under: "1. (a) The Board shall furnish to the consum er and the consumer shall accept at the point of supply mentioned in the schedule hereto, on and from the date on which the said premises shall be connected with the supply Distribut ing mains and during the continuance of the agreement, a constant supply of electrical energy at the pressure of . Volts, 50 cycles, 3 phases, 3 wires, alternat ing current system subject to standard varia tions as provided in Indian Electricity Rules, 1956 or any other statutory modifica tion thereof as may be in force from time to time for the purpose and upto the maximum specified (hereinafter referred to as the contract demand) and under the conditions laid down in the Schedule. " This clause talks of constant supply of electrical energy providing for voltage, cycles, phases and wires. It is clear that it does not talk of continuous supply nor does it talk of non continuous or intermittent supply. In fact this clause in our opinion is not very material for the decision of the case as the sole controversy pertains to interpreta tion of clause 13. Clause 4 of the agreement provides for the minimum guarantee and there is no dispute that if the consumer is not able to utilise electricity even upto the level of minimum guarantee. This clause provides for payment of charges of minimum guarantee. The real controversy pertains to the interpretation of clause 13. In fact in Northern India Iron & Steel Co. case. this Court had the occasion to consider a situation of this kind where this Court on this aspect of the matter has observed that where the Electricity Board fails to supply power because of shortage of energy, power cut or any other circumstances as per demand of the consumer according to the contract it will be considered as a circumstance beyond the control of the consumer which prevented it from consuming electricity as per the contract. Their Lordships observed as under: 174 "We are, therefore, of the view that the inability of the Board to supply electric energy due to power cut or any other circum stance beyond its control as per the demand of the consumer according to the contract will be reflected in and considered as a circumstance beyond the control of the consumer which prevented it from consuming electricity as per the contract and to the extent it wanted to consume. The monthly demand charge for a particular month will have to be assessed in accordance with subclause (b) of clause 4 of the tariff and therefore from a proportionate reduction will have to be made as per sub clause (f). We hope, in the light of the judgment, there will be no difficulty in working out the figures of the proportionate reduction in any of the cases and for any period. In case of any difference or dispute as to the quantum of the demand charge or the proportionate reduction, parties will be at liberty to pursue their remedy as may be available to them in accordance with law. " It appears that reading clause 13 in the present case clear ly provides for the contingency and it provides for the failure on the part of the supplier and also failure on the part of consumer in the circumstances like strike, riot, fire, flood, explosion or act of God or any other reason beyond the control of either of the parties. Clause 13 of the agreement reads: "If at any time the consumer is prevented from receiving or using the electrical energy to be supplied under this agreement either in whole, or in part due to strikes, riots, fire, floods, explosions, act of God or any other case reasonably beyond control or if the Board is prevented from supplying or unable to supply such electrical energy owing to any or all of the causes mentioned above then the demand charge and guaranteed energy charge set out in the schedule shall be reduced in pro portion to the ability of the consumer to take or the Board to supply such power and the decision of the Chief Engineer, Bihar State Electricity Board, in this respect shall be final." In view of this language of the clause clearly providing for the proportionate reduction of the annual minimum guarantee bills it could not be doubted that the High Court was not right in coming to the conclusion that the respondents were not liable to pay annual minimum 175 guarantee bills at all. The judgment of this Court also clearly indicated that the respondents consumers. are enti tled to a proportionate reduction of the minimum guarantee bills. In clause 13 of the agreement this is clearly stated that the authority competent to determine the proportionate reduction is the Chief Engineer and it appears that it was because of this that the respondents consumers approached the Chief Engineer for consideration. But it appears that the learned Chief Engineer also did not clearly understand the meaning of clause 13. The judgment of the High Court on which reliance is placed have only followed the judgment referred to above. In our opinion, therefore, the High Court was not right in coming to the conclusion that the respondents were not liable at all to pay annual minimum guarantee charges. In fact they are only entitled to the proportionate reduction. The judgment of the High Court clearly states the hours every year in dispute when the power was not supplied and on this basis the respondents consumers will be entitled to proportionate reduction as ordinarily the consumers are expected to have continuous power supply. It is therefore directed that the Chief Engineer of the Electricity Board on the basis of hours of non supply as indicated in the High Court judgment and not disputed in the High Court will assess the proportionate reduction of the annual minimum guarantee bills in respect of disputed years indicated above and it is also directed that until this is not done the power supply will not be disconnected on the basis of fail ure to pay the annual minimum guarantee bills for the peri ods stated above. However, after the proportionate reduction is made and fresh demand is made, Electricity Board will be entitled to take recourse to the normal procedure if the consumers fail to pay. In the circumstances no order as to costs. T.N.A. Appeals allowed.

Clause 1, of the agreement arrived at between the con sumerrespondents and the appellant Electricity Board, pro vided for constant supply of electrical energy to the con sumers. Clause 4 provided that even if the consumer does not consume electricity above the minimum guarantee then it will be incumbent upon the consumer to pay annual minimum charges. Clause 13 provided for the contingency that if the consumer is prevented from receiving or using the electrical energy due to strikes, riots, fire, floods, explosions, act of God or any other case reasonably beyond the control of the Board or if the Board is prevented from supplying such electrical energy owing to any of the causes mentioned then the consumer was entitled to a proportionate reduction of the annual minimum guarantee bill as determined by the Chief Engineer. The respondents were served with the hills for annual minimum guarantee for the years 1973 74 to 1982 83 by the Electricity Supply Division. The respondents filed their claims, under clause 13, with the Chief Engineer denying their liability to pay any such charges because the Board did not supply constant supply as provided in clause 1. It was alleged that during the period in question due to trip pings, load sheding and power cut the respondents suffered a great loss. The Chief Engineer negatived the claims of the respondents. A batch of writ petitions was filed in the High Court, challenging the order of the Chief Engineer. Although in these petitions relief sought was proportionate reduction of the annual minimum guarantee 169 bills but in view of the interpretation of clauses 1, 4 and 13 the High Court quashed the demand made by the Electricity Board by holding that under clause 1 it was incumbent for the Electricity Board to supply constant electricity supply and that the consumers will be liable to pay annual minimum guarantee charges only if the Board supplies the power as provided in the agreement but the consumer does not utilise the power. In these appeals by Special Leave, it was contended on behalf of the appellants that the 'constant supply ' men tioned in clause I cannot mean 'continuous supply '. The respondent consumers could not deny the liability to pay annual minimum guarantee bills if the Electricity Board could not supply power for all the 24 hours due to circum stances beyond the control of the Electricity Board. In case of shortage of supply due to circumstances beyond the con trol of the Board the consumers were entitled to a propor tionate reduction under clause 13 of the agreement. Allowing the appeals, the Court, HELD: 1. The High Court was not right in coming to the conclusion that the respondents were not liable at all to pay the annual minimum guarantee charges. [175C] 1.1. The High Court in its judgment clearly stated the hours every year in dispute when the power was not supplied and on this basis the respondent*consumers will only be entitled to proportionate reduction as ordinarily the con sumers are expected to have continuous power supply. Clause 13 clearly provides for the proportionate reduction of the annual minimum guarantee bills. [175D] 2. Clause 1 talks of constant supply of electrical energy providing for voltage, cycles, phases and wires. It does not talk of either of continuous or non continuons or intermittent supply. [173E] 3. The Respondent consumers are entitled to a propor tionate reduction of the minimum guarantee bill. The inabil ity of the Electricity Board to supply electrical energy due to power cut or any other circumstance beyond its control as per the demand of the consumer according to the contract will be reflected in and considered as a circumstance beyond the control of the consumer which prevented it from consum ing electricity as per the contract and to the extent it wanted to consume. [173G] 170 Northern India Iron & Steel Co. etc. vs State of Haryana 4. The Chief Engineer of the Electricity Board shall accordingly assess the proportionate reduction of the annual minimum guarantee bills in respect of disputed years on the basis of non supply as indicated in the High Court Judgment. [175D E] 4.1. Pending assessment, the power supply of the consum ers will not be disconnected on the ground of failure to pay the annual minimum guarantee bills. [175E] 4.2. The Electricity Board will be entitled to take recourse to the normal procedure if the consumers fail to pay after the proportionate reduction is made and fresh demand is made. [175E F] Amalgamated Electricity Co. Ltd. vs Jalagaon Borough Municipality, ; ; M/s. Man Industrial Corpo ration vs Rajasthan State Electricity Board and others, AIR and Mukand Iron and Steel Works Ltd. vs Maharashtra State Electricity Board and another, AIR 1982 Bombay 580, referred to.

ivil Appeal No. 1297 of 1968. Appeal by special leave ,from the judgment and order dated October 5, 1967 of the Bombay High Court, Nagpur Bench in S.C.A. No. 770 of 1966. S.V. Gupte, Santosh Chatterjee and G.S. Chatterjee, for the, appellant. 321 B.R.L. Iyengar and Naunit Lal, for respondents Nos. 1 to 3 and 5. N.S. Bindra and S.P. Nayar, for respondent No. 7 and the intervener. The Judgment of the Court was delivered by Vaidialingam, J. The appellant, the State Corporation, constituted under the Road Transport Corporation Act (LXIV of 1950), challenges in this appeal, by special leave, the order of the Nagpur Bench of the Bombay High Court dated October 5, 1967 in Special Civil Application No. '770 of 1967. The appellant, as well as respondents 1 to 5 and 8 to 16, applied to the Regional Transport Authority, Nagpur, on various dates in the year 1964 65, under section 46 of the (Act IV of 1939) (hereinafter called the Act) for grant of stage carriage permits on the routes (a) Chanda to Chimur; (b) Arni to Manora; (c) Sakoli to Lakhandur; (d) Sondkheri to Kalmeshwar; and (e) Chanda to Rajura. The appellant 's applications in respect of routes (a) and (c) were for additional trips and timings. Regarding (b), (d) and (e), the appellant 's applications were for grant of permits over the new routes opened for the first time. The applications were notified by the Regional Transport Authority under section 57(3) of the Act. The appellant and the other applicants filed objections and representations against each other 's applications. The Regional Transport Authority, after considering the applications and objections and hearing the parties, passed order granting the permits in favour of the appellant, in respect of all the routes. The order in respect of route (a) was passed on May 18, 1965, for routes (b) and (c) on August 19, 1965, for route (d) on October 9, 1965 and for route (e) on October 30, 1965. Respondents 1 to 5 filed appeals before the Appellate Committee of the Transport Authority of Maharashtra, challenging the grant of permits in favour of the appellant and rejecting their respective applications. Their appeals were Nos. 64, 82. 84, 106 and 114, all of 1965. Respondents 8 to 16 do not seem to have filed any appeals. All the appeals were heard and disposed of by the Appellate Committee by a common order, dated June 9, 1966. Before the Appellate Committee respondents 1 to 5 raised a contention that the mandatory information required to be submitted in an application for permit under section 46 of the Act, read with Form P.St. S.A. prescribed under rule 80 of the relevant rules, have not been fully and completely furnished by the appel 322 lant in its application. They also filed an affidavit pointing out what, according to them, were the details of information that should have been furnished by the appellant. The Appellate Committee, after noting that the appellant herein represented that the major items of information, as required under section 46 and the relevant form, had been given in the application, has expressed the view that information regarding certain other matters, as provided in the form of application, had not been provided by the State Corporation, and in consequence there was a major defect in its application and that the other operators had no opportunity to properly object and contest the claim of the State Corporation. In this view the Appellate Committee remanded the matter to the Regional Transport Authority for reconsideration with a direction that the State Corporation should be asked to furnish complete information and, after receipt of such information in the prescribed form, they must be duly published and an opportunity afforded to the respondents 1 to 5 herein to be duly heard by way of object.ion and that the entire matter be re heard and decided afresh. Respondents 1 to 5 challenged this order of the Appellate Committee before the Nagpur Bench of the Bombay High Court in Special Civil Appeal No. 770 of 1966 under articles 226 and 227 of the Constitution. They contended before the High Court that the Appellate Committee should have rejected the application of the State Corporation on the ground that the mandatory provisions of section 46 of the Act had not been complied with. They also urged that the application, filed by the State Corporation, inasmuch as it lacked information on vital matters, as provided in section 46 of the Act read with the form prescribed, could not be considered to be an application under the Act and, as such, it did not deserve to be considered at all. The order of the Appellate Committee really amounted to allowing the appellant to convert a defective application so as to bring it in conformity with the provisions of the Act and the form, which is not permissible in law. Though the appellant pleaded that all the necessary particulars had been furnished in its application and that even in respect of all matters on which further information was called for, it had already been furnished and that the authorities had jurisdiction to call for any additional information that may be neces sary for a proper consideration and disposal of the applications filed by the parties, the High Court, in the order under attack, has taken the view that there has been no proper compliance, by the State Corporation, with regard to the matters dealt. with, particularly in columns 10, 14 and 15 of the prescribed form, viz., the application for permit. The High Court is of the view 3 2 3 that the information furnished by the appellant, under those headings, cannot be considered to be either sufficient or adequate. The High Court has taken the view that withholding of information on vital points, constitutes a defect in the application of the appellant and that creates considerable difficulty to the authorities in considering the claim for grant of a permit. It is also of the view that the Act does not, either expressly or impliedly, give power to either the Regional Transport Authority or the Appellate Committee to give an opportunity to an erring applicant to furnish additional or further particulars so as to convert a defective application into a proper application. The High Court is also of the view that the provisions of section 46 of the Act read with section 48, cast a mandatory duty upon an applicant, applying for a permit, to give the particulars required in the several clauses of section 46. If the required particulars are not given, it is the view of the High Court that such applications are not applications within the meaning of section 46 and the rules and therefore are liable to be rejected. In the end the High Court has held that after the application filed by the State Corporation had been held to be defective, the Appellate Committee had no jurisdiction to give the State Corporation a fresh opportunity to furnish additional paritculars and, in that view, set aside the order of the Appellate Committee. The High Court, in consequence, remanded the appeals to the Appellate Committee, directing the latter to reconsider, on the materials already on record, the applications of all parties excepting that of the State Corporation and to decide the question of grant of permits between the rival parties afresh. The appellant has come up to this Court, against this order of the High Court. Mr. Gupte, learned counsel for the appellant, apart from contending that the High Court was in error in interfering in a writ petition, with the order of the Appellate Committee, when exercising jurisdiction under articles 226 and 227, has raised substantially two contentions: (1) That the form prescribed by the State Government, in this case, for an application for permit, has gone beyond the rule making power of the State Government under section 68 of the Act. (2) That the provisions of section 46 of the Act are not mandatory and there is no jurisdiction in the authorities functioning under the Act to reject an application summarily on the ground that the application is not in conformity with the Act or the rules framed thereunder. It is not necessary for us to reiterate the nature of the jurisdiction exercised by a High Court under article 226 or article 227. Under article 226 the High Court has power to quash an order when the error committed by a Tribunal or authority is one of 324 law and that is apparent on the face of the record. Similarly the powers of judicial supervision of a High Court under article 227 of the Constitution are not greater than those under article 226 and must be limited to seeing that the Tribunal functions within the limits of its authority (Vide: Nagendra Nath Bora vs The Commissioner of Hills Divn. & Appeals Assam(1). In this case, as we have already pointed out, the High Court has taken the view that the application filed by the appellant, for lack of the necessary particulars provided in the form prescribed, cannot be considered to be an application under the Act and in respect of such an application, the authorities have no jurisdiction to deal with. It is really the correctness of this view expressed by the High Court that arises for consideration. Since the impugned order of the Appellate Committee was challenged on the ground of lack of jurisdiction, it is not possible to hold that the High Court could not have entertained the writ petition. Mr. B.R.L. Iyengar, learned counsel for the contesting respondents, has urged that in order that an application filed by a party may be considered by the authorities charged with the duty of granting permits, the essential condition precedent is that the application must conform to the requirements of the statute in this case the Act. Section 46 of the Act provides various matters in respect of which an applicant will have to give full and detailed particulars. Over and above the requirements contained in els. (a) to (e) of the said section, any other matter that may be prescribed by the rules framed under the Act, by virtue of clause (f) of section 46 will have also to be properly and fully dealt with by an applicant. By vitrue of the rule making powers under section 68 of the Act, the State Government have framed the Bombay Motor Vehicles Rules, 1959 (hereinafter referred to as the rules); and r. 80(1) provides that every application for a permit in respect of a transport vehicle, including a private service vehicle, is to be in one of the forms mentioned therein. The appropriate form with which this Court is concerned now is the Form P.St. S.A. in respect of item 2. The form deals with various items, some of which may be covered by clauses (a) to (d) and others are over and above these particulars. The object underlying the Act, of an applicant being called upon to give the necessary particulars in respect of these matters, is obvious, viz., that the other applicants and the various other interested persons will be able to know the nature of the claim made by a particular applicant and either make suitable representations against the same or file objections. The High Court 's view, counsel points out, that the absence of particulars in this case, in respect of items 10, 14 and 15 in the form is a non compliance with the Act and is no application under (1) ; 3 2 5 the Act, is correct. Therefore counsel urged that the Appellate Committee 's order allowing the appellat to, so to say, amend the application, by giving additional particulars, was properly set aside by the High Court. Mr. Bindra, appearing for the State, while supporting the appellant that the Appellate Committee, in this case, acted within its jurisdiction in calling for particulars, urged that the form prescribed under the rules was perfectly valid and is not beyond the rule making power of the State Government. The scheme of the Act has been considered in several decisions of this Court and we do not propose to cover the ground over again. Chapter IV containing sections 42 to 68, deals with control of transport vehicles. Section 42 emphasises the necessity for permits. Section 45 deals with the various authorities to whom the application for permits, in the circumstances stated therein. is to be made. Section 46 provides that an application for a permit shall 'as far as may be, contain ' the particulars mentioned in clauses (a) to (f). Clauses (a) to (e) deal with certain definite particulars, but cl. (f) refers to 'such other matters as may be prescribed '. Section 2(21) defines the expression 'prescribed ' to mean 'prescribed by rules made under the Act. '. Therefore it will be seen that an application for a permit, apart from containing the particulars referred to in clauses (a) to (e) of section 46, must also contain. under el. (f), such other matters as may be prescribed. We will come to the rule making power a lit.tie later. Section 47 provides for the various matters to be taken into account by the Regional Transport Authority in considering an application for a stage carriage permit. That section also provides for taking into consideration any representation made by certain other parties referred to therein. Sub section (2) gives power to a Regional Transport Authority to refuse to grant a permit if from any time table furnished it appears that the provisions of the Act relating to the speed at which vehicles may be driven are likely to be contravened; but the proviso to this sub section casts a duty on the Authority to give an opportunity to the applicant to amend the time table before such refusal. Sub section (3) gives power to a Regional Transport Auhtority to limit the number of stage carriages in region or in any specified area or in any specified route within the region. Section 48 empowers the Regional Transport Authority, on an application made to it under section 46, to grant a stage carriage permit, subject to the provisions of section 47, in accordance with the application or with such modifications as it deems fit. It also gives the Authority power to refuse to grant such a permit. Section 57 deals with the procedure in applying for and granting permits. Sub section (3) provides for the Regional Transport Authority making L2SupCI/70 9 326 available an application for a permit for inspection at its office and also publish the application in the prescribed manner inviting representations within the period mentioned therein. The proviso to sub section (3) gives power to t,he Authority concerned to summarily refuse the application without, following the procedure laid down in sub section (3), in the circumstances mentioned therein. Sub sections (4), (5) and (6) read together, deal with the consideration of the representation received from a party and disposal of an application for a permit at, a public hearing in which an applicant and a person who had made a representation are given an opportunity of being heard. Sub section (7) casts a duty on the Regional Transport Authority, when refusing an application for permit, to give in writing to the applicant, concerned, its reasons for the refusal. Section 68(1) gives power to the State Government to make rules for the purpose of carrying into effect the provisions of Chapter IV. Sub section (2) enumerates the various matters in respect of which rules can be framed without prejudice to the generality of the power contained in sub section Clause (c) of sub section (2) deals with the 'forms to be used for the purposes of this Chapter, including the forms of permits '. The State Government has framed the rules. Rule 80(1) provides that every application for a permit in respect of a transport vehicle, including a private service vehicle shall be in one of the enumerated forms and the forms are mentioned as items (i) to (x). Item (ii) deals with a permit in respect of a service of stage carriages and the form prescribed is Form P.St. S.A. Sub r. (2) provides that the application shall be addressed to the Regional Transport Authority or to the Regional Transport Officer, as the case may be and accompanied by the fee prescribed by rule 84. In this case we are concerned with the Form P.St. It is seen from the judgment of the High Court that a copy of an application filed by the appellant in respect of the route Arni to Manora has been filed and it has been directed to form part of the record of the case. The form P.St. S.A. provides for nearly 22 items in respect of which a party has to fill up particulars. The particulars governed by item 4 may be related to section 46(a), those of items 5 and 7 to section 46(b), items 6 and 8 to section 46(c), item 10 to section 46(d) and items 11, 12, 14 to section 46(e). Over and above these particulars, the form provides several other matters on which information has to be given. The ground on which the High Court has regarded the application of the appellant as invalid is that the application did not give full and detailed particulars in respect of item 10, 14 and 15. We will now refer to the relevant entries in the application made by the appellant regarding the route Arni to Manora in 327 respect of columns 10, 14 and 15 and also the answers given by the appellant: "10. Number of vehicles kept in reserve to maintain the service regularly and to provide for special occasion : Nagpur Division which will operate this/these route(s) holds 470 vehicles against. , 376 schedule, to be operated by that Division. Thus there will be 94 vehicles in reserve to maintain the services regularly and to provide for special occasions. Particulars of any stage or contract carriage permit valid in the State held by the applicant. section 4 61, 5 61, 6 61, 7 61, 8 61, 9 61, 10 61, 13 61, 39 63, 40 63, 63 63, etc. Particulars of any permit held by the applicant in respect of the use of any transport vehicle in any other State : Pt. section 4/52, 4/53, 7 59, 1 60, 63 63, etc. " According to the High Court, the information given by the appellant is not sufficient and, that especially in respect of columns 14 and 15 the applicant has not given exhaustively the list of t, he permits owned by it. We are not inclined to accept the contention of Mr. Gupte that the form prescribed, requiring the furnishing of information on the various particulars and matters referred to therein is beyond the rule making power of the Government. Section 46, as we have already pointed out, requires information to be given by an applicant for permit not only in respect, of 'all the particulars ' enumerated under els. (a) to (e), but also under cl. He has to give information on such other matters as may be prescribed and 'prescribed ' as defined in section 2(21), means 'prescribed by rules made under the Act '. Section 68 to which we have already referred, gives power to the State Government to make rules for the purpose of carrying into effect, the provisions of Chapter IV and also, without prejudice to the generality of ' this power, to make rules in respect of the various matters mentioned in sub section Clause (c) of sub section (2) specifically gives power to prescribe the form to be used for the purpose of Chapter ' IV, including the form of permit. section Therefore, an application filed by a party for a permit must, at any rate, substantially con 328 form to the requirements of section 46, as well as to the form framed under the rule making power of the State Government. We have already pointed out that rule 80 provides that every application for permit should be in the appropriate form mentioned therein. Therefore section 46, the relevant rule, and the form prescribed, have to be read together, and so read it follows that an applicant for a permit must comply, at any rate, substantially with the various matters mentioned therein. It must be borne in mind that section 68 is not controlled by section 46 of the Act. In fact it specifically enables the St.ate Government to make rules for the purpose of carrying into effect the provisions of the Chapter. The Chapter itself, we have mentioned, is entitled 'Control of Transport Vehicles ' and if, with a view to carrying into effect the object. of control of transport vehicles, the form requires information on various matters over and above those enumerated in els. (a) to (d) of section 46, it cannot be stated that the State Government has acted beyond its rule making powers when prescribing such a form. The form so prescribed, in our opinion, forms an integral part of rule 80 which the State Government is authorised to make, under section 68 of the Act. Therefore, we are not inclined to accept the contention of Mr. Gupte that the matters enumerated in a form provided by a rule framed under the rule making power of the State Government cannot be considered to be 'such other matters as may be prescribed under section 46(f) '. The further contention that in order to treat the matter as one prescribed under section 46(f), it must have been enumerated as such in a rule framed 'under the Act, has also to be rejected. Even otherwise, we have already pointed out that section 68 is not controlled by section 46, in which case also it follows that the form prescribed by the State Government, by virtue of a rule framed under its rule making powers, must be considered to be valid. Mr. Gupte drew our attention of the decision of the Mysore High Court in Narayana vs S.T. Authority(1). One of the questions that arose for consideration in that decision was whether an application for a permit under the Act can be considered to be defective when it did not deal with certain matters provided in a from prescribed under r. 156 of the Rules framed by the State of Madras under the Act. The High Court held that such an application has to be considered to be defective and observed: "It is true that if by a rule properly made by the State, it was provided that further particulars in addition to those referred to in clauses (a) to (e) of section 46, should be furnished in the application, these particulars should have to be so furnished as directed by section 46(f). (I) A.I.R. 1950 Mys. 33=I.L.R. (1950) Mys. 329 But no such rule made by the State was pointed out to us. What the State did under r. 156 was to merely prescribe the form in which an application should be made, although that form contained columns which referred to many matters not specified in section 46. rule, which was made under section 68(2)(c) of the Act prescribed only a form. It did not prescribe any particulars. That being the position, those additional matters for which columns were provided in the form prescribed by it cannot merely for that reason, claim the status of particulars prescribed by rules under the Act, and cannot, therefore, be regarded as particulars referred to in section 46(f) of the Act. " We are not inclined to agree with this reasoning of the learned Judges of the Mysore High Court. We have already held that the form prescribed by the St.ate Government under the rules becomes part of the rule itself, which the State Government is competent to frame. Therefore the contention of Mr. Gupte that in prescribing the form the State Government has exceeded its rule making power, cannot be accepted. The further question that arises for consideration, is as to whether the view of the High Court that the application of the appellant is defective and suitable to be dismissed inasmuch as columns 10, 14 and 15 in the application form have not been properly filled up, is correct. Here again, we are not inclined to agree with the reasoning of the High Court that under such circumstances the application filed by the appellant cannot., be treated to be an application under the Act. It is needless to state that an application must. furnish full and complete information that is within his knowledge or possession, in his application for the grant of a permit. The scheme of the Act is quite clear, viz. that an applicant must have a proper permit for operating transport services. To obtain that permit, certain formalities and procedure have to be gone through. Apart from the other applicants having an opportunity to make representations or objections to the claim made by a particular applicant, certain other persons and authorities, as will be seen under section 57(3), have been given a right to make representations. Such filing of objections or making of representations can be effective only if an applicant gives all the information which is in it.s power or control. The expression, 'as far as may be ', occurring in section 46 of the Act, must only mean that an applicant must give information on the various particulars and matters referred to in section 46, in so far as those requirements apply to him and in respect of which it is possible to give information. In the absence of the expression 'as far as may be ' in the 330 old section 46 of the Act, the Mysore High Court, in two of its decisions C.K.M. Services vs Mys. Revenue Board(1) and Sethuramachar vs Hiranayya(2) has taken the view that the provisions in section 46 must be considered to be mandatory and non compliance with those provisions will mean that there is no proper and valid application under the Act and that an authority would be justified in rejecting the same. In Sethuramachar 's case( '2) the High Court has indicated that in the section, as it now stands, the position may be different. The Madhya Pradesh High Court in an unreported decision in S.H. Motor Transport Company vs The State Transport Appellate Authority(3) (a certified copy of which has been given to us) has held that when an applicant does not give some information on certain particulars required under section 46, it must be understood that he does not intend to do the necessary things as mentioned therein. In our opinion, the matter has to be approached from a slightly different angle, viz., whether the authorities have got the power to reject an application summarily if it does not contain information on any matters or particulars referred to in the form. We are unable to find any provision in the statute giving a power to the transport. authorities to reject an application summarily on that ground; but, we have already emphasized that the application must give the necessary information on the various particulars and matters enumerated in the form prescribed for such purpose. It is to the interest of the applicant himself to give full and clear information because he stands the risk of the permit not being granted to him for lack of information on certain matters. But this is quite a different thing from the power of the authority to reject an application forthwith on the ground that the application is defective. The only provision where such a power to reject summarily is given is under the proviso to section 57(3). Under this proviso, the Regional Transport Authority, without following the procedure of publishing an application and inviting objections can summarily refuse the application in the circumstances mentioned therein. No doubt it may be asked that if an application lacks information on very vital matters, the whole object of publishing the same and inviting objections could not be achieved because the parties entitled to make objections and representations cannot effectively make the same. But, as we have already pointed out it is really in the interest of the applicant himself to give the information as far as it lies within his power, on all matters. What the High Court has done in this case, was really to reject the application of the appellant summarily, a power which even the Transport Authority does not, in our opinion, have under (1) A.I.R. 1960 Mys. (2) A.I.R. 1960 Mys. 90. (3) Misc. Petition No. 6 of 1969, decided on 3 3 1969. 331 the Act. Probably the statute did not give power to an authority to reject an application summarily in cases not coming within the proviso to section 57(3) because when considering an application for grant of permit on merits, it may be open to the Regional Transport Authority, after giving reasons, under section 57(7), to refuse the application for permit. In such a case, as the Regional Transport Authority is bound to give reasons, the sufficiency and validity of the reasons given may also be canvassed before the appellate authority in an appeal under section 64 of the Act. But all this can be done only at the time of considering the grant of permit on merits, and not at an earlier stage, and the refusal to grant the permit will be not on the ground that the application is defective, but on the ground that the particulars or information and other matters given in the permit do not enable the Regional Transport Authority to take the view that a particular applicants claims are superior to those of others. The question can also be considered from another point of view. Section 47 makes it obligatory on a Regional Transport Authority, in considering an application for stage carriage permit, to have regard to the various matters mentioned therein. One of the matters about which regard must be had is contained in cl. (e) viz., "the operation by the applicant of other transport services, including those in respect of which applications from him for permits are pending". In respect of item 10, in our opinion, the answer given by the appellant appears to be fairly satisfactory. In respect of items 14 and 15, the High Court 's view appears to be that over and above the number of permits mentioned therein, the appellant should have given an exhaustive list of the other permits held by it in the State under item 14 or in any other State, under item 15. The Transports. Authorities. in our opinion, would be acting within their jurisdiction when they take into account the matter governed by cl. (e) of section 47(1) in calling upon a party to give more complete details, and give an opportunity to the other parties before it to state their objections. That is exactly what had been directed to be done by the Appellate Committee when it sent back the proceedings to the Regional Transport Authority. In this view, it follows that the order of the High Court treating the appellant 's applications as invalid and excluding them from the consideration of the Transport Authority, is not warranted by the provisions of the Act. The result is that the order of the High Court, dated October 5, 1967 is set aside and that of the Appellate Committee, dated June 9, 1966 is restored. Respondents 1 to 3 and 5 will pay the costs of the appellant.

The appellant, as well as. Respondents 1 to 5 and 8 to 16, applied to the Regional Transport Authority, Nagpur, on various dates in the. years 1964 65, under s: 46 of Act IV of 1939 for grant of stage carriage permits on certain routes. After notification of the applications and considering objections of and hearing the parties, the Regional Transport Authority passed orders granting permits in favour of the appellant. Respondents 1 to 5 filed appeals before the Appellate Committee of the transport authority of Maharashtra challenging the permits granted to the appellant on the ground that in the appellant 's application, mandatory information required to be submitted under section 46 read with the form prescribed under Rule 80 of the relevant rules had not been furnished by the appellant. The Appellate committee upheld the challenge and remanded ' the matter to the Regional Transport Authority for re consideration with a direction that the appellant should be asked to furnish complete information and, after the receipt of such information in the prescribed form as well as compliance with the normal procedure the entire matter be re heard and decided afresh. Respondents 1 to 5 challenged this order of the Appellate Committee before the High Court trader articles 226 and 227 of the Constitution contending that the Committee should have rejected the applications of the appellant on the ground that the mandatory provisions of section 46 had not been complied with and that the order of the Committee really amounted to allowing the appellant to convert a defective. application so as to bring it in conformity with the provisions of the Act and the form, which was not permissible in law. The High Court accepted this contention holding that the Appellate Committee had no jurisdiction to give the appellant a fresh opportunity to. furnish the necessary particulars. It therefore remanded the matter with a direction that the applications of all parties excepting that of the State. Road Transport Corporation be considered and a decision reached on the grant of permits between the rival applicants. In appeal before this Court it was contended inter alia that the. High Court was in error in interfering in a writ petition under articles 226 and 227 with the order of the Appellate Committee; that the form prescribed by the State Government for an application for a permit had ' gone beyond the rule making power of the State. Government under section 68 of the Act; and that the provisions of section 46 of the Act are not mandatory and there is no jurisdiction in the authorities functioning under the Act to reject an application summarily on the ground that it was not in conformity with the Act or the Rules framed thereunder. 320 HELD: Allowing the appeal: (i) Since the impugned order of the Appellate Committee was challenged on the ground ' of lack of jurisdiction, it was not possible to hold that the High Court could not have entertained the writ petition under Ars. 226 and 227. C] Nagendra Nath Bora vs The Commissioner of Hills Division (ii) The form prescribed by the State Government requiring the furnishing of information on the various particulars and matters referred to. therein was not beyond the rule making power of the State: Government under section 68 of the. Section 46, rule 80, and the form prescribed, have. to be read together, and so read it follows that an applicant for a permit must comply, at any rate, substantially with the various matters mentioned therein. Section 68 is not controlled by section '46 of the Act. In fact it specifically enables the State Government to make rules for the purpose of carrying into. effect the provisions of Chapter IV. The Chapter itself is entitled 'Control of Transport Vehicles ' and if, with a view to carrying into effect the object of control of transport vehicles, the form requires information on various matters over and above those enumerated in cls. (a) to (d) of section 46, it cannot be stated that the State Government has acted beyond its rule making powers when prescribing such a form. The form so prescribed, forms an integral part of rule 80 which the State Government is authorised to make. , under section 68 of the Act. [330 A D] C.K.M. Services vs Mys. Revenue Board, A.I.R. 1960 Mys. 72; and Sethuramachar vs Hirannayya, A.I.R. 1960 Mys. 90; referred to. (iii) The order of the High Court treating the appellant 's applications as invalid and excluding them from the consideration of the Transport Authority, was not warranted by the provisions of the Act. There is no provision in the statute giving a power to the transport authorities to reject an application summarily on the ground that it does not give some information on certain particulars required under section 46. It is needless to state that an applicant must furnish full and complete information that is within his knowledge or possession in his application for the grant of a permit. It is in the interest of the applicant himself to give such full and complete information because he stands the risk of the permit not being granted to him for lack of information on certain matters. But this is quite a different thing from the power of the authority to reject an application forthwith on the ground that the application is defective. D F] S.H. Motor Transport Company vs The State Transport Appellate Authority. Petition No. 6 of 1969, decided on 3 3 1969 by the Madhya Pradesh High Court, disapproved.

ivil Appeals Nos. 1987. 1988 of 1976. (Appeals by Special Leave from the Judgment and Order dated the 25 3 1975 of the Punjab and Haryana High Court in Civil Writ Petn. 1228 & 1229 of 1975). G.L. Singh, in CA 1988/76 with Hardev Singh, B. Datta and N.S. Sodhi, for the appellants. Niren De, Attorney General with Devan Chetan Das, Adv. General, Prem Malhotra and R.N. Sachthey, for respondents Nos. 1 & 2. Anand Swarup, and Mrs. section Bhandare, for respondent No. 3. 362 The Judgment of the Court was delivered by RAY, C.J. These appeals are by special leave against the judgment dated 25 March, 1975 of the Punjab and Haryana High Court dismissing the writ petitions. The appellants in the writ petitions asked for a manda mus directing Respondents No. 1 and 2 to appoint the appel lants to the posts of Additional District and Sessions Judge. The appellants also asked for a mandamus or an appropriate writ quashing the orders of Respondents No. 1 and 2 whereby the High Court was informed that the Govern ment was not prepared to appoint the appellants to the post of Additional District and Sessions Judge. Respondent No. 1 is the State of Haryana. Respondent No. 2 is the Chief Minister of Haryana. Respondent No. 3 is the High Court of Punjab and Haryana. The High Court dismissed the petitions on the ground that the appellants had no locus standi to file the peti tions. The reason given by the High Court is that the appel lants were not appointed and they had no right to be ap pointed. They had also no right to know why they were not appointed. The High Court by letter dated 19 February, 1972 invited applications from eligible members of the Bar to fill up two vacancies in the quota of direct recruits from the Bar in the Haryana Superior Judicial Service. The High Court called for interview 9 candidates on 18 October, 1972. The High Court thereafter recommended to the Haryana Government the names of the appellants for appointment as District/Additional District & Sessions Judges. After 27 months the Government reacted the recommendation of the High Court. Thereupon the appellants filed writ petitions challenging the order of rejection and asked for mandamus for appointment. There is a letter dated 8 September, 1972 from the Chief Secretary to the Government of Haryana to the Registrar of the High Court. In that letter the Government took excep tion to the inviting of applications from members of the Bar without the High Court having first obtained the approval of the Government for that purpose. The letter also stated that in the past two occasions the High Court obtained the approval of the State Government before inviting applica tion. The High Court rightly dismissed the petitions. It is elementary though it is to be restated that no one can ask for a mandamus without a legal right. There must be a judicially enforceable right as well as a legally protected right before one suffering a legal grievance can ask for a mandamus. A person can be said to be aggrieved only when a person is denied a legal right by some one who has a legal duty 363 to do something or to abstain from doing something (See Halsbury 's Laws of England 4th Ed. I, paragraph 122; State of Haryana vs Subash Chander Marwaha & Ors.(1) Jasbhai Motibhai Desai vs Roshan Kumar Haji Bashir Ahmed & Ors. (2) and Ferris Extraordinary Legal Remedies paragraph 198. The initial appointment of District Judges under Article 233 is within the exclusive jurisdiction of the Government after consultation with the High Court. The Governor is not bound to act on the advice of the High Court. The High Court recommends the names of persons for appointment. If the names are recommended by the High Court it is not obli gatory on the Governor to accept the recommendation. Counsel for the appellants relied on the decisions of this Court in Chandra Mohan vs State of Uttar Pradesh & Ors.(3); Chandramouleshwar Prasad vs Patna High Court & Ors(4) and A. Panduranga Rao vs State of Andhra Pradesh & ORS.(5) in SUppOrt of tWO contentions. First, the Governor should accept the recommendations made by the High Court. Second, if the Governor will not accept the recommendations he should give reasons for not accepting the recommenda tions. None of the decisions supports the contentions. In these three cases the scope and content of Article 233 was examined. This Court has held that the Constitu tion contemplates consultation of the Governor with the High Court inasmuch as the High Court is in a position to express views on the judicial work of persons who are recommended for appointment to the posts of District Judges. The High Court knows the merits and demerits of persons who will be promoted from the service to the post. The High Court interviews persons who will be appointed by direct recruit ment. The High Court in those circumstances will select candidates for promotion and direct recruitment and send their names to the Government. This Court has also held that the consultation of the Governor with the High Court does not mean that the Governor must aceept whatever advice or recommendation is given by the High Court. Article 233 requires that the Governor should obtain from the High Court its views on the merits and demerits of persons, selected for promotion and direct recruitment. In regard to persons who are appointed by promotion or direct recruitment this Court has held that it is not open to the Government to choose a candidate for appOintment by direct recruitment or by promotion unless and until his name is recommended by the High Court. In Panduranga Rao 's case (supra) there is an observation that the Government could tell the High Court its reasons for not accepting (1) ; (2) [19761 3 S.C.R. 58. (3) (4) [19701 2 S.C.R. 666. (5) ; 364 the recommendations of the High Court in regard to certain persons. The observation in Panduranga Rao 's case (supra) was made in the facts and circumstances of that case and in particular the controversial correspondence. In the present case the Government pointed out that the High Court had not written to the Government about the proposed appointments before issuing advertisements there for. In any event, after the Government communicated to the High Court that the recommendations were not accepted a new situation developed. The Government asked the High Court to issue advertisements and to invite applications for appointment to the posts. The High Court accepted that position and acted upon it. The High Court issued the advertisements. The attitude of the High Court has been peculiar. When the High Court decided to ask for fresh applications the High Court accepted the position that the original recom mendations which had been made by the High Court were not accepted by the State Government and yet the High Court supported before this Court the appellant 's case by pleading for the "candidature" of the appellants. The High Court should not take a partisan view by supporting the candida ture of any person. We were a little surprised that the High Court supported the appellants. This is not proper particularly when the High Court dismissed the writ peti tions of the appellants. For the foregoing reasons the appeals are dismissed. There will be no order as to costs. M.R. Appeals dis missed.

The Haryana High Court invited applications and interviewed candidates for filling up vacancies in the quota of direct recruits from the bar, in the Haryana Superior Judicial Service. The names of the appellants were recommended to the State Government who rejected them and asked the High Court to invite application again. Accepting the position, the High Court issued the advertisements. The appellants filed petitions against the order rejecting their names and asked for mandamus for appointment. The same were dismissed by the High Court on the ground that the appellants had no locus standi. Dismissing the appeals, the Court, HELD: (1) There must be a judicially enforceable right as well as a legally protected right before one suffering a legal grievance can ask for a mandamus. A person can be said to be aggrieved only when he is denied a legal right by some one who has legal duty to do something or to abstain from doing something. [362G H, 363A B] State of Haryana vs Subash Chander Marwaha & Ors. ; ; Jasbhai Motibhai Desai vs Roshan Kumar Haji Bashir Ahmed & Ors. ; ; Halsbury 's Laws of England 4th Ed. I, pargraph 122 and Ferris Extra ordi nary Legal Remedies, paragraph 198, applied. (2) The initial appointment of District Judges under Article 233 is within the exclusive jurisdiction of the Government after consultation with the High Court though the consulta tion does not mean that the Governor must accept whatever advice or recommendation is given by the High Court. Article 233 only requires that the Governor should obtain from the High Court its views on the merits and demerits of per sons, selected for promotion and direct recruitment.[363A B. F G] Chandra Mohan vs State of Uttar Pradesh & Ors. ; Chandramouleshwar Prasad vs Patna High Court & Ors. ; and A. Panduranga Rao vs State of Andhra Pradesh & Ors. ; referred to.

05 of 1953. Under article 32 of the Constitution of India for the enforcement of Fundamental Rights and APPELLATE JURISDICTION: Case No.1 of 1950 1047 Appeal under section 205 of the Government of India Act, 1935, from the Judgment and Decree, dated the 13th September, 1949, of the High Court of Judicature, Orion, in First Appeal No. 39 of 1949 arising out of the Judgment and Decree, dated the 11th September, 1945, of the Court of the District Judge, Cutback, in Original Suit No. 3 of 1943. N. C. Chattanooga (B. K. Saran and B. C. Pratt, with him) for the petitioners and appellants Nos. 1 to 13. section P. Sinclair (B. K. Saran and R. C. Pratt, with him) for appellants 14 to 16. M. C. Seth (G. N. Jose, with him) for respondents in both the matters. Agent R. H. Debar. March 16. delivered by MUKHERJEA J. These two connected matters are taken up together for the sake of convenience and may be,disposed of by one and the same judgment. Petition ;No. 405 of 1953 has been presented to this court under article 32 of the Constitution and the petitioners are the Mahants or superiors of two ancient and well known religiousinstitutions of Orissa, both of which have endowmentsof considerable value situated within and outside the Orissa State. An Act, known as the .Orissa Hindu Religious Endowments Act was passed by the Orissa Legislative Assembly functioning under the Government of India Act, 1935. in the vear 1939 and it received the assent of the Governor General on the 31st August, 1939. The object of the Act, as stated in the preamble, is "to provide for the better administration and governance of certain Hindu religious endowments" and ' the expression "religious endowment" has been defined comprehensively in the Act as meaning all property belongto or given orendowed for the support of Maths or temples or for the performance of any service orcharity connected therewith. The whole scheme of the Act is to vest the control and supervision of public temples and Maths in a statutory authority designated as the Commis. sioner of Hindu Religious Endowments and to confer 1048 upon him certain powers with a view to enable him to exercise effective control over the trustees of the Maths and the temples. The Commissioner is required to be a member of the Judicial or Executive Service of the Province and his actions are subject to the general control of the provincial Government. For the purpose, of meeting the expenses of the Commissioner and his staff, every Math or temple, the annual income of which exceeds Rs. 250, is required under section 49 of the Act to pay an annual contribution at certain percentage of the annual income which increases I progressively with the increase in the income. With this contribution as well as loans and grants made by the Government, a special fund is to be constituted as provided by section 50 and the expenses of administering the religious endowments are to be met out of this fund. In July, 1940, a suit, out of "which the Case No. 1 of 1950 arises, was instituted in the court of the District Judge of Cuttack by a number. of Mahants including .the two petitioners in the petition under article 32 before us. praying for a declaration that the Orissa Relig ious Endowments Act of 1939 was ultra vires the Orissa Legislature and for other consequential reliefs. The validity of the Act was challenged substantially on three grounds, namely, (1) that the subject matter of legislation was not covered by Entry 34 of List 11 in Schedule VII of the Government of India Act, 1935 ; (ii) that the, contribution levied under, section 49 was, in substance, a tax and could not have been imposed by the Provincial Legislature; and (iii) that as the provisions of the Act affected the income of properties situated outside the territorial limits of the Province, the Act was extra territorial in its operation and hence inoperative. All these contentions were overruled by, the District Judge of Cuttack, who by his judgment dated the 11 th September, 1945, dismissed the plaintiffs ' suit. Against that decision, an appeal was taken by the plaiitiffs to the High Court of Orissa and the appeal was heard by a Division Bench, consisting of Jagannedbadas and Narasimham JJ. The learned Judges by two separate but concurring judgments, dated the 13th September. 1949, affirmed the decision 1049 of the District Judge and dismissed the appeal. it is against this judgment that Case No. 1 of 1950 has come to this court. During the pendency of the appeal in this court the Constitution came into force on the 26th January , 1950, with its chapter on fundamental rights, and the Orissa Hindu Religious Endowments Act also has been amended recently by the State Legislature of Orissa by Amending Act II of 1952. In view of these changes, the present application under article 32 of the Constitution has been filed by two of the Mahants who figured as plaintiffs in the Declaratory Suit of 1940 and the application has been framed comprehensively so as to include all points that could be urged against the validity of the Orissa Hindu Religious Endowments Act on the basis of the provisions of the Constitution. It is conceded by both the parties that in these circumstances it is not necessary for us to deal separately with the appeal. The decision, which we would arrive at in the petition under article 32, will be our pronouncement on the validity or otherwise of the different provisions of the impugned Act. It may be stated at the beginning that the Orissa Hindu Religious Endowments Act of 1939 follows closely the pattern of the Madras Hindu Religious Endowments Act of 1927 which has been now replaced by a later Act passed by the State Legislature of Madras in 1951 and described as the Madras Hindu Religious and Charitable Endowments Act. The grounds upon which the validity of the Orissa Act has been attacked be fore us are substantially the same as were urged in assailing the constitutional validity of the Madras Act, in Civil Appeal No. 38 of 1953 (The Commissioner, Hindu Religious Endowments, Madras vs Sri Lakshmindra Thirtha Swamiar), the judgment in which has just been delivered. The grounds urged can be classified conveniently under two heads. In the first place, some of the provisions of the impugned Act have been challenged as invalid on the ground that they invade the fundamental rights of the petitioners guaranteed under articles 19(1) (f), 25 26, and, 27 of the Constitution. The other branch of the contention (1) ; 1050 relates to. the provision for levying contribution on religious institutions under section 49 of the Act and this provision has been impeached firstly on the ground that the contribution being in substance a tax, it was beyond the competency of the Provincial Legislature to enact any such provision. The other ground raised is, that the payment of such tax or imposition is prohibited by article 27 of the Constitution. The general questions relating to the scope and ambit of the fundamental rights embodied in articles 19 (1) (f ), 25, 26 and 27 of the Constitution in connection with Maths and temples have been discussed fully in our judgment in the Madras appeal referred to above and ,it would not, be necessary to reiterate these discussions for purposes of the present case. We can straightaway proceed to examine the different provisions of the Act to which objections have been taken by the learned counsel appearing for, the petitioners in the light of the principles which this court has laid down in the Madras appeal. It may be said that many of the impugned provisions of the Orissa Act correspond more or less. to similar provisions in the Madras Act. Section 11 of the Act has been objected to on the ground that it vests almost , an uncontrolled and arbitrary power upon the Commissioner. This section corresponds to section 20 of the Madras Act and as has been pointed out in our Judgment, in the Madras appeal, the powers, though seemingly wide, can be exercised only to ensure that Maths and temples are properly maintained and the endowments are properly administered. As the object and purpose for which these powers could be exercised have been indicated preoisely we do not think that it, could be said that the authority vested in the Commissioner is in any way arbitrary.or unrestricted. The explanation attached to the section only makes it clear that the general power conferred upon the Commissioner extends to passing of interim orders as the Commissioner might think fit. Section 14 lays down the duties of the trustee and the care which he should exercise in the management 1051 of the affairs of the religious institutions. The care, which he has to exercise, is What is demanded normally of every trustee in charge of trust estate and the standard is that of a man of ordinary prudence dealing with his own funds or properties. This is a matter relating to the administration of the estate and and does not interfere with any fundamental rights of the trustee. For the same reason, we think, no objection could be taken to the provision of section 28 which lays down that the trustee of a temple shall be bound to obey all orders issued under the provisions of the Act by the Commissioner. if the orders are lawful and made in pursuance of authority properly vested in the officer, no legitimate ground could be urged for not complying with the orders. The sections of the Act, to which serious objections have been taken are sections 38, 39, 46, 47 and 49. Sections 38 and 39 relate to the framing of a scheme. A scheme can certainly be settled to ensure due administration of the endowed property but the objection seems to be that the Act provides, for the framing. of a scheme not by a civil Court or under its supervision but by the Commissioner who is a mete administrative or executive officer. There is also no provision for appeal against his order to the court. Under section 58 of the Madras Act, although the scheme is to be framed by the Deputy Commissioner, an appeal lies against his order to the Commissioner in the first place. A party aggrieved by the order of the Commissioner again has a right of suit in the ordinary civil court, with a further right of appeal to the High Court. It seems that sub section (4) of section 39 of the impugned Act, as it originally stood, allowed the, trustee or any person having an interest in the institution to file a suit in a civil court to modify or set aside an order framing a scheme; and under section 40, the order made under section 39 could be final only subject to the result of such suit. Subsection (4) of section 39, however, was deleted by the Amending Act of 1952, and under the new sub section (4), the order passed by the Commissioner has been made final and conclusive. Strangely, however, section 41 of the Act has still been retained in its 1052 original shape and that speaks of an order settling a scheme being set aside or modified by the court. Obviously, this is careless drafting and the Legislature did not seem to have adverted to the apparently contradictory provisions that it made. The learned Attorney General, appearing for the State of, Orissa, has also conceded that these sections require redrafting. We think that the settling of a scheme in regard to a religious institution by an executive officer without the intervention of any judicial tribunal amounts to an unreasonable restriction upon the right of property of the superior of the religious institution which is blended with his office. Sections 38 and 39 of the Act must, therefore, be held to be invalid. There is nothing wrong in the provision of section 46 itself but legitimate exception, we think, can be taken to the proviso appended to the section. Under the law, as it stands, the Mahant or the superior of a Math has very wide powers of disposal over the surplus income and the only restriction that is recognised is that he cannot spend the income for his own personal use unconnected with the dignity of his office. The purposes specified in section 46 are all conducive to the benefit of the institution and there is no reason why the discretion of the trustee in regard to the spending of surplus for such purposes also should be still further restricted by directions which the Commissioner may choose to issue. Section 47 (1) lays down how the rule of cy pres is to be applied not merely when the orginal purpose of the trust fails or becomes incapable of being carried out either in whole or in part by reason of subsequent events, but also where there is a surplus left after meeting the legitimate expenses of the institution. Objection apparently could be raised against the last provision of the sub section, but as subsection(4) of section47gives the party aggrieved by any order of the Commissioner in this respect to file a suit in a civil court and the court is empowered to modify or set aside such order of the Commissioner, we do not ,think that there is any reasonable ground for complaint. The only other section that requires consideration is sect ion 49 under which every Math or temple having 1053 an annual income exceeding Rs. 250 has got to make an annual contribution for meeting the expenses of the Commissioner and the officers and servants working under him. The first question that arises with regard to this provision is whether the imposition is a tax or a fee; and it is not disputed that if it is a tax, the Provincial Legislature would have no authority to enact such a provision. This question has been elaborately discussed in our judgment in the Madras appeal referred to above and it is not necessary to repeat the discussions over again. As has been pointed out in the Madras appeal, there is no generic difference between a tax and a fee and both are different forms in which the taxing power of a State manifests itself. Our Constitution, however, has made a distinction between a tax and a fee for legislative purposes and while there are various entries in the three lists with regard to various forms of taxation, there is an entry at the end of each one of these lists as regards fees which could be levied in respect of every one of the matters that are included therein. A tax is undoubtedly in the nature of a complusory exaction of money by a public authority for public purposes, the payment of which is enforced by law. But the essential thing in a tax is that the imposition is made for public purposes to meet the general expenses of the State without reference to any special benefit to be conferred upon the payers of the tax. The taxes collected are all merged in the general revenue of the State to be applied for general public purposes. Thus, tax is a common burden and the only return which the taxpayer gets is the participation in the common benefits of the State. Fees, on the other hand, are payments primarily in the public interest but for some special service rendered or some special work done for the benefit of those from whom payments are demanded. Thus in fees there is always an element of quid pro quo which is absent in a tax. Two elements are thus essential in order that a payment may be regarded as a fee. It the first place,, it must be levied in consideration of certain services which the individuals accepted either willingly or unwillingly. But this by itself is not enough to make 136 1054 the imposition a fee, if the payments demanded for rendering of such services are not set apart or specifically appropriated for that purpose but are merged in the general revenue of the State.to be spent for general public purposes. Judged by this test, the contribution that is levied by section 49 of the Orissa Act will have to be regarded as a fee and not a tax. The payment is demanded only for the purpose of meeting the expenses of the Commissioner and his office which is the machinery set up for due administration of the affairs of the religious institution. The collections made are not merged in the general public revenue and are not appropriated in the manner laid down for appropriation of expenses for other public purposes. They go to constitute the fund which is contemplated by section 50 of the Act and this fund, to which also the Provincial Government contributes both by way of loan and grant, is specifically set apart for the render ing of services involved in carrying out the provisions of the Act. We think, therefore, that according to the Principles which this court has enunciated in the Madras appeal mentioned above, the contribution could legitimately be regarded as fees and hence it was within the competence of the Provincial Legislature to enact this provision. The fact that the amount of levy is graded according to the capacity of the payers though it gives it the appearance of an income tax, is not by any means a decisive test. We are further of opinion that an imposition like this cannot be said to be hit by article 27 of the Constitution. What is forbidden by article 27 is the specific appropriation of the proceeds of any tax in payment of expenses for the promotion or maintenance of any particular religion or religious denomination. The object of the contribution under section 49 is not the fostering or preservation of the Hindu religion or of any denomination within it; the purpose is to see that religious trusts and institutions wherever they exist are properly administered. It is the secular administration of the religious institutions that the Legislature seeks to control and the object, as enunciated in the Act, is to ensure that the endowments attached to the religious institutions are properly administered and their income is duly appropriated for purposes for which they were founded or exist. As there is no question of favouring any particular religion or religious denomination, article 27 could not possibly apply. The result is that, in our opinion, the only sections of the Act, which are invalid, are sections 38, 39 and the proviso to section 46. The application under article 32 is, therefore, allowed to this extent that a writ in the nature of mandamus would issue restraining the Commisoner and the State Government enforcing against the petitioners the provisions of the sections mentioned above. The other prayers of the petitioners are disallowed. No separate order is necessary in Case No. I of 1950, which will stand dismissed. We make no order as to costs either in the petition or in the appeal.

Held, that sections 38 and 39 and the proviso to section 46 of the Orissa Hindu Religious: Endowments Act, 1939 as amended by the Amending Act II of 1952 are ultra vires articles 19(1) (f), 25 and 26 of the Constitution. The annual contribution provided in section 49 of the Act is in the nature of a fee and not a tax and therefore it was within the competence of the Provincial Legislature to enact such a provision. Further an imposition like this is not hit by article 27 of the Constitution because the object of the contribution under section 49 is not the fostering or preservation of the Hindu religion or of any denomination within it but the proper administration of religious trusts and institutions wherever they exist. Civil Appeal No. 38 of 1953 referred to.

Civil Appeal Nos. 1841 1846 of 1978. From the Judgment and Order dated 21 9 1978 of the Allahabad High Court in W.P. Nos. 4846, 4436, 3815, 5040, 475 and 4587/78. AND CIVIL APPEAL No. 871 of 1978. From the Judgment and Order dated 29 4 1977 of the Allahabad High Court in W.P. No. 1749 of 1974. AND CIVIL APPEAL No. 1921 OF 1978. From the Judgment and Order dated 21 9 1978 of the Allahabad High Court in W.P. No. 4566 of 1978. AND CIVIL APPEAL No. 1960 OF 1978. From the Judgment and Order dated 21 9 1979 of the Allahabad High Court in W.P. No.4568/78. AND CIVIL APPEAL Nos. 2169 2173 OF 1978. From the Judgment and Order dated 21 9 1978 of the Allahabad High Court in W.P. Nos. 4542, 5589, 5592 to 5594/78. AND CIVIL APPEAL Nos. 2178 2187 of 1978. From the Judgment and Order dated 21 9 1978 of the Allahabad High Court in W.P. Nos. 4921, 4625, 4449, 5002, 5003, 5007, 5068, 5069, 5284 and 4568 of 1978. 113 AND CIVIL APPEAL Nos. 2219 2226 OF 1978. From the Judgment and Order dated 21 9 1978 of the Allahabad High Court in W.P. Nos. 5185 and 5059 of 1978. AND CIVIL APPEAL Nos. 2269, 2302, 2373 2375 OF 1978. From the Judgment and Order dated 21 9 1979 of the Allahabad High Court in W.P. Nos. 5193/78, 5192, 5010, 4584 and 4583 of 1978. AND CIVIL APPEAL Nos. 2321,2322,2356,2359,2386,2406 2408,2426 2428,2430 & 2431, 2457,2504,2507/1978 and 142,144,174,230,385,388,429,438,599,635,745,821,929 & 1007,1009/79,1149,1149A,1346,1630,1636,1638,1863,1865,1866,1 867 & 1869/79 and 2270,2272/78. From the Judgment and Order dated 21 9 1978 of the Allahabad High Court in W.P. Nos.5521, 4982, 5001,4447/78, 4454, 2311, 5134, 3826, 4409, 4020, 5144, 5728, 5002, 4455/78, 6948, 4665, 4560, 4666, 4985, 4449, 5540, 4823, 4619, 5150, 4588, 4593, 4926, 4947, 4948, 5012, 5062, 5088, 5089, 5191, 5539, 5106, 5097, 4833, 4911, 1398, 2114, 2515, 898/78, 5071, 5454, 5592, 5072, 5034, 4149, 5153, 5169, 5734/78, 4947/76, 5533/78, 3299/77, 4943, 4629/78 & 5194, 5195, 5196/79. AND CIVIL APPEAL No. 487 of 1979. From the Judgment and Order dated 21 9 1978 of the Allahabad High Court in W.P. No. 4445 of 1978. AND WRIT PETITION Nos. 257 & 600 of 1979. (Under Article 32 of the Constitution). F.S. Nariman, R. F. Nariman and P. C. Bhartari for the Appellants in CA Nos. 2260 & 2261. section P. Gupta, H. K.Puri, V. K Bahl and Miss Madhu Moolchandani for the Appellants in CAs 1841 to 1846, 2426 to 2428, 929, 1007 to 1009, 1630, 2169 to 2172 and 1635. V.M. Tarkunde, G. B. Pai, Mrs. Saran Mahajan, Mr. Arvind Kumar, Mrs. Lakshmi Arvind and R. K. Sinha for the Appellants in CA Nos. 2507, 2322, 2457 and 871. 114 Shanti Bhushan, section P. Gupta, H. K Puri and Miss Madhu Moolchandani for the Appellants in CA 174. L. N. Sinha, section section Ray, Ghayyas Alam and R. K Jain for the Appellants in CA 2269, 2270 to 2272. Shanti Bhushan, Subhash Chandra Birla and Shreepal Singh for the Appellants in 2373, 2302, 2374 and 2375. Yogeshwar Prasad and Mrs. Rani Chabra for the Appellants in CA 599, 142 to 144, 385, 1638, 2219 to 2226, 1921, 1960, 2173, 2178, 2180 to 2187, 2179, 386 to 388, 429 to 438 and W.P. 257. Pramod Swarup for the Appellants in CAs Nos. 230, 2359, and 2386. P. R. Mridul and Ashok Grover for the Appellants in CAs 2406 to 2408. Veda Vyasa, N. C. Sikri, A. K Sikri and Vijay Jaiswal for the Appellants in CA 821 & 487 and W.P. 600. O.P.Verma for the appellants in CAs 1867 and 1869. Y.S.Chitale, Mrs. Shandhana Ramachandran and P. K Pillai for Appellant No. 1 in CA 1846, 745 and Appellant No. 2 in CA 1633 and 1634. S.K.Jain for the Appellants in CA 187/79. T.S.Arora for the Appellants in CA 2356/78 & 1346/79. Y.S.Chitale, O. P. Rana and Mrs. section Ramachandran for the Appellants in CA 1866 and Appellants in CA 1865 and R.1 in CAs 142 & 143 and 144 and for the Appellants in CAs. 1631, 1632 and for appellant No. 1 in CA 1633, 1634 and Appellants in CA 1863. S.K Dhingra for the Appellants in CA 2321/78. J M.Khanna for the Appellants in CA 2430 & 2431. K B.Rohtagi and Praveen Jain for the Appellants in CA 2504/78. M.M.L.Srivastava for the Appellants in CA 1149 & 1149A. K C.Dua for the Appellants in CA 1635 & 1636. L M.Singhvi, B.D. Madhyan, R.N. Dikshit and L.K.Pandey for the Respondents (Mandi Samiti) CA 1841 to 1846,1921,2169 to 2173,2178 to 2187,2219 to 2226, 2260,2261,2269,2302,2373 to 2375,2322,2356,2406 to 2408,2420 to 2423,2431, 2426 to 2428,2507,142 to 144,174,385 to 388,429 to 439,599,230,635,1007 & 1008, 1149, 1149A, 1630 & 1631, 1638, 5135, 1346 and 2212. 115 E.C.Aggarwala and R. Satish for RR 2 in CA 2179,2180,2222 2271,2431,2433, 2504/78 and 1869 and 143/79 and in other matters for Mandi Samiti for Muzaffarnagar and Meerut. Ravinder Bana for RR 2 in 2457,2270 and 2272 and RR 2 and RR 3 in CA 2269 and WP No. 257/79. M.V.Goswami for RR 1 in CA 2356. The Judgment of the Court was delivered by UNTWALIA J. , The Uttar Pradesh Krishi Utpadan Mandi Adhiniyam, 1964 being U.P. Act XXV of 1964, hereinafter called the Act, was passed in that year. It led to the establishment of Market Areas, Principal Market Yards and Sub Market Yards etc. and the levying of the fee in relation to transactions of certain commodities in the State of Uttar Pradesh. Various Market Committees were formed known as Mandi Samitis. In order to give effect to the working of the Act The Uttar Pradesh Krishi Utpadan Mandi Niyamavali, 1965, hereinafter called the Rules, were made by the Governor of Uttar Pradesh. The Act has been amended several times. But we were distressed to find that the Rules were not accordingly amended as and when required to make them uptodate in accordance with the amended Act. Various traders carrying on business in the State of Uttar Pradesh within the jurisdiction of several Market Committees challenged the levy of fee in the High Court of Allahabad from time to time. There were several rounds of litigation in which they by and large, failed. Finally many Writ Petitions were dismissed by the High Court by its judgment dated September 21, 1978 on which date many writ petitions were also dismissed in limine. Civil Appeal 1841 of 1978 and about 103 more appeals are from the said judgment and order of the High Court. Immediately preceding the said judgment a longer and more elaborate judgment had been delivered by the High Court on April 29, 1977. Civil Appeal 871 of 1978 and Civil Appeal 1636 of 1979 are from the said judgment. Along with these 106 appeals, two Writ Petitions were also heard being Writ Petition No. 257 of 1979 and Writ Petition No. 600 of 1979. Thus in all 108 matters have been heard together and are being disposed of by this judgment. At the outset it may be mentioned that because of the litigations cropping up from time to time between the traders and the Market Committees the working of the Committees had not successfully proceeded so far, as, fees levied from time to time could not be realised in. Sometimes illegal or unauthorised collections seem to have been 116 made. Money justifiably realised also does not seem to have been fully utilised as it ought to have been done. In order to enable the Market Committees in their attempt to implement the law as far as possible and to save their attempt from being thwarted by any unnecessary litigation we allowed the parties to advance a full throated argument in this Court including some of the points which were not argued in the High Court or in support of which foundations of fact were lacking. In this judgment our endeavour will be to formulate the points of law and decide them as far as practicable so that in future the business of the Market Committees may be conducted in the light of this judgment leaving no scope for unnecessary litigation. Of course even in our judgment at places it would be indicated, and even apart from that, some genuine and factual disputes may crop up which in the first instance may be decided by the Market Committees, preferably a Board constituted by a particular Committee for deciding such disputes and then, if necessary, by the High Court. We do hope that no further time will be lost by the State Government in amending the Rules and making them up to date to fit in with the latest amendments in the Act. The long title of the Act indicates that it is an Act "to provide for the regulation of sale and purchase of agricultural produce and for the establishment, superintendence, and control of markets therefor in Uttar Pradesh." From the Objects and Reasons of the enactment it would appear that this Act was passed for the development of new market areas and for efficient data, collection and processing of arrivals in the Mandis to enable the World Bank to give a substantial help for the establishment of various markets in the States of Uttar Pradesh. In other States the Act is mainly meant to protect an agriculturist producer from being exploited when he comes to the Mandis for selling his agricultural produce. As pointed out by the High Court certain other transactions also have been roped in the levy of the fee, in which both sides are traders and neither side is an agriculturist. This has been done for the effective implementation of the scheme of establishment of markets mainly for the benefit of the producers. But as pointed out recently by a Constitution Bench of this Court in the case of Kewal Krishan Puri vs State of Punjab the fee realised from the payer of the fee has, by and large, to be spent for his special benefit and for the benefit of other persons connected with the transactions of purchase and sale in the various Mandis. The earlier cases on the point of fee have been elaborately reviewed in that judgment and certain principles have been called out which will be adverted to hereinafter. While deciding the question of quid pro quo in 117 relation to the impugned fees the High Court had not the advantage of the judgment of this Court. In that regard this judgment is a settler on the point and we hope that the authorities and all other concerned in the matter will be guided by and follow the said decision in the matter of levy and utilisation of the market fee collected. We shall now at the outset refer to the relevant provisions of the Act as they stood in the year 1978 and some of the rules framed thereunder. Wherever necessary reference will be made to the unamended provisions of the Act. In clause (s) of s.2 of the Act "Agricultural produce" has been defined to mean: "Such items of produce of agriculture, horticulture, viticulture, apiculture, sericulture, pisci culture, animal husbandry or forest as are specified in the Schedule, and includes admixture of two or more of such items, and also includes any such item in processed form, and further includes gur, rab, shakkar, khandsari and jaggery. " The 'Board ' means the State Agricultural Produce Markets Board constituted under Section 26 A. Clause (e) defines "commission agent" or "Arhatiya" to mean: "person who, in the ordinary course of business, makes or offers to make, a purchase or sale of agricultural produce, on behalf of the owner or seller or purchaser of agricultural produce, for Arhat or commission. " Under clause (k) "Market Area" means an area notified as such under Section 6, or as modified under Section 9. Clause (o) defines "Principal Market Yard" to mean the portion of a Market Area, declared as such under Section 7. Clause (p) must be read in full: "Producer ' means a person who, whether by himself or through hired labour, produces, rears or catches, any agricultural produce, not being a producer who also works as a trader, broker or Dalal, commission agent or Arhatiya or who is otherwise ordinarily engaged in the business of storage of agricultural produce. Provided that if a question arises as to whether any person is a producer or not for the purposes of this Act, the decision of the Director, made after an enquiry, conducted in such manner as may be prescribed, shall be final. " 118 Under clause (w) "Sub Market Yard" means a portion of a Market Area, declared as such under Section 7. Clause (y) defines a "trader" to mean: "a person who in the ordinary course of business is engaged in buying or selling agricultural produce as a principal or as a duly authorised agent of one or more principals and includes a person, engaged in processing of agricultural produce. " Action under s.5 was taken by the State Government declaring its intention to regulate and control sale and purchase of agricultural produce in any area and thereafter declaration of Market Area was made under s.6. Under the present impugned notification, which was issued on April 11, 1978 making it effective from May 1, 1978, almost the whole of Uttar Pradesh has been declared to be Market Area dividing it into 250 areas and indicating in Schedule B of the notification 115 commodities in respect of which the fee could be levied by the Market Committees. Under s.7 declarations of Principal Market Yards and Sub Market Yards have been made. Most of such areas declared so far are the markets or the Mandis where the traders are carrying on their businesses. It is proposed to establish Principal Market Yard and Sub Market Yards separately in every market area and a question of asking the traders to carry on their business only in such Market Yards is under consideration of the Government. The State Government under s.8 has got the power to alter any market area and modify the list of agricultural produce. Section 9 provides for the effects of declaration of Market Area. Chapter III of the Act deals with the establishment, incorporation and constitution of the Market Committees. The most important section is section 17 which provides for the powers of the Committee. Clause (i) authorises a Committee to issue or renew licences under the Act on such terms and conditions and subject to such restrictions as may be prescribed. Clause (iii) authorises a Committee to levy and collect (a) such fees as may be prescribed for the issue or renewal of licences, and (b) market fee at the rate and in the manner provided therein. Clause (b) of section 17(iii) has undergone drastic changes from time to time and that enabled the appellants to advance certain serious arguments to challenge the levy of the fees especially when the Rules were not correspondingly amended. We shall advert to this aspect of the matter later in this judgment at the appropriate place. Section 19 provides for the Market Committee Fund and its utilisation. Section 19 B was introduced in the Act by U.P. Act 7 of 1978 w.e.f. 29 12 1977 providing for the establishment of 'Market Development 119 Fund ' for each committee. The rule making power of the State Government is to be found in Section 40. From the Rules no provision is necessary to be specifically referred here except to point out that the State Government will be well advised to provide a machinery in the Rules for the adjudication of disputes which may be raised by the persons liable to pay the market fee in relation to their factum or quantum of liability. We are not impressed with the argument advanced on behalf of the Market Committees that no such disputes actually exist or are likely to exist which require any machinery of the Market Committee for its adjudication. At places hereinafter in this judgment we shall point out the nature of disputes which are likely to arise and which have got to be decided in the first instance by a machinery of the Market Committee such as a Board or the like. It would be just and proper and also convenient for all concerned if the disputes are thereafter taken to any court of law. Chapter VI of the Rules deals with levy and collection of fees. Rule 66 dealing with the levy of market fee and Rule 68 providing for its recovery on reference to the provisions of s.17(iii) will be alluded to hereinafter to point out the chaotic conditions in which the Rules have been left inspite of the amendment in s.17(iii)(b) of the Act. Rule 67 provides for licence fee and in none of these appeals we are concerned with the question of levy or quantum of the licence fee. Chapter VII deals with the transaction of business in market Yards. Several sets of arguments were advanced on behalf of the trader appellants in the various appeals by their respective learned counsel. Three sets of arguments were advanced on behalf of the various Market Committees and a separate argument was addressed to us on behalf of the State. In some of the appeals the State and/or the Market Committees are the appellants. The points urged on behalf of the trader appellants, although too numerous, broadly speaking are the following: (1) Big areas consisting of towns and villages have been notified as Market Areas without rendering any service. This is contrary to the whole object of the Act and the concept of fee. (2) No market area or market yard has been validly created. (3) No Mandi Samiti (Market Committee) has been validly appointed. 120 (4) No machinery has been provided in the Rules for adjudication of disputes. (5) Fixation of minimum of 1% to be charged as market fee by all the Market Committees under s.17(iii)(b) of the Act was illegal as the requirement of and the services to be rendered by the various Market Committees could not be on the same footing. (6) There was no application of mind in issuing the notification dated 11 4 1978 whereby 250 market areas were notified and 115 items of agricultural produce were specified. (7) There could not be any multi point levy of any market fee either in the same market area or in different market areas. (8) The retrospective operation of the law brought about in s.17(iii)(b) by U.P. Act 7 of 1978 w.e.f. 12.6.1973 is bad. (9) No market fee could be levied on goods not produced within the limits of a particular market area and if produced outside and brought in such area. (10) No market fee could be levied both on paddy and rice. The rice millers have been illegally asked to pay market fee on their sale of rice. Similarly no market fee was payable on Ghee either by the producer trader of Ghee or by its purchaser. (11) Fee could be charged on sale of animals but could not be charged on hides and skins as was being illegally done. (12) Fee could be charged on wood or timber but could not be charged either on furniture manufactured from such wood or timber or on Catechu (Katha). (13) Wood cut and brought from the jungle by a manufacturer of paper such as Star Paper Mills, Saharanpur could not be subjected to levy of fee. (14) Some of the items mentioned in the notification are Kirana goods brought from outside the market area or even from other States for sale in different Mandi. They cannot be subjected to the levy of market fee. (15) No market fee could be charged on tobacco or Tendu leaves nor on bidis. 121 (16) No fee could be charged in a municipal area as no market committee can be constituted there nor in a Nyaya Panchayat. (17) No market fee could be charged on rab salawat and rab galawat. (18) No market fee can be charged if only goods are brought in a market area and despatched outside it without there taking place any transactions of purchase and sale in respect of these goods. (19) Any goods sold under any controlled legislation such as rice etc. cannot attract the levy of fee as there is no freedom to make any sale in respect of such commodity. (20) If no licence is issued or taken under s.9(1) of the Act then there is no liability to pay a market fee. (21) No market fee can be levied on transactions of matchboxes, soyabin products, articles sold by Kisan Products Ltd. and Pan (betel leaves). (22) No market fee can be charged from vendors of fruits and vegetables through their Commission Agents. (23) Fee can be charged only on those transactions in which the seller is producer and not on any other transaction. (24) Market fee can be charged only on those transactions in which the seller is the purchaser of agricultural produce and not on any other transaction. Points 1 to 4 These four points are taken up together as there is no substance in any of them. Declaration of big areas as Market Areas does not offend any provision of law. Any area big or small including towns and villages can be declared as Market Area under s.6 of the Act. As explained in the case of Kewal Krishan Puri (supra) the whole of the market area is not meant where the traders or the licensees can be allowed to set up and carry on their business. The traders are required to take out licences under s.9(2) read with s.11 of the Act, for such place which is either a Principal Market Yard or a Sub Market Yard or at any specified place in the Market Area. No body can be permitted to carry on his business anywhere in the Market Area as the Market Committee will not be able to control and levy fee throughout the Market Area. The question of rendering service and its co 122 relation to the charging of fee has been elaborately discussed in the said decision and the following principles have been culled out: "(1) That the amount of fee realised must be earmarked for rendering services to the licensees in the notified market area and a good and substantial portion of it must be shown to be expended for this purpose. (2) That the services rendered to the licensees must be in relation to the transaction of purchase or sale of the agricultural produce. (3) That while rendering services in the market area for the purpose of facilitating the transactions of purchase and sale with a view to achieve the objects of the marketing legislation it is not necessary to confer the whole of the benefit on the licensees but some special benefit must be conferred on them which have a direct, close and reasonable co relation between the licensees and the transactions. (4) That while conferring some special benefits on the licensee it is permissible to render such service in the market which may be in the general interest of all concerned with the transactions taking place in the market. (5) That spending the amount of market fees for the purpose of augmenting the agricultural produce, its facility of transport in villages and to provide other facilities meant mainly or exclusively for the benefit of the agriculturists is not permissible on the ground that such services in the long run go to increase the volume of transactions in the market ultimately benefitting the traders also. Such an indirect and remote benefit to the traders is in no sense a special benefit to them. (6) That the element of quid pro quo may not be possible or even necessary, to be established with arithmetical exactitude but even broadly and reasonably it must be established by the authorities who charge the fees that the amount is being spent for rendering services to those on whom falls the burden of the fee. (7) At least a good and substantial portion of the amount collected on account of fees, may be in the neighbourhood of two thirds or three fourths, must be shown 123 with reasonable certainty as being spent for rendering services of the kind mentioned above. " As already stated, Market Yards also have been established while issuing notifications under s.7. By and large, the Mandis where the traders are carrying on their business for the time being have been declared as Market Yards. When the Market Committees are able to construct their own Market Yards, as in some places they have been able to do, then a question will arise whether a trader can be forced to go to that place only for carrying on his business in agricultural produce or he can be permitted to carry on his business in his old place. For the time being this question is left open. Market Committees have not been constituted yet in accordance with the provisions contained in s.13 of the Act. They have been constituted temporarily under Uttar Pradesh Krishi Utpadan Mandi Samitis (Alpakalik Vyawastha) Adhiniyam, 1972 which Act was a temporary Act and has been extended from year to year. But it is high time that Market Committees should be constituted in a regular manner on a permanent basis in accordance with the provisions contained in Chapter III of the Act. But the levy and collection of fee by the temporary Market Committees is not illegal as argued on behalf of the appellants. A machinery for adjudication of disputes is necessary to be provided under the Rules for the proper functioning of the Market Committees. We have already observed and expressed our hope for bringing into existence such machinery in one form or the other. But it is not correct to say that in absence of such a machinery no market fee can be levied or collected. If a dispute arises then in the first instance the Market Committee itself or any Sub Committee appointed by it can give its finding which will be subject to challenge in any court of law when steps are taken for enforcement of the provisions for realisation of the market fee. Point No. 5 Under clause (b) of s.17(iii) of the Act a minimum and maximum limit of market fee chargeable has been fixed by the legislature. The minimum is 1% and the maximum is 1 1/2 of the price of the agricultural produce sold. The fixing of the minimum of 1% fee by itself is not illegal but it would be subject to the rendering of adequate services as explained by this Court in Kewal Krishan Puri 's case. The facts placed before the High Court as also before us were too meagre to indicate that services to the extent of the fee levied at 1% are not being rendered. In Puri 's case we upheld the levy of market fee at 2% on the value of the goods sold. But there we found that the 124 Market Committees were rendering greater services than are being rendered by the Market Committees of Uttar Pradesh. Yet charging of 1% fee as is being charged throughout the State of Uttar Pradesh by all the Market Committees is not illegal and does not go beyond the quid pro quo theory discussed in Puri 's case. Point No. 6 It is difficult to understand the significance of this point. The notification dated 11 4 1978 indicates that in the various Districts, the number of which is about 55, 250 Market Committees have been constituted and about 115 items have been selected in respect of which market fee has been directed to be levied. None of the items so specified is such that it cannot be covered by the Schedule which is a part of the Act. The definition of agricultural produce is very wide. It is not confined to items of agricultural produce only but includes items of produce of horticulture, viticulture, apiculture, sericulture, pisci culture, animal husbandry or forest. Such items are specified in the Act which is undoubtedly a part of the Act. That being so challenge to the notification dated 11 4 1978 on the ground that it was issued without any application of mind is devoid of any substance and must be rejected. Point No. 7 It is clear and it was expressly conceded to on behalf of the Market Committees and the State that there cannot be any multi point levy of market fee in the same market area. The reason is obvious. Section 17(iii)(b), as amended by U.P. Act 7 of 1978 reads as follows: "market fee, which shall be payable on transactions of sale specified agricultural produce in the market area at such rates, being not less than one percentum and not more than one and half percentum of the price of the agricultural produce so sold, as the State Government may specify by notification, and such fee shall be realised in the following manner (1) if the produce is sold through a commission agent, the commission agent may realise the market fee from the purchaser and shall be liable to pay the same to the Committee; (2) if the produce is purchased directly by a trader from a producer the trader shall be liable to pay the market fee to the Committee; 125 (3) if the produce is purchased by a trader from another trader, the trader selling the produce may realise it from the purchaser and shall be liable to pay the market fee to the Committee; and (4) in any other case of sale of such produce, the purchaser shall be liable to pay the market fee to the Committee. " All the four clauses of clause (b) are mutually exclusive. If the produce is purchased from a producer directly the trader shall be liable to pay the market fee to the Committee in accordance with sub clause (2). But if the trader sells the same produce or any product of the same produce to another trader neither the seller trader nor the purchaser trader can be made to pay the market fee under sub clause (3). So far the position was not disputed by the Market Committees, rather it was conceded, and in our opinion, rightly. But some difficulty arises in regard to the products of the agricultural produce which has been subjected to the levy of market fee. This will be relevant when we come to consider the various agricultural produce in respect of which challenge was made on the ground that it amounts to multi point levy. At this stage we may explain our view point by taking a few examples from the Schedule appended to the Act. Wheat, an agricultural produce, is mentioned under the heading 'Cereals '. Suppose the transaction of wheat, namely, wheat purchased from a producer by a trader has been subjected to levy of market fee under s.17(iii) (b)(2) no further levy of market fee in the same market area could be made, not even on wheat flour if flour were to be included in the Schedule. The better example can be found in the items under the heading 'Animal Husbandry Products ' wherein in the Schedule milk and Ghee both are mentioned. Milk, of course, is not mentioned in the notification dated 11 4 1978. But if it would have been mentioned then only the transaction of milk in a particular market area could be subjected to levy of fee and Ghee manufactured from milk could not be so subjected. But since milk is not mentioned in the notification the transaction of Ghee can be subjected to the levy of fee in accordance with the principle to be discussed hereinafter. The greater difficulty arises with respect to paddy and rice as both of them are mentioned in the Schedule as well as in the notification. We shall show hereinafter that in a particular market area market fee can not be levied both in relation to the transaction of purchase and sale of paddy and the rice produced from the same paddy. Fee can be charged only on one transaction. This finds support from the unamended Rules as they are, wherein is to be found sub r.(2) of Rule 66. But we find nothing in the provisions of the Act or the Rules to 126 warrant the taking of the view that in another market area the Market Committee of that area cannot levy fee on a fresh transaction of sale and purchase taking place in that area. Supposing the Wheat is purchased in market area X by a trader from a producer, fee will be chargeable under s.17(iii)(b)(2). If the same Wheat is taken to another market area say Y and another transaction of sale and purchase takes place there between a trader and a trader the market fee will be leviable under sub clause (3). It is also not correct to say that the agricultural produce must have been produced in the market area in which the first levy is made. It might have been produced in another market area or even outside the State of Uttar Pradesh but if a transaction of sale and purchase takes place of an agricultural produce as defined in the Act and covered by the notification within a particular market area then fee can be charged in relation to the said transaction. Point No. 8 In order to appreciate the implication of this point we have first to read and compare the provisions of s.17(iii)(b) of the Act as they stood before 1973, between 1973 and 1978 and after the amendment by Act 7 of 1978. The provision as enacted in U.P. Act XXV of 1964 read as follows: "17. A Committee shall, for the purposes of this Act, have the power to: (iii) levy and collect: (b) market fees on transactions of sale or purchase of specified agricultural produce in the Principal Market Yard and Sub Market Yards from such persons and at such rates as may be prescribed, but not exceeding one half percentum of the price of the specified agricultural produce sold or purchased therein;" The Rules which were framed in 1965 prescribed the rates of and the liability of the persons to pay the market fee. The relevant provision of Rules 66 and 68 are quoted below: "66. Market fee Section 17(iii) (1) The Market Committee shall have the power to levy and collect fees on the specified agricultural produce brought and sold in the Market Yards at such rates as may be specified in the byelaws but not exceeding one half of one percentum of the price of the specified agricultural produce: Provided that the market fee shall be payable by the seller. 127 68. "Recovery of fees Section 17(iii) (1) The market fee on specified agricultural produce shall be payable as soon as such produce is sold in the Principal Market Yard or Sub Market Yards in accordance with the terms of and conditions specified in the bye laws. (2) The market fee shall be realized from the seller in the following manner: (i) If the specified agricultural produce is sold through the Commission agent or directly to the trader, the Commission agent or the trader, as the case may be, shall charge market fee from the seller in sale voucher in Form No. VI and deposit the amount of market fee so realised with the Market Committee in accordance with the directions of the Committee issued in this behalf. (ii) If the specified agricultural produce is sold directly by the seller to the consumer, the market fee shall be realised by the servant of the Market Committee authorized by it in this behalf. (3) The licence fee shall be paid along with the application for licence: Provided that in case the Market Committee refuses to issue a licence, the fee deposited by the applicant shall be refunded to him. (4) The payment of market fee and licence fee shall be made to the Committee in cash. " It would thus be seen that before 1973, reading the provisions of the Act and the Rules, market fee was to be charged at such rates as specified in the bye laws of a particular Market Committee. But it could not exceed 1/2 percentum of the price of the agricultural produce. We were informed at the Bar that almost every Market Committee had levied fees @ 1/2%. The liability to pay the fee was of the seller of the agricultural produce. Market fee was liable to be paid under Rule 68(2)(ii) even if the specified agricultural produce was sold directly by the seller to the consumer. This provision has been superseded now by an amendment in the Act brought about by U.P. Act 19 of 1979, whereby a proviso to the following effect has been added to section 17(iii)(b): "Provided that no market fee shall be levied or collected on the retail sale of any specified agricultural produce where such sale is made to the consumer. " 128 Clause (b) of section 17(iii) was amended by U.P. Act 13 of 1973 as re enacted by U.P. Act 20 of 1974. The said clause stood as follows after the said amendment: "(b) market fees, which shall be payable by purchasers, on transactions of sale of specified agricultural produce in the Principal Market Yard or a Sub Market Yard at such rates, being not less than one percentum and not more than one and a half percentum of the price of the agricultural produce so sold, as the State Government may specify by notification in the Gazette;" It would be noticed that by the said amendment in clause (b) the minimum rate fixed was 1 percentum and the maximum 1 1/2 percentum and the liability to pay the fee became that of the purchaser instead of the seller as prescribed earlier by the Rules. Yet the Rules continued as they were. Nonetheless it is plain that after the amendment in the Statute, Rules could apply only mutatis mutandis and wherever there was a conflict between the Rules and the Statute the latter had to prevail. In passing, reference may be made to the substitution of the words market area in place of the words "Principal Market Yard or the Sub Market Yards" occurring in clause (b) by U.P. Act 6 of 1977 w.e.f. 20 12 1976. We have already adverted to this aspect of the matter and pointed out that transactions cannot take place in whole of the market area and although theortically fee is chargeable in the whole of the area now but actually the Rules and especially the Explanation to Rule 66 indicate that the transactions do take place in the Principal Market Yard or Market Yards or some specified place or places in a particular market area. Then came the amended section 17(iii)(b) of U.P. Act 7 of 1978, which had already been extracted above and it was made retrospective w.e.f. 12 6 1973. Under the present provision a liability to pay the fee is under four mutually exclusive clauses. The Rules which were framed in 1965 namely Rules 66 and 68 are so very different from the present provision of law that we had to express our distress in the beginning of this judgment for the failure of the Government to amend the Rules and bring it in conformity with the amended provisions of the Statute from time to time. Any way, the Rules will apply as far as possible so long they do not come in conflict with the Statute and even without the aid of the Rules the provision in section 17(iii)(b) as it stands after the amendment brought about by U.P. Act 7 of 1978 is workable and can be given effect to. The 129 State legislature was competent to make retrospective amendment vide B. Banerjee vs Anita Pan and M/s. section K.G. Sugar Ltd. vs State of Bihar and Ors. It has also been pointed out in H. H. Sudhundra Thirtha Swamiar vs Commissioner for Hindu Religious & Charitable Endowments, Mysore at pages 324 25 that retrospective imposition of a fee is valid. Of course, this cannot be a rule of universal application. In a given case and in a given situation the retrospective operation may be hit by Article 19. But in the present case we are inclined to take the view that the retrospectivity of the law as such is not bad and the only safeguard which we want to point out is this. If market fee has been realised by any Market Committee in respect of transactions of sale of agricultural produce taking place between 12 6 1973 and coming into force of U.P. Act 7 of 1978, in accordance with the law as it prevailed then, no market fee under the amended law can be realised again. But if in respect of any transactions aforesaid market fee has not yet been realised then it can be realised in accordance with the amended provision of the law. The only hardship will be to persons covered by sub clauses (1) and (3) wherein a provision has been made to pass on the burden of fee to others. In the case of sub clause (1) the commission agent can realise the market fee from the purchaser and the seller trader under sub clause (3) can realise it from the purchaser. If market fees are realised from such persons in accordance with the amended provision of the law then in turn they may be able to realise it from persons on whom they could pass on the burden. We are not disposed to hold the law bad only on that account. Point No. 9 We have already alluded to this aspect of the matter earlier in our judgment and taken the view that market fee could be levied on transactions of goods not produced within the limits of a particular market area by the Market Committee of that area even though the goods are produced outside the State of Uttar Pradesh or outside the market area of that particular Market Committee provided the transactions take place within the limits of that Market area. On the other hand we find no provision in the Act or the Rules to limit the operation of the law in a particular market area only in respect of the agricultural produce produced in that area. Point No. 10 Apropos this point attention is first to be focussed on the definition of the word 'producer ' in clause (p) and 'trader ' in clause (y) of 130 section 2 of the Act which have already been quoted. A producer who produces agricultural produce generally does not indulge in trading activities so as to become a trader within the meaning of clause (y). He is covered by clause (p) only. If a person is simply a trader indulging in trading activities he is covered by the definition in clause (y). We have coined the expression producer trader for a person who is both a producer of agricultural produce and himself trades in it. For the purposes of the Act he ceases to be a producer and becomes a trader only as the definition indicates. While discussing the question of levy of market fee on paddy and rice this aspect of the matter is important and therefore we thought it appropriate to highlight it at this stage. By and large in the notification dated April 11,1978 there is hardly any duplication of any item of agricultural produce. As for example, under Group D Animal Husbandry Products, milk has been omitted although it is to be found in the Schedule appended to the Act. From milk can be prepared Ghee or Khoya and items 1 and 2 in Group D are the said articles. Hides and Skins can be had from the animals, so wool is obtained from the sheep. But in case of paddy and rice mentioned as items 3 and 4 in Group A I "Cereals", there is a duplication as rice is obtained from paddy. We would, therefore, like to clarify the position of law in this regard. If paddy is purchased in a particular market area by a rice miller and the same paddy is converted into rice and sold then the rice miller will be liable to pay market fee on his purchase of paddy from the agriculturist producer under subclause (2) of section 17(iii)(b). He cannot be asked to pay market fee over again under sub clause (3) in relation to the transaction of rice. Nor will it be open to the Market Committee to choose between either of the two in the example just given. Market fee has to be levied and collected in relation to the transaction of paddy alone. Otherwise, there will be a risk of violation of Article 14 if it is left to the sweet will of the Market Committee in the case of some rice millers to charge market fee on the transaction of paddy and in case of others to charge it when the sale of rice takes place. If, however, paddy is brought by the rice miller from another market area, then the Market Committee of the area where paddy is converted into rice and sold will be entitled to charge market fee on the transaction of sale in accordance with sub clause (3). We now take the example of a producer trader who is an agriculturist and produces paddy in his own field but owns a rice mill also in the same market area. He mills the paddy grown by him into rice and sells it as such. It is plain that in his case no market fee can be charged on paddy because there is no transaction of sale and purchase of paddy and market fee can be charged only on the sale of rice by him in accordance with sub clause (3) and he will be entitled to 131 pass on the burden to his purchaser. Disputes of facts were raised before us as to whether paddy had been subjected to the charge of market fee or not and whether the same paddy has been milled into rice. We did not enter into this disputed question of fact, and as observed above, after clarifying the law we direct the Market Committees to levy market fee in the light of this Judgment. It will be open to any trader to go to the High Court again, if necessary, for the redress of his grievance in connection with a disputed question which may arise even after our Judgment. In relation to the transactions of Ghee we had two types of dealers before us (1) a dealer who purchases milk or cream from the villagers and others and manufactures Ghee in his plant and (2) a dealer who purchases such Ghee from the manufacturer of Ghee and sells it to another trader in the same market area. The first dealer will be liable to pay market fee because he is the producer of Ghee within the meaning of the Act and at the same time a trader in Ghee also. When he sells Ghee to another dealer in Ghee who is simply a dealer then under sub clause (3) of section 17(iii)(b) the manufacturing dealer will be liable to pay market fee to the Market Committee on the transaction of Ghee. But he will be entitled to pass on the burden to his purchaser. Apropos the Market Committee, however, the liability will be of the manufacturing dealer. If milk, butter or cream would have been included in the notification then the charging of fee in relation to the first transaction of sale and purchase of such commodities would have been attracted in the light of the principle of law we have enunciated above with reference to paddy and rice. But in the case of Group D such commodities are not mentioned in the notification. Point No. 11 An attempt was made on behalf of the Hides and Skins dealers to show that hides and skins cannot be an agricultural produce within the meaning of the Act. They are obtained from the carcass of an animal and not from a living animal. Argument stressed was that under group G in the Schedule appended to the Act Animal Husbandry Products only can come. Item 11 Hides and Skins, item 12 bones, item 13 meat etc. are not products of Animal Husbandry. Some authoritative books were cited before us on "Words and Phrases" to show the meaning of 'Animal ', 'Husbandry ' and 'Animal Husbandry '. Animal Husbandry means that branch of agriculture which is concerned with farm animals especially as regards breeding, care and production. We are not impressed by this argument. The definition clause (a) of section 2 uses the expression 'animal husbandry ' by way of a descriptive one without strictly confining to the products of animal husbandry 132 as the addition of the words "specified in the schedule" indicates. In the schedule under the group 'husbandry products ' are mentioned all these items. We may also add that one may breed and rear animals in a farm for the purpose of obtaining hides and skins after they are butchered. Market fee is, therefore, leviable on the transactions of hides and skins as no market fee can be charged on transactions of sale and purchase of animals in a market area in the State of Uttar Pradesh, the same having not been included in the notification. Had it been included in the notification, then no market fee could be charged in the same market area on hides and skins. It could only be charged in relation to the transaction of purchase and sale of animals. Point No. 12 For discussing this point we have to refer to group E of the notification dated 11 4 1978 which deals with forest products. The items mentioned in the said group are (1) Gum, (2) Wood, (3) Tendu leaves, (4) Catechu and (5) Lac. Market fee can be charged on purchase of wood by a trader from a producer. No fee can be charged on the sale of furniture manufactured by the purchaser of wood. It was also conceded on behalf of the Market Committees that market fee was not being charged on the sale of furniture. If it has been so charged it will be refunded. Furniture is not an item mentioned in the group of forest products. Therefore, this question does not present any difficulty at all. Difficulty cropped up in relation to the charging of market fee apropos the transaction of Catechu. According to the Market Committees Catechu is a product from timber or trees like Gum or Lac. It trickles down from the trees. On the other hand, according to the Catechu dealers by processing of Khar trees Catechu is produced. We leave this question of fact to be decided by the Market Committees concerned in the first instance and then by a court of law. If Catechu is a product of Khar trees by some processing as prima facie it appears to us to be so, then it is plain that market fee can be charged only on the purchase of Khar wood and not on the sale of Catechu. Point No. 13 This item presented some difficulty in solution. A licence is granted to a Paper Mill and to other kinds of dealers for cutting wood from the jungle and bringing it to their factories for manufacture of various articles such as paper etc. It was argued that there was no transaction of sale and purchase involved in the above operation. Moreover the wood is cut from the jungle area which although has been roped in the market area but no service is rendered in that jungle area by any Market 133 Committee. In our opinion in the licence is involved sale of wood and a right to go to that land to cut that wood. The wood may be used by the manufacturer for manufacturing furniture or may be used in the manufacture of paper or any other commodity. That is immaterial. The owner of the jungle wherefrom the wood is cut and brought will be a producer within the meaning of the Act and the licensee producer of that wood would be a purchaser of an agricultural produce within the meaning of sub clause (2) of section 17(iii)(b) of the Act liable to pay market fee. It matters little what use is made of the wood by him. The question of quid pro quo and service cannot be decided by a dichotomy of service to every payer of fee as held by this Court in Kewal Krishan Puri 's case. The matter has to be judged in a broad sense and not in the sense of rendering service to every individual payer of the fee. Point No. 14 This point also presented some difficulty. But on a parity of reasoning mentioned so far in connection with the other items, we have got to hold that such Kirana goods as are included in the notification brought from outside a particular market area or even from outside the State of Uttar Pradesh are chargeable to market fee when their sale takes place in a particular market area. In group A VI Spices are mentioned including certain Kirana items such as Ripe Chillies, Sonf, turmeric etc. They are sold by the Kirana dealers. Sometimes they purchase them from the agriculturists in the same market area. In relation to those transactions they will be liable to pay market fee under sub clause (2) of section 17(iii)(b). More often than not such articles are brought from outside and sold by the Kirana merchants. If they are sold to consumers, no market fee can be levied in view of the proviso added in the year 1979. If they are sold in wholesale, then the transaction can be subjected to the levy of market fee because in a particular market area they enter into the first transaction of sale in respect of the specified agricultural produce. Point No. 15 Market fee can be charged on transaction of tobacco as it is included in group A V of the notification. As in the case of other items so in this case also the fee will be leviable if tobacco is purchased in the same market area from an agriculturist in accordance with sub clause (2). Otherwise it would be leviable under sub clause (3). Similar is the position in regard to tendu leaves which is mentioned in group E. Bidi cannot be treated as an agricultural produce as it is not an admixture of tobacco and tendu leaves within the meaning of section 2(a) of the Act. It was conceded on behalf of the Market Committees that no market fee was being charged on the transactions of Bidi. But 134 if a Bidi manufacturer purchases tobacco and tendu leaves in the market area and uses them in the manufacture of Bidi, he will be liable to pay market fee in relation to the transaction of tobacco and tendu leaves. Point No. 16 This point has been stated merely to be rejected. There is no substance in this point. Our attention was drawn to some provisions in the municipal Acts and the Zila Parishad Acts to show that no market committee could be constituted in a municipal area or a Nyaya Panchayat. We do not consider it necessary to deal with this point in any detail. We merely reject it as being devoid of any substance. Point No. 17 Gur, rab, shakkar, khandsari and jaggery are expressly included in the definition of agricultural produce given in clause (a) of section 2 of the Act. We are here concerned with the question as to whether rab galawat and rab salawat are rab within the meaning of section 2(a) or are bye products of molasses received at the time of manufacture of khandsari. According to the case of some of the appellants who deal in these commodities they are the bye products and market fee has already been charged on rab and therefore the fee cannot be charged again on rab galawat and rab salawat. Disputes of facts were raised in this connection before us on behalf of the Market Committees. On the materials placed before us it was clear to us that rab galawat and rab salawat cannot be subjected to a separate charge of market fee apart from the transaction of rab. Market fee can be levied on the first transaction of rab taking place in any market area in accordance with any of the sub clauses of section 17 (iii) (b), as it may be applicable. It cannot be again charged on the second transaction of rab galawat or rab salawat even assuming that it is rab. But on the materials placed before us it appeared to us that rab galawat and rab salawat are not rab in the original form but they are obtained at one stage or the other in the process of manufacture of khandsari. Any way the question of fact may be decided as we have indicated in respect of the other items in the first instance by the Market Committee and thereafter by the High Court, if necessary, in a fresh writ petition. It will bear repetition to say that the only transaction which can be subjected to levy of market fee in a particular market area is the first transaction of rab and no other transaction of rab galawat and rab salawat. Point No. 18 This point urged on behalf of the appellants is well founded and must be accepted as correct. On the very wordings of clause (b) of 135 section 17(iii) market fee is payable on transactions of sale of specified agricultural produce in the market area and if no transaction of sale takes place in a particular market area no fee can be charged by the Market Committee of that area. If goods are merely brought in any market area and are despatched outside it without any transaction of sale taking place therein, then no market fee can be charged. If the bringing of the goods in a particular market area and their despatch therefrom are as a result of transactions of purchase and sale taking place outside the market area, it is plain that no fee can be levied. Point No. 19 This point has no substance and has got to be rejected. As held in Vishnu Agencies (Pvt.) Ltd. etc. vs Commercial Tax Officer & Ors. etc. on a review of earlier decisions even if a commodity is sold pursuant to the controlled regulations still some small area is left to make it a transaction of sale. It may well be that no freedom is left to the parties in a large area of the transaction yet it is a transaction of sale. Point No.20 This point also must be rejected. A pure and simple producer as defined in clause (p) of section 2 is not required to take any licence for selling his agricultural produce nor is he required to pay market fee under any of the sub clauses of section 17(iii)(b). But if he is a producer trader in the sense we have explained above, then he will be required to take out a licence in accordance with section 9(2) of the Act and no body can be permitted to carry on any trade in agricultural produce in the market area without a valid licence. Merely for his lapse of not taking out a licence he cannot escape the liability to pay the market fee. Market fee will still be chargeable from the trader, as, in section 17(iii)(b) it is not stated that market fee can be charged only from the licensees. The proviso to clause (p) of section 2 will be attracted only if a question arises as to whether any person is a producer or not for the purposes of the Act and in that event the decision of the Director made after an inquiry conducted in the manner prescribed by the rules shall be final. The proviso has nothing to do with a case of a producer trader. If a question arises whether a person is merely a producer or producer trader the Director will have no power to decide this question. Such a question will have to be decided by the Market Committee itself which will be subject to the final decision of a court of law. 136 In support of the argument reliance was placed upon the decision of this Court in Raunaq Ram Tara Chand & Ors. etc. vs The State of Punjab & Ors. But that case is distinguishable because of the language of rules 29 and 31 of the Punjab Agricultural Produce Market Rules framed in accordance with the Punjab Agricultural Produce Markets Act, 1961. Both the rules aforesaid clearly stated that the fee could be charged from the licensees only. Not only that even the charging section 23 of the Act itself stated: "a Committee may, subject to such rules as may be made by the State Government in this behalf, levy on ad valorem basis fees on the agricultural produce brought or sold by licensees in the notified market area at a rate not exceeding rupee one fifty paise for every one hundred rupees, provided. "On the other hand in section 17 (iii) (b) of the U.P. Act and Rules 66 and 68 of the Rules charging of market fee in terms is not found to be chargeable from the licensees only. The traders cannot escape their liability to pay the fee on account of their default of taking out licences. Point No. 21 This point is also well founded and must be accepted as correct. Market fee can be charged only on the transactions of purchase of wood and if a manufacturer of match sticks purchases wood from the producer for the purposes of manufacturing the sticks he will be required to pay market fee on such purchase of wood only and not on the sale of match sticks or match boxes. Similarly market fee will be leviable on the transaction of purchase of soyabin and not on transaction of sale of soyabin products. Exactly the same will be the position with regard to the articles sold by Kisan Products Ltd. and the sale of Pan. Agricultural produce purchased by the dealers will be chargeable to market fee and not the sale of the products after one kind of processing or the other. Point No. 22 Under this head the submission on behalf of the fruit and vegetable merchants was that they bring their products to the market and sell them in wholesale through their commission agents. No market fee, therefore, should be charged from them. In our opinion the argument so placed on behalf of the merchants is misconceived. Under sub clause (1) of section 17(iii)(b) of the Act when fruits and vegetables are sold through a commission agent by the producer then the Commission agent is liable to pay the market fee and he can realise it from the purchaser of fruits and vegetables. The burden does not fall on the producer. The liability in the first instance is of the commission, agent and finally of the purchaser of the articles. 137 Point No. 23 Point No. 24 Reliance was placed upon a decision of the Mysore High Court (now Karnataka) in the case of K. N. Marudaradhya vs The Mysore State but the view taken by the Mysore High Court was dissented from by the Patna High Court in the case of Mangalchand Ramchandra and others etc. vs State of Bihar. One of us (Untwalia J,) delivering the judgment of the Patna High Court stated at page 1053 thus: "At this stage I would discuss a Bench decision of the Mysore High Court on which great reliance was placed on behalf of the petitioners in support of their contention that no fee can be levied on transaction of buying and selling between a dealer and a dealer even though such transactions take place within the market area or the market proper. The decision of the Mysore High Court is in the case of K. N. Marudaradhya vs The Mysore State A.I.R. At page 126 (column 2) from paragraph 33 starts the discussion on the point at issue. To the extent the decision goes to hold that the purchase in respect of which the fee could be levied or collected is the earliest purchase, that is to say, the fee can be levied only on one purchase and not on subsequent purchases, with respect I am inclined to agree with that view expressed in paragraphs 33 to 38. But while discussing the point, Iyer J., has confined this earliest purchase of the agricultural produce belonging to the producer only. There does not seem to be a pointed discussion of the question whether the first purchase from a dealer could be subjected to levy or not. But by necessary implication, as I read the judgment, it seems, their Lordships of the Mysore High Court took the view that such a deal cannot be subjected to the levy of fee. With great respect, in that regard, I strike my note of dissent from the view expressed by the Mysore High Court. Firstly, merely because the object of the legislation is the protection of the agriculturist, the plain meaning of the section cannot be cut down. Secondly, they have relied upon the practice prevailing around the area under different State statutes as mentioned in paragraph 36. If I may say with respect, law could not be so 138 decided on the basis of any practice. Of course, the interpretation given to the Statute can be supported by reference to practice. Thirdly, I am inclined to think that the Supreme Court decision in the case of Krishna Coconut Company does not lend support to the limited view expressed by the Mysore High Court. We approve of the Patna view and in the set up of the U.P. Act after an elaborate discussion we have pointed out as to in what kind of transaction who is liable to pay the market fee. In the U.P. Act even traders under certain circumstances have been made liable to pay such fees. Similarly the argument that market fee can be charged only on those transactions in which the seller is the producer of agricultural produce and not on any other transaction is also devoid of any substance. Conclusions For the reasons stated above, we hold that market fee should be regularised and be charged in the light of this Judgment. If anything has been realised from the traders or any other person which goes contrary to this Judgment the same should be refunded by the Market Committee concerned within six months from today. This may not be treated as a precedent for all cases of this type. The form of the order in relation to the refund of the market fee may vary from case to case depending upon the facts and circumstances of each case. Market fee due from the traders in the light of this judgement should also be charged and paid within a period of six months from today. If there is any disputed question of fact to be decided by the Market Committee then it should be decided as quickly as possible leaving the person concerned to agitate the matter in a court of law, preferably in the High Court, within a short time thereafter. The High Court will proceed to decide the matter in the light of our Judgment. We do hope that services are being rendered and will continue to be rendered by the various Market Committees in the light of the Judgment of this Court in Kewal Krishan Puri 's case. If in regard to any particular Market Committee it is found that services are not being rendered or in future lapses are made then it will be open to the payers of fees to re agitate the matter in the High Court in the light of that judgment. For the reasons stated above the appeals and writ petitions are partly allowed and partly dismissed in the manner indicated above. There will be no order as to costs in any of them. N.V.K. Appeals and petitions partly allowed.

The Uttar Pradesh Krishi Utpadan Mandi Adhiniyam, 1964 (U.P. Act XXV of 1964) provides for the regulation of sale and purchase of agricultural produce and for the establishment superintendence and control of markets in Uttar Pradesh. The enactment was passed for the development of new market areas and for efficient data collection and processing of arrivals in the Mandies to enable the World Bank to give a substantial help for the establishment of various markets in the State of Uttar Pradesh. It led to the establishment of Market Areas, Principal Market Yards and Sub Market Yards and levying of the fee in relation to transactions of certain commodities in the State of Uttar Pradesh. Various Market Committees were formed known as Mandi Samitis. In order to give effect to the working of the Act the Uttar Pradesh Krishi Utpadan Mandi Niyamawalli 1965, being Rules under the Act were made by the Governor. The Act was amended several times but the Rules were not accordingly amended as and when required to make them uptodate in accordance with the amended Act. "Agricultural Produce" has been defined in clause (a) of section 2 of the Act to mean: "Such items of produce of agriculture, horticulture, viticulture, apiculture, sericulture, pisci culture, animal husbandry or forest as are specified in the Schedule, and includes a mixture of two or more of such items, and also includes any such item in processed form, and further includes gur, rab, shakkar, khandsari and jaggery." while Clause (e) defines "commission agent" or "Arhatiya" to mean: "a person who, in the ordinary course of business, makes or offers to make, a purchase or sale of agricultural produce, on behalf of the owner or seller or purchaser of agricultural produce, for Arhat or commission". 105 under clause (p), ""producer" means a person who, whether by himself or through hired labour, produces, rears or catches, any agricultural produce, not being a producer who also works as a trader, broker or Dalal, commission agent or Arhatiya or who is otherwise ordinarily engaged in the business of storage of agricultural produce". Cause (y) defines a "trader" to mean: "a person who in the ordinary course of business is engaged in buying or selling agricultural produce as a principal or as a duly authorised agent of one or more principals and includes a person, engaged in processing of agricultural produce. " Under Clause (k), 'Market Area ' means an area notified as such under Section 6, or as modified under Section 8, while 'Principal Market Yard ' has been defined under clause (o) to mean, the portion of a Market Area, declared as such under Section 7, and 'Sub Market Yard ' under clause (w) means a portion of a Market Area, declared as such under Section 7. The State Government under section 8 has got the power to alter any market area and modify the list of agricultural produce. Section 9 provides for the effect of declaration of Market Area. Chapter III of the Act deals with the establishment, incorporation and constitution of the Market Committees, section 17 provides for the power of the Committee. Clause (i) authorises a Committee to issue or renew licences under the Act on such terms and conditions and subject to such restrictions as may be prescribed. Clause (iii) authorises a Committee to levy and collect (a) such Fees as may be prescribed for the issue or renewal of licences, and (b) market fee at the rate and in the manner provided therein. [Though clause (b) of section 17 (iii) had undergone drastic changes from time to time, the Rules were not correspondingly amended.] Section 19 provides for the Market Committee Fund and its utilisation. Section 19 B was introduced in the Act by U.P. Act 7 of 1978 w.e.f. 29 12 1977 providing for the establishment of 'Market Development Fund ' for each committee. The Rule making power of the State Government is in Section 40. Rule 66 deals with the levy of market fee, Rule 68 provides for its recovery and Rule 67 provides for licence fee. By a State Government notification, which was issued on April 11, 1978 making it effective from May 1, 1978, almost the whole of Uttar Pradesh had been declared to be a Market Area, dividing it into 250 areas and indicating in Schedule 8 of the Notification 115 commodities in respect of which the fee could be levied by the Market Committees. Declaration of Principal Market Yards and Sub Market Yards under Section 7 had also been made. Various traders carrying on business in the State of Uttar Pradesh within the jurisdiction of several Market Committees challenged the levy of fee in the High Court from time to time. There were several rounds of litigation and the writ petitions were dismissed. On account of the litigations between the traders and the Market Committees, the working of the Committees had not successfully proceeded, as fees levied from time to time could not be 106 realised in full. Sometimes illegal or unauthorised collections have been made. Money justifiably realised also had not been fully utilised as it ought to have been done. In the appeals and writ petitions to this court it was contended on behalf of the appellants and petitioners that: 1. Big areas consisting of towns and villages have been notified as Market Areas without rendering any service, which is contrary to the whole object of the Act and the concept of fee. No market area or market yard had been validly created. No Mandi Samiti (Market Committee) had been validly appointed. No machinery had been provided in the Rules for adjudication of disputes. Fixation of minimum of 1% to be charged as market fee by all the Market Committees under section 17(iii)(b) of the Act was illegal as the requirement of and the services to be rendered by the various Market Committees could not be on the same footing. There was no application of mind in issuing the notification dated 11 4 1978 whereby 250 market areas were notified and 115 items of agricultural produce were specified. There could not be any multi point levy of any market fee either in the same market area or in different market areas. The retrospective operation of the law brought about in section 17(iii)(b) by U.P. Act 7 of 1978 w.e.f. 12 6 1973 was bad. No market fee could be levied on goods not produced within the limits of a particular market area and if produced outside and brought in such area. No market fee could be levied both on paddy and rice. The rice millers had been illegally asked to pay market fee on their sale of rice. Similarly no market fee was payable on Ghee either by the producer trader of Ghee or by its purchaser. Fee could be charged on sale of animals but could not be charged on hides and skins as was being illegally done. Fee could be charged on wood or timber but could not be charged either on furniture manufactured from such wood or timber or on Catechu (Katha). Wood cut and brought from the jungle by a manufacturer or paper could not be subjected to levy of fee. Some of the items mentioned in the notification are Kirana goods brought from outside the market area or even from other States for sale in different Mandis, and cannot be subjected to the levy of market fee. No market fee could be charged on tobacco or tendu leaves nor on bidis. No market fee could be charged on rab salawat and rab galawat. 107 17. No market fee can be charged if only goods are brought in a market area and despatched outside it without there taking place any transaction of purchase and sale in respect of these goods. If no licence is issued or taken under section 9(1) of the Act then there is no liability to pay a market fee. No market fee can be levied on transactions of match boxes, soyabin products. No market fee can be charged from the vendors of fruits and vegetables through their Commission Agents. Fee can be charged only on those transactions in which the seller is producer and not on any other transaction, and market fee can be charged only on those transactions in which the seller is the purchaser of agricultural produce and not on any other transaction. ^ HELD: 1. Declaration of big areas as Market Areas does not offend any provision of law. Any area big or small including towns and villages can be declared as Market Area under section 6 of the Act. [121 F] 2. The traders are required to take out licences under s.9(2) read with s.11 of the Act, for such place which is either a principal Market Yard or a sub Market Yard or at any specified place in the Market Area. No body can be permitted to carry on his business anywhere in the Market Areas as the Market Committee will not be able to control and levy fee throughout the Market Area. [121 G H] 3. (i) Market Committees have not yet been constituted in accordance with the provisions contained in section 13 of the Act. They have been constituted temporarily under Uttar Pradesh Krishi Utpadan Mandi Samitis (Alpakalik Vyawastha) Adhiniyam, 1972 which was a temporary Act, extended from year to year. It is high time that Market Committees should be constituted in a regular manner on a permanent basis in accordance with the provisions contained in Chapter III of the Act. [123 C] (ii) The levy and collection of fee by the temporary Market Committees is not illegal as argued on behalf of the appellants. [123 D] Kewal Krishan Puri vs State of Punjab [1979] 3 S.C.R. 1217, referred to. A machinery for adjudication of disputes is necessary to be provided under the Rules for the proper functioning of the Market Committees. [123 E] 5(i) Under clause (b) of section 17(iii) of the Act a minimum and maximum limit of market fee chargeable has been fixed by the legislature. The minimum is 1% and the maximum is 1 1/2% of the price of the agricultural produce sold. The fixing of the minimum of 1% fee by itself is not illegal but it would be subject to the rendering of adequate services. [123 G] (ii) The charging of 1% fee throughout the State of Uttar Pradesh by all the market Committees is not illegal and does not go beyond the quid pro quo theory discussed in Puri 's case. [124 A] 108 6. The notification dated 11 4 1978 indicates that in the various Districts, which number about 55, 250 Market Committees have been constituted and about 115 items have been selected in respect of which market fee has been directed to be levied. None of the items so specified is such that it cannot be covered by the Schedule which is a part of the Act. The definition of 'agricultural produce ' is very wide, and it is not confined to items of agricultural produce ' only but includes items of produce of horticulture, viticulture, apiculture, sericulture, pisci culture, animal husbandry or forest. [124 C] 7(i) All the four clauses of clause (b) of section 17(iii) are mutually exclusive. If the produce is purchased from a producer directly the trader shall be liable to pay the market fee to the Committee in accordance with sub clause (2). But if the trader sells the same produce or any product of the same produce to another trader neither the seller trader nor the purchaser trader can be made to pay the market fee under sub clause (3). [125 C] (ii) In a particular market area market fee cannot be levied both in relation to the transaction of purchase and sale of paddy and the rice produced from the same paddy. Fee can be charged only on one transaction. This finds support from the unamended Rules as they are, wherein is to be found sub r. (2) of Rule 66. There is nothing in the provisions of the Act or the Rules to warrant the view that in another market area the Market Committee of that area cannot levy fee on a fresh transaction of sale and purchase taking place in that area. [125 H 126 A] 8(i) Before 1973, reading the provisions of the Act and the Rules, market fee was to be charged at such rates as specified in the bye laws of a particular Market Committee. But it could not exceed 1/2 percentum of the price of the agricultural produce. The liability to pay the fee was of the seller of the agricultural produce. Market fee was liable to be paid under Rule 68(2) (ii) even if the specified agricultural produces was sold directly by the seller to the consumer. This provision has now been superseded by an amendment in the Act brought about by U.P. Act 19 of 1979. [127 F G] (ii) After the amendment in the Statute, Rules could apply only mutatis mutandis and wherever there was a conflict between the Rules and the Statute the latter had o prevail. [128 D] (iii) The State Legislatures are competent to make retrospective amendment and retrospective imposition of a fee is valid. However, in a given case and in a given situation the retrospective operation may be hit by Article 19. [129 A B] B. Banerjee vs Anita Pan ; , M/s. section K. G. Sugar Ltd. vs State of Bihar & Ors. [1975] 1 S.C.R. 312 and H. H. Sudhundra Thirtha Swamiar vs Commissioner for Hindu Religious & Charitable Endowments, Mysore [1963] Suppl. 2 S.C.R. 302 referred to. (iv) The Rules which were framed in 1965 namely Rules 66 and 68 are very different from the present provision of law. The Government has failed to amend the Rules and bringing it in confirmity with the amended provisions of the Statute from time to time. The Rules will apply as far as possible so long they do not come in conflict with the Statute and even 109 without the aid of the Rules the provision in section 17(iii) (b) as it stands after the amendment brought about by U.P. Act 7 of 1978 is workable and can be given effect to. [128 G H] In the present case the retrospectivity of the law as such is not bad and the only safeguard will be that if market fee has been realised by any Market Committee in respect of transactions of sale of agricultural produce taking place between 12 6 1973 and the coming into force of U.P. Act 7 of 1978, in accordance with law as it prevailed then, no market fee under the amended law can be realized again. But if in respect of any transactions aforesaid market fee had not yet been realised then it can be realised in accordance with the amended provision of the law. [129 C] 9. No provision in the Act or the Rules limit the operation of the law in a particular market area only in respect of the agricultural produce produced in that area. [129 G] 10(i) A producer who produces agricultural produce generally does not indulge in trading activities so as to become a trader within the meaning of clause (y). He is covered by clause (p) only. If a person is simply a trader indulging in trading activities he is covered by the definition in clause (y). The expression producer trader has been coined for a person who is both a producer of agricultural produce and himself trades in it. For the purposes of the Act he ceases to be a producer and becomes a trader only as the definition indicates. [130 A B] (ii) If paddy is purchased in a particular market area by a rice miller and the same paddy is converted into rice and then sold the rice miller will be liable to pay market fee on his purchase of paddy from the agriculturist producer under sub clause (2) of section 17 (iii) (b). He cannot be asked to pay market fee over again under sub clause (3) in relation to the transaction of rice. [130 E] (iii) Market fee has to be levied and collected in relation to the transaction of paddy alone. Otherwise there will be a risk of violation of Article 14 if it is left to the Market Committee in the case of some rice millers to charge market fee on the transaction of paddy and in the case of others to charge it when the sale of the rice takes place. If, however, paddy is brought by the rice miller from another market area, then the Market Committee of the area where paddy is converted into rice and sold will be entitled to charge market fee on the transaction and sale in accordance with sub clause (3). [130 F G] (iv) In transactions of Ghee, a dealer who purchases milk or cream from the villagers and others and manufactures Ghee in his plant will be liable to pay market fee because he is the producer of Ghee within the meaning of the Act and at the same time a trader in Ghee also. When he sells Ghee to another dealer in Ghee who is simply a dealer then under sub clause (3) of Section 17(iii)(b), the manufacturing dealer will be liable to pay market fee to the Market Committee or the transaction of Ghee, but he will be entitled to pass on the burden to his purchaser. [131 C D] 11. The definition clause (a) of section 2 uses the expression 'animal husbandry 's by way of a descriptive one without strictly confining to the pro 110 products of animal husbandry as the additions, of the words 'specified in the schedule ' indicates. In the schedule under the group 'husbandry products ' are mentioned item 11 hides and skins, item 12 bones, item 13 meat etc. Market fee is, therefore, leviable on the transactions of hides and skins as no market fee can be charged on transactions of sale and purchase of animals in a market area in the State of Uttar Pradesh the same having not been included in the notification. Had it been included in the notification, then no market fee could be charged in the same market area on hides and skins. It could only be charged in relation to the transaction of purchase and sale of animals. [131 H, G; 132 B C] 12. Group E of the notification dated 11 4 1978 deals with forest products. The items mentioned therein are (1) Gum, (2) Wood, (3) Tendu leaves, (4) Catechu, and (5) Lac. Market fee can be charged on purchase of wood by a trader from a producer. No fee can be charged on the sale of furniture manufactured by the purchaser of wood. According to the Market Committees Catechu is a product from timber or trees like Gum or Lac, which trickles down from the trees, while, according to the Catechu dealers by processing of Khar trees Catechu is produced. This question of fact is left to be decided by the Market Committees concerned in the first instance and then by a court of law. If Catechu is a product of Khar trees by some processing as prima facie it appears to be so, it is plain that market fee can be charged only on the purchase of Khar wood and not on the sale of Catechu. [D, F] 13. The owner of the jungle wherefrom the wood is cut and brought will be a producer within the meaning of the Act and the licensee producer of that wood would be a purchaser of an agricultural produce within the meaning of sub clause (2) of section 17(iii) (b) of the Act liable to pay market fee. It matters little what use is made of the wood by him. The question of quid pro quo and service cannot be decided by a dichotomy of service to every payer of fee as held in Kewal Krishan Puri 's case. The matter has to be judged in a broad sense and not in the sense of rendering service to every individual payer of the fee. [133 B C] 14. In group A VI Spices are mentioned including certain Kirana items such as Ripe Chillies, Sonf, turmeric etc. They are sold by the Kirana dealers. Sometimes they purchase them from the agriculturists in the same market area. In relation to those transactions they will be liable to pay market fee under sub clause (2) of section 17(iii) (b). More often than not such articles are brought from outside and sold by the Kirana merchants. If they are sold to consumers, no market fee can be levied in view of the proviso added in the year 1979. If they are sold in wholesale, then the transaction can be subjected to the levy of market fee because in a particular market area they enter into the first transaction of sale in respect of the specified agricultural produce. [133 E F] 15. Market fee can be charged on transaction of tobacco as it is included in group A V of the notification. Similar is the position in regard to tendu leaves which is mentioned in group E. Bidi cannot be treated as an agricultural produce as it is not an admixture of tobacco and tendu leaves within the meaning of section 2(a) of the Act. But if a Bidi manufacturer purchases tobacco and tendu leaves in the market area and uses them in the manufac 111 ture of bidi, he will be liable to pay market fee in relation to the transaction of tobacco and tendu leaves. [133 G 134 A] 16. Market fee can be levied on the first transaction of rab taking place in any market area in accordance with any of the sub clause of section 17(iii)(b), as may be applicable. It cannot be again charged on the second transaction of rab galawat or rab salawat even assuming that it is rab. [134 F] 17. If goods are merely brought in any market area and are despatched outside it without any transaction of sale taking place therein, then no market fee can be charged. If the bringing of the goods in a particular market area and their despatch therefrom are as a result of transactions of purchase and sale taking place outside the market area, it is plain that no fee can be levied. [135 B] 18(i) Producer as defined in clause (p) of section 2 is not required to take any licence for selling his agricultural produce nor is he required to pay market fee under any of the sub clauses of section 17(iii) (b). But if he is a producer trader in the sense explained above, then he will be required to take out a licence in accordance with section 9(2) of the Act and no body can be permitted to carry on any trade in agricultural produce in the market area without a valid licence. [135 E] The proviso to clause (p) of section 2 will be attracted only if a question arises as to whether any person is a producer or not for the purposes of the Act and in that event the decision of the Director made after an inquiry conducted in the manner prescribed by the Rules shall be final. If a question arises whether a person is merely a producer or producer trader the Director will have no power to decide this question. Such a question will have to be decided by the Market Committee itself which will be subject to the final decision of a court of law. [135 G H] (ii) The traders cannot escape their liability to pay the fee on account of their default of taking out licences. [136 D] 19. Market fee can be charged only on the transactions of purchase of wood and if a manufacturer of match sticks purchases wood from the producer for the purpose of manufacturing the sticks he will be required to pay market fee on such purchase of wood only and not on the sale of match sticks or match boxes. Similarly market fee will be leviable on the transaction of purchase of soyabin and not on transaction of sale of soyabin products. [136 E] 20. Under sub clause (1) of section 17(iii)(b) of the Act when fruits and vegetables are sold through a commission agent by the producer then the commission agent is liable to pay the market fee and he can realise it from the purchaser of fruits and vegetables. The burden does not fall on the producer. The liability in the first instance is of the commission agent and finally of the purchaser of the articles. [136 H] 21. In the U.P. Act even traders under certain circumstances have been made liable to pay such fees. The argument that market fee can be charged only on those transactions in which the seller is the producer of agricultural produce and not on any other transaction is devoid of substance. [138 C] 112 Mangalchand Ramchandra and others etc. vs State of Bihar approved. If anything has been realised from the traders or any other person which goes contrary to this judgment the same should be refunded by the Market Committee concerned within six months. The form of the order in relation to the refund of the market fee may vary from case to case depending upon the facts and circumstances of each case. [138 D] 23. Market fee due from the traders should be regularised and be charged in the light of this judgment, and paid within a period of six month. If there is any disputed question of fact to be decided by the Market Committee then it should be decided as quickly as possible leaving the person concerned to agitate the matter in a court of law, preferably, in the High Court, within short time thereafter. [138 E F]

it Petition (Civil) No. 824 of 1988. (Under Article 32 of the Constitution of India) V.C. Mahajan, Gaurav Jain, and Ms. Abha Jain for the Petitioner. Anil Dev Singh, I. Makwana, Rathin Das, K.R. Nambiar, Ms. A. Subhashini, A.M. Khanvilkar, A.S. Bhasme, R.K. Mehta, V. Krishnamurthy, S.K. Agnihotri, A.V. Rangam, Mahabir Singh and P.K. Pillai for the Respondents. The Order of the Court was delivered by MISRA, J. This application under article 32 of the Consti tution is at the instance of an advocate by way of a public interest litigation asking for direction to the respondents for making provision of separate schools with vocational training facilities and separate hostels for children of prostitutes. Notice was issued not only to the original respondents but at the instance of the Court also to a11 the States and the Union Territories. Many of them have respond ed and affidavits have been filed by way of return to the rule nisi. Though Mr. Mahajan for the petitioner has pleaded that separate schools and hostels be raised for the children of the prostitutes, we are not inclined to accept the submis sion. Segregating prostitute children by locating separate schools and providing separate hostels, in our opinion, would not be in the interest of such children. It is said that prostitutes do not want to have children and ordinarily when children are born to them it is inspite of their desire not to rear children. But once such children are born to them, it is in the interest of such children and of society at large that the children of prostitutes should be segre gated from their mothers and be allowed to mingle with others and become part of the society. In fact, counsel appearing for several States have stated at the Bar the same way. We, therefore, reject the prayer for locating separate schools and hostels for children of the prostitutes. Children of prostitutes should, however, not be permit ted to live in inferno and the undesirable surroundings of prostitute homes. This 175 is particularly so for young girls whose body and mind are likely to be abused with growing age for being admitted into the profession of their mothers. While we do not accept the plea for separate hostels for prostitute children it is necessary that accommodation in hostels and other reformato ry homes should be adequately available to help segregation of these children from their mothers living in prostitute homes as soon as they are identified. Legislation has been brought to control prostitution. Prostitution has, however, been on the increase and what was once restricted to certain areas of human habitation has now spread into several localities. The problem has, therefore, become one of serious nature and requires considerable and effective attention. We are of the view that instead of disposing of this writ petition with a set of directions, a Committee should be constituted to examine the material aspects of the prob lem and submit a report containing recommendations to the Court on the basis of which further orders can be made. We accordingly direct that a Committee for such purpose shall be set up and it shall examine the matter from various angles of the problem taking into consideration the differ ent laws relevant to the matter and place its report before the Court within eight weeks from now. The Committee shall consist of: 1. Mr. V.C. Mahajan, Senior Advocate, New Delhi. Mr. R.K. Jain, Senior Advocate, New Delhi. Mr. M.N. Shroff, Advocate on Record, He shall act as the New Delhi. convenor. Mr. R.K. Mehta, Advocate on Record, New Delhi. Dr. Deepa Das, Women 's Studies & Development Centre, Chhatra Marg, University of Delhi, Delhi 110 007. 176 6. Sarla Mudgal, Kalyani, 5030, Kalidas Marg, Darya Ganj, New Delhi 110 002. Krishna Mukherji, All Bengal Women 's Union, Research & Development Committee, 89, Elliott Road, Calcutta 700 016. The Union of India in the Ministry of Welfare, Depart ment of Women & Child Development is directed to deposit in this Court a sum of Rs.20,000 for the present within two weeks to meet the expenses. The matter shall be listed on 16th January, 1990 (Tues day) for further orders after the report is received.

This writ petition has been filed pleading for separate schools and hostels for the children of prostitutes. On behalf of respondents, it was contended that since they are in fact unwanted children of prostitutes it is in the interest of such children and the society at large that they are segregated from their mothers and be allowed to mingle with others and become part of the society. Setting up a Committee consisting of 4 Advocates and 3 Social Workers to look into the matter and directing listing of the matter on receipt of the Committee 's report, this Court. HELD: 1. Children of prostitutes should not be permitted to live in inferno and the undesirable surroundings of prostitute homes. This is particularly so for young girls whose body and mind are likely to be abused with growing age for being admitted into the profession of their mothers. While separate schools and hostels for prostitute children are not desirable, accommodation in hostels and other refor matory homes should be adequately made available to help segregation of these children from their mothers living in prostitute homes as soon as they are identified. [174H; 175A B] 2. The Committee now set up will look into the problems and submit its report within 8 weeks. [175D] [This Court directed the Ministry of Welfare, Deptt. of Women & Child Development functioning under the Union of India to deposit a sum of Rs.20,000 within two weeks to meet the expenses of the Committee].

Appeal No. 278 of 1959. Appeal by special leave from the judgment and order dated April 2, 1957, of the Punjab High Court, in Civil Revision No. 239 of 1956. C. K. Daphtary, Solicitor General of India, section N. Andley, Rameshwar Nath and P. L. Vohra, for the appellant. section T. Desai and Naunit Lal, for the respondents. May 2. The Judgment of the Court was delivered by GAJENDRAGADKAR, J. The appellant Dr. Gopal Das Varma owns a double storeyed house known as 28, Barakhamba Road, New Delhi. The ground floor of this house consists of a block of offices and the first floor consists of four flats; three of these are in the occupation of the appellant while the fourth has been let out to respondent 1, Dr. Bhardwaj. Dr. Bhardwaj is an ear, nose, throat specialist, and in one of the four rooms of the flat be and his wife, respondent 2, reside, while the, three other rooms are used by him for the purpose of his profession. Respondent 1 ap. pears to have taken the premises on lease as early as 1934 although he executed an agreement of tenancy in favour of the appellant on November 8, 1935. This agreement shows that the appellant agreed to let out his flat to respondent 1 on a rent of Rs. 90 per month payable in advance. The tenancy was to commence from October 1, 1935, and was intended to continue up to _September 30, 1936. Parties agreed that the said 680 tenancy could be renewed on terms to be settled later. In fact the tenancy has been renewed from year to year and the flat is still in possession of respondent 1. In October 1953 the appellant sued the two respondents for ejectment on two grounds. He alleged that he required the premises in question for occupation as residence for himself and for the members of his family and that respondent 1 had recently built a suitable residence for himself in Golf Link Area, New Delhi. The first plea was made under section 13(1)(e) of the Delhi and Ajmer Rent Control Act, 1952 (Act XXXVIII of 1952) (hereafter called the Act), while the second was raised by reference to section 13(1)(h) of the Act. According to the appellant, since both the requirements of the Act were satisfied he was entitled to obtain a decree for ejectment against the respondents. The claim thus made by the appellant was denied by the respondents. Respondent 2 pleaded that she was not the tenant of the appellant and she alleged that it was she and not respondent 1 who had built the house in Golf Link Area. Respondent 1 admitted that he was a tenant under the appellant. He, however, contended that the appellant did not require the premises bona fide for his personal use, and he urged that he was using the premises for carrying on his medical profession and as such the appellant was not entitled to eject him. He supported his wife in her plea that the house built in Golf Link Area belonged to her and not to him. On these pleadings the learned trial judge framed appropriate issues. He found that respondent 1 alone was the tenant of the appellant and that the premises in question had been let to respondent 1 for residential purpose. According to the trial judge the premises in suit had been constructed for residential purposes and the flat in question was let out to respondent exclusively for that very purpose. The trial judge further held that the fact that a portion of the premises was used by respondent 1 for his profession or business would not make the tenancy one for nonresidential purposes. In that view he rejected the 681 argument raised by respondent 1 on the explanation to section 13(1)(e) of the Act. The trial judge also held that it was respondent 1 who had built a house in Golf Link Area and since the said house was suitable for his residence the requirements of section 13(1)(h) were satisfied. On the question about the bona fide requirements of personal residence pleaded by the appellant under section 13(1)(e) the trial court made a finding against him. Even so, as a result of his conclusion under section 13(1)(h) the trial judge passed a decree for ejectment in favour of the appellant. Both the respondents challenged this decree by preferring an appeal before the Senior Sub Judge at Delhi. The appellate Court held that on the facts proved in the case it cannot be inferred that the premises in suit were built for residential purposes alone, and that evidence did not show that the premises in question had been lot to respondent 1 for residence alone. The appellate judge examined the conduct of the parties and held that it was proved beyond any shadow of doubt that respondent 1 was using the premises both for his residence and his professional work since the inception of the tenancy without any objection on behalf of the appellant, and so in his opinion the premises could not be said to have been let for residence alone. He also found that under the proviso to section 13(1)(e) it cannot be said that the premises were used incidentally for profession without the consent of the appellant; in that view section 13(1)(e) did not apply to the case. Since the appellant had failed to prove that the premises were residential premises within the meaning of section 13(1)(e) and (h) the appellate Court held that respondent 1 could not be ejected. In the result the appeal preferred by the respondents was allowed and the decree for ejectment passed by the. trial Court against them was set aside. The appellant then took the dispute before the High Court of Punjab by his revisional application. The High Court has in substance agreed with the view taken by the appellate Court, confirmed its main findings and has dismissed the revisional application. The High Court has observed that in its opinion the 682 appellate judge was fully justified in holding that the premises were let out to the tenant for the purpose of residence and for the purpose of his work as a member of the medical profession. It has made an alternative finding that even if it was assumed that the premises were let out to respondent 1 for the purpose of residence the plea of bona fide requirement made by the appellant was not proved and the argument based upon section 13(1)(h) was not available to the appellant because the Golf Link building which respondent 1 had acquired cannot be said to be suitable for the conduct of business if the neighborhood or the locality in which it is situated is not suitable for that purpose. In the result the High Court dismissed the appellant 's revisional application It is against this decision that the appellant has come to this Court by special leave. It is relevant to refer to the material provisions of the Act before dealing with the points raised for the appellant by the learned Solicitor General in the present appeal. The Act applies to premises which are defined by section 2(g) as meaning, inter alia, any building or part of a building which is, or is intended to be, let separately for use as a residence or for commercial use or for any other purpose. Section 13(1) provides that notwithstanding anything to the contrary contained in any other law or any contract, no decree or order for the recovery of possession of any promises shall be passed by any Court in favour of the landlord against any tenant including tenant whose tenancy is terminated. This provision is, however, subject to the exceptions provided under the several clauses of the proviso. We are concerned with two of these. Section 13(1)(c) allows a decree for ejectment to be passed if the Court is satisfied that the premises let for residential purposes are required bona fide by the landlord who is the owner of such premises for occupation as a residence for himself or his family and that he has no other suitable accommodation. The explanation to this clause provides that for the purpose of this clause residential premises include any premises which having been let for use as a residence are, without the 683 consent of the landlord, used incidentally for commercial or other purposes; and section 13(1)(h) provides for ejectment in a case where the Court is satisfied that the tenant has whether before or after the commencement of this Act built, acquired vacant possession of, or has been allotted, a suitable residence. It is with these three provisions that we are concerned in the present appeal. It would be noticed that as soon as it is found that the premises in question have been used by respondent 1 incidentally for professional purposes and it is further established that this use is made with the consent of the landlord then the case goes outside the purview of section 13(1)(e) altogether. In the present case it has been found by the appellate Court and the High Court that right from the commencement of the tenancy a substantial part of the premises is used by respondent 1 for his professional purpose, and they have also found that this has been done obviously with the consent of the landlord. It is unnecessary to refer to the evidence on which this finding is based. Even the trial Court was apparently inclined to take the same view about this evidence but it did not fully appreciate the effect of the explanation; otherwise it would have realised that the professional use of a substantial part of the premises with the consent of the appellant clearly takes the case outside section 13(1)(e). In other words, where premises are let for residential purposes and it is shown that they are used by the tenant incidentally for commercial, professional or other purposes with the consent of the landlord the landlord would not be entitled to eject the tenant even if he proves that he needs the premises bona fide for his personal use because the premises have by their user ceased to be premises let for residential purposes alone. This position cannot be seriously disputed. Faced with this difficulty the learned Solicitor General attempted to argue that the very finding made by the Courts below about the nature of the tenancy takes the premises outside the purview of section 2(g) of the Act. The argument is that the premises cannot 684 then be said to have been let for use as a residence or for a commercial use and so they ceased to be premises under the Act. It is suggested that any other use which is specified by section 2(g) would not include a combination of residence with commercial or professional purposes. The other use there referred to may be use for charity or something of that kind which is different from use as residence or commercial use. In our opinion this argument is not well founded. The three kinds of user to which the definition refers are residence, commerce and any other purpose which necessarily must include residence and commerce combined. It may also include other purposes as suggested by the learned Solicitor General. As soon as it is shown that the premises have been let both for the use of residence and for commercial purposes it does not follow that the premises cease to be premises under section 2(g); they continue to be premises under the last clause of section 2(g). This position is wholly consistent with the division of the premises made with reference to their user in paragraphs 3, 4 and 5 of Part A in the Second Schedule to the Act. Therefore, in our opinion, the argument urged by the learned Solicitor General on the construction of section 2(g) cannot be sustained. It will be recalled that the present suit has been filed by the appellant himself praying for the respondent 's ejectment under the provisions of the Act, and so the argument that the Act does not apply to the premises in question can be justly characterised as an argument of desperation. Then it is contended that even if the appellant may not be entitled to claim ejectment under section 13(1)(e) he would be justified in claiming a decree for ejectment against the respondent independently under section 13(1)(h). It is urged that as soon as it is shown that respondent 1 has acquired a suitable residence he can be ejected even though section 13(1)(e) may not apply to his tenancy. In our opinion, even this argument is fallacious. Section 13(1)(h) applies to tenancies which are created for essential purposes, and it provides that in the case of such tenancies even if the landlord may not be able to prove his case under section 13(1)(e) he would nevertheless be entitled to eject the tenant once it is shown 685 that the tenant has acquired another suitable residence. The requirement is that the tenant must have suitable residence. Both words of the requirement are significant; what he has acquired must be residence, that is to say the premises which can be used for residence and the said premises must be suitable for that purpose. If the promises from which ejectment is sought are used not only for residence but ' also for profession how could section 13(1)(h) come into operation? One of the purposes for which the tenancy is acquired is professional use, and that cannot be satisfied by the acquisition of premises which are suitable for residence alone, and it is the suitability for residence alone, which is postulated by section 13(1)(h). Therefore, in our opinion, it would be unreasonable to hold that tenancy which has been created or used both for residence and profession can be successfully terminated merely by showing that the tenant has acquired a suitable residence. That is the view taken by the High Court and we see no reason to differ from the conclusion of the High Court. The last argument urged by the learned Solicitor General is that respondent 1 should not be allowed to approbate and reprobate as he has done in the present case. This argument is based on the conduct of the respondent at the previous stages of the dispute. It is true that in 1941 and onwards respondent 1 has successfully urged that the tenancy was for residence, and in consequence has secured the extension of tenancy under cl. 11A of the New Delhi House Rent Control Order, 1939, issued under r. 81(2)(bb) of the Defence of India Rules. The statements made by respondent 1 in that behalf indicate that he exercised his option of obtaining extension of the lease on the ground that the premises were let out to him for residence. The argument is that since by the said representations he had actually obtained an advantage he cannot be permitted now to contend that the lease is not only for residence. On the other hand the conduct of the appellant himself is also inconsistent with the stand taken by 87 686 him in the present proceedings. In 1942 when he demanded an increased rent from respondent 1 he made out a case which is inconsistent with his present story that the premises were let out to respondent 1 only for residence. The case then made out by him appears to be that the tenancy fell under paragraph 4 of Part A in the Second Schedule to the Act, and that would mean that the premises had not been let only for residence. Indeed the conduct of both the parties has been actuated solely by considerations of expediency and self interest in this case, and so it would prima facie be idle for the appellant to contend that respondent 1 should not be allowed to approbate and reprobate. But, apart from this fact, it is obvious that the appellant cannot be allowed to raise this contention for the first time before this Court. The plea sought to be raised can be decided only after relevant evidence is adduced by the parties, and since this plea has not been raised by the appellant at the proper stage respondent 1 has had no opportunity to meet the plea and that itself precludes the appellant from contending that though the lease may not be one for residence alone respondent 1 should not be permitted to urge that it is not for residence but for residence and profession, It is the settled, practice of this Court that new pleas of this kind which need further evidence are not allowed to be raised in appeals under article 136 of the Constitution. The result is the appeal fails, but in the circumstances of this case we direct that the parties bear their own costs throughout. Appeal dismissed.

The respondent as a tenant of tile appellant was occupying a portion of the premises in question for residence and the other major portion for his professional work as an ear, nose, throat specialist. The appellant sued for the ejectment of the respondent on the grounds that (i) he required the premises for his own residence and that (ii) the respondent had built a suitable residence for himself in another locality. The first plea was based on the ground mentioned in section 133(1)(e) and the second plea on section 13(1)(h) of the Delhi and Ajmer Rent Control Act, 1952. The trial court decreed the suit but the appellate court and the High Court dismissed it on the finding that from the beginning of the tenancy a substantial part of the premises was used by the respondent for his professional work obviously with the consent of the appellant. Held, that premises let for residential purposes but used by 679 the tenant with the consent of the landlord incidentally for commercial, professional or other purposes cease to be premises let for a residential purpose alone and as such the landlord would not be entitled to eject the tenant under section 13(1)(e) of the Act. Nor can such a tenant be ejected independently under section 13(1)(h) because a tenancy created or used both for residence and profession cannot be terminated merely by showing that the tenant had acquired a suitable residence. Premises let both for residence and commercial purposes do not cease to be premises under section 2(g) and continue to be so under the last clause of section 2(g).

Appeals Nos. 635 to 641 of 1957. Appeals from the judgment and decree dated September 8, 1954, of the Punjab High Court in Regular First Appeals Nos. 42, 43, 44, 45, 46, 47 and 48 of 1949. R. Gopalakrishnan, T. M. Sen and R. H. Dhebar, for the appellants. Darya Dutt Chawla, for the respondents. May 1. The Judgment of the Court was delivered by RAGHUBAR DAYAL, J. Civil Appeal No. 635 of 1957 is an appeal, by certificate, and raises the question regarding the effect of the abatement of the appeal, by the State of Punjab, against Labhu Ram, one of the respondents, on the State appeal against Nathu Ram, co respondent. Civil Appeals Nos. 636 to 641 of 1957 also raise the same question between the same parties. The facts leading to the appeal are that the Punjab Government acquired on lease certain parcels of land belonging to Labhu Rain and Nathu Ram, for different military purposes, under the Defence of India Act, 81 638 1939 (XXXV of 1939). Labhu Ram and Nathu Ram, brothers, refused to accept the compensation offered to them by the Collector and applied to the Punjab Government, through the Collector, under r. 6 of the Punjab Land Acquisition (Defence of India) Rules, 1943, hereinafter called the Rules, as amended by the Notification of the Punjab Government No. 1444 HM44/19124, dated 10th March, 1944, and published in the Punjab Gazette, Part 1, dated 17th March, 1944 (Home Department). The State Government referred the matter to an arbitrator as required under r. 10, who, after enquiry, passed an award ordering the payment of an amount higher than what was offered by the Collector and also ordered the payment of certain amount on account of income tax which would be paid on the compensation received. The State Government appealed against the award to the High Court of Punjab. During the pendency of the appeal, Labhu Ram, one of the respondents, died. The High Court, holding that the appeal abated against Labhu Ram and that its effect was that the appeal against Nathu Ram also abated, dismissed the appeal. It also dismissed the cross objections. The State Government applied for a certificate of fitness of the case for appeal to this Court and the High Court granted it, as questions of great private and public importance were involved. It is not disputed that in view of 0. XXII, r. 4, Civil Procedure Code, hereinafter called the Code, the appeal abated against Labhu Ram, deceased, when no application for bringing on record his legal representatives had been made within the time limited by law. The Code does not provide for the abatement of the appeal against the other respondents. Courts have held that in certain circumstances, the appeals against the co respondents would also abate as a result of the abatement of the appeal against the deceased respondent. They have not been always agreed with respect to the result of the particular cir cumstances of a case and there has been, consequently, divergence of opinion in the application of the principle. It will serve no useful purpose to consider the cases. Suffice it to say that when 0. XXII, r. 4 does 639 not provide for the abatement of the appeals against the co respondents of the deceased respondent, there can be no question of abatement of the appeals against them. To say that the appeals against them abated in certain circumstances, is not a correct statement. Of course, the appeals against them cannot proceed in certain circumstances and have therefore to be dismissed. Such a result depends on the nature of the relief sought in the appeal. The same conclusion is to be drawn from the provisions of 0. 1, r. 9, of the Code which provides that no suit shall be defeated by reason of the misjoinder or non joiner of parties and the Court may, in every suit, deal with the matter in controversy so far as regards the rights and interests of the parties actually before it. It follows, therefore, that if the Court can deal with the matter in controversy so far as regards the rights and interests of the appellant and the respondents other than the deceased respondent, it has to proceed with the appeal and decide it. It is only when it is not possible for the Court to deal with such matters, that it will have to refuse to proceed further with the appeal and therefore dismiss it. The question whether a Court can deal with such matters or not, will depend on the facts of each case and therefore no exhaustive statement can be made about the circumstances when this is possible or is not possible. It may, however, be stated that ordinarily the considerations which weigh with the Court in deciding upon this question are whether the appeal between the appellants and the respondents other than the deceased can be said to be properly constituted or can be said to have all the necessary parties for the decision of the controversy before the Court. The test to determine this has been described in diverse forms. Courts will not proceed with an appeal (s) when the success of the appeal may lead to the Court 's coming to a decision which be in conflict with the decision between the appellant and the deceased respondent and therefore which would lead to the Court 's passing a decree which will be contradictory to the decree which had become final with respect to 640 the same subject matter between the appellant and the deceased respondent; (b) when the appellant could not have brought the action for the necessary relief against those respondents alone who are still before the Court and (c) when the decree against the surviving respondents, if the appeal succeeds, be ineffective, that is to say, it could not be successfully executed. There has been no divergence between the Courts about the Court 's proceeding with the appeal between the respondents other than the deceased respondent, when the decree in appeal was not a joint decree in favour of all the respondents. The abatement of the appeal against the deceased respondent, in such a case, would make the decree in his favour alone final, and this can, in no circumstances, have a repercussion, on the decision of the controversy between the appellant and the other decree holders or on the execution of the ultimate decree between them. The difficulty arises always when there is a joint decree. Here again, the consensus of opinion is that if the decree is joint and indivisible, the appeal against the other respondents also will not be proceeded with and will have to be dismissed as a result of the abatement of the appeal against the deceased respondent. Different views exist in the case of joint decrees in favour of respondents whose rights in the subject matter of the decree are specified. One view is that in such cases, the abatement of the appeal against the deceased respondent will have the result of making the decree affecting his specific interest to be final and that the decree against the other respondents can be suitably dealt with by the appellate Court. We do not consider this view correct. The specification of shares or of interest of the deceased respondent does not affect the nature of the decree and the capacity of the joint decree holder to execute the entire decree or to resist the attempt of the other party to interfere with the joint right decreed in his favour. The abatement of an appeal means not only that the decree between the appellant, and the deceased respondent has become final, but also, as a necessary corollary, 641 that the appellate Court cannot, in any way, modify that decree directly or indirectly. The reason is plain. It is that in the absence of the legal representatives of the deceased respondents, the appellate Court cannot determine anything between the appellant and the legal representatives which may affect the rights of the legal representatives under the decree. It is immaterial that the modification which the Court will do is one to which exception can or cannot be taken. It is therefore necessary to determine, on the facts of this case, whether the State appeal could proceed against Nathu Ram. The award of the arbitrator in each of these cases was a joint one, in favour of both the respondents Labhu Ram and Nathu Ram. To illustrate the form of the award, we may quote the award for the year 1945 46 in the proceedings leading to Civil Appeal No. 635 of 1957. It is: "On the basis of the report of section Lal Singh, Naib Tehsildar (Exhibit P. W. 9/1) and Sheikh Aziz Din, Tehsildar, Exhibit P. W. 9/2, the applicants are entitled to a sum of Rs. 4,140 on account of rent, plus Rs. 3,872 8 0 on account of Income tax etc., due to the inclusion of Rs. 6,193 8 0 in their total income, plus such sum as the petitioners have to pay to the Income tax Department on account of the inclusion of Rs. 4,140 in their income as awarded by this award." The result of the abatement of the appeal against Labhu Ram is therefore that his legal representatives are entitled to get compensation on the basis of this award, even if they are to be paid separately on calculating their rightful share in the land acquired, for which this compensation is decreed. Such calculation is foreign to the appeal between the State of Punjab and Nathu Ram, The decree in the appeal will have to determine not what Nathu Ram 's share in this compensation is, but what is the correct amount of compensation with respect to the land acquired for which this compensation has been awarded by the arbitrator. The subject matter for which the compensation is to be calculated is one and 642 the same. There cannot be different assessments of the amounts of compensation for the same parcel of land. The appeal before the High Court was an appeal against a decree jointly in favour of Labhu Ram and Nathu Ram. The appeal against Nathu Ram alone cannot be held to be properly constituted when the appeal against Labhu Ram bad abated. To get rid of the joint decree, it was essential for the appellant, the State of Punjab, to implead both the joint decree holders in the appeal. In the absence of one joint decree holder, the appeal is not properly framed. It follows the that State appeal against Nathu Ram alone cannot proceed. It is however contended for the State that according to the entries in the village records, Labhu Ram and Nathu Ram had equal shares in the land acquired and that therefore the appeal against Nathu Ram alone can deal with half the amount of the award. We do not agree. The mere record of specific shares in the revenue records is no guarantee of their correctness. The appellate Court will have to determine the share of Nathu Ram and necessarily the share of Labhu Ram in the absence of his legal representatives. This is not permissible in law. Further, the entire case of Labhu Ram and Nathu Ram, in their application to the Government for the appointment of an arbitrator, was that the land jointly belonged to them and had been acquired for military purposes, that a certain amount had been paid to them as compensation, that they received that amount under protest and that they were entitled to a larger amount mentioned in the application and also for the income tax they would have to pay on account of the compensation received being added to their income. Their claim was a joint claim based on the allegation that the land belonged to them jointly. The award and the joint decree are on this basis and the appellate Court cannot decide on the basis of the separate shares. The State objected before the arbitrator, and urges before us, that under the rules, the joint application of Labhu Ram and Nathu Ram should have been 643 treated as separate applications with respect to the correctness of the compensation payable to each of them respectively and that the arbitrator should have made separate awards with respect to such separate claims of Labhu Ram and Nathu Ram. The necessary corollary of such a contention for the State is that the abatement of the appeal against Labhu Ram will not make infructuous the appeal against Nathu Ram. The respondent urges that the Punjab Land Acquisition (Defence of India) Rules, do not contemplate separate applications by the persons interested in the compensation on account of the acquisition of a particular parcel of land. The arbitrator did not agree to deal with the claims of Labhu Ram and Nathu Ram separately. He, however, did not decide the question on the basis of the land belonging jointly to the two brothers as members of the joint Hindu family. He however held that the expression 'a person interested ' in r. 3, included all persons claiming an interest in the compensation to be paid on account of the acquisition of the land and that r. 18 permitted the joinder of applications for joint enquiry when each case rested on the same and similar basis and each of the applications included land included in a larger part of land acquired at one time. He also took into consideration that the separation of the applications of Labhu Ram and Nathu Ram would involve various difficulties in matters of income tax. He therefore used his discretion and ordered the application to be proceeded with jointly. In view of our opinion on the main point, we do not consider it necessary to interpret the rules and decide whether the joint application was maintainable or not. The fact remains that Labhu Ram and Nathu Ram made a joint claim and got a joint decree against the State for compensation. The frame of the appeal is to be with reference to the nature of the decree challenged. We therefore see no force in this appeal and dismiss it with costs. This order will govern the other 644 connected appeals, viz., Civil Appeals Nos. 636 to 641 of 1957. Appeal dismissed.

The Punjab Government acquired certain parcels of land belonging to two brothers Land N who refused to accept the compensation offered to them and applied to the Government of Punjab under r. 6 of the Punjab Land Acquisition (Defence of India) Rules, 1943, to refer to arbitration their joint claim based on the allegation that the land belonged to them jointly. The State Government referred the matter to an arbitrator as required under r. 10 who passed an award in favour of both L and N ordering inter alia payment of an amount higher than what was offered to them by the Government. The Government appealed against the said award to the High Court. During the pendency of the appeal before the High Court respondent L died and as no application for bringing on record his legal representative had been made within the time limit, the High Court dismissed the appeal holding that the appeal had abated against L and that its effect was that the appeal against N also abated. Held, that there can be no question of abatement of appeal against the correspondents of the deceased respondent as Order 22 Rule 4 of the Code of Civil Procedure does not provide for the same but in certain circumstances the appeal cannot proceed against them and such a result depends on the nature of the relief sought in the appeal. If the Court can deal with the matter in controversy so far as regards the rights and interest of the appellant and the respondents other than the deceased respondent, it has to proceed with the appeal and decide it; otherwise it will have to refuse to proceed further with the appeal and therefore dismiss it. Ordinarily, the consideration which will weigh with the court in deciding upon the question whether the entire appeal had abated or not will be whether the appeal between the appellants and the respondents other than the deceased respondent can be said to be properly constituted or can be said to have all the necessary parties for the decision of the controversy before the court and the tests to determine this have been described thus: (a) when the success of the appeal may lead to the court 's coming to a decision which will be in conflict with the decision between the appellant and the deceased respondent and therefore which would lead to the court 's passing a decree which will be contradictory to the decree which had become 637 final with respect to the same subject matter between the appellant and the deceased respondent; (b) when the appellant could not have brought the action for the necessary relief against those respondents alone who are still before the court and (c) when the decree against the surviving respondents, if the appeal succeeds, be ineffective that is to say it could not be successfully executed. The abatement of an appeal against the deceased respondent means not only that the decree between the appellant and the deceased respondent has become final but also as a necessary corollary that the appellate court cannot in any way modify that decree directly or indirectly. When the decree in favour of the respondents is joint and indivisible, the appeal against the respondents other than the deceased respondent cannot be proceeded with if the appeal against the deceased respondent has abated. In the present case the appeal against N alone was not pro perly constituted when the appeal against L had abated and the State appeal against N alone could not proceed.

Appeal No. 361 of 1958. Appeal by special leave from the judgment and order dated December 11, 1957, of the Mysore High Court in Civil Revision No. 702 of 1956, against the judgment and order dated August 10, 1956, of the Court of the Second Extra Assistant Judge, Belgaum, in Misc. Appeal No. 36 of 1955, arising out of the order dated September 1, 1955, of the 1st Joint Civil Judge, Junior Division, Belgaum, in Regular Civil Suit No. 197 of 1955. M. M. Gharekhan and I. N. Shroff, for the appellant. D. D. Chawla and G. Gopalakrishnan, for the respondent. B. Sen and T. M. Sen, for the intervener (Attorney General of India). February 13. The Judgment of the Court was delivered by SARKAR, J. This is an appeal from the judgment passed by the High Court at Bangalore on a petition in revision. The question is whether a certain suit should be stayed under section 34 of the . 214 The appellant carries on business as a supplier of electrical energy in Belgaum. It obtained a licence from the Government under section 3 of the , authorising it to supply the energy in that area. The respondent, who is the plaintiff in the suit, obtained supply of electricity from the appellant. The respondent felt that he was being overcharged by the appellant for the electricity so supplied. He thereupon filed a suit in the Court of the Civil Judge, Belgaum, on or about the 8th of June, 1955, claiming a refund of the amount paid in excess of what he thought was the legitimate charge. The appellant then applied under section 34 of the for a stay of the suit on the ground that the matter was referable to arbitration under the provisions of the . The application was dismissed by the Civil Judge and his decision was confirmed by the Extra Assistant Sessions Judge on appeal and lastly, by the High Court in revision. The appellant has now come to this Court. The appellant contends that this matter is referable to arbitration under the provision contained in cl. XVI of the Sixth Schedule of the Act of 1948. A few of the provisions of these Acts will now have to be referred to. Under the Act of 1910 the business of supplying electrical energy can be carried on only with the sanction of the Government. Section 3 of that Act makes provision for the grant of a licence for supplying electrical energy. The appellant obtained a licence in 1932. A form of the licence is set out in the rules framed under the Act of 1910 and that form prescribes the maximum limit which a licensee is entitled to charge a consumer for the electrical energy supplied. The Act of 1948 made a somewhat different provision with regard to these charges. It provided by section 57 as follows: "section 57. (1) The provisions of the Sixth Schedule and the Table appended to the Seventh Schedule shall be deemed to be incorporated in the licence of every licensee, not being a local authority, from the date of the commencement of the licensee 's next succeeding 215 year of account, and from such date the licensee shall comply therewith accordingly and any provisions of, such licence or of the , or ' any other law, agreement or instrument applicable to the licensee shall, in relation to the licensee, be void and of no effect in so far as they are inconsistent with the provisions of this section and the said schedule and Table. (2). . . . . . . . . . This section had therefore the effect of incorporating in the licence the terms of these two Schedules and provided that they would prevail over the terms of any previously granted licence or the provisions of the Act of 1910, or any other law, agreement or instrument inconsistent with these Schedules. The Sixth Schedule made new provisions about the charges that a licensee was entitled to realise for the current supplied. Clause XVI of that Schedule contains a provision for arbitration and it is on that that the appellant relies. That clause is in these terms: Any dispute or difference as to the interpretation or any matter arising out of the provisions of this Schedule shall be referred to the arbitration of the Authority. " The appellant contends that the dispute covered by the respondent 's suit is one of the kind mentioned in this clause and therefore must be referred to arbitration under its terms. We will assume that the dispute is of the kind mentioned in cl. XVI of the Sixth Schedule. We are however unable to see that it is a dispute which is referable to arbitration under that clause. It is not the appellant 's case that el. XVI is a clause in any contract between it and the respondent. That being so, the only other way in which it is possible for the appellant to contend that the respondent is bound to refer the dispute to arbitration under this clause is by showing that it is a statutory provision for arbitration. No doubt if it were so, then in view of the provisions of section 46 of the the 'appellant would be entitled to apply for a stay of the suit under section 34 of that Act. We are however wholly unable to agree that cl. XVI is such a statutory provision. The only 216 statutory provision that we find on the subject is that contained in section 57 and its effect is that the terms of cl. XVI and the other clauses in the Sixth Schedule are to be deemed incorporated in a licence granted by the Government under section 3 of the Act of 1910 and the licensee is to comply with the terms of that Schedule. Therefore all that we get is that the licence which is granted by the Government to a supplier of electricity, like the appellant, is to contain a clause that certain disputes would be referred to arbitration. The licence is an 'engagement between the Government and the licensee, binding the parties to it to its provisions. It is unnecessary to decide whether this engagement is contractual or statutory, for, in either case it is between the two of them only. An arbitration clause in an instrument like this can only be in respect of disputes between the parties to it. Such an arbitration clause does not contemplate a dispute between a party to the instrument and one who is not such a party. We are unable to read section 57 as making cl. XVI in the Sixth Schedule a statutory provision by which certain disputes between any and every person have to be referred to arbitration. It was said on behalf of the appellant that the licence is a statutory document ' That, in our view, is a loose way of putting the thing. By that the utmost that can be meant is that it is issued under the terms of a statutory provision and must comply with the provisions thereof. But that cannot convert it into a statutory provision for reference to arbitration of disputes irrespective of the parties between whom the disputes may exist. In our view, therefore, cl. XVI of the Sixth Schedule of the Act of 1948 contains no provision for arbitration, statutory or otherwise, for reference of the dispute of the nature we have before us, between a licensed supplier of electricity and a consumer of it from him. In the result, this appeal fails and is dismissed with costs. Appeal dismissed.

The arbitration clause incorporated by section 57(1) of the , in a licence granted by the Government for the supply of electrical energy to the consumers is not available for adjudicating upon a dispute between the licensee and the consumer, for the licence is an engagement between the licensee and the Government and the arbitration clause in it refers only to disputes between them. Section 57(1) does not make the arbitration clause a statutory provision by virtue of which disputes between any and every person may be referred to arbitration.

minal Appeal No. 195 of 1966. Appeal from the judgment and order dated February 25, 1966 of the Andhra Pradesh High Court in Criminal Revision, Case No. 382 of 1964. P. Ram Reddy and G.S. Rama Rao, for the appellant. A.V. Rangam, Miss Sen, A. Vedavalli and Subhashini, for the respondent. The Judgment of the Court was delivered by Shah, J. Motor Lorry No. A.P.P. 4695 belonging to the respondent Yedla Perraya was seized by the Forest Range Officer, Gokavaram, early in the morning of December 25,1963, when it 624 was being used without a license for carrying,eight Yegisi logs on Rajahmundry Gokavaram Road. The driver of the motor lorry and another person were tried before the 2nd Additional, 2nd Class Magistrate, Rajahmundry on a complaint 'by the Forest Range Officer for offences under sections 35 and 36 of the Andhra Pradesh Forest Act and the rules framed thereunder. The two accused admitted that they had committed the offence of illicit transportation of timber, and on their plea of guilty they were convicted. The respondent applied to the Trial Magistrate for an order releasing the motor lorry on the plea that the offence of transportation of timber was committed without his knowledge and that the value of the timber seized was not more than Rs. 50/ at the relevant time. The learned Magistrate observed: "After careful perusal of the deposition of R.W. 1, I find that there is nothing in it to indicate that the petitioner knowingly lent his lorry for the illicit transport of timber on the night of 24 12 63. There is also nothing in the case records to show that the petitioner allowed the lorry to illicitly transport the timber on the above date. 1 accordingly hold that the petitioner cannot be said to have knowingly allowed his lorry to illicitly transport the timber. " But the learned Magistrate was of the view that by section 43 of the Andhra Pradesh Forest Act, where it was proved that the value of the timber transported exceeded Rs. 50/ , he was enjoined to direct confiscation of the vehicle in which the forest produce was being transported without a license. In his view the value of eight logs of timber seized from the lorry was Rs. 311/ at the market rate in Rajahmundry. In appeal by the respondent to the Court of Session at Rajahmundry the order of confiscation was set aside and the High Court of Andhra Pradesh confirmed the order of the Court of Session. The State of Andhra Pradesh has appealed to this Court with certificate. granted under article 134( 1 ) (c) of the Constitution. The Andhra Pradesh (Andhra Area) Forest Act 5 of 1882 provides by section 41 that when there is reason to believe that a forest offence has been committed in respect of any timber or forest produce, such timber or produce, together with all tools, ropes, chains, boats, vehicles and cattle used in committing any such offence may be seized by any Forest officer or Police officer. Section 43 as amended by Act 11 of 1963 provides: "Where a person is convicted of any forest offence, the Court sentencing him shall order ,confiscation. to the Government of, the timber or the ' forest produce in respect of which such 'offence was committed, and also any 625 tool, boat, cattle and vehicle and any other article used in committing such offence: Provided that it shall be open to such Court not to order confiscation of any tool, boat, cattle, vehicle or any other article used in committing such offence when the value of the timber or the forest produce in respect of which such offence was committed does not exceed fifty rupees. " It may be observed that before the Forest Act was amended by Act 11 of 1963, the Magistrate was not obliged to direct confiscation of the articles, vehicles, cattle, tools or boats used for committing a forest offence. The Trial Magistrate was of the view that after the amendment of the Forest Act by Act 11 of 1963 he had no option and he was bound on conviction of the offender in respect of any forest offence to direct confiscation of the vehicle used in the commission of such offence. Counsel for the respondent contended that if the interpretation put by the Trial Magistrate upon section 43 as amended is correct, the enactment imposes an unreasonable restriction upon the fundamental right ' of the owner of the vehicle declared by article 19(1)(e) of the Constitution, and is on that account void. Counsel urged that a statute which imposes upon a person who has himself not committed any offence or infraction of the law liability to forfeit his valuable property must be regarded as unreasonable. It was urged that if a vehicle is stolen and then used for commission of a forest offence, or is borrowed by some person for a legitimate purpose and then used without the consent or knowledge of the owner for committing an offence under the Forest Act, or where with a view to involve the owner of the vehicle into a forest offence, forest produce is surreptitiously introduced into the vehicle, and the vehicle is liable to be forfeited, the provision making it obligatory to impose the penalty of forfeiture of the vehicle must be deemed to impose an unreasonable restriction on the owner of the vehicle and is ultra rites on that account. It is not necessary for the purpose of this case to express any opinion on that part of the case. Assuming that the statute which enjoins the Magistrate to confiscate the vehicle used in the commission of the forest offence, even when it is used without the knowledge or consent of the owner, is valid, in our judgment, section 47 of the Act enables the Court of Session and the High Court to make an appropriate order with regard to the vehicle which is just. That section provides: "Any person claiming to be interested in property seized under section 41, may, within one month from the date of any order passed under section 43, 44 or 626 45, present an appeal therefrom which may be disposed of in the manner provided by section 419 Code of Criminal Procedure. " The reference to section 419 is to the Code of Criminal Procedure of 1872 in force when the Andhra Pradesh Forest Act 5 of 1882 was enacted. Section 419 of the Code of 1872 is now substituted by section 520 of the Code of Criminal Procedure, 1898, and by section 520 power is conferred, inter alia, upon the court of appeal to direct that any order passed under sections 517, 518 or 519 by a Court subordinate thereto be stayed pending consideration by the Court of appeal, and that Court may modify, alter or annul such order and make any further order that may be just Section 43 of the Andhra Pradesh Forest Act does not restrict the power of the appellate court to pass any appropriate order as may be just regarding disposal of the property. The Court of Session in the present case has on the finding recorded by the Magistrate and confirmed by it passed an order which is essentially a just order and that has been confirmed by the High Court. The Legislature had originally conferred a discretion both upon the Magistrate and the Court of Appeal to pass appropriate order with regard to the disposal of property used in the commission of the offence as may be just. The Legislature has thereafter amended section 43 by Act 11 of 1963 and made it obligatory upon the Magistrate to confiscate the property or the vehicle used in the commission of Such offence. No such restriction has, however, been placed upon the power of the appellate court and we will not be justified, having regard to the clear expression of the legislative intent, that the power is to be limited in the manner provided by section 43. There is no warrant for implying that the power conferred by section 47 of the Act upon the appellate court is subject to some unexpressed limitation. The High Court was, therefore, right in holding that the motor lorry belonging to the respondent, on the finding recorded by the Magistrate was not liable to be confiscated. The appeal therefore fails and is dismissed. V.P.S, Appeal dismissed.

The respondent 's lorry was used by the driver of the lorry and another, without the respondent 's knowledge, for illicit transport of forest timber worth more than Rs. 50. The driver and the other person were convicted for offences under sections 35 and 36 of the Andhra Pradesh Forest Act, 1882, and the magistrate directed confiscation of the lorry under section 43 of the Act as amended by Act 11 of 1963. The Sessions Court set aside the order of confiscation in appeal and the High Court confirmed the order of the Sessions Court. In appeal to this Court, HELD: The Legislature originally conferred both upon the trial court and the appellate court a discretion to pass an appropriate: order with regard to the disposal of a vehicle used in the commission of an offence under the Act. After the amendment of 1963, the Legislature made it obligatory upon the trial court to confiscate the vehicle used, but no such restriction was placed upon the appellate court; Under section 47, the appellate court could pass orders regarding disposal of property in the same manner 'as an appellate court under section 520 Criminal Procedure Code, corresponding to section 419 of the Code of 1872. Under section 520 of the Code, power is conferred upon the appellate court to pass any appropriate order, as may be just, regarding the disposal of property used in the commission of any offence. The order of the Sessions Court in appeal in the present case was essentially a just order and was rightly confirmed by the High Court. [626 B E]

N: Criminal Appeal Nos. 106 107 of 1986. WITH (Criminal Appeal Nos. 166 67/1986). From the Judgment and order dated 5.9.1985 of the High Court of Rajasthan in D.B. Appeal No. 126/77 and Criminal Appeal Nos. 98 and 99 of 1977. R.L. Kohli, Uma Dutt and R.C. Kohli for the Appellant. B.D. Sharma and M.I. Khan Additional Advocate General for the Respondent. The Judgment of the Court was delivered by OZA, J. These two appeals arise out of the conviction of these two appellants alongwith one another under Section 302 read with Section 34 and sentenced to imprisonment for life and fine of Rs. 100 each in Sessions Case No. 39/75 by Sessions Judge, Jhunjhunu dated 601 29th January 1977. Alongwith these two appellants Chandan and Om Prakash one Babulal son of Onkar Mal was also convicted but we have no appeal before us on behalf of Babulal. The prosecution case was that Smt. Dhaka widow of Shri Hanuman Prasad and mother of Shri Gyarsi Lal was living all alone in her house (Haveli) at Ward No. 1, Khetadi. In the morning of 23rd August, 1975 a person engaged for grazing the goats in jungle went to Smt. Dhaka 's house for taking her goats for grazing and called Smt. Dhaka but he did not get any response. P.W. 2 Smt. Banarsi who was living in the vicinity came on the spot and alongwith the Goatmen went inside the Haveli. They found goods scattered here and there and even when they loudly called Smt. Dhaka they did not hear any reply. P.W. 1 Matadeen who was feeding pigeons nearby was informed by Smt. Banarsi that Smt. Dhaka normally used to get up early but it appears that she had not woken up by that time and therefore expressed surprise. On this Matadeen went inside the house, reached the upper floor and found all the rooms opened and plenty of goods of Smt. Dhaka lying scattered. There he saw Smt. Dhaka Iying on a cot and found that she was wounded and bleeding at number of places. Shri Matadeen, then went to the Police Station, Khetadi and submitted his report exhibit P. 1. The Station House officer Surindra Singh reached the spot, prepared a memo and carried out the investigation. On 3rd September, 1975 one Mam Chand was arrested as an accused. Another accused Babulal was arrested on 5th September and the acquitted accused Laxmikant was arrested on 7th September and the two appellants in this appeal Om Prakash and Chandan were arrested on 11th September, 1975. Mam Chand later was granted pardon and has been examined as an approver in this case. On trial the learned Sessions Judge convicted all the accused persons and on appeal the High Court acquitted the accused Laxmikant but maintained the conviction against the three and aggrieved by the judgment of the High Court the present appeal on special leave has been filed before us by the two appellants mentioned above. It is not in dispute that there is no direct evidence in this case. The only evidence is the evidence of the approver Mam Chand and other evidence regarding recovery of articles. Learned counsel for the appellant contended that certain articles were recovered at the instance of Om Prakash and were put up for test identification and according to the evidence of the test identification these articles that were put up for identification, four witnesses were supposed to identify. Four witnesses appeared at test identification but three appeared in the 602 Court at trial. Out of these four witnesses, the first witness did not identify any article. The two witnesses Rameshwar and Phool Chand, P.Ws 13 and 14 did identify some articles. Their evidence after consideration has been rejected by the trial court and the other witness who identified the articles was Gyarsi Lal who happens to be the son of deceased, for the reasons best known, has not been examined at the trial at all and it was therefore contended by the learned counsel that so far as the recovery and identification of articles are concerned no article recovered has been identified to be that of the deceased and therefore this evidence of recovery in absence of identification is not at all relevant for the prosecution. He therefore contended that as it is settled law that accomplice 's evidence if it inspires confidence could be used to convict the accused person only if there is independent corroboration which could connect the accused with the crime and it was contended that this evidence of recovery and identification was supposed to be the evidence connecting the accused with the crime and corroborating the testimony of the approver but the learned Judges of the High Court did not consider this aspect of the matter that the two witnesses who had identified some articles their testimony has been discarded by the trial court and the High Court has not come to the conclusion that the trial court was not right in rejecting their testimony but superficially held that the evidence of identification is sufficient to corroborate the testimony of the approver. It was also contended that even the reading of the testimony of the approver shows that he has tried to keep himself away and the manner in which he has described the whole incident and the way in which he was taken into confidence by the other accused persons make his testimony unnatural and therefore could not be accepted. Learned counsel also placed reliance on certain decisions of this Court where the rule of prudence about the testimony of the accomplice has been repeatedly stated. Learned counsel appearing for the State of Rajasthan admitted that so far as the identification evidence is concerned, the most important witness Gyarsi Lal has not been examined at the trial and the other two who were examined, their testimony has been rejected but he attempted to contend that although Gyarsi Lal has not been examined in evidence at the trial but in test identification he had identified articles and therefore that evidence is sufficient to corroborate the testimony of the accomplice. He however did not challenge the proposition that the conviction could not be maintained on the sole testimony of the accomplice unless it is corroborated by some independent evidence connecting the accused with the crime. 603 So far as the question about the conviction based on the testimony of the accomplice is concerned the law is settled and it is established as a rule of prudence that the testimony of accomplice if it is thought reliable as a whole conviction could only be based if it is corroborated by independent evidence either direct or circumstantial connecting the accused with the crime. In Haroon Haji Abdulla vs State of Maharashtra, [ ; it was observed as under: "An accomplice is a competent witness and his evidence could be accepted and a conviction based on it if there is nothing significant to reject it as false. But the rule of prudence, ingrained in the consideration of accomplice evidence, requires independent corroborative evidence first of the offence and next connecting the accused against whom the accomplice evidence is used, with the crime". Similarly in Ravinder Singh vs State of Haryana, [ ; it was observed as under: "An approver is a most unworthy friend, if at all, and he. having bargained for his immunity, must prove his worthiness for credibility in court. This test is fulfilled, firstly if the story he relates involves him in the crime and appears intrinsically to be a natural and probable catalogue of events that had taken place. The story if given of minute details according with reality is likely to save it from being rejected brevi manu. Secondly, once that hurdle is crossed, the story given by an approver so far as the accused on trial is concerned, must implicate him in such a manner as to give rise to a conclusion of guilt beyond reasonable doubt. In a rare case taking into consideration all the factors circumstances and situations governing a particular case, conviction based on the uncorroborated evidence of an approver confidently held to be true and reliable by the court may be permissible. Ordinarily, however, an approver 's statement has to be corroborated in material particulars bridging closely the distance between the crime and the criminal. Certain clinching features of involvement disclosed by an approver appertaining directly to an accused, if reliable, by the touchstone of other independent credible evidence, would give the needed assurance for acceptance of his testimony on which a conviction may be based. " 604 In this decision the first test indicated is that if the story given out by the accomplice appears intrinsically to be natural and probable, then alone that evidence could be of some value and then it is further observed that ordinarily an approver 's statement has to be corroborated. In this view of the settled legal position which was not disputed before us, it was contended that the evidence about recovery is of no consequence as there is no evidence of identification but as it was contended by the learned counsel for the respondent State that Gyarsi Lal who is the son of the deceased is not examined at the trial but he had identified articles at the identification parade and the learned counsel attempted to contend that this evidence could be used as a piece of corroboration. Unfortunately this evidence could not be looked into because: i) what he identified and stated to the Magistrate who conducted the identification parade is only a hearsay evidence as that evidence could only be used to corroborate his testimony if he was examined at the trial; and ii) what he stated to the Magistrate at the time of the test identification parade is not subjected to cross examination and was at the back of the accused could not be used as evidence against the accused. These are matters so settled and therefore it is sufficient to say that this contention is without any substance. Except this even the learned counsel for the State of Rajasthan had to concede that there is nothing about identification or anything to connect these articles with the crime and in such a situation the evidence of recovery is not at all relevant as it is not connected with the crime. It is not disputed that except this we are left with the only evidence of the approver Mam Chand. His evidence has been read by the counsel for the parties before us and his evidence clearly indicates that he has attempted to suggest that he did nothing. Neither he stated that he participated in looting nor in injuring or attacking the deceased. Reading through his evidence clearly indicates that he has claimed to be a spectator at every moment but has not participated at any stage. Apart from it the initial story appears also to be absolutely unnatural as according to him, he did not know anyone of these accused persons but a month before the incident they took him into confidence and told him to join them. After reading the evidence of the witnesses as a whole apparently the impression created is that the version does not appear to be natural version. In this view of the matter, in our opinion, the testimony is not such which inspires confidence. Apart from it as there is no corroboration at all from any other independent circumstance or source of evidence therefore the conviction of the appellants could not be maintained. It is rather unfortunate that the appeal has come up for hearing after a long time and ultimately it is found that 605 there is no evidence to sustain the conviction. The appeals are there A fore allowed. The sentence and conviction passed against both the accused are set aside. The appellants shall be set at liberty forthwith. P.S.S. P.S.S. Appeals allowed.

% Five persons were tried for the murder of a widow, out of which one turned approver. There was no direct evidence in the case. The only evidence was the evidence of the approver and the other evidence regarding recovery of articles by three witnesses. The trial court discarded the testimony of two witnesses who had identified some articles. The third witness, the son of the deceased and who had identified the articles was not examined at the trial. The court, however, convicted all the accused persons under section 302 read with section 34 lPC. The High Court maintained the conviction of three persons on the finding that the evidence of identification was sufficient to corroborate the testimony of the approver. In the appeals by special leave by two of the accused, it was contended for the State that although the son of the deceased had not been examined at the trial, he had identified articles at the test identification and, therefore, that evidence was sufficient to corroborate the testimony of the accomplice. Allowing the appeals, ^ HELD: It is established as a rule of prudence that the testimony of an accomplice if it is thought reliable as a whole conviction could only be based if it is corroborated by independent evidence either direct or circumstantial connecting the accused with the crime. [603A B] Haroon Haji Abdulla vs State of Maharashtra, ; and Ravinder Singh vs State of Haryana, ; referred to. In the instant case, the evidence of the son of the deceased could 600 not be looked into because (i) what he identified and stated to the Magistrate, who conducted the identification parade, was only a hearsay evidence and that evidence could only be used to corroborate his testimony if he was examined at the trial, and (ii) what he stated to the Magistrate was not subjected to cross examination and was at the back of the accused. Further, there is nothing about identification or anything to connect the articles with the crime and in such a situation the evidence of recovery is not at all relevant as it is not connected with the crime. It could not, therefore, be used as evidence against the accused. [604C D] The only evidence against the accused was that of the approver. He has claimed to be a spectator at every moment but has not participated at any stage. Apart from it, the initial story appears also to be absolutely unnatural, as according to him he did not know anyone of the accused persons but a month before the incident they took him into confidence and told him to join them. The evidence of the witnesses as a whole does not appear to be natural version and is not such which inspires confidence. Moreover, there was no corroboration at all from another independent circumstance or source of evidence. The conviction of the appellant, therefore, could not be maintained. [604F H]

Appeal No. 2348 of 1993. From the Judgment and Order dated 13.7.1992 of the Central Administrative Tribunal, Guahati in O.A. No. 33/91. Ms. K. Amareswari, B.P. Sarathy and C.V. Subba Rao for the Appellants. P.K. Goswami, Kailash Vasdev, Ms. Lira Goswami and Ms. Alpana Poddar for the Respondent. The Judgment of the Court was delivered by B.P. JEEVAN REDDY, J. Heard counsel for the parties. Leave granted. Respondent is a Garden Curator in the Office of the Scientist SE, Botanical Survey of India, Eastern Circle, Shillong. By order dated January 29, 1991 he was transferred from Shillong to Pauri (Uttar Pradesh) by the Senior Administrative Officer, office of the Director, Botanical Survey of India, (Ministry of Environment and Forests, Government of India). As many as 19 persons were transferred under the said order including the respondent. The respondent has been working in Shillong since the year 1979. The respondent approached the Gauhati Bench of the Central Administrative Tribunal (Original Application No. 33 of 1991) questioning the order of his transfer. He submitted that his wife is also employed at Shillong in and off ice of the Central Government, that his children are studying at Shillong and further that he himself had suffered back bone fracture injuries some time ago. He submitted that the guidelines contained in Government of India O.M. dated 3.4.1986 have not been kept in mind while ordering his transfer. tie complained that some other officials who have been serving at Shillong for a longer period, have been allowed to continue at Shillong. He attributed 'mischief ' to his Controller Officer, Shri B.M. Wadhwa (third respondent in the O.M.). In the counter affidavit filed by the respondents, they submitted that the transfer was ordered on administrative grounds and is unexceptionable. The learned Single Member of the Central Administrative Tribunal quashed the order of transfer on the following reasoning: the decisions of the Courts establish that the power of transfer is not an unfettered one but is circumscribed by various circulars/guidelines contained in the administrative instructions issued 430 by the Government. An order of transfer can be interdicted if it is discriminatory. The said principles are applicable to the case of the respondent. Further "in the matter of considering transfer of an individual officer, the Office Memorandum dated 3.4.1986, educational dislocation of the children and health ground, if all present, deserve special consideration not to pass the order." Having said so the learned Member recorded the following finding: "In view of the above facts and circumstances and findings it is held unhesitatingly that the transfer order No. BSI. 80/5/80 Estt. dated 29.1.1991 in respect of applicant S.L.Abbas was malafide and liable to be quashed. " The Union of India has preferred this appeal. An order of transfer is an incident of Government Service. Fundamental Rule 11 says that "the whole time of a Government servant is at the disposal of the Government which pays him and he may be employed in any manner required by proper authority". Fundemental Rule 15 says that "the President may transfer a government servant from one post to another". That the respondent is liable to transfer anywhere in India is not in dispute. It is not the case of the respondent that order of his transfer is vitiated by mala fides on the part of the authority making the order, though the Tribunal does say so merely because certain guidelines issued by the Central Government are not followed, with which finding we shall deal later. The respondent attributed"mischief"to his immediate superior who had nothing to do with his transfer. All he says is that he should not be transferred because his wife is working at shillong, his children are studying there and also because his health had suffered a set back some time ago. He relies upon certain executive instructions issued by the Government in that behalf. Those instructions are in the nature of guidelines. They do not have statutory force. Who should be transferred where, is a matter for the appropriate authority to decide. Unless the order of transfer is vitiated by malafides or is made in violation of any statutory provisions, the Court cannot interfere with it. While ordering the transfer, there is no doubt, the authority must keep in mind the guidelines issued by the Government on the subject. Similarly if a person makes any representation with respect to his transfer, the appropriate authority must consider the same having regard to the exigencies of administration. The guidelines say that as far as possible, husband and wife must be posted at the same place. The said guideline however does not confer upon the government employee a legally enforceable right. The jurisdication of the Central Administrative Tribunal is akin to the jurisdiction of the High Court under Article 226 of the constitution of India in service matters. This is evident from a persual of Article 323 A of the constitution. The constraints and norms which the High Court observes while exercising the 431 said jurisdiction apply equally to the Tribunal created under Article 323 A. (We find it all the more surprising that the learned Single Member who passed the impugned order is a former Judge of the High Court and is thus aware of the norms and constraints of the writ jurisdiction.) The Administrative Tribunal is not an Appellate Authority sitting in judgment over the orders of transfer. It cannot substitute its own judgment for that of the authority competent to transfer. In this case the Tribunal has clearly exceeded its jurisdiction in interfering with the order of transfer. The order of the Tribunal reads as if it were sitting in appeal over the order of transfer made by the Senior Administrative Officer (competent authority). Shri Goswami, learned counsel for the respondent relies upon the decision of this Court in Bank of India vs Jagjit Singh Mehta [1992] 1 S.C.C.306 rendered by a Bench of which one of us (J.S. VermaJ.) was a member. On a perusal of the judgment, we do not think it supports the respondent in any manner. It is observed therein: "There can be no doubt that ordinarily and as far as practicable the husband and wife who are both employed should be posted at the same station even if their employers be different. The desirability of such a course is obvious. However, this does not mean that their place of posting should invariably be one of their choice, even though their preference may be taken into account while making the decision in accordance with the administrative needs. In the case of all India services, the hardship resulting from the two being posted at different stations may be unavoidable at times particularly when they belong to different services and one of them cannot be transferred to the place of the other 's posting. While choosing the career and a particular service, the couple have to bear in mind this factor and be prepared to face such a hardship if the administrative needs and transfer policy do not permit the posting of both at one place without sacrifice of the requirements of the administration and needs of other employees. In such a case the couple have to make their choice at the threshold between career prospects and family life. After giving preference to the career prospects by accepting such a promotion or any appointment in an all India service with the incident of transfer to any place in India, subordinating the need of the couple living together at one station, 'they cannot as of right claim to be relieved of the ordinary incidents of all India service and avoid transfer to a different place on the ground that the spouses thereby would be posted at different places. . . . . . . . No doubt 432 the guidelines requires the two spouses to he posted at one pi" as far as practicable, but that does not enable any spouse to claim such a posting as of right if the departmental authorities do not consider it feasible. The only thing required is that the departmental authorities should consider this aspect along with the exigencies of administration and enable the two spouses to live together at one station if it is possible without any detriment to the administrative needs and the claim of other employees." (emphasis added) The said observations in fact tend to negative the respondent 's contentions instead of supporting them. The judgment also does not support the Respondents ' contention that if such an order is questioned in a Court or the Tribunal, the authority is obliged to justify the transfer by adducing the reasons therefor. It does not also say that the Court or the Tribunal can quash the order of transfer, if any of the administrative instructions/guidelines are not followed, much less can it be charactrised as malafide for that reason. To reiterate, the order of transfer can be questioned in a court or Tribunal only where it is passed malafide or where it is made in violation of the statutory provisions. For the above reasons, the appeal is allowed. The judgment under appeal is set aside. There shall be no order as to costs. N.P.V. Appeal Allowed.

The respondent, a Central Government employee, who was transferred from one place to another, challenged the order of transfer on the grounds that: his wife was also employed at the same place in a Central Government office; his children were also studying there; he himself had suffered backbone fracture injuries some time ago; the guidelines contained in Government of India O.M. dated 3.4.1986 had not been kept in mind while ordering his transfer; some other officials, who had been serving at the same place for a longer period than the respondent had been allowed to continue and his transfer was due to the mischief of his Controlling Officer. In the counter affidavit filed by the appellants, it was submitted that the transfer was ordered on administrative grounds and was unexceptionable. , A Single Member of the Central Administrative Tribunal quashed the order of transfer on the ground that the power of transfer was not an unfettered one, but was circumscribed by various circulars/ guidelines contained in the administrative instructions issued by the Government and an order of transfer could be interdicted if it was discriminatory, that in the matter of considering transfer of an individual officer, the Office Memorandum dated 3.4.1986, educational dislocation of the children and health ground,if present deserved special consideration and that in view of the facts and circumstances of the case the transfer order in question in respect of the respondent was mala fide. 428 Allowing the appeal, preferred by the Union of India and others, this Court, HELD: 1.1 An order of transfer is an incidence of Government servie. Who should be transferred where is a matter for the appropriate authority to decide. Unless the order of transfer is vitiated by malafides or is made in violation of statutory provisions, the Court cannot interfere with it. There is no doubt that, while ordering the transfer the authority must keep in mind the guidelines issued by the Government on the subject. Similarly, if a person makes any representation with respect to his transfer, the appropriate authority must consider the same having regard to the exigencies of administration. The guidelines say that as far as possible, the husband and the wife must be posted at the same place. The said guideline, however, does not confer upon the government employee a legally enforceable right. Executive instructions issued by the Government are in the nature of guidelines. They do not have statutory force. [430 C E] 1.2. There is no dispute that the respondent is liable to transfer anywhere in India. It is not the case of the respondent that the order of his transfer was vitiated by mala fides on the part of the authority making the order, though the Tribunal says so, merely because certain guidelines issued by the Central Government were not followed. The immediate superior of unit, against whom mischief had been attributed by the respondent, has nothing to do with his transfer. [430 F] 2.1. The jurisdiction of the Central Administrative Tribunal is akin to the jurisdiction of the High Court under Article 226 of the Constitution of India in service matters, as is evident from Article 323 A of the Constitution. The constraints and norms which the High Court observes while exercising the said jurisdiction apply equally to the Tribunal created under Article 323A. The Administrative Tribunal is not an Appellate Authority sitting in judgment over the order; of transfer. It cannot substitute its own judgment for that of the authority competent to transfer. [430 H,431 A] 2.2. In the instant case, the Tribunal has dearly exceeded its jurisdiction in interfering with the order of transfer. The order of the Tribunal reads as if it were sifting in appeal over the order of transfer made by the Senior Administrative Officer (competent authority). [431 B] Bank of India vs Jagjit Singh Mehta, ; , explained.

Appeals Nos. 6 to 12 of 1963. Appeals from the judgment and decree dated February 2, 1959 of the Madras High Court in Writ Petition Nos. 1. 2, 202, 203, 204, 309 and 373 of 1958. A. Ranganadham Chetty and A. V. Rangam, for the appellants (in all the appeals). R. Gopalakrishnan, for the respondent (in C.A. No. 11/63). section V. Gupte, Additional Solicitor General and R. H. Dhebar, for interveners Nos. 1 and 2. M. C. Setalvad, N. section Bindra and R. H. Dhebar, for intervener No. 3. G. C. Kasliwal, Advocate General, Rajasthan, R. H. Dhebar and B. R. G. K. Achar, for intervener No. 4. 938 March 3, 1964. The Judgment of the Court was delivered by SHAH, J. "Whether sections 2 and 3 of the Madras Lignite (Acquisition of Land) Act XI of 1953 which seek to amend the Land Acquisition Act 1 of 1894 in their application to acquisition of lignite bearing lands are invalid because they infringe the fundamental right under article 31 of the Constitution of owners of lands whose property is to be compulsorily acquired is the only question which falls to be determined in this group of appeals. Investigations conducted by the Geological Survey of India in 1947 revealed deposits of lignite in the South Arcot District of the State of Madras, and exploratory mining operations were commenced by the Government of Madras. Discovery of deposits of lignite led to speculation in lands. On October 6, 1948, the Government of Madras issued a "Press Note" announcing that the Government proposed to undertake legislation reserving power to compel any person who had purchased land on or after a date to be prescribed in 1947 in the lignite bearing areas to sell such lands to the Government at the rate at which it was purchased. The Government also advised the owners of the lignite bearing lands in the Vriddhachalam and Cuddalore taluks not to sell their lands to speculators. On January 7, 1953, the Government of Madras published a Bill to amend the Land Acquisition Act 1 of 1894 in certain respects. The Bill was duly passed by the State Legislature on June 2, 1953 and received the assent of the President. It was published as an Act on June 10, 1953 and came into force on August 20, 1953. By this Act substantially three provisions are made: (1) that compensation for acquisition of lignitebearing lands under the Land Acquisition Act as amended, is to be assessed on the market value of the land prevailing on April 28, 1947, and not on the date on which the notification is issued under section 4(1) of the Land Acquisition Act; 939 (2) power is reserved under section 17 of the Land Acquisition Act to take possession in cases of urgency of lands for the purpose of working lignite mines in the areas in which the Madras Lignite (Acquisition of Land) Act XI of 1953 extends; and (3) in assessing the market value of the land on April 28, 1947, value of any non agricultural improvements on the land commenced, made or effected after that date are not to be taken into account, even if such improvements were made before the date of publication of the notification under section 4(1) of the Land Acquisition Act. Pursuant to this Act, notifications under section 4(1) of the Land Acquisition Act were issued between the months of January and May 1957 notifying for acquisition certain lands in Vriddachalam taluk of the South Arcot District. These notifications were followed by notifications under section 6 of the Land Acquisition Act. Between the months of May and November 1957 the Land Acquisition Officer made his awards under section 11 of the Land Acquisition Act assessing compensation on the basis of market value of the lads on April 28, 1947 and ignoring in the computation of compensation the value of houses built or other non agricultural improvements made on the land since that date. The owners of the lands affected by these awards submitted petitions under article 226 of the Constitution to the High Court of Judicature at Madras challenging the validity of the awards on the ground that the provisions of Madras Act XI of 1953 violated the fundamental right of the owners of the lands under article 31(2) of the Constitution. They claimed that the Land Acquisition Officer was bound to award compensation for acquisition of their lands and buildings at the market value prevailing on the respective dates of the notifications under section 4(1), and that awards valuing the lands at the market rate prevailing on April 28, 1947, and excluding the value of buildings constructed after that date and trees thereon were without jurisdiction. The petitioners accordingly claimed that writs of mandamus be 940 issued directing the State of Madras and the Land Acquisi tion Officers to refrain from taking possession of the land& and buildings from the petitioners without payment of adequate compensation and for other appropriate relief. The High Court upheld the contention of the petitioners and declared that the awards made on the basis of the provisions of Madras Act XI of 1953 could not be sustained. Against the order passed by the High Court, these appeals have been preferred by the State of Madras, with certificate of fitness granted by the High Court under article 132 of the Constitution. The Madras Act XI of 1953 makes an important departure from the scheme of the Land Acquisition Act 1 of 1894. Under the Land Acquisition Act 1 of 1894, a person interested in any land. compulsorily acquired is entitled to the market value of his interest in the land at the date of the publication of the notification under section 4(1), and this compensation includes the value of all improvements agricultural and non agricultural made in the land upto the date of the notification. By Madras Act XI of 1953, compensation made payable for compulsory acquisition of land is the value of the land on April 28, 1947, together with the value, of any agricultural improvements made thereon after that date and before publication of the notification under section 4(1). The result of the Madras Act is therefore to freeze for the purpose of acquisition the prices of land in the area to which it applies, and the owners are deprived of the benefit of appreciation of land values since April 28, 1947, whenever the notification under section 4(1) may be issued and also of non agricultural improvements made in the land after April 28, 1947. Departure from the provisions of the Land Acquisition Act is challenged as illegal on the ground that it deprives the owner of the land of just compensation for compulsory acquisition of his property. Madras Act XI of 1953 was passed before the Constitution (Fourth Amendment) Act, 1955 was enacted, and we have to deal with the question of the validity of the Act in the light of the constitutional provisions contained in article 31 before the constitutional amendment. We may 941 :make it clear that for the purpose of this judgment, we express no opinion on the question whether it is possible by enacting legislation after the amendment of article 31(2) by the Constitution (Fourth Amendment) Act, 1955 (which is not given any retrospective operation) to provide that compensation for compulsory acquisition of land may be fixed on the basis of market value prevailing on a date Anterior to the date of the issue of the notification under section 4(1). Article 31 before it was amended by the Constitution (Fourth Amendment) Act 1955, by its cls. (1) and (2) provided: "(1) No person shall be deprived of his property save by authority of law. (2) No property, movable or immovable, including any interest in, or in any company owning, any commercial or industrial undertaking, shall be taken possession of or acquired for public purposes under any law authorising the taking of such possession or such acquisition, unless the law provides for compensation for the property taken possession of or acquired and either fixes the amount of the compensation, or specifies the principles on which, and the manner in which, the compensation is to be determined and given. " It was held by this Court in Chiranjit Lal Chowdhuri vs, Union of India and others(1) and The State of West Benga vs Subhodh Gopal Bose and others(2) that cls. (1) and (2, of article 31 relate to the same subject of "eminent domain", By article 31 therefore every person was protected agains, deprivation, of his property save by authority of law, an( the law authorising taking possession or acquisition of property for public purposes had to fix the quantum o compensation, or to specify principles on which compensa tion was to be determined for the, property. taken possession of or acquired. Power to legislate,, in respect of compensa tion for acquisition and requisitioning of property was (1) ; (2) ; 942 contained in Entry 42 List III of the Seventh Schedule and read as follows : "Principles on which compensation for property acquired or requisitioned for the purpose of the Union or of a State or for any other public purpose is to be determined, and the form and the manner in which such compensation is to be given. " The Constitution therefore conferred by article 31(2) fundamental right upon every person, protecting his property against compulsory acquisition otherwise than by authority of law, and without just indemnification for loss suffered by him. In The State of West Bengal vs Mrs. Bela Banerjee and others(1) this Court observed that when under Entry 42 List III the Legislature was given discretionary power to, lay down the principles which should govern determination of the amount to be given to the owner of the property appropriated, such principles must ensure that what is, determined as payable must be a just equivalent of what the owner has been deprived of, and that subject to this basic limitation the Constitution allowed free play to the legislative judgment as to what principles should guide the determination of the amount payable. The Court therefore held that the West Bengal Land Development and Planning Act, 1948, which was enacted primarily for the settlement of immigrants who had migrated into West Bengal due to, communal disturbances in East Bengal and which by section 8 provided that the compensation to be awarded for compulsory acquisition to the owner of the land was not to exceed the market value on December 31, 1946, was ultravires the Constitution and void under article 31(2) of the Constitution. It was observed at p. 564 : "Turning now to the provisions relating to compensation under the impugned Act, it will be seen that the latter part of the proviso to section 8 limits the amount of compensation so as not to exceed the market 'value of the land (1) ; 943 on December 31, 1946, no matter when the land is acquired. Considering that the impugned Act is a permanent enactment and lands may be acquired under it many years after it came into force, the fixing of the market value on December 31, 1946, as the ceiling on compensation, without reference to the value of the land at the time of the acquisition is arbitrary and cannot be regarded as due com pensation in letter and spirit with the requirement of article 31(2). " That principle must apply in adjudging the validity of Madras Act XI of 1953. It may be assumed that April 28, 1947, was the date on which lignite deposits were discovered in the areas to which the Act is extended. But there is no true relation between the acquisition of the lands in these cases and fixation of compensation based on their value on the market rate prevailing on April 28, 1947. Fixation of compensation for compulsory acquisition of lands notified many years after that date, on the market value prevailing on the date on which lignite was discovered is wholly arbitrary and inconsistent with the letter and spirit of article 31(2) as it stood before it was amended by the Constitution, (Fourth Amendment) Act, 1955. If the owner is by a, constitutional guarantee protected against expropriation of ' his property otherwise than for a just monetary equivalent, a law which authorises acquisition of land not for its true. value, but for value frozen on some date anterior to the acquisition, on the assumption that all appreciation in its value since that date is attributable to purposes for which the State may use the land at some time in future, must be, regarded as infringing the fundamental right. Counsel for the State of Madras relying upon the following observation of Patanjali Sastri, C.J., in Mrs. Bela Banerjee 's case(1) at p. 564: "The fixing of an anterior date for the ascertainment of Value may not, in certain circumstances, be (1) ; 944 .lm15 a violation of the constitutional requirement as, for instance, when the proposed scheme of acquisition becomes known before it is launched and prices rise sharply in anticipation of the benefits to be derived under it, but the fixing of an anterior date, which might have no relation to the value of the land when it is acquired, may be, many years later, cannot but be regarded as arbitrary", submitted that a law which merely fixes the market value on a date anterior to the date on which the owner is expro priated of his land, as determinative of the market value on which the compensation is to be based, cannot without further enquiry be regarded as infringing article 3 1 (2) of the Constitution. In our view this observation cannot assist the State of Madras in saving the provisions of Madras Act XI of 1953 from the vice of infringing the constitutional guarantee under article 31 (2) of the Constitution. The right which is guaranteed is undoubtedly the right to just indemnification for loss, and appreciation in the market value of the land because of the proposed acquisition may in assessing compensation be ignored. Even the Land Acquisition Act provides for assessment of compensation ,on the basis of market value of the land not on the date on which interest of the owner of land is extinguished under section 16, but on the basis of market value prevailing oil the date on which the notification under section 4(1) is issued. Whether this rule in all cases irrespective of subsequent developments ensures just indemnification of the expropriated owner so as to be immune from attack, does not call for comment in this case. But any principle for determination of compensation denying to the owner all increments in value between a fixed date and the date of issue of the notification under section 4(1 ), must prima facie, be regarded as denying to him the true equivalent of, the land which is expropriated and it is for the State to show that fixation of compensation on the market value on an anterior date does not amount to a violation of the constitutional guarantee. No materials have been placed by the State before this Court ,which would support any such case. 945 it is true that, the Province of Madras had issued a 'Press Note" in 1948 announcing that the Government proposed to undertake legislation reserving the power to compel any person who had purchased land in the lignite bearing areas to sell such land to them at the rate at which it was purchased. The only intimation given thereby to the owners of lands was that the Government may undertake legislation for the purpose of purchasing lands at the price at which the speculators in land may have purchased them. There is no evidence that any scheme for acquisition of land for mining of lignite was prepared in 1947 by the Government of Madras. The mining operations in 1947 must, in the very nature of things, have been exploratory. The statement of objects and reasons for the Act clearly discloses that initially mining operations were started by the Government on a small area. Assuming that in appropriate cases, fixation of a date anterior to the publication of the notification under section 4(1) for ascertainment of market value of the land to be acquired, may not always be regarded as a violation of the constitutional guarantee, in the absence of evidence that compensation assessed on the basis of market value on such anterior date, awards to the expropriated owner a just monetary value of his property at the date on which his interest is extinguished, the provisions of the Act arbitrarily fixing compensation based on the market value at a date many years before the notification under section 4(1) was issued, cannot be regarded as valid. It is a matter of common knowledge that since the termination of hostilities in the last World War there has been an upward tendency in land values resulting in appreciation In some areas many times the original value of lands. No attempt has been made by the State to prove that appreciation in the market value of lands in the area since April 1947 was solely attributable to a scheme of land acquisition of lignite bearing lands. To deny to the owner of the land compensation at rates which justly indemnify him for his loss by awarding him compensation at rates prevailing ten years before the date on which the notification under section 4(1) was issued amounts in the circumstances to a flagrant infringement of the fundamental right of the owner of the land under article 31 (2) as it stood when the Act was enacted. 134 159 S.C. 60 946 The validity of the provision relating to fixation of compensation had to be adjudged in the light of the constitutional protection guaranteed at the date when the Act was brought into operation, and any restriction of the constitutional protection by subsequent amendment of article 31(2) which has not been given retrospective effect, must be entirely ignored. The provision which denies to the owner of land compensation for non agricultural improvements made by him since April 28, 1947, also infringes the protection of article 31(2). Under section 3(a) of the Land Acquisition Act "land" is defined as including benefits to arise out of land, and things attached to the earth or permanently fastened to anything attached to the earth, and when tinder section 4(1) land is notified for acquisition, the acquisition is of the entirety of the interest of the owner in the land including underground rights if any, crops, trees and superstructures. By the Madras Act the owner is deprived of the value of all non agricultural improvements including the value of non agricultural buildings, erected on the land after April 28, 1947. It is not clear whether the non agricultural build ings constructed after the specified date are forfeited to the State on acquisition, or the owner is entitled to remove them. In either case the owner is deprived of just value of his land including the superstructure, of which he is expro priated. Denial to the owner of the land of the value of the structures constructed by him (even of those put up after April 28, 1947, with the knowledge that the Government may undertake legislation for the purpose of compulsory acquisition of the land) would still be denying to him just compensation for the loss suffered by him on account of compulsory acquisition of his holding, and would amount to infringement of article 31(2) of the Constitution. We are therefore of the view that the provisions which require the Land Acquisition Officer and the Court to assess compensation of the land compulsorily acquired only on the market value of the land on April 28, 1947, together with the value of agricultural improvements on the land commenced, made or effected after that date, and before the date of the publication of the notification under section 4(1), 947 without taking into consideration the value of non agricul tural improvements made after that date, must be regarded as invalid. We are not called upon to express any opinion on the question whether the power reserved under section 17 of the Land Acquisition Act as amended by section 2 of Madras Act XI of 1953 to take possession of lands under the emergency clause for the purpose of working lignite mines in the areas to which the Madras Lignite (Acquisition of Land) Act, 1953, extends is invalid. No argument has been advanced by either side before us on this question. Nor was the High Court called upon to consider the validity of that provision. The appeals therefore fail and are dismissed. The respondents in this group of appeals, except in appeal No. 11 of 1963, have not appeared in this, Court. Therefore in appeal No. 11 of 1963 alone, the State of Madras will pay the costs of the respondent. There will be no order as to costs in other appeals. Appeals dismissed.

The respondents in the above appeals are owners of certain lands which are to be compulsorily acquired udder Madras Lignite (Acquion of Land) Act, 1953. This Act came into force on August 20, 53 before article 31 of the Constitution was amended by the Constituion (Fourth Amendment) Act, 1955. By the said Act substantially o provisions which are material to the present appeals were made. ,e first was that compensation for acquisition of lignite bearing lands der the Land Acquisition Act is to be assessed on the market value the land prevailing on August 28, 1947 and not on the date on which notification is issued under section 4(1) of the Land Acquisition Act. condly it was provided that in awarding compensation the value of non agricultural improvements commenced since April 28, 1947 win not taken into consideration. In accordance with the above provisions, after issuing the notices as acquired under sections 4(1) and 6 of the Land Acquisition Act the Land acquisition Officer made awards regarding the lands of the respondents. he respondents thereupon filed petitions under article 226 of the Constition before the High Court of Madras challenging the validity of the ward on the ground that the provisions of the Act relating to the ward of compensation violate article 31(2) of the Constitution [as it food before the Constitution (Fourth Amendment) Act, [955]. The High Court upheld the contention. In appeal, Held: (i) The validity of the Act impugned in the present appeal ,is to be examined in the light of the provisions of article 31 of the constitution as they stood before the Constitution (Fourth Amendment) Act, 1955. Chiranjit Lai Chowdhuri V. Union of India, [1950] S.C.R. 869, State of West Bengal vs Subodh Gopal Bose, ; , and State of lest Bengal vs Mrs. Bela Banerjee, ; , relied. 937 (ii) The principle laid down in Bela Banerjee 's case, that the ceiling on the compensation without reference to the value of the land at the time of the acquisition is arbitrary and cannot be regarded as due compensation in letter and spirit within the requirement of article 31(2), would apply to the impugned Act. Fixation of compensation for compulsory acquisition of land notified many years after that date on the market value prevailing on the date on which lignite was discovered is wholly arbitrary and inconsistent with the letter and spirit of article 31(2) as it stood before the Constitution (Fourth Amendment) Act, 1955. (iii) Any principle for determination of compensation denying to the owner all increments in value between a fixed date and the date of issue of the notice under section 4(1) of the Land Acquisition Act must prima facie, be regarded as denying him the true equivalent of the land which is ex propriated and it is for the State to show that fixation of compensation on the market value on an anterior date does not amount to a violation of the Constitutional guarantee. In the present appeals no materials have been placed by the State which would support any such case. (iv) Denial of compensation for the value of non agricultural improvements would be denying to him just compensation for the loss suffered by him on account of compulsory acquisition of his holding and would amount to infringement of article 31(2) of the Constitution.

ivil Appeal No. 353 of 1 969. From the judgment and decree dated the 19th/20th July, 1965 of the High Court of Gujarat at Ahmedabad in First Appeal No. 584 of 1960. M.N. phadke, section C. Patel and R.N. Poddar for the appellant. 552 D.V. Patel, R.A. Shraff, Gopal Subramaniam and D.P. Mohanty for the respondent. The order of the Court was delivered by KOSHAL, J. The sole respondent in this appeal died on the 10th December, 1978. He was also arraigned as an appellant in the connected appeal (Civil Appeal No. 2132 of 1977) in which an application was made on the 20th February 1979 stating the factum and the date of the demise. A copy of that application was delivered on the date last mentioned to the clerk of learned counsel for the appellant State, who, however, took no step to move the Court for having the legal representatives of the deceased respondent brought on the record in the present appeal till the 29th August, ]979 when an application was made for that purpose, but without being accompanied by any affidavit containing averments as to why the inordinate delay in filing the application should be condoned. An affidavit of the type just mentioned was filed in Court on 4th March, 198(). It is common ground between the parties that on the death of the sole respondent to the appeal the right to sue survived to his legal representatives. No application having been made within 90 days of the death, the appeal abated on the 11th March. 1979 and an application for having the abatement set aside could have been made within the period of 60 days following that date. (Article 121 of the Limitation Act). The application actually made in that behalf was thus time barred by more than 3 months and a half. Mr. Phadke, learned counsel for the appellant does not dispute this proposition. He urges. however, that the delay in making the application last mentioned should be condoned and the abatement of the appeal set aside. No sufficient cause, however, for the condonation of the delay is made out from any material on the record. As pointed out earlier, the clerk of the learned counsel for the appellant was served with a copy of the application dated 23rd February, 1979 on that date itself and no reason, good, bad or indifferent is assigned for the failure of that counsel right from the 20th February, 1979 to the 29th August, 1979 to move the Court till the 29th August, 1979 either for having the legal representatives of the deceased brought on the record or for having the abatement set aside after it had taken place. His knowledge of the death of the respondent must be attributed to the appellant State 553 also and his negligence in not moving the Court in time must be deemed to be that of the appellant. Mr. Phadke also contended that he had a strong case for the acceptance of the appeal on merits and that the same should be regarded as a very good reason for the condonation of the delay. The contention is wholly without substance. The abatement stands in the way of the appeal being heard on merits which cannot, therefore, be looked into. No grounds for the condonation of the delay having been made out we refuse to set aside the abatement. The appeal is accordingly dismissed.

Dismissing the appeal by special leave, the Court ^ HELD: The abatement stands in the way of the appeal being heard on merits. In the instant case, (a) on the death of the sole respondent to the appeal the right to sue survived to his Legal representatives; (b) no application having been made within 90 days of the death. the appeal abated on the 11th of March, 1979 and an application for having the abatement set aside could have been made within the period of 60 days following that date, under Article 121 of the Limitation Act; and (c) the application actually made to set aside the abatement was time barred by more than three months and a half. The clerk of the learned counsel for the appellant was served with a copy of the application dated 23rd February, 1979 on that date itself and no reason, good, bad or indifferent is assigned for the failure of that counsel right from the 20th February, 1979 to the 29th August, 1979 either for having the legal representatives of the deceased brought on the record or for having the abatement set aside after it had taken place. His knowledge of the death of the respondent must be attributed to the appellant State also and his negligence in not moving the Court in time must be deemed to be that of the appellant. [652 E H, 653 A, B]

ivil Appeal No. 744 of 1987. From the Judgment and Order dated 9.10.1986 of the Industrial Tribunal Karnataka in Serial No. 1/80 in I.D. No. 26 of 1979. Narayan B. Shetye, Vineet Kumar and Vinay Bhasin for the Appellant. M.C. Narasimhan and Jitender Sharma for the Respondent No. 2. The Judgment of the Court was delivered by PUNCHHI, J. Whether "night shift allowance" forms part of "wages" in the context of section 32(2)(b) of the Indus trial Disputes Act, 1947 (hereinafter referred to as 'the Act ') is the issue which crops up for decision in this appeal by special leave against the order dated October 9, 1986 of the Industrial Tribunal, Karnataka at Bangalore in Serial No. 1 of 1980 in I.D. No. 26 of 1979. It arises on these facts. Bharat Electronics Limited, Bangalore, the appellant herein, is the "management" and the respondent Shri B. Sridhar, "workman" 973 was in employment with the management as a bus driver. The establishment of the management, at the relevant time, had about 13,500 employees out of whom about 2,800 were females. The management provided transport facilities for picking up and dropping down its employees from and at stipulated official stops. The driver,, plying buses of the establish ment on a rotational basis, working on night shifts, used to get a variable night shift allowance. On May 1, 1979 the workman was detailed to work in the first shift for picking up certain employees of the second shift and general shift, and for drop. ping school children at various scheduled points. He was also detailed to pick up female employees, who were to report for the shift commencing from 10.30 a.m. to 7.00 p.m. from the stipulated official stops. En route the workman did not park his vehicle at one of the stipulat ed establishment bus stops but rather quite away from it, which caught the attention of Shri K.L. Balasubramaniam, a senior Engineer in the employment of the Management wanting to go the factory. Shri Balasubramaniam went there and in the process of boarding the bus enquired whether he could go to the factory in the same bus. He was in for a shock to see the workman indulging in sexual act with a woman in the gang way of the bus. The sudden appearance of Shri Balasubramani am surprised the workman and he abruptly and falsely replied in the negative. The matter was reported to the high offi cials of the Management. He confessed his guilt before Shri M.V. Subbarayappa, Deputy Manager, Transport. The misconduct committed by the workman became the subject matter of a domestic enquiry. At the enquiry S/Shri Balasubramaniam and Subbarayappa appeared for the management and deposed to the aforesaid facts. The Enquiry Officer found the workman guilty of the misconduct imputed under Standing Orders 15(1)(h) and 15(1)(r) of the Standing Orders of the Company. The workman was thereafter dismissed from service with effect from December 31, 1979. On that very day, the management sought approval from the Industrial Tribunal, Karnataka at Bangalore under section 33(2)(b) of the Act of the action taken and towards meeting the requirement of the provision paid to the workman before hand a sum of Rs.607.90 as wages for one month, Before the Industrial Tribunal the workman filed an objection statement raising various contentions denying inter alia the allegations made against him and challenging the validity of the domestic enquiry. It somehow kept pend ing for over six years though under the unamended section 32(5), it was required of the Tribunal to without delay hear the application and pass such order in relation thereto as it deemed fit. Now with effect from 21 8 1984, three months time limit is 974 fixed though extendable by an order in writing. Anyway while that was in progress, he made an application on July 13, 1986 before the Tribunal seeking amendment of the objection petition enabling him to urge an additional ground to the effect that one month 's wages paid to him were short by Rs. 12, the monthly sum due for night shift ' allowance. The additional objection was based on the premises that since the workman was ordinarily expected to work on night shift on a rotational basis as per the Standing Orders of the Company, such allowance should have formed part of the wages. On that basis it was urged that since full wages had not been paid to the workman, there was a serious infraction of the provisions of section 33(2)(b) warranting the sought for approval to be declined. The management could not, and did not, deny that factu ally the night shift allowance had not been included in one month 's wages as paid to the workman. The management however maintained that the question of the validity of the domestic enquiry, which the Tribunal had already undertaken, should first be settled and that in any case the additional objec tion raised by the workman required leading evidence. The management further contended that the night shift allowance was neither paid nor was payable to the workman as he could not be said to have earned it automatically as part of wages unless he had actually worked on the night shift. It was pointed out that the said allowance was variable in nature depending upon the number of shifts in which the workman had actually performed work. It was asserted that the night shift allowance is not payable to the workman when he does not come for work for any reason and thus was not such allowance which would automatically flow even without work ing. Lastly it was projected that since during the pendency of the domestic enquiry the workman was under suspension there could otherwise arise no occasion for his coming on duty to earn the night shift allowance. The Presiding Officer, Industrial Tribunal, Bangalore relying on the views expressed by an Hon 'ble Single Judge of the Karnataka High Court in Writ Petition No. 6607 of 1985 decided on August 28, 1986, titled Ramakrishnappa vs The Industrial Tribunal & Another, sustained the objection of the workman taking the view that night shift allowance should have formed part of one month 's wages and on that score went alongwith the workman in abandoning giving any finding the validity of domestic enquiry. Consequentially for the view so taken the management was declined approval to the dismissal of the workman. So the order of the Tribu nal taking that view is directly under attack in this appeal by special leave and indirectly at issue is the 975 correctness of the decision of the Karnataka High Court in Ramakrishnappa 's case aforementioned. Two provisions of the Act which would require being adverted to are these. Section 2(rr) provides the definition to the word "wages". It reads as follows: "2. DEFINITIONS In this Act, unless there is anything repugnant in the subject or context, (rr) 'wages ' means all remunerations capable of being expressed in terms of money, which would, if the terms of employment, expressed or implied, were fulfilled, be payable to a workman in respect of his employment, or of work done in such employment, and includes (i) such allowances (including dearness allowance) as the workman is for the time being entitled to; (ii) the value of any house accommodation, or of supply of light, water, medical attendance or other amenity or of any service or of any concessional supply of food grains or other articles; (iii) any travelling concession; (iv) any commission payable on the promotion of sales or business or both; but does not include (a) any bonus; (b) any contribution paid or payable by the em ployer to any pension fund or provident fund or for the benefit of the workman under any law for the time being in force; (c) any gratuity payable on the termination of his service; Section 33(2)(b) as extracted reads as follows: 976 "33. CONDITIONS OF SERVICE, ETC. TO REMAIN UNCHANGED UNDER CERTAIN CIRCUMSTANCES DURING PENDENCY OF PROCEEDINGS (2) During the pendency of any such proceeding in respect of an industrial dispute, the employer may, in accordance with the standing orders applicable to a workman concerned in such dispute for where there are no such stand ing orders, in accordance with the terms of the contract, whether express or implied, between him and the workman], (b) for any misconduct not connected with the dispute, discharge or punish, whether by dismissal or other wise, that workman: Provided that no such workman shall be discharged or dismissed, unless he has been paid wages for one month and an application has been made by the employer to the authority before which the proceeding is pending for approv al of the action taken by the employer. " It is not disputed that section 33(2)(b) was attracted to the facts of this case. The only point, as said before, is whether night shift allowance was to be paid to the workman as part of wages even though he had not factually worked on the night shift. The definition of the word "wages", as given in clause (rr) of section 2 is comprehensive enough to include (vide inclusion 1) such of the allowances as the workman is for the time being entitled. Yet, despite such comprehension, the inclusive meaning is subject to a meaningful change if there is anything repugnant in the subject or context. The proviso to section 33(2)(b) mandates that unless the workman is paid wages for one month and an application as contem plated is made by the employer for approval of his action, no such workman can be discharged or dismissed. The inten tion of the legislature in providing for such a contingency is not far to seek and as was pointed out by this Court in the case of Syndicate Bank Limited vs Ram Nath Bhat, [1967 68] (XXXII) FJR 490 at 497 was "to soften the rigour of unemployment that will face the workman, against whom an order of discharge or dismissal has been passed". One month 's wages as thought and provided to be given are con ceptually for the month to 977 follow, the month of unemployment and in the context wages for the month following the date of dismissal and not a repetitive wage of the month previous to the date of dis missal. If the converse is read in the context of the provi so to section 32(b), it inevitably would have to be read as double the wages as earned in the month previous to the date of dismissal and that would, in our view be, reading in the provision something which is not there, either expressly or impliedly. We have thus to blend the contextual interpreta tion with the conceptual interpretation to come to the view that night shift allowance could never be part of wages, and those would be due only in the event of working. This Court in M/s. Podar Mills Ltd. vs Bhagwan Singh and Another, ruled that the date of dismissal under section 33(2)(b) is the date when the approval application is filed, after dissmissal With effect from that date, the occasion to earn night shift allowance cannot, and will not, arise. This Court in Bennett Coleman & Co. (P) Ltd. vs Punya Priya Das Gupta, ; was called upon to rule whether car allowance and benefit of free telephone and newspaper were such allowances, includable in wages under section 2(rr) of the Act in order to determine a claim of gratuity of a journalist. This Court held as follows: "Since wages has not been defined in the Act, its meaning is the same as assigned to it in the . Under section 2(rr) of that Act, "wages" means all remuneration capable of being expressed in terms of money, which would, if the terms of employment, expressed or implied, were fulfilled, be payable to a workman in respect of his employ ment or of work done in such employment, and includes (i) such allowances (including dearness allowance) as the work man is for the time being entitled to; (ii) the value of any house accommodation, or of supply of light, water, medical attendance or other amenity or of any service or of any concessional supply of food grains or other articles; (iii) any travelling concession; but does not include any bonus and other items mentioned therein. Mr. Ramamurthi 's argument was that the car allowance as also the benefit of the free telephone and newspapers would fall under the first part of the definition as they are remuneration capable of being expressed in terms of money. The argument, however, cannot be accepted as neither of them can be said to be remunera tion payable in respect of emp 978 1oyment or work done in such employment. Neither the car allowance nor the benefit of the free telephone was given to the respondent in respect of his employment or work done in such employment as the use of the car and the telephone was not restricted to the employment, or the work of the re spondent as the special correspondent. There was no evidence that the car allowance was fixed after taking into consider ation the expenses which he would have ordinarily to incur in connection with his employment or the work done in such employment. Even if the respondent had not used the car for conveying himself to the office or to other places connected with his employment and had used other alternative or cheap er means of conveyances or none at all, the car allowance would still have had to be paid. So too, the bills for the telephone and the newspapers whether he used them or not in connection with his employment or his work as the special correspondent. Therefore we have to turn to the latter part of the definition and see if the two items properly fall under. So far as the car allowance is concerned, there was, as aforesaid, nothing to suggest that it was paid to reim burse him of the expenses of conveyance which he would have to incur for discharging his duties as the special corre spondent, or that it was anything else than an allowance within the meaning of section 2(rr) of that Act. It would, there fore, fall under the inclusive part (i) of the definition. Likewise, the benefit of the telephone and newspapers was allowed to the respondent and merely for the use thereof in connection with his employment or duties connected with it. Both the car allowance and the benefit of the free telephone and newspapers appear to have been allowed to him to direct ly reduce the expenditure which would otherwise have gone into his family budget and were therefore items relevant in fixation of fair wages. [See Hindustan Antibiotics Ltd. vs Workmen, That being the position, the two items could on the facts and circumstances of the present case be properly regarded as part of the respondent 's wages and had to be taken into calculations of the gratuity pay able to him." (Emphasis supplied) The above extract and more so the emphasised words are significant to convey that the car allowance and the bene fits of free telephone and newspapers were held allowances includable in wages in the 979 facts and circumstances of that case. These allowances were held part of the wages of the journalist on the finding that he was entitled to them not as remuneration capable of being expressed in terms of money but as allowances within the meaning of the First inclusion. In Dilbagh RaiJarry vs Union of India & Ors., ; this Court was required to determine whether "run ning allowance" formed part of wages for the purpose of . That was a case in which a railway guard, who was convicted in a criminal case but later acquitted, and who in the meantime had been dismissed from service but his dismissal too had been upset by the High Court followed by his reinstatement, had asked for back wages for the period between the date of his dismissal and the date of reinstatement. Finally he was let to this Court reiterating his claim that a running allowance was part of his wages which he would have earned while on duty. This Court in that context observed as follows: Mr. Bishan Narain further contends that Running Allowance was a part of the pay or substantive wages. In support of this argument he has invited our attention to rule 2003 of the Railway Establishment Code, clause 2 of which defines 'average pay '. According to the second proviso to this clause in the case of staff entitled to running allowance, average pay for the purpose of leave salary shall include the average running allowance earned during the months immediately preceding the month in which a Railway servant proceeds on leave subject to a maximum of 75 per cent of average pay for the said period, the average running allow ance once determined remaining in operation during the remaining part of the financial year in cases of leave not exceeding one month. The crucial words, which have been underlined, show that such Running Allowance is counted towards 'average pay ' in those cases only where the leave does not exceed one month. It cannot, therefore, be said that Running Allowance was due to the appellant as part of his wages for the entire period of his in active service. Travelling allowance or running allowance is eligible if the officer has travelled or run, not otherwise. We therefore negative this contention. " (Emphasis supplied) It is noteworthy that running allowance or travelling allow ance, as the 980 case may be, had to be earned by actually travelling or running, and not otherwise, as held in Dilbagh Rai Jarry 's case (supra). Only a fiction was available for a limited period as per Clause 2003 of the Railway Establishment Code. The average running allowance once determined in accordance with the Clause, afore quoted, was to remain operative during the remaining part of the financial year only in those cases where the employee had taken leave not exceeding one month, and not otherwise. In cases of leave exceeding one month the fiction on its 'own dropped. Now confluencing the two legal thoughts expressed in Bennett Coleman 's case (supra) and Dilbagh Rai Jarry 's case (supra), the stream of thought which inevitably gurgles up is that an allowance which from the term of employment flows as not contingent on actual working is part of wages for the purposes of section 33(2)(b) but an allowance which is earnable only by active serving is not an allowance which will form part of wages, within the meaning of the said provision. In Ramakrishnappa 's case Hon 'ble Single Judge of the Karnataka High Court employed Bennett Coleman 's case to come to the conclusion that night shift allowance was part of the wages by observing as follows: "Therefore, I find it difficult to accede to the contention of the management that conveyance allowance, night shift allowance and turnout allowance were not wages as defined in section 2(rr) of the Act, and therefore, they were not required to be included in computing the wages of the petitioner for one month. The decision of the Supreme Court in Bennett Coleman and Co. [1970] 37 FJR 498; AIR 1970 SC 427, though it arose in the context of quantification of gratuity, the view taken therein that the allowances given for purchase of newspapers, towards telephone and conveyance also should be calculated in computing one month 's wages for the purpose of computing gratuity, sup~ ports the construc tion placed on section 2(rr) of the Act for the petitioner, for, the Supreme Court invoked the said definition as the word "wages" had not been defined in the Working Journalists (Conditions of Service and Miscellaneous Provisions) Act, 1955. In the Case of Jarry; , , on which the learned counsel for the second respondent relied, the ques tion decided was, whether 981 wages payable to a railway guard for the period he was kept out of service consequent on his dismissal from service till he was reinstated included the amount of running allowance, which was under the rules payable only if the railway serv ant had gone on duty, and the Supreme Court held that it was not, in view of the condition. Section 2(rr) of the Act did not come up for consideration in that case and, therefore, not apposite to this case. " This view, as said before, was adopted by the Tribunal to decline approval to the management. But for reasons set out before, we are of the view that the Hon 'ble Single Judge fell into an error in enlarging the scope of Bennett Cole man 's case and dwarfing that of Dilbagh Rai Jarry 's case. Thus the conclusion is inescapable that the workman had to earn night shift allowance by actually working in the night shift and his claim to that allowance was contingent upon his reporting to duty and being put to that shift. The night shift allowance automatically did not form part of his wages and it was not such an allowance like in Bennett Coleman 's case which flowed to him as his entitlement not restricted to his service. Thus we hold that the Tribunal fell into a grave error in declining the application of the management for approval on the ground of short payment of Rs. 12 on account of night shift allowance, which the workman suppos edly would have earned had he gone to report on duty, which in the circumstances he could not, or having worked rota tionally at night, which he did not, and that too fictional ly, in the month following the month and the date of the application, on which date the dismissal was to be effec tive. We cannot refrain from expressing our concern to the manner in which the other issue before the Tribunal regard ing the validity of the domestic enquiry was side tracked. Had there been a finding on the same, one way or the other, we could have easily finalised the matter. For over six years the matter on that count was kept pending and the additional objection being permitted to be raised was unac countably abandoned. The matter could have in this situation been sent back to the Tribunal but at this late stage we do not propose to do so and are inclined to close the matter, as we are otherwise satisfied that plea about the validity of the domestic enquiry was without merit and even though raised was by conduct abandoned. Before concluding the judgment the observations in Syndicate Bank 's case, afore quoted, are again to be borne to mind. In the facts and circumstances of this case the management paid to the workman a 982 sum of Rs.607.90 as a month 's salary "to soften the rigour of unemployment that will face the workman". How could a short payment of Rs. 12 be said to have lessened the soften ing of such rigour is thought stirring. Viewed in the con text, there could genuinely be a dispute, as in the present case, as to whether a particular sum was due as wages. It is, of course, risky for the management to raise it as to pay even a paise less than the month 's wages due under section 33(2)(b), would be fatal to its permission sought. But at the same time it needs to be clarified that it is for the management to establish, when questioned, that the sum paid to the workman under section 33(2)(b) represented full wages of the month following the date of discharge or dis missal, as conceived of in the provision and as interpreted by us in entwining the ratios in Bennett Coleman 's case (supra) and Dilbagh Rai Jarrv 's case (supra) and adding something ourselves thereto. Thus for the foregoing reasons, we allow this appeal, set aside the judgment and order of the Industrial Tribunal, Karnataka at Bangalore and allow the application of the management under section 33(2)(b) of the without any order as to costs. R.N.J. Appeal allowed.

Respondent workman was in employment of the Appellant management as Bus driver. Following an incident of miscon duct committed by him, a domestic inquiry was conducted against him under Standing Orders 15(1)(b) and 15(1)(r) of the Company wherein he was held guilty by the Enquiry Offi cer and was eventually dismissed from the service w .e.f. 31.12.1979. On that day itself the management moved an application before the Industrial Tribunal under section 33(2)(b) of the Act for approval of the action taken and towards meeting the requirements of the provisions of the act paid to the workman before hand wages for one month. The workman filed his objection Statement to that application raising several contentions denying all the allegations made against him and challenging the validity of the domestic enquiry. This application somehow was kept pending by the Tribunal for over six years when sometime in July, 1986 the workman moved an application before the Tribunal seeking amendment of his objection petition to urge an additional ground that one month 's wages paid to him were short by Rs. 12, being the monthly night shift allowance as he was ordi narily expected to work by rotation as per standing orders of the Company and thus as full one month 's wages had not been paid to him as required under section 33(2)(b) of the Act, the approval sought for ought to be declined. The management contended that the night shift allowance is neither paid nor payable unless the night shift is actually performed and thus this amount cannot form part of the month 's wages automatically. The Industrial Tribunal while abandoning giving any finding on the validity of the domes tic enquiry, upheld the additional objection taken by the workman and declined the management 's application seeking approval to the dismissal of the workman. Hence this appeal by special leave by the management. Setting aside the im pugned judgment and order of the Tribunal and allowing their application made under section 33(2)(b) of the , this Court in allowing the appeal, 972 HELD: The workman had to earn night shift allowance by actually working in the night shift and his claim to that allowance was contingent upon his reporting to duty and being put to that shift. The night shift allowance did not automatically form part of his wages and it was not such an allowance which flowed to him as an entitlement of his service. [981C] The Tribunal fell into a grave error in declining the application of the management for approval on the ground of short payment of Rs. 12 on account of night shift allowance, which the workman supposedly would have earned had he gone to report for duty. [981D] Syndicate Bank Limited vs Ram Nath Bhat, [1967 68] (XXXX) FJR 490 at 497; M/s. Podar Mills Ltd. vs Bhagwan Singh and Another, [4974] 3 SCC 157; Bennett Coleman & Co. (P) Ltd. vs Punya Priya Das Gupta, ; and Dilbagh Rai Jarry vs Union of India & Ors., ; referred to.

N: Criminal Appeal No. 38 of 1950. Appeal from the judgment and order of the High Court of Patiala (Teja Singh C.J., and Gurnam Singh J.) dated 5th October, 1950, in Criminal Appeal No. 28 of 1950, affirming the conviction and sentence of the appellant by the Sessions Judge of Sangrur. Gopal Singh and Kartar Singh, for the appellant. Narinder Singh, Advocate General for the Patiala and East Punjab States Union (Jindra Lal, with him) for the respond ent. Jai Gopal Sethi (R. L. Kohli, with him) for the Cavea tor. 1951. December 19. The Judgment of the Court was deliv ered by FAZL ALl J. This is an appeal against the judgment of the High Court at Patiala upholding the conviction and sentence of the appellant, who was tried by the Sessions Judge of Sangrut for the offence of murder and sentenced to death. 373 The prosecution story is a somewhat long and complicated one, but ignoring unnecessary details, the material facts may be shortly stated as follows : On the 5th October, 1949, there was a quarrel between the appellant and one Darbara Singh, in the course of which the appellant attacked the latter with a phawra (a cutting instrument). About that time, Gurmail Singh, the deceased person, returned to his house, which was close to the house of Darbara Singh, from his cotton field, where he had been working, in order to take tea for his companions who were still working in his field. The appellant asked Gutmail Singh to lend him a spear to enable him to kill Darbara Singh, but since the latter refused to do so, there ensued a quarrel between him and the appellant, in the course of which they exchanged abuses and grappled with each other, and the fight was stopped only by the intervention of cer tain persons present at the place. It appears that the appellant was greatly affected by this quarrel, and thereaf ter he is said to have armed himself with a rifle and at tacked 3 persons in the vicinity of Gurmail Singh 's cotton field. He fired firstly at Kartar Singh, son of Satwan Singh, while the latter was returning to his house from the field of Gutmail Singh, but he was not hurt. Soon after that, while Gurmail Singh was returning to his field after attending to his buffaloes in a garden which was nearby, the appellant chased him and fired at him thereby causing his instantaneous death. Lastly, he is said to have fired at Kartar Singh, son of Bishan Singh and one Jangir Singh, while they were raising an alarm, but the bullet missed them. Upon these allegations, the following three charges were framed against him : "(1) That you. fired a shot at Gurmail Singh deceased with rifle P.I. with the intention of killing him and caused his death and thereby committed an offence pun ishable under section 302. (2) That you. fired a shot at Kartar Singh and Jangir Singh with rifle P.I. with the intention of causing death and made an attempt to cause their death 374 section 307. . (3) That you. . fired a gun shot at Kartar Singh s/o Satwan Singh. with the intention of killing him and made an attempt to cause his death and thereby committed an offence punishable under section 307. " It appears that the appellant was an Instructor in the Home Guards. and the rifle which he is said to have used had been given to him by his superior officer with 20 rounds of ammunition. To support their version of the occurrence, the prosecu tion examined 3 eye witnesses whose evidence has been ac cepted by both the courts below after careful scrutiny. The learned Sessions Judge acquitted the appellant of the second and third charges under section 307 of the Indian Penal Code, holding that there was no convincing evidence that the appellant intended to murder Jangit Singh and the other 2 persons. He however convicted him of the first charge under section 302 of the Indian Penal Code and sentenced him to death, which sentence was later confirmed by the High Court. The learned counsel for the appellant had very little to argue on the merits of the case, but he seriously contended that there had been a misjoinder of charges which could not be tried together under the law, and the illegality so committed had vitiated the whole trial of the appellant. It appears that in the High Court, the line of argument on this point was somewhat different from the line adopted in this court. What was stressed in that court seems to have been that the three incidents in respect of which the appellant was charged not having happened in the course of the same transaction, they could not have been properly made the subject of one trial, and for this contention reliance was placed mainly on section 235 (1)of the Criminal Procedure Code, which provides that "if, in one series of acts so connected together as to form the same transaction, more offences than one are committed by the same person, he may be at one trial for, every such offence. " It should be noted 375 that that section is only one of the exceptions to the general rule laid down in section 233 of the Code that for every distinct offence, there shall be a separate charge and every such charge shall be tried separately. In this court, no reference was made to section 235, but the argument was confined to the question as to whether the present case falls within another exception of section 23 '3 which is contained in section 234 (1) which runs as 'follows : "When a person is accused of more offences than one of the same kind committed within the space of twelve months from the first to the last of such offences, whether in respect of the same person or not, he may be charged with, and tried at one trial for any number of them not exceeding three. " It was argued before us that even though only 3 charges have been framed against the appellant, he has in fact been tried for 4 offences and not 3. The 4 offences are said to be these : (1) Committing the murder of Gurmail Singh; (2) Attempting to murder Kartar Singh, son of Sarwan Singh; (3) Attempting to murder Jangit Singh; and (4) Attempting to murder Kartar Singh, son of Bishan Singh. The learned counsel contended that the fact that the appellant has been acquitted of the last 3 offences and convicted only of the first offence was immaterial to the point raised by him, and we have only to see whether all the offences mentioned above could be properly tried together. In our opinion, the short reply to this contention is that the second charge which relates to the appellant firing at Kartar Singh and Jangir Singh is not a charge with respect to 2 offences but is a charge with respect to one offence only. The evidence adduced by the prosecution shows that the appellant fired only one bullet. The word "offence" has been defined in the Criminal Procedure Code as meaning "any act or omission made punishable by any law for the time being in force". There seems to be 49 376 nothing wrong in law to regard the single act of firing by the appellant as one offence only. On the other hand, we think that it would be taking an extremely narrow and arti ficial view to split it into 2 offences. There are several reported cases in which a similar view has been taken, and in our opinion they have not been incorrectly decided. In Queen Empress vs Raghu Rai(1), where a person stole several bullocks from the same herdsman at the same time, it was held that only one offence had been committed. In Promotha Nath Ray vs King Emperor(2), it was held that misappropria tion in regard to several account books constituted only one offence. In Johan Subarna vs King EmPeror(3), it was held that when an attempt to cheat a number of men by speaking to them in a body had been committed, one joint charge was valid. In Poonit Singh vs Madho Bhot (4), it was held that only one offence had been committed by a person who gave false information in one statement to the police against 2 persons. In Sudheendrakumar Ray vs Emperor(5), a person who was chased by 2 constables had fired at them several times, but it seems to have been rightly assumed that the firing did not constitute more than one offence, though the point was not specifically raised or decided. In our opinion, there is no substance in the point raised, though we should not be understood as laying down the wide proposition that in no case can a single act constitute more than one of fence. The other points urged on behalf of the appellant before us were somewhat unsubstantial points relating to the merits of the case, which it is not usual for this court to allow to be raised in appeals by special leave. In our opinion, this appeal is without merit, and it is accordingly dismissed. Appeal dismissed. Agent for the caveator: Vidya Sagar.

The appellant was tried in respect of the following charges: (i) causing the death of A and thereby committing an offence punishable under section 302, Penal Code, (ii) firing a shot at B and 372 C with the intention of causing their death and thereby committing an offence punishable under section 307, Penal Code, and (iii) firing a shot at D with the intention of killing him and thereby committing an offence punishable under section 307, Penal Code. It was contended on his behalf that there was a misjoinder of charges as the second charge was really a charge in respect of two offences viz., attempt to murder B and attempt to murder C and the accused had therefore been charged with, and tried for, more than three offences in contravention of section 234 (1) of the Criminal Procedure Code :.Held, that there was nothing wrong in the trial as the single act of firing a shot at B and C is one offence and not two offences and the trial was not bad for misjoinder of charges. [Their Lordships however observed that they should not be understood as laying down the wide proposition that in no case can a single act constitute more than one of fence.] Promotha Natha Roy vs King Emperor , Johan Subarna vs King Emperor , Poonit Singh vs Madho Bhot (I.L.R. and Sudheendra Kumar Roy vs Emperor (I.L.R. approved.

ls Nos. 140 to 143 and 156 and 157 of 1953. Appeals by special leave granted by the Supreme Court by its Order dated the 23rd April, 1953, from the decision dated the 19th December, 1952, of the Labour Appellate Tribunal of India, Third Bench, Madras, in Appeals Nos. 245/52, 246/52, 247/52 and 248/52. 466 C.K. Daphtary, Solicitor General for India, (I. B. Dadachanji, with him) for the appellants in all the appeals. S.Mohan Kumaramangalam for the respondents in Civil Appeals Nos. 140 to 143. H. J. Umrigar for the respondents in Civil Appeals Nos. 156 and 157. October 8. The Judgment of the Court was delivered by MAHAJAN J. The Government of Mysore by a notification dated 15th June, 1951, under powers conferred by section 7 of the Industrial *Disputes Act, 1947, constituted an Industrial Tribunal for a period of one year consisting of a chairman and two members for the adjudication of industrial disputes in accordance with the provisions of the Act. It appointed the following persons as chairman and members thereof: Chairman : Rajadharmaprasakta T. Singaravelu Mudaliar. Members : Janab Mohamed Sheriff. Sri section Rangaramiah. Two disputes between the management and the workers of the Minerva Mills Ltd., Bangalore, and two other disputes between the management and workers of the Mysore Spinning and Manufacturing Co. Ltd., Bangalore, were referred to the said Industrial Tribunal under section 10 (1) )c) of the Act for adjudication. Several other disputes were also referred for adjudication to the same tribunal. Till the 15th June, 1952, when the period of one year expired, the tribunal had only disposed of 5 out of the 22 disputes referred to it. In the four disputes with which we are concerned ,the tribunal had only framed issues and had not proceeded to record any evidence. On 27th June, 1952, the Government by another notification constituted another tribunal for adjudication of these disputes and acting under section 10(1) (c) of the Act referred all the disputes left undisposed of by the first tribunal to the newly constituted 467 tribunal. This notification was not very happily worded and has been the subject matter of a good deal of comment in the courts below and also before us. It runs thus : "Whereas under Notification No. L.S. 1075 L.W. 68 51 2, dated 15th June, 1951 an Industrial Tribunal for the adjudication of industrial disputes in accordance with the provisions of the , was constituted for a period of one year, And whereas the said period of one year has expired creating a vacancy in the office of both the chairman and the two members, namely, Chairman: Sri B. R. Ramalingiah. Members : Janab Mohamad Sheriff. Sri section Rangaramiah. Now therefore in exercise of the power conferred under sections 7 and 8 of the , H.H. the Maharaja of Mysore is hereby pleased to constitute an Industrial Tribunal for adjudication of industrial disputes in the Mysore State in accordance with the provisions of the Act and further to appoint the following persons as chairman and members thereof Chairman Sri B. R. Ramalingiah. Members Janab Mohamad Sheriff. Sri K. Shamaraja Iyengar. Under section 10 (1) (c) of the , H. H. the Maharaja is pleased to direct that the tribunal now constituted under this notification shall hear and dispose of all the references made to the previous tribunal constituted under the notification of 15th June, 1951, and which have remained undisposed of on 15th June, 1952. " When the second tribunal proceeded to hear the four disputes which are the subject matter of these appeals, the employers raised a number of preliminary objections regarding the jurisdiction of the tribunal to hear and dispose of the disputes, the principal contentions being, (1) that the time limit of one year fixed 468 for die life of the first tribunal was unauthorized illegal and therefore the first tribunal continued to exist in spite of the expiry of that period; (2) that the Government could not withdraw the disputes referred to the first tribunal,from it, so long as the members of the first tribunal were available for discharging their duties and. that section 8 had no application to the facts of this case ; and (3) that the trial of these disputes by the newly constituted tribunal, even if,it had jurisdiction to entertain them, could not be started from the stage at which they were left by the first tribunal and should begin de novo. The employees contested these propositions and contended that it was competent for the Government to constitute one or more Industrial Tribunals under section 7 and it was open to it to prescribe that these tribunals should function for a limited period; that the notification dated the 27th June, 1952, was valid both under sections 7 and 8 of the Act and the second tribunal was properly constituted and had jurisdiction over the disputes referred to it under section 10 (1) (c) of the Act and that there was no need for a de novo trial in law. The second tribunal rejected the preliminary objections raised by the employers and came to the conclusion that the Government was competent to constitute the first tribunal for a limited period, that the second tribunal was properly constituted and that the references made were proper and could be proceeded with from the stage at which the first tribunal had left them. Against this order the employers preferred appeals ' to the Labour Appellate Tribunal, Nos. 245 to 248 of 1952. They also filed writ applications under article, 226 of the Constitution of India before the Court, C.P. Nos. 79 and 80 of 1952 53, for the issue of writs of prohibition prohibiting the second tribunal from proceeding with the adjudication of the four disputes, the subject matter of the appeals. The points that arose for decision in the appeals as well as in the writ applications were substantially the same. In these circumstances the High Court postponed hearing the 469 writ applications till the appeals had been heard by the Labour Appellate Tribunal. The Labour Appellate Tribunal by its order dated 19th December, 1952, dismissed all the 'appeals and subsequently the High Court of Mysore by its order dated 25th March, 1953, also dismissed the writ applications. It, however, granted the employers a certificate of leave to appeal to this court. The employers filed applications for special leave to appeal against the order of the Labour Appellate Tribunal passed in the appeals before it, and this court granted special leave to appeal by an order dated 23rd April, 1953. The result is that we have four appeals now before us against the order of the Labour Appellate Tribunal, C.A. Nos. 140 to 143 of 1953 and two appeals before us from the order of the High Court refusing the application of the employers under article 226 of Constitu tion, C.A. Nos. 156 and 157 of 1953. As all these appeals raise a common question of law they can conveniently be disposed of by one judgment. Mr. Daphtary, who appeared for the employers, contended that the four disputes between the ,employers and employees that were referred to the Industrial Tribunal constituted by the notification of 15th June, 1951, were still in law pending before that tribunal and it was that tribunal and that tribunal alone that could adjudicate on them and give its award on them and that the second tribunal constituted by the notification of 27th June, 1952, had no jurisdiction to entertain the references or to give any awards concerning them. It was contended that under the there is no power in the Government for appointing a tribunal for a limited duration, and that its power is only to constitute a tribunal and to refer certain disputes to it. It is said that in the provisions of the Act it is implicit that a tribunal once appointed can cease to function only after the references made to, it have been exhausted, i.e., after it has given its award. It 6 83 S.C. India/59. 470 was further urged that there is no power in the Government once it has made a reference under section 10 of the Act to withdraw it from the tribunal and to hand it over to another tribunal. It was suggested that the members of the first tribunal should be directed to hear those references and to give their award. In our opinion, none of these contentions can be sustained on the provisions of the Act Section 7 of the Act provides as follows : "The appropriate Government may constitute one or more Industrial Tribunals for the adjudication of industrial disputes in accordance with the provisions of this Act. (2)A tribunal shall consist of such number of independent members as the appropriate Government may think fit to appoint, and where the tribunal consists of two or more members, one of them shall be appointed as the chairman thereof . . ". Section 8 provides that if for any reason a vacancy occurs in the office of the chairman or any other member of a court or tribunal, the appropriate Government shall, in the case of a chairman, and may, in the case of any other member, appoint another independent person, in accordance with the ' provisions of section 6 or section 7, as the case may be, to fill the vacancy, and the proceedings may be continued before the court or the tribunal so reconstituted. Section 7 does not restrict or limit the powers of the Government in any manner and does not provide that a tribunal cannot be constituted for a limited period or for deciding a limited number of disputes. From the very nature and purpose for which Industrial Tribunals are constituted it is quite clear that such tribunals are not to be constituted permanently. It is only when some industrial disputes arise that such tribunals are constituted and normally such tribunals function so long as the disputes referred to them are not disposed of. But from this circumstance it cannot be inferred that it is not open to the Government to fix a time limit for the life of these tribunals in order 471 to see that they function expeditiously and do not prolong their own existence by acting in a dilatory manner. Mr. Daphtary, however, contended that though the language of section 7 was wide enough to include within its phraseology a power in the Government to constitute tribunals for any period of time it thought fit, this wide construction of its language had been limited by the other provisions of the Act. He made reference to the provisions of section 4 which deals with conciliation officers. Sub section (2) of section 4 provides that a conciliation officer may be appointed for a specified area or for specified industries in a specified area or for one or more specified industries and either permanently or for a limited period. It is obvious that the nature of duties of conciliation officers being of a different character, provision has been made that they may be either appointed permanently or for a limited period. From these provisions it is difficult to infer the same or a different intention regarding Industrial Tribunals. They may well be appointed ad hoc for a particular dispute. It was for this reason that no restriction was placed on the powers of Government regarding the constitution of tribunals, and Government was given very wide discretion and it could appoint them for any limited time or for a particular case or cases as it thought fit and as the situation in a particular area or a particular case demanded. Reference was then made to the provisions of sections 15 to 20 of the Act for the proposition that once a reference is made to a tribunal, the adjudication must be ,concluded by that tribunal and that tribunal alone must give the award, and that the life of the tribunal cannot be cut short between the date of the reference of the dispute for adjudication and the date of the award. Section 15 provides that where an industrial dispute has been referred to a Tribunal for adjudication, it shall hold its proceedings expeditiously and shall, as soon as practicable, on the conclusion thereof, submit its award to the appropriate Government. We are unable to see that any inference 472 can be raised from the provisions of the section supporting the contention of Mr. Daphtary. This is a provision directing the tribunal to function expeditiously and give its award as soon as possible. Section 20(3) is in these terms "Proceedings before a tribunal shall be deemed to have commenced on the date of the reference of dispute for adjudication and such proceedings shall be deemed to have concluded on the date on which the award becomes enforceable under section 17 A." This section lays down the date or the terminus a quo for the termination and commencement of the proceedings. It is difficult to see that it in any way cuts the power of the Government to appoint a tribunal for a limited duration. Reference was also made to the provisions of section 33 which relate to the conditions of service during the pendency of the proceedings in adjudication. It is provided therein that there shall be no change in the conditions of service of the workmen pending adjudication. In our opinion, the Labour Appellate Tribunal and the High Court were right in holding that from these provisions it could not be held that it was implicit in section 7 that the Government could not withdraw a dispute referred to a tribunal or make the appointment of a tribunal for a limited period of time. In our opinion, under the provisions of section 7, the appropriate Government has ample power of constituting a tribunal for a limited time, intending thereby that its life would automatically come to an end on the expiry of that time. The contention therefore of Mr. Daphtary that the notification appointing the first tribunal for a period I of one year was illegal and that the first tribunal continues to exist is without force. His further contention that the Government could not withdraw the dispute referred to the first tribunal so long as the members of the first tribunal were available and could not hand it over to the 'second tribunal cannot also be sustained.

Under Section 7 of the , the appropriate Government has ample power to constitute an industrial tribunal for a fixed period of time and to constitute a new tribunal on the expiry of that period, to hear and dispose of all references made to the previous. tribunal which had not been disposed of by that tribunal.

Appeal No. 647 of 1963. Appeal from the judgment and order dated September 21, 1962, of the Punjab High Court in Civil Writ No. 280 of 1962. the appellant appeared in person. S.V. Gupte, Additional Solicitor General, N.S. Bindra and R.H. Dhebar, for the respondent (Union of India). S.M. Sikri, Advocate General, Punjab, N.S. Bindra and R.H. Dhebar, for the respondent (State of Punjab). November 19, 1963. The Judgment of P.B. Gajendragadkar, K. Subba Rao, K.N. Wanchoo and J.C. Shah, JJ. was delivered by Wanchoo, J. Raghubar Dyal, J. delivered a dissenting Opinion. WANCHOO J. This is an appeal on a certificate granted by the Punjab High Court. The appellant joined the Indian Civil Service in 1939 and was governed in matters relating to discipline by the Civil Services (Classification, Control and Appeal) Rules, (hereinafter referred to as the Appeal Rules) made by 435 the Secretary of State for India in Council. He continued in service till the transfer of power under the Indian Independence Act, 1947. Under s.10 of that Act he continued to serve under the Government of India and was entitled to receive from the Government of India or of the Province which he might from time to time be serving the same conditions of service as respects remuneration, leave and pension, and the same rights as respects disciplinary matters or, as the case may be, as respects the tenure of his office, or rights as similar thereto as changed cir cumstances may permit as he was entitled to immediately before the transfer of power, which took place on August 15, 1947. The same guarantee was extended to the appellant and all members of what were the Secretary of State 's Services before August 15, 1947 by article 314 of the Constitution. As the appellant 's case is based on 'that Article we may set it out: "Except as otherwise expressly provided by this Constitution, every person who having been appointed by the Secretary. of State or Secretary of State in Council to a civil. service of the Crown in India continues on and after the commencement of this Constitution to serve under the Government of India or of a State shall be entitled to receive from the Government of India and the Government of the State, which he is from time to time serving, the same conditions of service as respects remuneration, leave and pension, and the same rights as respects disciplinary matters or rights as similar thereto as changed circumstances may permit as that person was entitled to immediately before such commencement. " We shall hereafter refer to such a person as a member of the (former) Secretary of State 's Services. It appears that the appellant was in the Indian Civil Service cadre in the State of Madras at the time of transfer of power, though later he was transferred to the Punjab. After the transfer of power the Indian 436 Civil Service as a Secretary of State 's Service came to an end and thereafter a new Service was constituted known as the Indian Administrative Service. Formal legal shape was given to the new Service after the enactment of the All India Services Act, No. LXI of 1951, and the Indian Administrative Service (Recruitment) Rules, 1954, (hereinafter referred to as the Recruitment Rules) were framed under Act LXI of 1951. By r. 3 of these Rules, the Indian Administrative Service was to consist of (a) members of the Indian Civil Service, not permanently allotted to the judiciary; (b) members of the Indian Civil Service per manently allotted to the judiciary who have been holding executive posts from the date of the commencement of the Constitution and who may be declared by the Central Government to be members of the Service in consultation with the State Government; (c) persons who, at the commencement of these rules, are holding substantively listed posts, other than posts in the judiciary, (d) persons recruited to the Service before the commencement of these rules: and (e) persons recruited to the Service in accordance with the provisions of these rules. The appellant thus became a member of the new Indian Administrative Service by virtue of these rules and continued to serve in the Punjab. In 1955, the Central Government framed the All India Services (Discipline and Appeal) Rules, 1955 (hereinafter referred to as the Discipline Rules) which were applicable to all members of the Indian Administrative Service and the Indian Police Service. On July 18, 1959, the appellant was suspended with immediate effect by the Governor of the Punjab on the ground that a criminal case was pending against him. The order also provided that for the period of suspension the appellant shall be paid subsistence 437 allowance which shall be equal to leave salary which he would have drawn under the leave rules applicable to him if he bad been on leave on half average pay with a further provision that in case the suspension lasted for more than twelve months a further order fixing the rate of subsistence allowance shall be passed. This order appears to have been passed under r. 7(3) of the Discipline Rules and in consequence thereof the appellant remained under suspension. The appellant filed a writ petition in the Punjab High Court on February 16, 1962, challenging this order of suspension. His contention was that he was entitled to. the guarantee contained in article 314 of the Constitution and the order of suspension passed against him violated that guarantee and was therefore ineffective and invalid. He relied for this purpose on r. 49 of the Appeal Rules, which provided for suspension as a penalty. He contended that the Appeal Rules which governed him and which must be held to have continued to govern him in view of the guarantee contained in article 314 provided for suspension as a penalty only and that there was no provision anywhere in any rule or statute immediately before January 26, 1950 on which date the Constitution came into force, providing for suspension otherwise than as a penalty. Therefore it was not open to the Governor to suspend him in the manner in which he did so in the present case, though it was not denied that he could be suspended pending criminal proceedings provided the suspension was as a penalty under r. 49 of the Appeal Rules; on the other hand mere suspension pending a criminal case not inflicted as a penalty was not provided at all by the Rules or the statute governing the appellant immediately before January 26, 1950. Therefore when the Governor proceeded to suspend him under r. 7(3) of the Discipline Rules, he violated the guarantee contained in article 314. The appellant also contends that as it was not open to any authority to suspend him except as a punishment immediately before January 26, 1950, r.7 of the Discipline Rules 438 which provides for suspension during disciplinary proceedings or during the pendency of a criminal charge insofar as it applies to him was ultra vires article 314 of the Constitution. He also attacked rr.3 and 10 of the Discipline Rules as violative of article 314 of the Constitution, r.3 being concerned with penalties to be imposed on members of the Indian Administrative Service and r.10 with the right of appeal. The contention in this connection was that r.3 omitted the penalty of suspension which was to be found in r.49 of the Appeal Rules with the result that suspension under r.7 was not open to appeal under r.10 which provided for appeals against penalties mentioned in r.3. Therefore the guarantee under Art.314 was violated inasmuch as previously whenever the penalty of suspension was inflicted on a member of the Secretary of State 's Services it was open to him to appeal under r. 5 6 of the Appeal Rules. Therefore the scheme of the Discipline Rules was such as to take away the protection to a member of the Secretary of State 's Service which was available to him immediately before the Constitution came into force and in consequence rr.3 and 10 also violated the guarantee contained in article 314 and were ultra vires. The appellant therefore prayed for an appropriate writ, order or direction in the nature of mandamus striking down rr.3,7 and 10 of the Discipline Rules being violative of article 314 of the Con stitution and also for an order striking down the order of the Governor dated July 18, 1959, by which he suspended the appellant and such other appropriate relief as was just and proper. The petition was opposed by the State of Punjab and its main contention was that rr. 3,7 and 10 of the Discipline Rules were perfectly valid and did not violate the guarantee contained in Art.314. It was urged that article 314 only gave restricted protection to the members of what were formerly the Secretary of State 's Services in respect of disciplinary matters and stress was laid on the words "or rights as similar thereto as changed circumstances may permit" appear 439 ing therein. It was also urged that suspension pending departmental enquiry or pending a criminal case was not the same thing as suspension by way of punishment and that previous to January 26, 1950, there could be suspension pending departmental enquiry or pending a criminal case and that no appeal lay from such suspension even then. It was also urged that suspension pending a departmental enquiry or pending a criminal case was not a disciplinary matter at all and was therefore not included within the sweep of article 314 and in any case the rule relating to suspension even if it is connected with disciplinary matters was liable to variation as changed circumstances might demand and r.7 was framed in view of the changeed circumstances. It was also urged that removal of suspension as a penalty under r. 3 could not affect the guarantee contained in article 314, for the effect of such removal was that there could be in future no penalty of suspension. against a member of the Indian Administrative Service. Therefore as the penalty had gone r. 10 did not naturally provide for an appeal against a penalty which did not exist. Rule 7 which provides for suspension does not provide for any penalty and therefore there was no necessity of providing for any appeal against it. It was urged that a difference must be made between suspension as a penalty and suspension as an interim measure only pending a departmental enquiry or pending a criminal case and if that difference was borne in mind there was no reason for holding that rr.3 and 10 were ultra vires article 314. The respondent State finally contended that the order of the Governor passed under r. 7(3) was perfectly valid and did not violate the guarantee contained in article 314. The High Court dismissed the petition. It was of the view that it was inconceivable that under the old rules prevailing 'before January 26, 1950, a civil servant could never be suspended while an enquiry into his conduct was pending. It was further of the view that suspension during the pendency of an enquiry was a power inherent in an employer like the 440 Government and the power to suspend was always implied in the authority making the appointment. The High Court therefore rejected the contention of the appellant that under the old rules no member of the Secretary of State 's Services could have been suspended except by way of punishment. The High Court further held that even if the contention of the appellant be accepted that a member of the Secretary of State 's Services had a right of appeal even where he was suspended during a departmental enquiry there was a provision in the Discipline Rules for a memorial to the President (see r.20) and that in the opinion of the High Court gave a right as similar to the right existing before January 26, 1950, as the changed circumstances permitted. The High Court therefore dismissed the petition. The appellant then applied for a certificate which was granted; and that is how the matter has come up before us. The only question that has been debated before us is with respect to suspension whether as a punishment or otherwise of a member of one of the Secretary of State 's Services, in this case the Indian Civil Service, members of which have become members of the Indian Administrative Service under the Recruitment Rules; and it is only this question that falls to be determined in the present appeal. But the appellant has also challenged rr.3 and 10 of the Discipline Rules which do not deal with suspension at all. In these circumstances we do not propose to consider the vires of rr. 3 and IO, for that does not fall for decision as the order which is challenged has not been made under r. 3 and relates only to suspension. It is therefore unnecessary to decide whether rr. 3 and 10 can in the changed circumstances apply to those members of the Indian Administrative Service who were at one time members of the Indian Civil Service. We shall therefore express no view one way or the other on the vires of r. 3 and r. 10 and consider only r. 7 which deals with suspension. We should also like to make it clear that what we say during the course of ' this judgment 441 with respect to suspenion refers only to those members of the Indian Administrative Service who became members thereof under r. 3 (a) and (b) of the Recruitment Rules and not to other members of the Indian Administrative Service who were not members before 1947 of the Indian Civil Service, for it is only the former kind of members of the Indian Ad ministrative Service who are entitled to the protection of article 314 and the whole case of the appellant is based on that protection. Let us therefore turn to article 314 which we have already set out above. This Article came to be considered by this Court in the Accountant General Bihar vs N. Bakshi(1). In that case, however, that part of it was considered which related to "conditions of service as respects remuneration, leave and pension", and it was held that r. 3 of the All India Services (Overseas Pay, passage and leave salary) Rules, 1957, was ultra vires having regard to the guarantee contained in article 314 of the Constitution. That case is an authority for the proposition that where any rule is framed, which is inconsistent with the guarantee contained in article 314 with respect to remuneration, leave and pension, that rule would be bad. In the present case we are concerned with another part of article 314, namely, "the same rights as respects disciplinary matters or rights as similar thereto as changed circumstances may permit as that person was entitled to immediately before such commencement". The same principle will apply to this part of article 314 also and if any rule is framed which goes against the guarantee contained in this part of article 31.4 with respect to members of what were former Secretary of State 's Services, it will be bad. What article 314 provides with respect to disciplinary matters is that the members of the former Secretary of State s Services who continue to serve under the Government of India or of a State would be entitled to the same rights as respects disciplinary matters or rights as similar thereto as changed circumstances (1) [1962] Supp. 1. S.C.R. 505. 442 may permit. Stress has been laid on behalf of the respondent on the words "rights as similar thereto as changed circumstances may permit", and it is urged that in view of these words it was open in the " changed circumstances" to frame rules in particular with respect to suspension pending departmental enquiry or pending criminal proceedings. These words in our opinion cannot bear this interpretation. What the words "changed circumstances" mean is the change in circumstances due to transfer of power in August, 1947, and the coming into force of the Constitution in January, 1950, and no more. Therefore when article 314 speaks of "rights as similar thereto as changed circumstances may permit", it only means that a member of the former Secretary of State 's Services would have rights similar to his pre existing rights as the changed circumstances resulting from constitutional changes may allow. As an illustration take a case where a member of a Secretary of State 's Service could before August, 1947, be dismissed only by the Secretary of State; but after the transfer of power and the coming into force of the Constitution, circumstances have changed and there is no Secretary of State, therefore we have to look to the changed circumstances and find out which would be the authority to dismiss such a member in the changed circumstances. If we do so, we find that the Government of India can be the only authority which now in the changed circumstances will have the power to dismiss such a member in the absence of a specific provision of law in force before January 26 , 1950. These words do not mean that as time passes circumstances change and therefore new rules may be framed to meet the new circumstances due to passage of time. The words "changed circumstances" in article 314 only refer to the constitutional changes which occurred after the transfer of power in August, 1947, and the coming into force of the Constitution in January 1950. Further, article 314 provides that the protection is limited only to those rights as to disciplinary matters which a member of the former Secretary of State 's 443 Services was entitled to immediately before the commencement of the Constitution i.e. on January 25, 1950. It is only those rights which are protected and no more. Another argument that is urged on behalf of the respondent is that suspension pending a departmental enquiry or pending a criminal proceeding cannot be said to be a disciplinary matter at all and therefore the protection of article 314 does not extend to such suspension. We cannot accept this argu ment. The words "disciplinary matters" with which we are concerned appear in a constitutional provision and must be given their widest meaning consistent with what disciplinary matters may reasonably include. Suspension is of two kinds, namely, as a punishment, or as an interim measure pending a departmental enquiry or pending a criminal proceeding. We shall deal with these aspect 's of suspension in detail later. So far as suspension as a punishment is concerned, it is conceded that it is a disciplinary matter. The dispute is only as to suspension pending a departmental enquiry or pending a criminal proceeding. There can in our opinion be no doubt that suspension of this kind also must be comprised within the words "disciplinary matters" as used in article 314. Take the case of suspension pending a departmental enquiry. The purpose of such suspension is generally to facilitate a departmental enquiry and to ensure that while such enquiry is going on it may relate to serious lapses on the part of a public servant , he is not in a position to misuse his authority in the same way in which he might have been charged to have done so in the enquiry. In such a case suspension pending a departmental enquiry cannot be but a matter intimately related to disciplinary matters. Take again the case where suspension is pending criminal proceedings. The usual ground for suspension pending a criminal proceeding is that the charge is connected with his position as a government servant or is likely to embarass him in the discharge of his duties or involves moral turpitude. 444 In such a case a public servant may be suspended pending investigation, enquiry or trial relating to a criminal charge. Such suspension also in our opinion is clearly related to disciplinary matters. If the trial of the criminal charge results in conviction, disciplinary proceedings are bound to follow against the public servant so convicted. Even in case of acquittal proceedings may follow where the acquittal is other than honourable. The usual practice is that where a public servant is being tried on a criminal charge, the Government postpones holding a departmental enquiry and awaits the result of the criminal trial and departmental proceedings follow on the result of the criminal trial. Therefore, suspension during investigation, enquiry or trial relating to a criminal charge is also in our opinion intimately related to disciplinary matters. We cannot therefore accept the argument on behalf of the respondent that suspension pending a departmental enquiry or pending investigation, enquiry or trial relating to a criminal charge is not a disciplinary matter within the meaning of those words in article 314. Before we investigate what rights a member of the former Secretary of State 's Services had with respect to suspension, whether as a punishment or pending a departmental enquiry or pending criminal proceedings, we must consider what rights the Government has in the matter of suspension of one kind or the other. The general law on the subject of suspension has been laid down by this Court in two cases, namely, The Management of Hotel Imperial New Delhi vs Hotel Workers ' Union(", and T. Cajee vs U. Jormanik Siem(2). These two cases lay down that it is well settled that under the ordinary law of master and servant the power to suspend the servant without pay could not be implied as a term in an ordinary contract of service between the master and the servant but must arise either from an express term in the contract itself or a statutory provision governing such contract. It was further held that an order (1) ; (2) ; 445 of interim suspension could be passed against an employee while inquiry was pending into his conduct even though there was no specific provision to that effect in his terms of appointment or in the rules. But in such a case he would be entitled to his remuneration for the period of his interim suspension if there is no statute or rule existing under which it could be withheld. The general principle therefore is that an employer can suspend an employee pending an enquiry into his conduct and the only question that can arise on such suspension will relate to the payment during the period of such suspension. If there is no express term in the contract relating to suspension and payment during such suspension or if there is no statutory provision in any law or rule, the employee is entitled to his full remuneration for the period of his interim suspension; on the other hand if there is a term in this respect in the contract or there is a provision in the statute or the rules framed thereunder providing for the scale of payment during suspension, the payment would be in accordance therewith. These general principles in our opinion apply with equal force in a case where the government is the employer and a public servant is the employee with this modification that in view of the peculiar structural hierarchy of government, the employer in the case of government, must be held to be the authority which has the power to appoint a public servant. On general principles therefore the authority entitled to appoint a public servant would be entitled to suspend him pending a departmental enquiry into his conduct or pending a criminal proceeding, which may eventually result in a departmental enquiry against him. This general principle is illustrated by the provision in section 16 of the General Clauses Act, No. X of 1897, which lays down that where any Central Act or Regulation gives power of appointment that includes the power to suspend or dismiss unless a different intention appears. Though this provision does not directly apply in the present case, 446 it is in consonance with the general law of master and servant. But what amount should be paid to the public servant during such suspension will depend upon the provisions of the statute or rule in that connection. If there is such a provision the payment during suspension will be in accordance therewith. But if there is no such provision, the public servant will be entitled to his full emoluments during the period of suspension. This suspension must be distinguished from suspension as a punishment which is a different matter altogether depending upon the rules in that behalf. On general principles therefore the govern ment, like any other employer, would have a right to suspend a public servant in one of two ways. It may suspend any public servant pending departmental enquiry or pending criminal proceedings; this may be called interim suspension. Or the Government may proceed to hold a departmental enquiry and after his being found guilty order suspension as a punishment if the rules so permit. This will be suspension as a penalty. These general principles will apply to all public servants but they will naturally be subject to the provisions of article 314 and this brings us to an in vestigation of what was the right of a member of the former Secretary of State 's Services in the matter of suspension, whether as a penalty or otherwise. As article 314 only guarantees protection to those rights which were in existence immediately before the Constitution came into force, all that is necessary is to find out the position before August 14, 1947, when the transfer of power took place and on January 25, 1950, just before the Constitution came into force. Members of the Secretary of State 's Services who are protected under article 314 were appointed either by the Secretary of State or by the Secretary of State in Council. Therefore on general principles it would have been open to the Secretary of State or the Secretary of State in Council, as the case may be, to suspend a member of such Services as the appointing authority as an interim measure pending a departmental enquiry or pending a criminal proceeding if it thought fit to do so. What 447 remuneration such a public servant would get during such interim suspension would depend upon the rules if any, and if there were no rules he would be entitled to his full emoluments during such interim suspension. But it appears that as the Secretary of State or the Secretary of State in Council was in London it was thought proper for the sake of administrative convenience to provide for suspension by authorities other than the appointing authority. Reference in this connection may be made to section 247 (2) of the Government of India Act. 1935, as in force upto August 13, 1947. That subsection provided that "any order suspending any such person (meaning thereby a member of the former Secretary of State 's Services) from office shall, if he is serving in connection with the affairs of the Federation, be made by the Governor General exercising his individual judg ment and, if he is serving in connection with the affairs of a Province, be made by the Governor exercising his individual judgment". This sub section therefore made a specific provision for suspension by authorities other than the appointing authority; this was in addition to the general right of the employer (namely, the Secretary of State who was the appointing authority) to suspend an employee (namely, a member of one of the former Secretary of State 's Services). Suspension in section 247 (2) cannot in our opinion be confined only to suspension as a penalty. The words are general and must be given their full meaning and would include any kind of suspension, whether as a penalty or otherwise; and this power vested firstly in the Secretary of State or the Secretary of State in Council, as the case may be, under the general law of master and servant and also in the Governor General and the Governor, as the case may be, by virtue of this provision of the statute. Further section 247 (3) also provided for remuneration of a suspended member of one of the former Secretary of State 's Services and laid down that "if any such person as aforesaid is suspended from office, his remuneration shall not during the period of his suspension be reduced except to such extent, if any, as may be directed by the Governor General exercising his in 448 dividual judgment or, as the case may be, by the Governor exercising his individual judgment". Besides this statutory provision relating to former Secretary of State 's Services, there was a general provision as to payment to a government servant under suspension in Fundamental Rule 53. That general provision is that a suspended governmentservant is at least entitled to one fourth of his pay. This general provision was subject ,to section 247 (3) andin the case of members of the former Secretary of State 's Services, the Governor General or the Governor as the case may be, had to specify the amount which could be even more than what was provided by F.R. 53. Here again when F.R. 53 speaks of suspension, it speaks of it in general terms. It applies to all kinds of suspension whether as a penalty or otherwise. Further r. 49 of the Appeal Rules deals with penalties and provides suspension as a penalty. It also provides for appeals in r. 56 etc. where suspension is inflicted as a penalty for good and sufficient reasons. Rule 49 applied to the former Secretary of State 's Services also and thus these members were subject to the penalty of suspension. A review therefore of the general law of master and servant, the provisions of the Government of India Act, 1935, of the Appeal Rules and the Fundamental Rules discloses that the position on August 13, 1947 with respect to members of the former Secretary of State 's Services with respect to suspension whether as a punishment or otherwise was as follows. Members of the former Secretary of State 's Services were liable to suspension either as an interim measure or as a punishment. Where suspension was as an interim measure and not as a punishment, it could be imposed either by the Secretary of State or the Secretary of State in Council as the appointing authority or by the Governor General or the Governor as the case may be as the statutory authority. Suspension could also be imposed by the proper authority as a punishment under the Appeal Rules and such orders of suspension were subject to appeals as provided by the Appeal Rules. There 449 was also provision for payment during suspension in the shape of subsistence allowance which was governed generally by F.R. 53 and in the case of members of the former Secretary of State 's Services, F.R. 53 was subject to section 247 (3) of the Government of India Act, 1935. Therefore, the contention of the appellant that there could be no suspension except by way of punishment under r. 49 of the Appeal Rules before 1947 is not correct. It is equally clear that where suspension before 1947 was an interim measure and not as a punishment under r. 49, there was no question of any appeal from such an interim suspension pending a departmental enquiry or pending a criminal proceeding. If the position on January 25, 1950, stood as it was on August 13,1947, the appellant could not susbstantially challenge the order of the Governor passed on July 18, 1959, for it would have been covered by section 247(3) of the Govemment of India Act, 1935, and the appellant could not claim anything more under article 314 of the Constitution. But article 314 does not speak of the protection which members of the All India Services had on August 13, 1947; it speaks of protection which they had immediately before the commencement of the Constitution i.e. on January 25, 1950, and that brings us to a consideration of the changes that took place between 1947 and 1950 after the transfer of power on August 15, 1947. The effect of the transfer of power on the Secretary of State 's Services in particular came up for consideration be fore this Court in State of Madras vs K.M. Rajagopalan(1) and it was held that "the conferral of Independence on India brought about an automatic and legal termination of service on the date of Independence. But all persons previously holding civil posts in India are deemed to have been appointed and hence to continue in service, except those governed by 'general or special orders or arrangements ' affecting their respective cases, The guarantee about prior conditions of service and the previous statutory safeguards relating to disciplinary (1) ; 1 SCI/64 29 450 action continue to apply to those who are thus deemed to continue in service but not to others". Section 10 of the Indian Independence Act provides or the Secretary of State 's Services and lays down that every person who having been appointed by the Secretary of State, or Secretary of State in Council, to a civil service of the Crown in India continues on and after the appointed day to serve under the Government of either of the new Dominions or of any Province or part thereof, shall be entitled to receive the same conditions of service as respects remuneration, leave and pension and the same rights as respects disciplinary matters or, as the case may be, as respects the tenure of his office, or rights as similar thereto as changed circumstances may permit as that person was entitled to immediately before the appointed day, i.e. August 15, 1947 By virtue of this provision those members of the Secretary of State 's Services who continued to serve the Government of India or the Government of any Province from August 15, 1947, were entitled to the protection of section 10. What Rajagopalan 's case(" decided was that the Government of India was not bound to continue in service every member of the Secretary of State 's Services because of section 10 of the Indian independence Act; but that the protection of that section only applied to such members of the afore said services whose services the Government of India agreed to continue after August 14, 1947. In Rajagopalan 's case(" the Government of India did not agree to continue Rajagopalan 's services and therefore, he could not claim the protection of section 10 of the Indian Independence Act. In the appellant 's case his service continued after the transfer of power and therefore he was entitled to the protection of section 10 of the Indian Independence Act, which was almost in similar terms as article 314 of the Constitution so far as disciplinary matters were concerned. On August 14, 1947, however, the India Provisional Constitution) Order, 1947, was promulgated as G.G.O. 14. By that Order, section 247 of the Government of India was substituted by a new section and sub sections (2) and (3) (1) ; 451 thereof to which we have already referred were repealed. The substituted section 247 read as under: "Conditions of service of persons orginally recruited by Secretary of State The conditions of service of all persons who, having been appointed by the Secretary of State or the Secretary of State in Council to a civil service of the Crown in India, continue on and after the date of the establishment of the Dominion to serve under the Government of the Dominion or of any Province, shall (a) as respects persons serving in connection with the affairs of the Dominion, be such as may be prescribed by rules made by the Governor General; (b) as respects persons serving in connection with the affairs of a Province (i) in regard to their pay, leave, pensions, general rights as medical attendance and any other matter which immediately before the establishment of the Dominion was regulated by rules made by the Secretary of State, be such as may be prescribed by rules made by the Governor General; and (ii) in regard to any other matter, be such as may be prescribed by rules made by the Governor of Province. " It will be clear from this that sub sections (2) and (3) of section 247 disappeared on August 14, 1947. No rules framed by the Governor General under the new section with respect to what we have called interim suspension have been brought to our notice. Therefore no power was left in the Governor General or the Governor, as the case may be, to suspend a member of the former Secretary of State 's Services as an interim measure and only the appointing authority could suspend such a public servant, which in the changed circumstances would be the Government of India. The explanation for this may be that as the Secretary of State disappeared and his place was taken by the Government of India, 452 it might not have been thought necessary to continue the further powers conferred by section 247 (2) in addition to the general power of the appointing authority to suspend. Be that as it may, the fact remains that on August 14, 1947, section 247 (2) disappeared and therefore the Governor General and the Governor lost the power to suspend as an interim measure a member of the former Secretary of State 's Services and such power could only be exercised by the appointing authority which in the changed circumstances must be deemed to be the Government of India. As for suspension as a punishment that continued to be provided in the Appeal Rules and no change was made therein. It has however been urged that as the conferral of Independence on India brought about an automatic and legal termination of service on the date of Independence, there must in law have been reappointment of all members of the former Secretary of State 's Services. This reappointment in case of those serving in connection with the affairs of a Province must be deemed to have 'been made by the Governor of the Province concerned and consequently the Governor will have the power to suspend as the appointing authority. We are of opinion that there is no force in this argument. The antecedent circumstances with respect to such Services have been fully dealt with in Rajagopalan 's case (1) and those circumstances show that the question of the retention of officers serving in these Services was dealt with between the Government of India and His Majesty 's Government and it was the Government of India which decided ,that all such officers should continue except those whom the Government of India, was not prepared to invite to continue and in the case of this limited class the Government of India agreed to compensation. It was in consequence of this agreement between the Government of India and His Majesty 's Government that section 10 of the Independence Act provided that those officers who continued would have the same conditions of service etc. as they were entitled to immediately before August 14, 1947. The Governors of Provinces were nowhere in the picture in this matter and we can see (1) ; 453 no warrant for holding that the appointment must be deemed to be by the Governors of Provinces where such officers were serving in connection with the affairs of a Province. It is true that the Indian Administrative Service as an all India Service was legally and formally constituted in 1951. It is also true that under section 10 of the Indian Independence Act members of the former Secretary of State 's Services continued on and after August 14, 1947, to serve under the Government of either of the new Dominions or of any Province or part thereof It is also true that there are some passages in the correspondence between His Majesty 's Government and the Government of India which suggest that His Majesty 's Government was thinking on the lines that members of the former Secretary of State 's Services will become members of the Provincial Services. These however are not conclusive of the matter and we have to find out what actually took place after this exchange of correspondence between the Government of India and His Majesty 's Government in connection with the former Secretary of State 's Services. We have already indicated that section 10 was incorporated in the Indian Independence Act in consequence of this correspondence between the Government of India and His Majesty 's Government. Thereafter we find that the India (Provisional Constitution) Order, 1947 (i.e. G.G.O. 14) was passed on August 14,1947, under powers conferred on the GovernorGeneral by virtue of section 9 (1) (a) of the Indian Independence Act. Article 7 (1) of that Order is in these terms: "(1) Subject to any general or special orders or arrangements affecting his case, any person who immediately before the appointed day is holding any civil post under the Crown in connection with the affairs of the Governor General or Governor General in Council or of a Province other than Bengal or the Punjab shall, as from that day, be deemed to have been duly appointed to the corresponding post under the,Crownin connec 454 tion with the affairs of the Dominion of India or, as the case may be, of the Province. " Reading this provision along with the provision in section 10 of the Indian Independence Act, it would in our opinion be right to say that so far as the. members of the former Secretary of State 's Services are concerned they must be deemed to have been appointed to the posts on which they were serving at the time of conferral of Independence, by the Govemmentof India. The deemed appointment under article 7 (1) of G.G.O. 14 was "subject to any general or special orders or arrangements affecting his case", and these arrangements are clear from the correspondence which ensued between the Government of India and His Majesty 's Government. That correspondence and the special orders or arrangements contemplated by article 7 (1) of G.G.O. 14 show that so far as the members of the former Secretary of State 's Services were concerned, it was the Government of India which took the final decision whether to continue such officers or not. It is true that in so doing it consulted the various Provincial Governments and was to a large extent guided by the views of the Provincial Governments, particularly in connection with such officers who were serving in connection with the affairs of the Provinces; even so, as the facts in Rajagopalan 's case(1) show, the final decision whether to continue or not a member of the former Secretary of State 's Services was taken by the Government of India. In these circumstances it would in our opinion be reasonable to hold that in the case of the members of the former Secretary of State 's Services it was the Government of India which must be deemed to have appointed them after the conferral of Independence on India to the respective posts which they were holding whether under the Government of India or under the Governments of Provinces. This conclusion is reinfored by the fact that the system in force before 1947 was that all members of the Secretary of State 's Services were assigned to one Province or other and from them such members as were necessary used to be on deputation to the Government of India for serving it directly. It would be very anomalous (1) [1955].2 S.C.R. 541. indeed that the accident whether an officer was serving on August 13, 1947, on deputation under the Government of India directly or in the Province to which he was assigned should determine who the appointing authority must be deemed to be on the date of the transfer of power. Such an anomaly could in our opinion never have been intended and we have no doubt therefore in view of the history dealt with in Rajagopalan 's case(1) that on the conferral of Independence, even if there was legal termination of the services of members of the former Secretary of State 's Services, the reappointment must be deemed to be by the Government of India and not by the Governors of Provinces even in the case of officers who were serving in connection with the affairs of Provinces. In this connection our attention has been drawn to section 241 (1) of the Government of India Act 1935 as it then stood, which is in these terms: "(1) Except as expressly provided by this Act, appointments to the civil services of, and civil posts under, the Crown in India, shall be made (a) in the case of services of the Dominion, and posts in connection with the affairs of the Dominion, by the Governor General or such person as he may direct; (b) in the case of services of a Province, and posts in connection with the affairs of a Province, by the Governor or such person as he may direct." This provision in our opinion does not apply in the peculiar circumstances arising out of the transfer of power in August 1947. It is a general provision relating to appointments to civil services and civil posts under the Dominion or under the Provinces. It has in our opinion nothing to do with the case of members of the civil services and holders of civil posts who were deemed to have continued by virtue of article 7 of G.G.O. 14 of August 14, 1947. Clause (b) of section 241 (1) therefore cannot in our opinion lead to the inference that in the case of those members of the former Secretary of State 's (1) 456 Services who were deemed to have been appointed in connection with the affairs of a Province under article 7 (1) of G.G.O. 14, the appointments must be deemed to have been made by the Governor. Such deemed appointments in our opinion must depend for their validity on article 7 G.G.O 14 and not on section 241 of the Government of India Act which is not a deeming provision and therefore we have to look to article 7 (1) to find out by whom the appointments must be deemed to have been made in these of the members of the former Secretary of State 's Services. As article 7 opens with the words "subject to any general or special orders or arrangements affecting his case " (i.e. each individual officer 's case), it must be held in view of the history which is elaborately set out in Rajagopalan 's case( ) that so far as members of the former Secretary of State 's Services were concerned, it was the Government of India who must be deemed to have made the appointments in view of the special orders and arrangements with respect to such officers. Reliance in this connection was also placed on the amendment of section 240 (2) of the Government of India Act by the same G.G.O. Section 240 (2) as it originally stood provided that " no such person as aforesaid (meaning thereby a member of a civil service of the Crown in India or a person holding any civil post under the Crown in India) shall be dismissed from the service of His Majesty by any authority subordinate to that by which he was appointed". Amendment of this sub section became necessary as the Secretary of State for India was disappearing and some authority had to be provided which could dismiss members of the former Secretary of State 's Services. G.G.O. 14 therefore provided that no member of a Secretary of State 's Services who continued in service after August 14, 1947, shall be dismissed by any authority subordinate to the Governor General or the Governor according as that person was serving in connection with the affairs of the Dominion or of a Province. This amendment gave power to the Governor to dismiss even members of the former Secretary of State 's Services and stress has been laid on behalf of (1) 457 the respondent on this amendment and it is urged that this shows that appointments of such members who were serving in connection with the affairs of the Provinces must be deemed to have been made by the Governor concerned. It appears however that the amendment by which the Governor could dismiss a member of the former Secretary of State 's Services may have crept in by inadvertence, for it would prima facie be against the provisions of the guarantee contained in s.10 of the Indian Independence Act. In any case this sub section was further amended by G.G.O. 34 and the power of dismissal was only vested in the Governor General and was taken away from the Governor. We are therefore of opinion that no inference can be drawn from the fact that for a short time section 240 (2) provided that the Governor may dismiss a member of the former Secretary of State 's Services, that the appointments of such members who were serving in connection with the affairs of the Province was by the Governor, and not by the Government of India. Such an inference is in our opinion against the conclusion which can be plainly drawn from the history relating to the continuance and appointment of the members of the former Secretary of State 's Services at the time of conferral of Independence and the provisions of article 7 (1) of G.G.O. 14 of August 14, 1947. The final position therefore on January 25, 1950, with respect to suspension of a member of the former Secretary of State 's Services whether as a punishment or as an interim measure pending departmental enquiry or pending a criminal proceeding was this. Such member could be suspended under the general law by the appointing authority, which in the changed circumstances was, the Government of India, as an interim measure pending a departmental enquiry or pending a criminal proceeding, but there was no power in any other authority to pass such an order of interim suspension, for as we have already indicated the power under section 247 (2) was repealed by G.G.O.14 of August 14. Besides this power of interim suspension otherwise than as a punishment, the power to suspend 458 as punishment continued under r. 49 of the Appeal Rules and an order of suspension made in exercise of that power was subject to appeal under r. 56 etc. , thereof So far as payment during the period of interim suspension or during the period of suspension as a penalty is concerned, section 247 (3) had disappeared and therefore the general provision contained in F.R. 53 applied. That general provision has made some distinction between the members of the Indian Civil Service and others; but that is a matter of detail, in which it is unnecessary to go. So the position immediately before the commencement of the Constitution was that members of the former Secretary of State 's Services could be suspended either as an interim measure pending departmental enquiry or pending criminal proceeding or as a punishment. Where suspension was as an interim measure and not as a punishment such suspension could only be by the appointing authority, which in the changed circumstances should be deemed to be the Government of India. Such interim suspension was not subject to any appeal. So far as suspension as a punishment was concerned, r. 49 of the Appeal Rules applied and the authorities specified in these Rules could pass an order of suspension as a punishment and that order would be subject to appeal provided in r. 56 and other rules therein. As to the payment during the period of suspension that was governed by F.R. 53. It is this position which was protected by article 314 of the. Constitution so far as suspension of members of the former Secretary of State 's Services was concerned whether as an interim measure or as a punishment. Then we come to the Discipline Rules 1955. Rule 3 of these Rules provides for penalties and omits suspension as a penalty. Now if suspension had remained a penalty under r. 3 of the Discipline Rules, the appellant would have been entitled to the same rights as respects suspension as a punishment or rights as similar thereto as changed circumstances would permit in view of article 314. But r. 3 of the Discipline Rules has altogether done away with the penalty of suspension for members of 459 the Indian Administrative Service, which includes the members of the lndian Civil Service under r. 3 (a) and (b) of the Recruitment Rules. Further rules corresponding to the Discipline Rules was repealed by r. 23 of the Discipline Rules , so after the Discipline Rules came into force in 1955 suspension could no longer be inflicted as a penalty on a member of the Indian Administrative Service (including members of the Indian Civil Service who became members of the Indian Administrative Service). It is therefore unnecessary for us to consider whether the order of July 18, 1959, can be justified as a punishment and if so whether the memorial provided by r. 20 of the Rules is a sufficient protection for the purpose of article 314 which speaks of "rights as similar thereto as changed circumstances may permit". Nor is it the case of the respondent that the appellant was suspended by way of punishment by the order of July 18, 1959. The respondent justifies the said order under r. 7 ( 3) of the Discipline Rules and thus the case of the respondent is that the appellant was suspended not as a punishment but that the order of suspension was passed by the Governor as an interim measure which he could do either pending a departmental enquiry or pending a criminal charge. The appellant has thus been suspended by the order of July 18, 1959, not as a punishment but as an interim measure pending a criminal charge against him; and this is what practically in terms the order says, for it places the appellant immediately under suspension because a criminal case was pending against him. But as we have already pointed out the power to pass an order of interim suspension in the case of a member of the former Secretary of State 's Services on January 25, 1950, was only in the appointing authority, (namely, the Government of India). The power to suspend a member of the Indian Administrative Service which the appellant became by virtue of r. 3 of the Recruitment Rules as punishment has disappeared from r. 3 of the Discipline Rules 1955. The appellant therefore could not be suspended by the Governor as an interim measure and such suspension could only be by the Government of India. The proper procedure therefore in a case 460 where the State Government wants a member of the former Secretary of State 's Services to be suspended pending departmental enquiry or pending investigation, inquiry or trial of a criminal charge against him is to approach the Government of India and ask it as the appointing authority to suspend such officer as an interim measure. It is not open to the Government of India by framing a rule like r. 7 of the Discipline Rules to take away the guarantee as to Disciplinary matters contained in article 314. We have already said that the guarantee in the case of a member of the former Secretary of State 's Services is that in disciplinary matters his rights would be the same or as similar thereto as changed circumstances would permit as they were immediately before the commencement of the constitution. The right in the matter of interim suspension As distinct from suspension as a punishment was that a member of the former Secretary of State 's Services could not be suspended by any authority other than the Government of India. That was guaranteed by article 314 and could not be taken away by framing a, rule like r. 7 of the Discipline Rules. We have already referred to Bakshi 's case(" in which it has been held that the rights guaranteed by article 314 of the Constitu tion could not be destroyed or taken away by the Central Government in exercise of its rule making power ' In the present case the right guaranteed to a member of the former Secretary of State 's Services with respect to interim suspension (as distinct from suspension as a punishment is that such a member cannot be so suspended except by the appointing authority which in the changed circumstances is the Government of India. That right has in our opinion been violated by r. 7 of the Discipline Rules insofar as it permits any authority other than the Government of India to suspend pending a departmental enquiry or pending a criminal charge a public servant who was a member of the, former Secretary of State 's Services. Rule 7 therefore insofar as it permits this violation of the guarantee contained in article 314 with respect to interim suspension (other than suspension (1) [1962] Supp. I S.C.R. 505. 461 as a punishment) is to that extent ultra vires article 314 i.e. insofar as it applies to the members of the Indian Adminstrative Service who fall within cls. (a) and (b) of r. 3 of the Recruitment Rules. it follows therefore that the order of the Governor dated July 18, 1959, purporting to be passed under r. 7 (3) of the Discipline Rules is without authority and must be set aside. This brings us to the question of relief to be granted to the appellant. it appears that on September 11, 1963, the Governor passed an order by which he reinstated the appellant for the period from July 18, 1959, to April 4, 1963, and granted him his full emoluments for that period. The writ petition in the present case was filed in February 1962. So the appellant is apparently not entitled to any further relief in the matter of his emoluments besides what has been granted to him by the Governor. The order of reinstatement contained therein is unnecessary in view of our decision and the order granting full emoluments may be taken to be in pursuance of our judgment. We therefore allow the appeal and declare r. 7 of the Discipline Rules insofar as it applies to members of the Indian Administrative Service who are members thereof by virtue of r. 3 (a) and (b) of the Recruitment Rules to be bad to the extent to which it permits an authority other than the Government of India to suspend as an interim measure (and not as a punishment) such members of the Services. In consequence we set aside the order of the Governor dated July 18, 1959. As however the order of September, 1963, has granted all such monetary reliefs to the appellant as we could grant him on setting aside the order of July 18, 1959, no further relief can be granted to the appellant. We order the respondent the State of Punjab to pay the costs of the appellant in this Court as well as in the High Court. RAGHUBAR DAYAL J. I am of opinion that this appeal should be dismissed. The appellant a member of the Indian Civil Service, was serving under the Government of Madras immediately before the appointed day ', i.e. August 15 462 1947, as laid down in sub section (2) of section I of the Indian Independence Act, 1947 (10 & 11 Geo. 6, Ch. 30) hereinafter referred to as the Independence Act. He continued to serve under the Government of Madras on and after the appointed day. Subsequently, he was transferred to the State of Punjab where he was serving on ,,July 18, 1959, when he was suspended by the Governor of Punjab as a criminal case was pending against him. 'the appellant was a member of the Indian Administrative Service in 1959 and the order of suspension appears to have been made by the Governor in exercise of the power conferred by r. 7 of the All India Services (Discipline and Appeal) Rules, 1955, hereinafter referred to as the Discipline Rules. The appellant challenges the validity of this order on the ground that this rule violates the provisions of article 314 of the Constitution. His contention is that prior to August 15, 1947, a member of the Indian Civil Service could be suspended by way of punishment in view of r. 49 of the Civil Services (Classification, Control and Appeal) Rules, hereinafter referred to as the Classification Rules and that there was no provision for his suspension otherwise than as a penalty and that his suspension, as a disciplinary measure, though permissible, would have been then treated as suspension by way of penalty and therefore as subject to an apeal under r. 56 of the Classification Rules. No appeal is provided under the Discipline Rules against an order of suspension under r. 7 which therefore violates article 314 of the Constitution as, according to that article, he was entitled to receive from the Government the same rights as respects disciplinary matters or rights as similar thereto as changed circumstances, permitted as he was entitled to immediately before 'the commencement of the Constitution. He further contends that sub section (2) of section 10 of the Independence Act guaranteed to him the same rights as respects disciplinary matters or rights as similar thereto as changed circumstances permitted, as he was entitled to immediately before the appointed day. It was further contended, during the course of the submissions in Court, that though prior to the appoin 463 ted day an order of suspension during the pendency of a departmental enquiry or of a criminal charge could have been made only by the Governor General or the Governor, such an order thereafter and till January 26, 1950 could be made only by the Governor General, and that therefore such a suspension order subsequent to the commencement of the Constitution could be made by the Union Government and not by the Government of Punjab and that for this reason too, r. 7 of the Discipline Rules empowering the State Government to make an order of such suspension violates article 314. I need not discuss the various points on which I agree with my learned brother Wanchoo, J. I agree that the expression 'changed circumstances ' in article 314 only refer to the constitutional changes which occurred after the transfer of power in August, 1947, and the coming into force of the Constitution in January, 1950, that suspension during the pendency of disciplinary proceedings or of a criminal charge is related to disciplinary matters within the meaning of those words in article 314, that from the appointed day there was no express provision in the Government of India Act or in the rules framed thereunder empowering the Governor General or the Governor to suspend, otherwise as penalty, officers appointed by the Secretary of State for India and that any order of suspension pending enquiry against a person appointed by the Secretary of State on a day immediately before the coming into force of the Constitution had to be made by the Government in the exercise of the general power of suspension which an employer has with respect to his employee, that this general power an employer has to suspend an employee pending an enquiry into his conduct vests in the appropriate authority where the Government is the employer and a public servant is the employee and that such an authority in the case of Government, in view of the peculiar structure of the hierarchy of Government, be taken to be the, authority which has the power to appoint the public servant concerned. I am however. further of opinion that the appropriate authority in this connection can also include officers superior to 464 the appointing authority and that in the case of members of All India Services serving under any state includes the Governor who, as the executive head of State, has administrative control cover all officers serving under the State Government. It would be anomalous to hold that the Governor could not suspend a person, appointed by the Secretary of State, during the pendency of departmental proceedings or a criminal charge against him, though he could have imposed a penalty of suspension on such a person in view of rr. 49 and 62 of the Classification Rules which were in force between the appointed day and January 25, 1950, and continued in force subsequently, up to the coming into force of the Discipline rules. 1, however, do not rest my decision on this view as, in my view, the appellant is to lie deemed to have been appointed by the Governor of Madras, on the appointed day, to the post corresponding to ,the post he was holding immediately before the appointed day under the Madras Government. I now deal with the question of the authority which should be taken to be the appointing authority for persons who had been appointed by the Secretary of State to the Civil Services or to any post under the Crown and who continued to serve the Government after the appointed day. To determine this question it is necessary to consider the following matters: (1) Did the Service known as the Indian Civil Service, whose members were to be recruited by the Secretary of State for India in view of section 244 (1) of the Government of India Act, cease to exist on and from the appointed day and, if so, whether any other AR India Service took its place immediately after it had ceased to exist? (2) If it ceased to exist, were the services of the members of the Indian Civil Service terminated immediately before the appointed day? (3) Which members of the Service continued in service of the Government on or after the appointed day. (4 ) Whether those who so continued did so on account of their becoming servants of the new Government under the provisions of any Act, or their continuance in service was on account of their fresh appointment. (5) If it was due to fresh 465 appointment, which authority appointed them and to which post or service Before I deal with the above questions, I may set out the relevant provisions which have a bearing in this connection. The Independence Act was enacted by the British Parliament on July 18, 1947, for setting up in India two independent Dominions and to provide for necessary consequential matters. By sub section (1) of section 1, two independent Dominions known as India and Pakistan were to be set up from August 15, 1947. Subsection ( 2) of that section provided for their being referred to as the new Dominions and August 15, 1947, being referred to as the appointed day. One of the consequences of the setting up of the new Dominions was stated in sub section (1) of section 7 to be that His Majesty 's Government in the United Kingdom was to have no responsibility as respects the government of any of the territories which, immediately before the appointed day, were included in British India. Section 9 empowered the Governor General to make such provisions by order as appeared to him to be necessary or expedient for certain purposes mentioned therein. Subsections (1) and (2) of section 10 of the Act read: "(1) The provisions of this Act keeping in force provisions of the Government of India Act, 1935, shall not continue in force the provisions of that Act relating to appointments to the civil services of, and civil posts under, the Crown in India by the Secretary of State, or the provisions of that Act relating to the reservation of posts. (2) Every person who (a) having been appointed by the Secretary of State, or Secretary of State in Council, to a civil service of the Crown in India continues on and after the appointed day to serve under the Government of either of the new Dominions or of any Province or part thereof; or (b) having been appointed by His Majesty before the appointed day to be a judge of the Federal SCI/64 30 466 Court or of any court which is a High Court within the meaning of the Government of India Act, 1935, continues on and after the appointed day to serve as a judge in either of the new Dominions, shall be entitled to receive from the Governments of the Dominions and Provinces or parts which he is from time to time serving or, as the case may be, which are served by the courts in which he is from time to time a judge, the same conditions of service as respects remuneration, leave and pension, and the same rights as respects disciplinary matters or, as the case may be, as respects the tenure of his office, or rights as similar thereto as changed circumstances may permit, as that person was entitled to immediately before the appointed day The Governor General, in the exercise of the powers conferred on him by section 9 made the India (Provisional Constitution) Order, 1947 (G.G.O. 14 of 1947), hereinafter called the Provisional Constitution Order. Article 7(1) of this Order is: "Subject to any general or special orders or arrangements affecting his case, any person who immediately before the appointed day is holding any civil post under the Crown in connection with the affairs of the Governor General or GovernorGeneral in Council or of a province other than Bengal or the Punjab shall, as from that day, be deemed to have been duly appointed to the corresponding post under the Crown in connection with the affairs of the Dominion of India or, as the case may be, of the Province." Sub section (1) of section 241 of the Government of India Act, as modified by this Order, reads: "Except as expressly provided by this Act, appointments to the civil services of, and civil posts under, the Crown in India, shall be made (a) in the case of services of the Dominion, and posts in connection with the affairs of the 467 Dominion, by the Governor General or such person as he may direct; (b) in the case of services of a Province, and posts in connection with the affairs of a Province, by the Governor or such person as he may direct." Section 247 of the Government of India Act as modified reads: "The conditions of service of all persons who, having been appointed by the Secretary of State or the Secretary of State in Council to a civil service of the Crown in India, continue on and after the date of the establishment of the Dominion to serve under the Government of the Dominion or of any Province shall, (a) as respects persons serving in connection with the affairs of the Dominion be such as may be prescribed by rules made by the GovernorGeneral; (b) as respects persons serving in connection with the affairs of a Province (i) in regard to their pay, leave, pensions, general rights as to medical attendance and any other matter which immediately before the establishment of the Dominion was regulated by rules made by the Secretary of State, be such as may be prescribed by rules made by the GovernorGeneral; and (ii) in regard to any other matter be such as may be prescribed by rules made by the Governor of the Province. " Sections 244 to 246 of the Government of India Act, 1935, which dealt with Services recruited by the Secretary of State was omitted from the Act by this Order. Reference may also be made to the announcement by His Excellency the Viceroy on April 30, 1947. It purported to relate to grant of compensation for premature termination of their service in India to members of the Civil Services appointed by the Secre 468 tary of State and to regular officers and British Warrant Officers of the Indian Naval and Military Forces. Its first 7 paragraphs are set out at pp. 548 to 550 in State of Madras vs K.M. Rajagopalan(1). Its para 8 stated inter alia: "In pursuance of their wish to give all possible help to the Government of India in building up the new services, His Majesty 's Government agree 'that their obligation covers the claim to ultimate compensation of those British members of the Services who are asked to serve on in India and decide to do so. " It may also be mentioned that subsequent to June 3, 1947, the Government of India made enquiries through the Provincial Governments from the members of the Secretary of State 's Services, including the Indian Civil Service. about their desire to continue in service of the Government after the transfer of power and also made enquiries from the Provincial Governments themselves about their readiness to retain those officers in service who expressed their desire to continue in service. This Court had occasion to discuss the effect of the steps taken by the Government of India prior to the appointed day and of the provisions of the Independence Act and the Provisional Constitution Order in Rajagopalan 's case(1) Rajagopalan was a member of the Indian Civil Service and was serving in the Province of Madras till August 14, 1947, when his services were terminated, though he had expressed his willingness to continue in the service of the, Govern.ment of Madras on and after the appointed day. What this Court directly held and observed in connection with the points urged before it in that case would be mentioned at appropriate places in discussing the five points I have formulated earlier. This first two points were directly decided in that case. This Court held that the Secretary of State and his Services disappeared as from the appoin (1) ; 469 ted day and that, section 10(2) of the Independence Act and article 7(1) of the Provisional Constitution Order proceeded on a clear and unequivocal recognition of the validity of the various special orders and the individual arrangements made and amounted to an implicit statutory recognition of the principle of automatic termination of the Services brought about by the political change. It is clear therefore that the Indian Civil Service, one of the Secretary of State 's Services, ceased to exist from the appointed day and that the services of its members automatically terminated on August 14, 1947. This Court had not to consider whether any All India Service was set up to take the place of the Indian Civil Service on and from the appointed day, as the termination of Rajagopalan 's services was held to be valid. There is nothing on the record to show that any such new Service took the place of the Indian Civil Service at the changeover, though, subsequently, the Indian Administrative Service was set up as an All India Service. When it was actually set up is not known. Article 312 of the Constitution states in cl. (2) that the Services known at the commencement of the Constitution as the Indian Administrative Service and the Indian Police Service shall be deemed to be services created by Parliament under that article. The All India Services Act, 1951 (Act LXI of 1951) defined an All India Service to mean the service known as the Indian Administrative Service or the service known as the Indian Police Service. The Indian Administrative Service Recruitment Rules, 1954, came into force in 1954 and its r. 3 dealing with the constitution of the service provides inter alia that the Service shall consist of (a) members of the Indian Civil Service, not permanently allotted to the judiciary; (b) members of the Indian Civil Service permanently allotted to the judiciary who have been holding executive posts from the date of commencement of the Constitution; (d) persons recruited to the Service before the commencement of those Rules. It appears therefore that all the 470 members of the Indian Civil Service who continued to serve the Government on and after the appointed day were not made members of the Indian Administrative Service and that those who were made members of the Service became members of such Service in 1954. If the Indian Administrative Service had been set up to replace the Indian Civil Service immediately on the appointed day and the erstwhile members of the Indian Civil Service had become its members, the provisions of r. 3 (a) and (b) would have been different from what they are. This indicates that the Indian Administrative Service did not take the place of the Indian Civil Service automatically after the changeover on the appointed day and that therefore the members of the Indian Civil Service who continued in service did not continue so as members of any All India Service. The Viceroy 's announcement dated April 30, 1947, makes no mention of any All India Service replacing the Indian Civil Service immediately on the transfer of power though it specifically mentioned in para 8 about the giving of all possible help to the Government of India in building up the new Services and to the members of the Secretary of State 's Services continuing to serve under the Government in India after the transfer of power. The provisions of article 7(1) of the Provisional Constitution Order also do not refer to the persons in the Secretary of State 's Services to continue in service as members of any All India Service though it specifically deals with the appointment of such other employees of Government to the posts they had held on the day immediately preceding the appointed day. I am therefore of opinion that the service of the appellant as a member of the Indian Civil Service came to an end on August 14, 1947, and that thereafter he did not automatically or otherwise become member of any All India Service on August 15, 1947. In connection with point No. 3 formulated by me. this Court said in Rajagopalan 's case(1) at P. 552 (1) ; 471 that the continuance of service was contemplated only in respect of such of the previous servants who intimated their desire for the continuance of their services and whose offer in that respect was accepted, and at p. 563 that sub section (2) of section 10 of the Independence Act had nothing to say as to who were the persons who would continue in service and receive the benefit that being obviously left to be provided by delegated 'legislation in the shape of Orders of the Governor General and at p. 565 that in view of the provisions of article 7(1) of the Provisional Constitution Order, all persons who were previously holding civil posts were deemed to have been appointed and hence to continue in service excepting those whose case was governed by general or special orders or arrangements affecting their cases. It is clear therefore that only those members of the Secretary of State 's Services continued in service who had been holding civil posts immediately before the appointed day and were deemed to have been appointed to the corresponding post in view of the provisions of article 7 (1) of the Provisional Constitution Order. The persons who had been holding civil posts immediately before the appointed day did not automatically become servants of the new Government on the appointed day. Article 7(1) of the Provisional Constitution Order contemplates 'deemed appointment ' of such persons to their respective posts on that day. The language of this article is not consistent with any suggestion that they automatically, by the force of the Independence Act or the Provisional Constitution Order, became holders of the respective posts on the appointed day. The language is very much different from the language used in articles 374, 376, 377 and 378 of the Constitution which provide for certain persons holding office immediately before the commencement of the Constitution becoming, on such commencement, holders of corresponding posts on such commencement. The language is also different from that of article 375 of the Constitution which deals with the continuance of courts, authorities 472 and officers after the commencement of the Constitution and reads: "All courts of civil, criminal and revenue jurisdiction, all authorities and all officers, judicial, executive and ministerial, throughout the territory of India, shall continue to exercise their respective functions subject to the provisions of this Constitution. " There is no such expression in this article which would indicate that any of these officers had to be freshly appointed or would be deemed to have been appointed to their respective posts on the commencement of the Constitution. The language of article 7(1) of the Provisional Constitution Order correspond to some extent to that of section 58 of 21 & 22 Vic. Cap. CVI, 1858, an Act for the better Government of India, which was passed when the .,Government of India was transferred to Her Majesty from the East India Company. Section 58 reads: "All persons who at the time of the commence ment of this Act shall hold any offices, employments, or commissions whatever under the said Company in India shall thenceforth be deemed to hold such offices, employments, and commissions under Her Majesty as if they had been appointed under this Act. . . " The language of article 7(1) of the Provisional Constitution Order, for purposes of comparison, may be just noted, and is ". any person who immediately before the appointed day is holding any civil post under the Crown . shall, as from that day, be deemed to have been duly appointed to the corresponding post under the Crown. " The language of section 58 of the 1858 Act contemplated a fresh appointment, though deemed appointment, as is abundantly clear from the words 'shall. be deemed to hold such offices, employments, and corn 473 missions. .as if they had been appointed under this Act. ' I am therefore of opinion that the Provisional Constitution Order, by its article 7(1), provided for deemed fresh appointment of the members of the Secretary of State 's Services whose services had terminated automatically on the day immediately preceding the appointed day. I will now deal with the last point as to which authority would be deemed to have appointed the persons who had been in the Secretary of State 's Services, to their corresponding posts on the appointed day. The Government of India Act, 1935, hereinafter called the Act, as modified by the Orders of the Governor General, was in force on that day and the authorities competent to make appointments on that day would be deemed to have made the appointments of the erstwhile servants in the Secretary of State 's Services. No other authority could have made those appointments and therefore no other authorities could be deemed to have made those appointments which were deemed to be made in view of the provisions of article 7(1) of the Provisional Constitution Order. Section 241 of the Act provided that the GovernorGeneral, or such person as he may direct, would make appointments to the civil services of the Dominion and civil posts in connection with the affairs of the Dominion and that the Governor would make appointments to the services of a Province and posts in connection with the affairs of a Province. Such persons of the Secretary of State 's Services who were holding posts in connection with the affairs of a Province would therefore be appointed to the corresponding posts, on the appointed day, by the Governor of that Province, as only he could have made appointments to those posts. It is to be noticed that article 7(1) of the Provisional Constitution Order refers to appointments to posts and not to appointments to Services and that even prior to the appointed day the appoint 474 ments, to the various posts in the Provinces, of members of All India Services allotted to the cadre of the Provinces were also made by the Governor and not by the Governor General. In this respect, with regard to all appointments to posts in connection with the affairs of the Provinces there had been really no ,change. It is contended for the appellant that his deemed appointment to the post corresponding to the post he had held on August 14, 1947, was by the GovernorGeneral or the Government of India. Article 7(1) of the Provisional Constitution Order does not expressly provide so. Section 241 of the Act did not authorize the Governor General to make appointments to posts in connection with the affairs of the Provinces. The provisions of article 7(1) of the Provisional Constitution Order refer to all the persons employed in the civil services and holding civil posts under the Crown and are not restricted to those persons only who held posts and had been appointed by the Secretary of State. The mere fact that the Provisional Constitution Order was made by the Governor General would not lead to the result that the deemed appointments of all the persons serving under the Crown, whether as members of civil services or as holders of posts, had been made by the Governor General. That could not have been intended. All such employees would be deemed to be appointed by the appropriate authority on the appointed day and the appropriate authority for the appointment of a particular employee is to be found in section 241 of the Act. It is also true that the erstwhile members of the Secretary of State 's Services were not actually reappointed by the appropriate appointing authority and that they were merely deemed to be so appointed in view of the provisions of article 7(1) of the Provisional Constitution Order whose purpose was to validate the continuity of the service of such persons even though they had not been actually appointed. I see no reason why the provisions of section 241 of the Act be not applicable to the deemed appoint 475 ments of such persons who had been in the Secretary of State 's Services. Undoubtedly, it was not a special provision for the deemed appointments at the particular occasion, but was of general application to appointments on and after the appointed day. Appointments, whether actual or deemed to be made by the new Governments immediately on the changeover of the Government, must be governed by its provisions. This Court did not make any reference to section 241 of the Act in Rajagopalan 's Case.(1) This is not because that section did not govern all the erstwhile members of the Secretary of State 's Services, but because the Court was not concerned in that case with the question of such fresh deemed appointments as Rajagopalan did not continue in service as his services were held to be validly terminated on August 14, 1947. It has been urged in support of the appellant 's case that the retention of persons of the Secretary of State 's Services was dealt with between the Government of India and His Majesty 's Government as would appear from the various documents in connection with the steps taken for the setting up of the two Dominions and that only those officers continued in service whom the Government of India invited to continue and that those who were not so invited were to be paid compensation. It is not clear from the antecedent circumstances that it was the Government of India which decided about the continuance in service of such officers of the Secretary of State 's Services who had been prior to the changeover serving under the Government of a Province. Even if it was the Government of India which was to decide and invite the officers to continue, such a decision and invitation cannot amount to its appointing those officers to the various posts in connection with the affairs of a Province, in view of section 241 of the Act. of course, negotiations with respect to the services took place between the Government of India (1) ; 476 and His Majesty 's Government. A Provincial Government could not have continued such negotiations. I do not find any specific mention in any of the documents referred to in Rajagopalan 's Case ' ') to the effect that it was the Government of India which decided which officers were to continue in service. The Viceroy 's announcement dated April 30, 1947, practically sums up the result of the negotiations between the Government of India and His Majesty 's Government. It is clear from what was stated in paragraphs 3 and 6 of this announcement that the undertakings and assurances 'with respect to persons appointed by the Secretary of State and who were to continue in service were given by the Government of India with respect to those who were to continue under its service and by the Provincial Governments with respect to those who would join the Provincial Services. It is said in para 3, which dealt with the terms of pay etc., that the Government of India would then propose to Provincial Governments that they should give similar assurances to members of the Secretary of State 's Services who agreed to join Provincial Services. It was said in para 6 : "His Majesty 's Government have been reviewing the whole position. They have noted the undertaking which the Government of India have given in regard, to officers whom they desire should continue to serve under the Government of India . Many Indian members of the Secretary of State 's services will however become members of provincial services and in their cases His Majesty 's Government 's agreement that the need not be compensated is conditional upon the Provincial Governments guaranteeing the existing terms of service. If they are not prepared to do so His, Majesty 's Government reserve the right to reconsider the matter. It is therefore clear that the Provincial Governments were also concerned in the negotiations though they Were actually made by the Government (1) ; 477 of India and had to agree to guarantee the existing terms of service and safeguards in matters of discipline And had also to agree to pay compensation. It may look anomalous that some persons who had been members of the Secretary of State 's Services may be deemed to have been appointed to their respective posts, on the appointed day, by the Governor of a Province if they had been holding Posts under the Provincial Government and others be deemed to have been appointed by the Governor General if they happened to be then serving posts in connection with the affairs of the Government of India or the Dominion. Such an anomaly was bound to come into existence and had been contemplated during the negotiations between the Government of India and His Majesty 's Government. There was no other choice open to the members of the Secretary of State 's Services who were serving under the Government of a: Province when their services automatically came to an end and when they desired to continue ' in Government service. Their wishes were ascertained in the context of what was taking place. They knew of the; announcement by the Viceroy dated April 30, 1947. It was only with their consent that their services were continued after the changeover. They can therefore have no grievance for being appointed to provincial services or posts under the Provincial Governments and naturally, under its administrative control. In fact, even prior to the changeover, such persons had been under the administrative control of the Provincial Government. This Court, in Rajagopalan 's Case(1), refers at p. 551 to the Government of India asking the Provincial Govemments, by its letter dated June 18, 1947, to state, when forwarding the replies from the individual officers, about their willingness or otherwise to continue in service, whether for any reason they Would prefer such officer not to continue in service notwithstanding his desire to remain in service, and pointing out to the Provincial Government that in case it did not (1) ; 478 desire to retain the services of such persons, the Pro vincial Government would be incurring the liability to pay compensation. Such an enquiry indicates, to my mind, that the decision to continue such persons in service after the changeover rested with the Provincial Government and It was on this account that .it had to bear the liability to the compensation payable to such persons. Such a decision had to be taken by the Provincial Government because it was contemplated that officers serving under the Provincial Government would be appointed to their respective posts after the changeover by that Government itself and that the Government of India will have nothing to do with their appointments. In the circumstances, it follows that it was the Provincial Government which invited such officers to continue in service and not the Government of India. It is true that the Madras Government informed Rajagopalan of the Government 's decision not to retain him in service after August 15, 1947, and stated that a formal communication in that respect would issue from the Government of India. The Government of India in a way approved of the decision of the Madras Government not to continue Rajagopalan in service. But it does not follow that the Government of India 's approval was necessary for the Government of Madras to continue under its service officers whom it was prepared to keep in service. The ter mination of service of such officers was prior to the coming into force of the Act as modified by the Provisional Constitution Order and therefore the termination order had to be formally made by the Government of India. The order had to be passed prior to the changeover and at that time it was proper that any order about the termination of the services be with the approval of the Government of India. The fresh deemed appointment was to be made on August 15, 1947, immediately after the changeover and, in view of the practical difficulties, such a fresh appointment was not actually made but was deemed to have been made, as provided by article 7(1) of the Provisional 479 Constitution Order. When the appointment was to be made of persons serving under the Provincial Governments, there was no necessity of obtaining prior approval of the Government of India to retain such officers in service. I am therefore of opinion that such members of the Secretary of State 's Services who were holdingposts under a Provincial Government immediately before the appointed day and continued in service on and after the appointed day are to be deemed to be appointed to the corresponding posts by the Governor of the Province, in view of the provisions of section 241 of the Act. The appellant was serving under the Madras Government immediately before the appointed day. He will therefore be deemed to be appointed by the Governor of the Province of Madras to the post he was holding on the appointed day. The Governor of the Province was his appointing authority and therefore he could be suspended on the day immediately before the commencement of the Dominion by the Governor of the Province where he might have been then serving. He can at best claim protection of his right of not being suspended pending departmental enquiry or of a criminal charge by any authority of a lower rank. Rule 7 of the Discipline Rules does not provide for such suspension of a person who had been a member of the Secretary of State 's Services by an authority lower than the Governor. The appellant was suspended by the Governor of Punjab on July 18, 1959. He had no right of appeal against such an order of suspension. The Discipline Rules did not provide for an appeal against such an order of suspension and, in not so providing, cannot be said to violate the provisions of article 314 of the Constitution as the appellant had no right of appeal against such an order before the commencement of the Constitution. It follows that r. 7 of the Discipline Rules does not violate the provisions of that Article and that the impugned order of suspension was therefore valid. 480 1 would therefore dismiss the appeal. ORDER in accordance with the opinion of the majority the appeal is allowed with costs in this Court and in the ' High Court.

The appellant joined the Indian Civil Service in 1939 and was posted in the province of Madras. After the transfer of power under the Indian independence Act on August 15,1947, he was 432 transferred to the Punjab and later when the Indian Administrative Service was constituted he became its member. On July 18, 1959, he was suspended by the Governor of the State of Punjab under r. 7(3) of the Indian Services (Discipline and Appeal) Rules, 1955, on the ground that a criminal case was pending against him. He challenged the order of suspension by a writ petition in the Punjab High Court as being violative of the guarantee contained in article 314 of the Constitution and contrary to r. 49 of the Civil Services (Classification, Control and Appeal) Rules which provided only for suspension as a penalty. His case was that there was no provision immediately before January 26, 1950, that provided for suspension otherwise than as penalty. The High Court dismissed the petition. Held: (per Gajendragadkar, Subba Rao, Wanchoo and Shah, JJ). The general law of master and servant and section 247 of the Government of India Act, r. 53 of the Fundamental Rules and rr. 49, 56 of the Civil Services (Classification, Control and Appeal) Rules, read together clearly show that members of the former Secretary of State 's Services were on August 14, 1947, liable to suspension either as an interim measure or as a punishment. Interim suspension could be imposed either by the Secretary of State as the appointing authority or the Governor General or the Governor, as the case might be, as the statutory authority. Management of Hotel Imperial, New Delhi v Hotel Workers ' Union, [19601 1 S.C.R. 476 and T. Cajee vs U. Jormanik Siem, ; , referred to. It was not therefore correct to say that there could be no suspension except by way of punishment under r.49 of the Appeal Rules before 1947. In a case of interim suspension before 1947 there was however no right of appeal. Article 314 of the Constitution, properly construed, affords such protection to the members of the Secretary of State 's Services as they were entitled to immediately before the commencement of the Constitution. There can be no doubt that suspension pending a departmental enquiry or a criminal proceeding falls within the word 'disciplinary matters ' used in that Article. It was not correct to say that as independence was conferred on India and the Services automatically terminated, there was in law reappointment of all the former Secretary of State 's Services, and those serving in a province must be deemed to have been reappointed by the Governor and that, consequently, the Governor as the appointing authority had the power to order suspension. Article 7(1) of India (Provisional Constitution) Order, 1947, G.G.O. 14, read with section 10 of the Independence Act, 1947, in the light of other relevant circumstances shows that the final decision whether or not the former members of the Secretary of State 's Services should continue was of the Government of India and that Government, therefore, must be deemed to have appointed 433 them to posts either under itself or in the Provinces. Section 241(b) of the Government of India Act, as it then stood, and s.240(2) of the said Act, as amended by G.G.O. 14, could not alter this position. State of Madras vs K.M. Rajagopalan, ; , referred to. On the eve of the commencement of the Constitution i.e. January 25, 1950, a former member of the Secretary of State 's Services could be suspended under the general law by the Government of India alone as the appointing authority as an interim measure pending departmental enquiry or criminal proceeding and by no other authority. He was liable to suspension as punishment under section 49 of the Civil Services (Classification, Control and Appeal) Rules. Rule 53 of the Fundamental Rules governed pay during interim suspension or suspension as penalty. While there was no appeal from an order of interim suspension, r. 56 of the Appeal Rules provided for an appeal from an order of suspension as penalty. It was this position which article 314 of the Constitution sought to protect. Rule 7 of the All India Services (Discipline and Appeal) Rules, 1955, violated the guarantee contained in article 314 in respect to interim suspension and was to that extent ultra vires in so far as it applied to the members of the Indian Administrative Services who fell within cls. (a) and (b) of r.3 of the Indian Administrative Services (Recruitment) Rules, 1954. The Governor 's Order under r.7(3) directing interim suspension of the appellant must, therefore, be set aside. The proper procedure would be to approach Government of India for such interim suspension. The Accountant General, Bihar vs N. Bakshi, [1962] Supp. 1 S.C.R. 505, referred to. Per Dayal, J. In view of the provisions of section 241 of the Government of India Act as modified by the India (Provisional Constitution) Order, 1947, G.G.O. 14 of 1947, members of the Secretary of State 's Services who were holding posts under a provincial Government immediately before the appointed day, i.e., August 15, 1947, and continued in service thereafter must be deemed in view of article 7(1) of the said Order to have been appointed to the corresponding posts by the appropriate authority, the Governor of the Province. That article generally applied to all appointments on and after the appointed day. The appellant cannot be deemed to have been appointed by the Governor General or the Government of India. It was not intended that merely because that Order was made by the Governor General, the deemed appointments must be taken to have been made by him. It would be anomalous to hold that the Governor, who was in administrative control of the services, could not pass an interim order of suspension against a person appointed by the Secretary of State, though he could impose a penalty of suspension under 1/SCI/64 28 434 rr. 49 and 52 of the Civil Services (Classification, Control and Appeal) Rules, which continued in force till the All India Services (Discipline and Appeal) Rules came into force in 1955. The Indian Civil Services ceased to exist from August 15,1947, and the services of its members automatically terminated on August 14, 1947. The appellant 's service, therefore, came to an end on August 14, 1947, but since he was serving under the Madras Government immediately before August 15, 1947, and continued to do so thereafter he must be deemed to have been appointed by the Governor of Madras to the post he was holding on the appointed day. Rule 7 of the All India Services (Discipline and Appeal) Rules, 1955, does not violate the provision of article 314 of the Constitution, nor can the absence of a right of appeal against interim suspension do so since the appellant had none before the Constitution. His suspension by the Governor of Punjab under r.7(3) was, therefore valid. State of Madras vs K.M. Rajagopalan, ; , considered.

Appeal No. 347 of 1966. Appeal by special leave from the judgment and order dated December 11, 1963 of the Allahabad High Court in second Appeal No, 3809 of 1958. 1008 C. B. Agarwala, O. P. Rana and Ravindra Rana, for the appellants. Denial Latifi and M. 1. Khowaja, for respondent No. 1. The Judgment of the Court was delivered by Grover, J. This is an appeal by special leave from a judg ment of the Allahabad High Court in which the principal question for determination is whether section 9 of the Indian , hereinafter called the "Act", which came into force on December 30, 1955, would be applicable to a suit which was pending on that date. Respondent No. 1 was born on July 3, 1934. He went to Pakistan in October 1950. In March 1953 he obtained a visa from the Indian High Commission in Pakistan for coming to India. He came to India on July 22, 1953. On July 20, 1954 the period of authorised stay expired and respondent No. 1 applied for permanent settlement in India. He, however. filed a writ petition in the High Court on July 15, 1954 but the same was dismissed on February 10, 1955 and respondent No. 1 was directed to file a suit. He instituted a suit on May 6, 1955. He claimed that he was born in India of parents who were residing here and that he was a minor when he was persuaded by two muslim youths to accompany them on a trip to Pakistan. He went there without any intention to settle there permanently. Later on he made efforts to return but due to certain restrictions he was unsuccessful. He had no alternative but to obtain a passport from the Pakistan authorities in order to come to India. He had thus never changed his nationality and continued to remain a citizen of India. He sought a permanent injunction res training the Union of India, the State of U.P., District Magistrate, Kanpur and the Superintendent of Police. Kanpur. who were impleaded as defendants from deporting him. The suit was contested and on the, pleadings of the parties the appropriate issues were framed. The learned Munsif held that respondent No. 1 had gone to Pakistan for settling there permanently and had ceased to be an Indian citizen. The suit was dismissed. Respondent No. 1 appealed to the First Additional Civil Judge, Kanpur. The Teamed Judge was of the view that respondent No. 1 had gone to Pakistan when he was a minor and when his father, who was his guardian, was in India. By his departure to Pakistan, respondent No. 1 could not change his nationality. Even on a consideration of the evidence it could not be held that he had shifted to Pakistan with the intention of settling there permanently. His appeal was allowed and a permanent injunction as prayed was issued. The Union of India and other appellants preferred an appeal to the High 1009 Court. Before the High Court a preliminary objection was taken that the civil court had no jurisdiction to try the question whether respondent No. 1 had acquired the citizenship of Pakistan which matter had to be referred to the Central Government under Rule 30 of the Citizenship Rules framed under the Act. This objection was repelled in view of another decision of the High Court according to which section 9 of the Act and Rule 30 could not operate retrospectively and affect pending litigation. Before the High Court the finding that respondent No. 1 did not go to Pakistan with the intention of settling there permanently was not challenged by the appellants. The High Court was inclined to agree with the lower appellate court that so long as respondent No. 1 was a minor he could not change his Indian domicile because his parents were domiciled in this country. The High Court proceeded to say that since respondent No. 1 had spent one year in Pakistan after he had ' obtained majority it was necessary to investigate whether he had acquired, during that period, the citizenship of Pakistan. An appropriate issue was framed and remitted to the lower appellate court for its determination. The appellate court held that respondent No. 1 had not acquired the citizenship of Pakistan since it was not legally possible for him to do so for the reason that according to laws of Pakistan he could become a major only on attaining the age of twenty one. On December 11, 1963 the High Court disposed of the appeal of the present appellants by dismissing it in view of the findings which were in favour of respondent No. 1. Learned counsel for the appellants had contended before us that the civil court had no jurisdiction to decide the question of citizenship after the enforcement of the Act towards the end of the year 1955 in view of the provisions of Rule 30 of the Citizenship Rules 1956 promulgated in exercise of the Dower conferred by section 1 8 (2) (h) of the Act. Section 9 is in the following terms "section 9(1) Any citizen of India who by naturalisation, registration or otherwise voluntarily acquires, or has at any time between the 26th January 1950 and the commencement of this Act, voluntarily acquired the citizenship of another country, shall upon such acquisition or, as the case may be, such commencement, cease to be a citizen of India : Provided that nothing in this sub section shall apply to a citizen of India who during any war in which India may be engaged, voluntarily acquires the citizenship of another country, until the Central Government otherwise directs. 1010 (2) If any question arises as to Whether, when or how any person has acquired the citizenship of another country, it shall be determined by such authority in such manner and having regard to such rules of evidence, as may be prescribed in this behalf. " Rule 30 provides: "Authority to determine acquisition of citizenship of another country. (1) If any question arises as to whether, when or how any person has acquired the citizenship of another country, the authority to determine such question shall, for the purpose of section 9(2) by the Central Government. The Central Government shall in determining any such question have due regard to the rules of evidence. specified in Schedule III. " The validity of the provisions of the Act and the Rules is no longer open to challenge. 'It has not been disputed by learned counsel for respondent No. 1 that after the enforcement of the Act and promulgation of Rule 30 the only authority which is competent to determine whether citizenship of Pakistan has been acquired by him is the Central Government. But it has been strenuously urged that the suit in the present case had been instituted prior to the date of enforcement of the Act and therefore respondent No. 1 was entitled to get this question determined by the Courts and not by the Central Government. In other words section 9 of the Act cannot be given 'retrospective operation so as to be made applicable to pending proceedings. Thus the first point which has to be decided is whether section 9 either expressly or by necessary implication has been made applicable to or would govern pending proceedings. The language of sub section (1) is clear and unequivocal and leaves no room for doubt that it would cover all cases where an Indian citizen has acquired foreign nationality between January 26, 1950 and its commencement or where he acquires such nationality after it ; commencement. The words "or has at any time between the 26th January 1950 and the, commencement of this Act. voluntarily acquired the citizenship of another country" would become almost redundant if only prospective operation, is given to section 9 (1) of the Act. This according to the settled rules of intepretation cannot be done. It must be remembered that Article 9 of the Constitution provides that no person shall be a Citizen of India by virtue of article 5 or be deemed to be a citizen of India by virtue of article 6 or article 8 if he has voluntarily acquired the citizenship of any foreign State. , This. means that if prior to the commencement of the Constitution a person ' had voluntarily acquired the citizenship of any foreign State he was not entitled ' to ' 'claim the citi 1011 zenship of India by virtue of articles 5 and 6 or 8. This article thus deals with cases where the citizenship of a foreign State had been acquired by an Indian citizen prior to the commencement of the Constitution (vide Izhar Ahmed Khan vs Union of India) (1). Article 11, however, makes it clear that Parliament has the power to make any provision with respect to the acquisition and termination of citizenship and all other matters relating to citizenship. The Parliament could thus regulate the right of citizenship by law. As pointed out in the above decision of this Court it would be open to the Parliament to affect the rights of citizens and the provisions made by the Parliamentary statute cannot be impeached on the ground that they are inconsistent with the provisions contained in other Articles, in Part II of the Constitution. The Act has been enacted under the powers of the Parliament preserved by article 11 in express terms. The Parliament had also legislative competence under Entry 17, List I of Seventh Schedule. It could thus make a provision about the forum where the question as to whether a person had acquired citizenship of another country could be determined and this is what has been done by Rule 30. The cases that would ordinarily arise about loss of Indian citizenship by acquisition of foreign citizenship would be of three kinds: (1) Indian citizens who voluntarily acquired citizenship of a foreign State prior to the commencement of the Constitution; (2) Indian citizens who voluntarily acquired the citizenship of another State or country between January 26, 1950 and December 30, 1955 i.e. the date of commencement of the Act and (3) Indian citizens who voluntarily acquired foreign citizenship after the date of commencement of the Act i.e. December 30, 1955. As regards the first category they were dealt with by article 9 of the Constitution. The second and the third categories would be covered by the provisions of section 9 of the Act. If a question arises as to whether, when or how an Indian citizen has, acquired the citizenship of another country that has to be determined by the Central Government by virtue of the provisions of sub section (2) of section 9 read with Rule 30 of the Citizenship Rules. Counsel for respondent No. 1 has relied on a decision of a learned Single Judge of the Allahabad High Court in Abida Khatoon & Another vs State of U.P. & Ors. (2) which was followed in the present case. There it was observed that a litigant, after filing a suit, acquired a vested right to have all questions determined by the court in which the suit was filed and that the institution of the suit carried with it all the rights of appeal then in force. Referring to the normal principle that an Act is ordinarily not retrospective, that vested rights are not disturb (1) [1962] Supp 3 section R. 235, 244, 245, (2) A.I.R. 1963 All. 1012 ed and that the jurisdiction of the civil courts in pending cases is not taken away by the creation of a new tribunal for the determination of a particular question, the learned judge held that there was nothing in the language or the scheme of the Act to suggest that Parliament wanted to depart from these principles. We are unable to agree. In our judgment from the amplitude of the language employed in section 9 which takes in persons in category (2) mentioned above the intention has been made clear that all cases which come up for determination where an Indian citizen has voluntarily acquired the citizenship of a foreign country after the commencement of the Constitution have to be dealt with and decided in accordance with its provisions. In this view of the matter the entire argument which prevailed with the Allahabad court can have no substance. It has next been contended that retrospective operation should not be given to section 9 of the Act because loss of Citizenship is a serious and grave matter and it involves loss of personal liberty. Under article 21 no person can be deprived of his life or personal liberty except according to procedure established by law. The procedure established by law before the commencement of the Act was the ordinary procedure of determination by civil courts whenever a question arose about loss of Indian citizenship by acquisition of citizenship of a foreign country or State. It is suggested by learned counsel for respondent No. 1 that by giving retrospective operation to section 9 so as to make it applicable to pending proceedings the provisions of article 21 win be contravened or violated. This would render section 9 of the Act unconstitutional. It is somewhat difficult to appreciate the argument much less to accede to it. If the Parliament was competent under article 11, which is a constitutional provision read with the relevant Entry in List 1, to legislate about cases of persons belonging to categories 2 and 3 referred to at a previous stage it could certainly enact a legislation in exercise of its sovereign power which laid down procedure different from the one which obtained before. The new procedure would itself become the "procedure established by law" within the meaning of article 21 of the Constitution. Therefore even on the assumption that loss of Indian citizenship with consequent deportation may involve loss of personal liberty within the meaning of article 21, it is not possible to hold that by applying section 9 of the Act and Rule 30 of the Rules to a case in which a suit had been instituted prior to the commencement of the Act there would be any contravention or violation of that Article. In conclusion it may be mentioned that this could, in several cases, has consistently held that questions falling within section 9(2) have to be determined to the extent indicated therein by the 1013 Central Government and not by the courts. Such matters as are not covered by that provision have, however, to be determined by the courts; (see Akbar Khan Alam Khan & Anr. vs The Union of India & Ors. (1) and lzhar Ahmed Khan vs Union of India) (2) and The Government of Andhra Pradesh vs Syed Mohd. Khan) (3). In the present case the High Court ought not to have called for a decision of the lower appellate court on the issue of the plaintiff having acquired or not acquired the citizenship of Pakistan between July 3, 1952 and the date of his return to India. The appeal is, consequently, allowed and the order of the High Court is hereby set aside. It will be for the High Court now to make appropriate orders for determination of the aforesaid question by the Central Government after which alone the High Court will be in a position to dispose of the appeal finally. Costs will abide the result. G.C. Appeal allowed. (1) [1962] 1 S.C.R.779. (2) [1962] Supp. 3 S.C.R. 235. (3) (1962] Supp. 3 S.C.R. 288. LlISup C.1/69 2,500 31 3 70 GIPF.

Respondent No. 1 was born in undivided India on July 3, 1934. He went to Pakistan in October 1950. In 1953 he obtained a visa from the Indian High Commission in Pakistan and came to India on July 22, 1953. After the expiry of his period of stay he sought permanent settlement in India. On May 6, 1955 he filed a suit claiming that he was a minor when he went on a trip to Pakistan and had not ceased to be an Indian citizen. He sought a permanent injunction restraining the Union of India and other authorities from deporting him. The Munsif who tried the suit held that respondent No. 1 had ceased to be an Indian citizen, and dismissed the suit. The District Judge in first appeal held that being a minor whose father was in India respondent no.1 could not by leaving for Pakistan, lose his Indian nationality. In second appeal the High Court of Allahabad remanded the case to the first appellate court to determine the question whether by having spent one year in Pakistan after attaining majority respondent No. 1 had acquired the citizenship of Pakistan. The High Court rejected the contention on behalf of the State that in view of section 9(2) of the Indian which came into force on December 30, 1955 and Rule 30 of the Citizenship Rules made under the Act, the question whether respondent No. 1 was a citizen of India or not could only be decided by the Central Government. In taking this view the High Court relied on the decision in Abida Khatoon 's case in which a single Judge of that court had held that section 9 of the was not retrospective and could not take away the vested right of a citizen who had already filed a suit to have his claim for citizenship decided by a court. 'the first appellate court gave after remand a finding favourable to respondent No. 1 and on receipt of this finding the High Court dismissed the State 's appeal. The State then appealed to this Court. The questions that fell for consideration were : (i) whether section 9 of the Act would apply to a suit pending on the date when the Act came into force; (ii) whether in view of the fact that the procedure established by law before the commencement of the Act allowed the question as to the acquisition of the citizenship of another country to be determined by courts, there was by giving retrospective operation to section 9, a violation of the guarantee of personal liberty under article 21. HELD : (i) The language of sub section (1) of section 9 is clear and unequivocal and leaves no room for doubt that it would cover all cases where an Indian citizen has acquired foreign nationality between January 26, 1950 and its commencement or where he acquires such nationality after its commencement. The words "or has at any time between the 26th January 1950 and the commencement of the Act, voluntarily acquired the citizenship of another country" would become almost redundant if only prespective operation is given to section 9(1) of the Act. This according to the settled rules of interpretation cannot be done, [1010 F G] 1007 (ii) The Act has been enacted under the powers of the Parliament preserved by article 11 in express terms and a law made by Parliament cannot, as. held in lzhar Ahmed 's case be impeached on the ground that it is inconsistent with the provisions contained in other Articles in Part II of the Constitution. The Parliament had also legislative competence under Entry 17, List I of Seventh Schedule. It could thus make a provision, about the forum where the question as do whether a person had acquired citizenship of another country could be determined and this is what has been done by r. 30. [1011 B D] The cases that would ordinarily arise about loss of Indian citizenship by acquisition of foreign citizenship would be of three kinds : (1) Indian citizens who voluntarily acquired citizenship of a foreign, State perior to the commencement of the Constitution; (2) Indian citizens who voluntarily acquired the citizenship of another State or country between January 26, 1950 and December 30, 1955 i.e. the date of commencement of the Act, and (3) Indian Citizens who voluntarily acquired foreign citizenship after the date of commencement of the Act i.e. December 30, 1955. As regards the first category they were dealt with by article 9 of the Constitution. The second and third categories would be covered by the provisions of section 9 of the Act. Therefore, if a question arises as to whether when and how an Indian citizen has acquired citizenship of another country that has to be determined by the central Government by virtue of the provisions of sub section (2) of section 9 read with r. 30 of the Citizenship Rules. In view of the amplitude of the language employed in section 9 which takes in persons mentioned in category (2) mentioned above, the entire argument which prevailed with the Allahabad High Court in Abida Khatoon 's case can have no substance. [1011 D H, 1012 C] lzhar Ahmad Khan vs Union of India, [1962] Supp. 3 S.C.R. 235, 244, 245., Akbar Khan Alam Khan & Anr. vs Union of India, ; and The Government of Andhra Pradesh vs Syed Mohd. Khan, [1962] Supp. 3 S.C.R. 288, referred to. Abida Khatoon & Anr. vs State of. U.P. & Ors. A.I.R. 1963 All 260, disapproved. (iii) The contention that retrospective operation of section 9 would contravene article 21 of the Constitution could not be accepted. If the Parliament was competent under article 11 which is a constitutional provision read with the relevant entry in List I to legislate about ' cases of persons belonging to categories 2 and 3 referred to earlier it could certainly enact a legislation in exercise of its sovereign power which laid down a procedure different from the one which obtained before. The new procedure would ltself become the "procedure established by law" within the meaning of article ' 21 of the Constitution. [101 2 E G] The High Court was therefore wrong in the present case in calling for a decision of the lower appellate court on the issue of the plaintiff having acquired or not the citizenship of Pakistan between July 3, 1952 and the date of his return to India. [High Court accordingly directed to have question determined by Central Government and thereafter dispose of appeal finally]. [1013 B C]

ppeal No. 4447 of 1991 From the Judgment and Order dated 24.4.1991 of the Madras High Court in Civil Revision Petition No. 4769 of 1984. E.C.Agarwala for the Appellant. Mrs. Jayashree Ahmed for the Respondent. The Judgment of the Court was delivered by RANGANATH MISRA, CJ. Special leave granted. Appellant is the tenant of a premises located in Sivaka si within the State of Tamil Nadu to which the provisions of the Tamil Nadu Buildings (Lease and Rent Control) Act apply. The rental of the premises is Rs. 275 per month. Respondents initiated action for eviction on the plea that there was "wilful default" in the matter of payment of rent and change of user. It was contended that the lease was residential but it had been used partly for commercial activity. The appellant took the stand that rent was not being collected every month since the respondents resided away from the place where the property is situated and every two to three months they used to come and collect rent at land lord 's convenience. Two receipts were produced to support this stand. Rent was collected in one case for three months and in the other for two months at a time. Admittedly at the time of filing of the petition for eviction three months ' rent had fallen due. So far as the 205 change of user was concerned it was denied by pleading that mixed use was the basis of the tenancy. The original authority dismissed the petition but that has been reversed in appeal and the reversal has been upheld by the High Court. Two contentions were raised before us: (i) there is no case of wilful default particularly when the two receipts showed acceptance of rent for periods as pleaded by the tenant without demur and (ii) that the premises had been rented out also for business use and at any rate admittedly from 1973 there has been this change. Counsel for the respondents does not dispute that from 1973 there has been change of use. The petition for eviction is of 1980. It follows that for seven years no objection was raised for change of use and for the first time when evic tion was sought, conversion was made the second ground. In these circumstances, we are prepared to accept the submis sion advanced on behalf of the appellant that the landlords accepted the user to be also other than residential. Both parties relied upon a decision of this Court in the case of section Sundaram Pillai & Ors. etc. V.R. Pattabiraman & Ors. ; , , where default and 'wilful ' default were distinctly treated. In the several statutes operating in the different States regulating the law relat ing to landlord and tenant 'wilful ' default has been made the ground of eviction while default is not. We may also refer to a short but suggestive Order dated March 27,1991, of this court in Civil Appeal No. 1367 of 1991 [Premchand Banka vs A. Vasanthrai Khatod & Ors.] to support our conclu sion. A situation where the landlord had consented to col lect rent for two to three months at a time non payment of rent for three months cannot constitute wilful default. Since in the present case default was of three months at time of filing of the case, we are prepared on the basis of the evidence on record that it was not a case for wilful default. Accordingly the conclusion reached in appeal and upheld by the High Court would not be sustainable. We allow the appeal and reverse the Judgment of the High Court and dismiss the petition for eviction. We would, however. like to add that judicial notice can be taken of the fact that rental has escalated everywhere and appropri ate rent in the present case should be raised to Rs. 400 per month from 1.1.1992. The tenant should have a direction to pay the rent in advance from month to month as stated by him in the Court below and it should be by the end of every month. There will be no order as to COSTS. V.P.R. Appeal allowed.

Appellant was a tenant under the respondents. Action for eviction against the appellant was initiated on the pleas that there was "wilful default" in the matter of payment of rent and that the lease was residential but it had been used partly for commercial activity. At the time of filing of the petition for eviction three months ' rent had fallen due. The appellant 's case was that rent was not being collected every month and every two to three months the respondents landlords used to come and collect rent at their convenience, and that mixed use of the premises was the basis of the tenancy. The original authority dismissed the petition. In appeal it was reversed. The High Court upheld the reversal holding that there was no case of wilful default and that the prem ises had been rented out also for business use. In the appeal by special leave the tenant appellant contended that there was no case of wilful default and that the premises had been rented out also for business use and the change of user was since 1973. Allowing the appeal of the tenant, this court, HELD: 1. In the several statutes operating in the different states regulating the law relating to landlord and tenant 'wilful ' default has been made the ground of eviction while default is not. [205 E] 204 2. A situation where the landlord had consented to collect rent for two to three months a time, non payment of rent for three months cannot constitute wilful default. [205 F] 3. It is not disputed that from 1973 there had been change of use. The petition for eviction was of 1980. It follows that for seven years no objection was raised for change of use and for the first time when eviction was sought, conversion was made the second ground. In these circumstances the landlords accepted the user to be also other than residential. [205 C D] section Sundaram Pillai & Ors. V.R. Pattabiraman & Ors. ; , ; Premchand Banka vs A. Vasanthrai Khatod & Ors., C.A.No. 1367 of 1991, decided on 27.3.1991, referred to.

Appeal No. 650 of 1957. Appeal from the judgment dated July 13, 1956, of the Patna High Court in Miscellaneous Judicial Case No. 665 of 1954. R. Ganapathy Iyer and R. H. Dhebar, for the appellant. A. V. Viswanatha Sastri and R. C. Prasad, for the respondent. November 29. The Judgment of the Court was delivered by HIDAYATULLAH, J. This is an appeal by the Commissioner of Income tax with a certificate against the judgment and order of the High Court at Patna answering two questions of law referred to it under section 66(1) of the Income tax Act by the Tribunal, in the negative. Those questions were: "(1) Whether in the circumstances of the case assessment proceedings were validly initiated under section 34 of the Indian Income tax Act? (2) If so, whether in the circumstances of the case the amount received from interest on arrears of agricultural rent was rightly included in the income of the assessee ?" The assessee, the Maharaja Pratapsingh Bahadur of Gidhaur, had agricultural income from his zamindari for the four assessment years 1944 45 to 1947 48. In assessing his income to income tax, the authorities did not include in his assessable income interest received by him on arrears of rent. This was presumably so in view of the decision of the Patna High Court. When the Privy Council reversed the view of law taken by the Patna High Court in Commissioner of Income tax vs Kamakhya Narayan Singh (1), the Income tax Officer issued notices under section 34 of the (1) 762 Indian Income tax Act for assessing the escaped income. These notices were issued on August 8, 1948. The assessments after the returns were filed, were completed on August 26, 1948. Before the notices were issued, the Income tax Officer had not put the matter before the Commissioner for his approval, as the section then did not require it, and the assessments were completed on those notices. Section 34 was amended by the Income tax and Business Profits Tax (Amendment) Act, 1948 (No. 48 of 1948), which received the assent of the Governor General on Sep tember 8, 1948. The appeals filed by the assessee were disposed of on September 14 and 15, 1951, by the Appellate Assistant Commissioner, before whom no question as regards the validity of the notices under section 34 was raised. The question of the validity of the notices without the approval of the Commissioner appears to have been raised before the Tribunal for the first time. In that appeal, the Accountant Member and the Judicial Member differed, one holding that the notices were invalid and the other, to the contrary. The President agreed with the Accountant 'Member that the notices were invalid, and the assessments were ordered to be set aside. The Tribunal then stated a case and raised and referred the two questions, which have been quoted above. The High Court agreed with the conclusions of the majority, and the present appeal has been filed on a certificate granted by the High Court. Section 34, as it stood prior to the amendment Act No. 48 of 1948, did not lay any duty upon the Income tax Officer to seek the approval of the Commissioner before issuing a notice under section 34. The amending Act by its first section made sections 3 to 12 of the amending Act retrospective by providing "sections 3 to 12 shall be deemed to have come into force on the 30th day of March, 1948. . Section 8 of the amending Act substituted a new section in place of section 34, and in addition to textual changes with which we are not concerned, also added a proviso to the following effect : "Provided that 763 (1) the Income tax Officer shall not issue a notice under this sub section unless he has recorded his reasons for doing so and the Commissioner is satisfied on such reasons that it is a fit case for the issue of such notice. " The question is whether the notices which were issued were rendered void by the operation of this proviso. ' The Commissioner contends that section 6 of the , particularly cls. (b) and (c) saved the assessments as well as the notices. He relies upon a decision of the Privy Council in Lemm vs Mitchell (1), Eyre vs Wynn Mackenzie (2) and Butcher vs Henderson (3) in support of his proposition. The last two cases have no bearing upon this matter; but strong reliance is placed upon the Privy Council case. In that case, the earlier, action which had been commenced when the Ordinance had abrogated the right of action for criminal conversation, had already ended in favour of the defendant and no appeal therefrom was pending, and it was held that the revival of the right of action for criminal conversation did not invest the plaintiff with a right to begin an action again and thus expose the defendant to a double jeopardy for the same act, unless the statute expressly and by definite words gave him that right. The Privy Council case is thus entirely different. No doubt, under section 6 of the it is provided that where any Act repeals any enactment, then unless a different intention appears, the repeal shall not affect the previous operation of any enactment so repealed or anything duly done thereunder or affect any right, obligation or liability acquired, accrued or incurred under any enactment so repealed. It further provides that any legal proceedings may be continued or enforced as if the repealing Act had not been passed. Now, if the amending Act had repealed the original section 34, and merely enacted a new section in its place, the repeal might not have affected the operation of the original section by virtue of section 6. But the amending Act goes further than this. It (1) ; (2) (3) 764 repeals the original section 34, not from the day on which the Act received the assent of the Governor General but from a stated day, viz., March 30, 1948, and substitutes in its place another section containing the proviso above mentioned. The amending Act provides that the amending section shall be deemed to have come into force on March 30, 1948, and thus by this retrospectivity, indicates a different intention which excludes the application of section 6. It is to be noticed that the notices were all issued on August 8, 1948, when on the statute book must be deemed to be existing an enactment enjoining a duty upon the Income tax Officer to obtain prior approval of the Commissioner, and unless that approval was obstained, the notices could not be issued The notice were thus invalid. , The principle which was applied by this Court in Venkatachalam vs Bombay Dyeing & Mfg. Co. Ltd. (1) is equally applicable here. No question of law was raised before us, as it could not be in view of the decision of this Court in Narayana Chetty vs Income tax Officer (2), that the proviso was not mandatory in character. Indeed, there was time enough for fresh notices to have been issued, and we fail to see why the old notices were not recalled and fresh ones issued. For these reasons, we are in agreement with the High, Court in the answers given, and dismiss this appeal with costs. A appeal dismissed.

The appellant who had agricultural income from his Zamindari was assessed to income tax for the four assessment years, 1944 45, to 1947 48. The income tax authorities did not include in his assessable income, interest received by him on arrears of rent, in view of a decision of the Patna High Court, but subsequently this view of law was reversed by the Privy Council. On August 8, 1948, the Income tax Officer issued notices under section 34of the Indian Income tax Act, 1922, for assessing the escaped income. Before the notices were issued the Income tax Officer had not put the matter before the Commissioner for his approval as the section then did not require it and the assessments were completed on those notices. In the meantime, certain amendments were made to the Indian Income tax Act by Act 48 of 1948, which received the assent of the Governor General on September 8, 1948. The Amending Act substituted a new section in place of section 34, which among other changes, added a proviso to the effect that "the Income tax Officer shall not issue a notice. unless he has recorded his reasons for doing so and the Commissioner is satisfied on such reasons that it is a fit case for the issue of such notice", and also made it retrospective by providing that the new section "shall be deemed to have come into force on the 30th day of March, 1948". The question was whether the notices issued by the Income tax Officer on August 8, 1948, without the approval of the Commissioner, were rendered void by reason of the operation of the amended section 34. The Commissioner claimed that section 6 of the , saved the assessments as well as the notices. Held, that section 6 of the , was in applicable as the Amending Act of 1948 indicated a different intention within the meaning of that section, inasmuch as the amended section 34 of the Indian Income tax Act, 1922, provided that it shall be deemed to have come into force on March 30, 1948. Lemm vs Mitchell, ; , distinguished, 761 Held, further, that the notices issued by the Income tax Officer on August 8, 1948, and the assessments based on them were invalid. Venkatachalam vs Bombay Dyeing & Mfg. Co., Ltd., ; , applied.

Special Leave Petition (Civil) No. 11868 of 1983. From the Judgment and Order dated the 16th July, 1983 of the Andhra Pradesh High Court in Application No. 53 of 83. Soli J. Sorabjee, V.R. Reddy, K. Rajendra Chowdhary and K. Shivraj Chowdhary for the Petitioner. The Judgment of the Court was delivered by FAZAL ALI, J. This petition for special leave is directed against an interlocutory Order dated July 16, 1983 of the Andhra Pradesh High Court rejecting the application of the petitioner for dismissing the election petition of the respondent in limine under section 86 of the Representation of the People Act (hereinafter referred to as the `Act '.) The petition arises out of an election to the Siddipets Assembly Constituency in Andhra Pradesh which took place on January 5, 1983. The petitioner was declared elected to the said Assembly. The respondent filed an election petition in the High Court alleging certain corrupt practices. The short point for consideration before us is as to whether or not the election petition was liable to be dismissed in limine under section 86 of the Act as the copies of the documents and schedules, which formed an integral part of the election petition, were not supplied to the petitioner which amounted to a clear breach of the mandatory provisions contained in section 81 (3) of the Act. The High Court after hearing both the parties dismissed the application of the petitioner for throwing out the election petition of the respondent in limine We have heard counsel for the parties at length and it seems to us that the matter is no longer res integra and is covered by a decision of this Court is Sahodrabai Rai vs Ram Singh Aharwar (1) to which we shall refer hereafter. 896 On the findings of the High Court three facts are clearly proved: (a) that when the election petition was filed, it was accompanied by as many copies as were the respondents, (b) that the election petition was duly verified and the copies thereof were accompanied by the necessary schedules containing the details of corrupt practices, and (c) that the schedules or the annexures to the petition were also signed by the election petitioner (respondent). The only complaint of the petitioner was that the copy of the election petition served on him was not accompanied by copies of the schedules and hence there was a clear breach of the provisions of section 81 (3) of the Act. Section 81(3) may be extracted thus: "81. Presentation of petitions XX XX XX (3) Every election petition shall be accompanied by as many copies thereof as there are respondents mentioned in the petition, and every such copy shall be attested by the petitioner under his own signature to be a true copy of the petition." An analysis of the above reveals (a) that the petition should be accompanied by as many copies as there are respondents, (b) that every such copy should be attested by the petitioner under his own signature to be a true copy of the petition. It is not disputed in this case that both these conditions were fully satisfied. Section 83 of the Act contains four requirements, viz., (a) that the election petition shall contain a concise statement of the material facts relied upon by the petitioner, (b) that the petitioner should set forth the full particulars of the corrupt practices alleged, 897 (c) that the petition should be signed by the petitioner and verified in the manner laid down in the Code of Civil Procedure and where a corrupt practice is alleged the petition should also be accompanied by an affidavit in the prescribed form, giving the particulars of the corrupt practice, and (d) any schedule or annexure to the petition should also be signed and verified by the petitioner. These conditions have also been fulfilled in the present case. The counsel for the petitioner vehemently contended that as the schedules and other documents formed an integral part of the petition, the same should have been served on the petitioner (respondent in the High Court) before it could be said that the provisions of sections 81 and 82 of the Act had been complied with. It was further argued that in the absence of such a compliance, the petition was liable to be rejected in limine under section 86 of the Act. We are, however, unable to agree with this contention which does not at all flow from the plain and simple requirements of sections 81 and 82. As indicated above, all that was necessary was done in this case and there was no requirement that the documents or the schedules should also have been served on the petitioner because if they were filed in the Court it was always open to the petitioner to inspect them and find out the allegations made in the petition. We are unable to hold that the documents or the schedules formed an integral part of the petition. An identical question came up for consideration before this Court in Sahodrabai 's case (supra) where while repelling a similar argument the following observations were made: "The only provision to which our attention has been drawn is sub section (3) of section 81 and sub section (2) of section 83. The first provides that every election petition shall be accompanied by as many copies thereof as there are respondents mentioned in the petition and that every such copy shall be an authenticated true copy. The words used here are only "the election petition. " There is no mention of any document accompanying the election petition. . Assistance is however taken from the provisions of sub section (2) of section 83 which provides that any schedule or any annexure to the 898 petition shall also be signed by the petitioner and verified in the same manner as the petition. It is contended that since the pamphlet was an annexure to the petition it was not only necessary to sign and verify it, but that it should have been treated as a part of the election petition itself and a copy served upon the respondents. In this way, non compliance with the provisions of section 86 (1) is made out. In our opinion, this is too strict a reading of the provisions. We have already pointed out that section 81 (3) speaks only of the election petition. . Even if this be not the case, we are quite clear that sub section (2) of section 83 has reference not to a document which is produced as evidence of the averments of the election petition but to averments of the election petition which are put, not in the election petition but in the accompanying schedules or annexures. . But what we have said here does not apply to documents which are merely evidence in the case but which for reasons of clarity and to lend force to the petition are not kept back but produced or filed with the election petitions. They are in no sense an integral part of the averments of the petition but are only evidence of those averments and in proof thereof. The pamphlet therefore must be treated as a document and not as a part of the election petition in so far as averments are concerned. . It would be stretching the words of sub section (2) of section 83 too far to think that every document produced as evidence in the election petition becomes a part of the election petition proper. " It is a well settled principle of interpretation of statute that wherever a statute contains stringent provisions they must be literally and strictly construed so as to promote the object of the Act. As extracted above, this Court clearly held that if the arguments of the appellant (in that case) were to be accepted, it would be stretching and straining the language of sections 81 and 82 and we are in complete agreement with the view taken by this Court which has decided the issue once for all. The learned counsel relied on a latter decision of this Court in the case of M. Karunanidhi vs H. V. Hande(1) where a Division 899 Bench while considering a similar question made the following observations: "The Preliminary issue and the appeal turn on a short point of construction. The question that arises is whether the words "copies thereof" in sub section (3) of Section 81 comprehend the election petition proper or do they also include a schedule or annexure in terms of sub section (2) of Section 83 or merely a document only in proof of the allegations in paragraph 18 (b) must turn on a construction of sub section (3) of Section 81 read with sub section (2) of Section 83. It now appears to be well settled by Sahodrabai 's case; , that sub section (2) of section 83 applies only to a schedule or annexure which is an integral part of the election petition and not to a document which is produced as evidence of the averments of the election petition. " This decision in no way departs from the ratio laid down in Sahodrabai 's case (supra). The aforesaid case however, rested on the ground that the document (pamphlet) was expressly referred to in the election petition and thus became an integral part of the same and ought to have been served on the respondent. It is, therefore, manifest that the facts of the case cited above are clearly distinguishable from the facts of the present case. Furthermore, the decision in M. Karunanidhi 's case (supra) has noticed the previous decision and has fully endorsed the same. For these reasons, therefore, we are clearly of the opinion that the view taken by the High Court was correct and no interference is called for with the judgment of the High Court. As the matter was clearly concluded by authorities of this Court we did not think it necessary to grant special leave and hearing the parties at length we disposed of and dismiss the petition in terms of the aforesaid observations. P.B.R. Petition dismissed.

The respondent filed an election petition in the High Court alleging that the returned candidate (petitioner herein) had committed corrupt practices which rendered his election void. The returned candidate made an application stating that the respondent had committed breach of the mandatory provisions of section 81 (3) in that with the copy of the election petition served on him, copies of documents and schedules which formed an integral part of the election petition, had not been enclosed and that for this reason the election petition was liable to be dismissed in limine under section 86. The High Court dismissed his application. In the special leave petition the returned candidate has urged the same argument advanced by him before the High Court. Dismissing the petition, ^ HELD: There is no requirement of law that the documents or schedules to the election petition should also be served on the candidate because if they were filed in Court it is always open to the returned candidate to inspect them and find out the allegations made in the petition. Documents or schedules do not form an integral part of the election petition. [897E F] In the instant case all that was necessary to be done by the election petitioner had been done. The election petition was accompanied by as many copies as there were respondents. It was duly verified and copies thereof were accompanied by necessary schedules containing the details of corrupt practices and the schedules were also signed by the petitioner. [897E F] 895 Sahodrabai Rai vs Ram Singh Aharwar, [1968 3 SCR and M. V. Hande, , held inapplicable.

Appeal No. 426 of 1964. Appeal by special leave from the judgment and order dated February 22, 1962 of the Punjab High Court (Circuit Bench) at Delhi in Civil Revision No. 311 D of 1958. S.P. Sinha and Inder Sen Sawhney, for the appellant, K. K. Jain and Bishambar Lal, for the respondent. The Judgment of the Court was delivered by Ramaswami, J. This appeal is brought, by special leave, from the judgment of the Punjab High Court dated February 22, 1962 in Civil Revision No. 331 D of 1958 whereby the High Court upheld and confirmed the judgment of the Appellate Court and set aside the judgment of the trial court staying proceedings in the suit. The Uttar Pradesh Co operative Federation Limited (herein after referred to as the 'Society ') was registered under the Cooperative Societies Act No. II of 1912 at Lucknow and was carrying on the business of plying public carriers on Kanpur Delhi route. The Society had been granted, for this purpose, permits by the Uttar Pradesh Government and Delhi Administration for seven vehicles. In March, 1954, the Society entered into an agreement with the plaintiffs M/s Sunder Brothers through Bimal Kumar Jain and Dhan Kumar Jain by which they were appointed as Managing Agents for carrying on the business as public carriers. The terms of the Managing Agency agreement were embodied in a letter dated March 2, 1954 written by the Secretary of the Society. Clause 28 of the agreement reads as follows: "That in the event of there being any dispute regarding the terms and conditions of this agreement and your appointment hereunder as Managing Agents of the aforesaid business or any matter arising from and relating thereto or the subject matter thereof, such dispute shall be decided by arbitration as provided under Co operative Societies Act II of 1912 and you undertake and agree to be bound by the provisions for arbitration in the said Act". The agreement was to last for a period of three years but on July 5, 1954 the Society terminated the agreement by its letter dated July 5, 1954, The plaintiffs therefore brought a suit on August 217 18, 1954 in the Court of the Subordinate Judge, First Class, Delhi praying for a declaration that the termination of the Managing Agency agreement by the Society was illegal and the plaintiffs were entitled to continue the business of Managing Agents in accordance with the terms and conditions of the agreement. The plaintiffs prayed for a mandatory injunction restraining the defendant Society from terminating the agreement. The Society made an application under section 34 of the Indian before the Subordinate Judge, Delhi, for an order for staying the suit. It was claimed by the Society that the suit was not main tainable, because under section 51 of the Co operative Societies Act the dispute was to be adjudicated upon by the Registrar of Co operative Societies. In the alternative it was alleged that by agreement between the parties the dispute was to be referred to arbitration in accordance with the Co operative Societies Act and consequently proceedings should be stayed. The trial court stayed the proceedings but on the appeal of the plaintiffs the order of the trial court was set aside and the application of the Society under section 34 of the Indian was dismissed. The Society moved the Punjab High Court in revision but the revision application was dismissed and the order of the lower appellate court was confirmed. It is necessary at this stage to set out the relevant provisions of the Indian (Act 10 of 1940). Section 34 of this Act states: "34. Where any party to an arbitration agreement or any person claiming under him commences any legal proceedings against any other party to the agreement or any person claiming under him in respect of any matter agreed to be referred, any party to such legal proceedings may, at any time before filing a written statement or taking any other steps in the proceedings, apply to the judicial authority before which the proceedings are pending to stay the proceedings, and if satisfied that there is no sufficient reason why the matter should not be referred in accordance with the arbitration agreement and that the applicant was, at the time when the proceedings were commenced, and still remains, ready and willing to do all things necessary to the proper conduct of the arbitration, such authority may make an order staying the proceedings". Section 46 provides as follows: "46. The provisions of this Act, except sub section (1) of section 6 and sections 7, 12, 36 and 37, shall apply to every arbitration under any other enactment for the time being in force, as if the arbitration were pursuant to an 5301 16(a) 218 arbitration agreement as if that other enactment were an arbitration agreement, except in so far as this Act is in. consistent with that other enactment or with any rules, made thereunder". Section 47 reads as follows: "47. Subject to the provisions of section 46, and save in so far as is otherwise provided by any law for the time being in force, the provisions of this Act shall apply to all arbitrations and to all proceedings thereunder: Provided that an arbitration award otherwise obtained may with the consent of all the parties interested be taken into consideration as a compromise or adjustment of a suit by any Court before which the suit is pending". There was some controversy in the lower courts as to whether the arbitration under cl. 28 of the agreement was a statutory arbitration and whether section 46 of the Indian was applicable to the case. It was argued by Mr. Sinha on behalf of the appellant Society that no statutory arbitration is created by cl. 28 of the agreement but the parties had merely agreed to act in accordance with the provisions of the Co operative Societies Act (Act 11 of 1912) and the Rules made thereunder. It was contended that the parties had merely incorporated the statutory provisions by reference in their agreement and section 47 of the Indian will, therefore, be applicable to the case. This legal position was not controverted by Mr. K. K. Jain appearing on behalf of the respondent. The only question in debate was whether the lower court rightly exercised their jurisdiction under section 34 of the Indian in not granting the stay of the proceedings of the suit. If the arbitration agreement is not to be treated as a statutory arbitration under section 46 of the but an arbitration agreement under section 47 of the Act, then the procedure to be followed for the arbitration under that agreement will be that provided under the Co operative Societies Act and the Rules framed thereunder. Under section 47 of the Indian the arbitration will be governed only by such rules of the Co operative Societies Act and rules framed thereunder as are not inconsistent with the provisions of the Indian . In this con nection it is necessary to refer to Rules 115, 116 and 117 of the Co operative Societies Rules framed under section 43 of the Co operative Societies Act. Rule 115 states as follows: "Any dispute touching the business of a registered society (i) between members or past members of a society or persons claiming through a member or past member, (ii) or between a member or a past member or persons so claiming and the society or its committee or 219 any officer of the society, (iii) between the society or its committee and any officer of the society, and (iv) between two or more registered societies, shall be decided either by the Registrar or by arbitration and shall for that purpose be referred in writing to the Registrar". Rule 116 provides: "The Registrar on receipt of a reference shall either decide the dispute himself, or refer it for decision to an arbitrator or to two joint arbitrators appointed by him or to three arbitrators, of whom one shall be nominated, by each of the parties to the dispute and the third by the Registrar who shall also appoint one of the arbitrators to act as chairman". Rule 117 states: "In case it is decided to appoint three arbitrators (i) The Registrar shall issue a notice calling on each of the parties to nominate one person as its nominee within 15 days of the receipt of the notice. (ii) if a party consists of more than one person, such persons shall jointly make only one nomination. (iii) if more than one person is nominated by a party the Registrar shall appoint either one of the nominees or some other person of his own choice as the nominee of that party, (iv) if a party fails to nominate an arbitrator within the appointed time or if its nomination is not valid the Registrar may himself make the nomination, (v) if one of the arbitrators fails to attend or refuses to work as an arbitrator, the remaining arbitrators may decide the dispute. If two of the arbitrators fail to attend or refuse to work as arbitrators and the claim is not admitted the remaining arbitrator shall refer the case to the Registrar who may authorise him to give an award or appoint one or more arbitrators to proceed, with the reference or he may decide the case himseff". It has been observed by the High Court that it would be a difficult task for the arbitrator to investigate as to which of the rules made under the Co operative Societies Act are consistent with and which of those rules are not consistent with the provisions of the Indian and therefore it was, a fit case in which discretion of the court under section 34 of the Indian should be exercised in not staying the proceedings of the suit. In our opinion, the reasoning of the High Court has much substance. 220 There is also another reason why there should not be a stay of the proceedings under section 34 of the Indian . The suit was filed in 1954 and, though 12 years have elapsed, nothing has been, done in the suit and it will not be in the interest of speedy disposal of the suit between the parties if the proceedings in the suit are further stayed and the parties are referred to arbitration. There is also another ground why the proceedings in the suit should not be stayed in the present case. If Rules 11.5 and 116 of the Co operative Societies Rules are applicable then the reference of the dispute has to be made to the Registrar of the Co operative Societies who may either decide the dispute himself or refer the dispute to an arbitrator or two joint arbitrators appointed by him or to three arbitrators, of whom one shall be nominated by each of the parties to the dispute and the third by the Registrar who shall also appoint one of the arbitrators to act as Chairman. It is alleged by the respondent that the Registrar of Co operative Societies is ex officio President of the Society and it was with his approval that the agreement in dispute was terminated. It was also pointed out that the Registrar was the chief controlling and supervising officer of the Society under its bye laws. It was submitted for the respondent that the Registrar may not, therefore, act fairly in the matter and it is improper that he should be an arbitrator in the dispute between the parties. In our opinion, there is much validity in this argument. The legal position is that an order of stay of suit under section 34 of the Indian will not be granted if it can be shown that there is good ground for apprehending that the arbitrator will not act fairly in the matter or that it is for some reason improper that he should arbitrate in the dispute between the parties. It is, of course, the normal duty of the Court to hold the parties to the contract and to make them present their disputes to the forum of their choice but an order to stay the legal proceedings in a Court of law will not be granted if it is shown that there is good ground for apprehending that the arbitrator will not act fairly in the matter or that it is for some reason improper that he should arbitrate in the dispute. Reference may be made, in this connection, to the decision of the House of Lords in Bristol Corporation vs John And & Co.(1). This case was concerned with an application for stay of proceedings under section 4 of the English which is similar to section 34 of the Indian . Upon the settlement of the final account there arose a bona fide dispute of a substantial character between the contractor and the engineer, who was the arbitrator under the contract, involving a probable conflict of evidence between, them. The House of Lords held, affirming the decision of the (1)[1913] A,C. 241. 221 Court of appeal, that the fact that the engineer, without any fault of his own, must necessarily be placed in the position of a Judge and a witness is a sufficient reason why the matter should not be referred in accordance with the contract. At pp. 247 248 of the report Lord Atkinson stated as follows: "Whether it be wise or unwise, prudent or the contrary, he has stipulated that a person who is a servant of the person with whom he contracts shall be the judge to decide upon matters upon which necessarily that arbitrator has himself formed opinions. But though the contractor is bound by that contract, still he has a right to demand that, notwithstanding those preformed views of the engineer, that gentleman shall listen to argument and determine the matter submitted to him as fairly as he can as an honest man; and if it be shown in fact that there is any reasonable prospect that he will be so biased as to be likely not to decide fairly upon those matters, then the contractor is allowed to escape from his bargain and to have the matters in dispute tried by one of the ordinary tribunals of the land. But I think he has more than that right. If, without any fault of his own, the engineer has put himself in such a position that it is not fitting or decorous or proper that he should act as arbitrator in any one or more of those disputes, the contractor has the right to appeal to a Court of law and they are entitled to say, in answer to an application to the Court to exercise the discretion which the 4th section of the vests in them, "We are not satisfied that there is not some reason for not submitting these questions to the arbitrator". In the present case the question is, has that taken place"? Lord Moulton after tracing the growth of the law of arbitration made the following observations in his speech: "But, My Lords, it must be remembered that these arbitration clauses must be taken to have been inserted with due regard to the existing law of the land, and the law of the land applicable to them is, as I have said, that it does not prevent the parties coming to the Court, but only gives to the Court the power to refuse its assistance in proper cases. Therefore to say that if we refuse to stay an action we are not carrying out the bargain between the parties does not fairly describe the position. We are carrying out the bargain between the parties, because that bargain to substitute for the Courts of the land a domestic tribunal was a bargain into which was written, by reason of the existing legislation, the condition that it should only be enforced if the Court thought it a proper case for its being so enforced". 222 Lord ;Parker, after pointing out that section 4 of the ' gave a discretionary power to the Court to be exercised after it was ' satisfied that there was no sufficient reason why the matter should not be referred in accordance with the submission, expressed the ' following views: "In making up its mind on this point the Court must of course give due consideration to the contract between the parties, but it should, I think, always be remembered that the parties may have agreed to the submission precisely because of the discretionary power vested in the Court under the . They may, very well, for instance, have said to themselves, 'If in any particular case it would be unfair to allow the arbitration we are agreeing to proceed we shall have the protection of the Court". It is manifest that the strict principle of sanctity of contract is subject to the discretion of the Court under section 34 of the Indian , for there must be read in every such agreement an implied term or condition that it would be enforceable only if the Court, having due regard to the other surrounding circumstances, thinks fit in its discretion to enforce it. It is obvious that a party may be released from the bargain if he can show that the selected arbitrator is likely to show bias or by sufficient reason to suspect that he will act unfairly or that he has been guilty of continued unreasonable conduct. As we have already stated, the respondent has alleged in the present case that the Registrar, Co operative Societies has approved the termination of the contract of Managing Agency with the plaintiff and the Registrar was the chairman of the defen dant Society. We are accordingly of the opinion that the High Court properly exercised its discretion under section 34 of the Indian in not granting a stay of the proceedings in the suit. It is well established that where the discretion vested in the Court under section 34 of the Indian has been exercised by the lower court the appellate court should be slow to interfere with the exercise of that discretion. In dealing with the matter raised before it at the appellate stage the appellate court would normally not be justified in interfering with the exercise of the discretion under appeal solely on the ground that if it had considered the matter at the trial stage it may have come to a contrary conclusion. If the discretion has been exercised by the trial court reasonably and in a judicial manner the fact that the appellate court would have taken a different view may not justify interference with the trial court 's exercise of discretion. As is often said, it is ordinarily not open to the appellate court to substitute its own exercise of discretion for that of the trial Judge; but if it appears to the, appellate court that in exercising its discretion the trial court has acted unreasonably or capriciously or has ignored relevant facts then it would certainly be open to the appellate court 223 to interfere with the trial court 's exercise of discretion. This principle is well established; but, as has been observed by Viscount Simon, L. C., in Charles Osenton & Co. vs Johnston(1): "The law as to the reversal by a court of appeal of an order made by a Judge below in the exercise of his discretion is well established, and any difficulty that arises is due only to the application of well settled principles in an individual case". For these reasons we hold that the appellant has made out no case for our interference with the order of the High Court refusing stay of the proceedings in the suit under section 34 of the Indian . The appeal accordingly fails and is dismissed with costs. Appeal dismissed.

The appellant society carried on business as public carriers on the Kanpur Delhi route. By an agreement in 1954 they appointed the respondents as their Managing Agents for a period of 3 years. But much before the expiry of that period they terminated the agreement. Disputes arising between the parties were under the agreement, to be decided by arbitration as provided in the Co operative Societies Act II of 1912. According to the relevant provisions of the said Act disputes were to be decided by the Registrar of Co operative Societies or by an arbitrator or arbitrators appointed by him. The respondents however filed a suit against the Society asking for a declaration that the termination of the agreement by the society was illegal and for a mandatory injunction restraining the society from terminating the agreement. The Society thereupon filed an application under section 34 of the Indian Arbitration Act praying for a stay of the aforesaid suit on the ground that the respondents had agreed to arbitration as provided in the Co operative Societies Act. The trial Court stayed the suit but the appellate Court set aside the trial Court 's order and dismissed the application under section 34. The High Court upheld the appellate Court 's order whereupon, by special leave, the society appealed to this Court. HELD:(i) The High Court rightly refused to stay the suit. It rightly observed that it would be a difficult task for the arbitrator to investigate as to which of the rules made under the Co operative Societies Act are consistent with and which of those rules are not consistent with the provisions of the Indian Arbitration Act. The suit, moreover, was filed as far back as 1954 and its stay would not be in the interests of its speedy disposal. [219 G 220 B] (ii)It is, of course, the normal duty of the court to hold the parties to the contract and to make them present their disputes to the forum of their choice, but the strict principle of sanctity of contract is subject to the discretion of the Court under section 34 of the Indian Arbitration Act. A party may be released from the bargain if he can show that the selected arbitrator is likely to show bias or there is sufficient reason to suspect that he will act unfairly or that he has been guilty of unreasonable conduct. [222 D] In the present case the respondent had alleged that the Registrar Co operative Societies had approved the termination of the contract of Managing Agency with the plaintiff and the Registrar was the Chairman of the Defendant Society. In the circumstances the High Court Trust be held to have Properly exercised its discretion under section 34 of the Indian Arbitration Act in not granting a stay of the proceedings in the suit. [222 E]. 216 Bristol Corporation vs John Aird & Co. , referred to. (iii)If it appears to the, appellate Court that in exercising its discretion the trial court has acted unreasonably or capriciously or has ignored relevant facts then it would certainly be open to the Appellate Court to interfere with the trial court 's exercise of discretion, [222 H] Charlies Osenton & Co. vs Johnston, , referred to.

Appeal No. 276 of 1956. Appeal from the judgment and decree dated October 15, 1954, of the Allahabad High Court in Execution First Appeal No. 224 of 1951. section P. Sinha and Tiryugi Narain for the appellants. G. C. Mathur, for respondent No. 1. 1961. February 20. The Judgment of the Court was delivered by DAS GUPTA, J. This appeal raises a question of limitation in execution proceedings. The decree sought to be executed was made by the Civil Judge, Kanpur, on September 2, 1938, in a suit for partition brought by two brothers Jumna Prasad and Devi Prasad and two minor sons of Jumna Prasad, against Gajju Lal, his son Jawala Prasad, the four minor sons of Jawala Prasad Sharda Prasad, Dharam Pal, Ram Pal and Krishna Pal, and one Smt. Sundari. By the decree one of the properties, a house formerly bearing No. 36/22 and now 36/58, Etawa Bazar, Kanpur, was awarded along with other properties to the defendants in the suit. The present application for execution was made by the four brothers, Sharda Prasad, Dharam Pal, Ram Pal and Krishna Pal on Novem ber 23, 1949. The prayer was that these applicants may be delivered possession over this Etawa Bazar house along with Gajju Lal, Jawala Prasad and Smt. Sundari on dispossession of Jumna Prasad and Devi Prasad. It is stated in the application that all these applicants had " up till now been minors and one of them is still a minor and so no question in respect of time arises. " This ' it is important to note, was the first application for execution of the ' partition decree. A number of objections were raised but the principal objection and the only one with which we are concerned in this appeal was that the application was barred by time. The decision of this question depended on the answer to the question raised on behalf of the opposite parties that Jawala Prasad one of the persons entitled jointly 'with these applicants to make an application for the execution of the decree could have 877 given a discharge of the liability under the decree without the concurrence of his minor sons and so time ran under section 7 of the Limitation Act against them also from the date of the decree. The Trial Court did not feel satisfied that Jawala Prasad could give a valid discharge and held accordingly that the application was within time. on appeal the High Court held that Jawala Prasad as the Karta of the Hindu joint family could act on behalf of the entire joint family in taking possession of the house allotted to the defendants and delivery of such possession could discharge the liability qua the entire joint family and held accordingly that the application was barred by limitation. The High Court however granted a certificate under article 133(1)(c) of the Constitution and on that certificate this appeal has been filed by the applicants for execution. Two contentions were raised on behalf of the appellants in support of the plea that the High Court erred in holding that the application for execution was barred by limitation. First, it is urged that section 7 of the Limitation Act does not apply at all to a partition decree. The second contention is that in any case Jawala Prasad could not give a valid discharge of the liability under the decree in view of the provisions of O. 32 of the Code of Civil Procedure. On the first contention the argument is that the word " discharge " is appropriate only in respect of a monetary claim and is wholly inappropriate in respect of any decree for possession whether on partition or otherwise. There is, in our opinion no substance in this argument. The mere fact that the two illustrations to section 7 are in respect of debts is no ground for thinking that the provisions of section 7 are limited to suits or decrees on monetary claims only. Nor can we see any reason to think that the word " discharge " can refer only to debts. Discharge means, to free from liability. The liability may be in respect of monetary claims, like the debts; it may be in respect of possession of property; it may be in respect of taking some order as regards property it may be in respect of many other matters. Except in the case of declaratory decrees or 878 decrees of a similar nature, the decree in favour of one person against another requires the person against whom the decree is made liable to do something or to refrain from doing something. This liability is in a sense a debt which the party is in law bound to discharge. The ordinary use of the word " judgment debtor " to denote a person against whom a decree has been made makes a clear recognition of this. It is worth mentioning in this connection that the Code of Civil Procedure itself defines " judgment debtor " to mean " any person against whom a decree is passed or an order capable of execution has been made. " It is helpful to notice in this connection the provisions of section 8 of the Limitation Act that " nothing in section 6 or section 7 applies to suits to enforce rights of preemption. " If section 7 had been applicable merely to litigation for monetary claims it would have been unnecessary and indeed meaningless to take the special step of exempting suits to enforce rights of pre emption from the operation of section 7. This is a further reason in support of the conclusion that the word " discharge" in section 7 is not limited to discharge of monetary claims only but also to discharge or satisfaction of all other liabilities as well. We therefore hold that the first argument raised on behalf of the appellants has no substance. Equally untenable is the second argument that the provisions of 0. 32 of the Code of Civil Procedure debar the manager of a Hindu joint family from giving discharge in respect of a liability to deliver properties. Under the Hindu Law the Karta of a Hindu joint family represents all the members of the family and has the power and duty to take action which binds the family in connection with all matters of management of the family property. Clearly, therefore, when in respect of a transaction of property possession has to be received by the several members of the family, it is the Karta 's duty and power to take possession on behalf of the entire family, including himself, the members of the family who are sui juris as well as those who are not. 879 When any minor member of a joint family is a party to a proceeding in a court he has however to be represented by a next friend appointed by the court and where somebody other than the managing member, of the family has been appointed a guardian ad litem there might be difficulty in the way of the managing member giving a discharge on behalf of the minor. Where however the managing member himself is the guardian ad litem the only difficulty in the way of action being taken by him on behalf of a minor is to the extent as mentioned in 0. 32, rr. 6 and 7. In Ganesha Row vs Tuljaram Row (1) the Judicial Committee pointed out that: " No doubt a father or managing member of a joint Hindu family may, under certain circum stances and subject to certain conditions, enter into agreements which may be binding on the minor members of the family. But where a minor is party to a suit and a next friend or guardian has been appointed to look after the rights and interests of the infant in and concerning the suit, the acts of such next friend or guardian are subject to the control of the Court. " In that case their Lordships held that in view of the provisions of section 462 of the then Code of Civil Procedure (which corresponds to 0. 32, r. 7 of the present Civil Procedure Code) the managing member who had been appointed a guardian in the suit had no authority to enter into any compromise or agreement purporting to bind the minor. This principle has been applied also to cases where the provisions of 0. 32, r. 6 would apply and so it has been held in numerous cases in India that the Karta of a Hindu joint family though guardian in the suit cannot give a valid discharge in respect of a claim or a decree for is money or other movable property." (Parmeshwari Singh vs Banjit Singh (2) and Letchmana Chetty vs Subbiah Chetty (3)) In the present case however there is no scope for the application of either the provisions of 0. 32, r. 6 or O.32, r. 7 of the Code of Civil Procedure. Neither is (1) (1913) L.R. 40 I.A. 132,138, (2) A.I.R. 1939 Pat. (3) Mad. 920. 880 this a case of a receipt of any money or movable properties nor is there any question of entering into an agreement or compromise on behalf of the minor. For, clearly acceptance of delivery of possession of property in terms of the decree in a partition suit can by no stretch of imagination be considered entering into any " agreement or compromise" We are therefore of the opinion that Jawala Prasad, the managing member of the family could have given a discharge of the liability under the partition decree by accepting delivery of possession on behalf of his minor sons without their consent and so time ran against them also under section 7 of the Limitation Act from the date of the decree. The High Court was therefore right in its conclusion that the application for execution was barred by limitation. The appeal is accordingly dismissed with costs. Appeal dismissed.

A decree dated September 2, 1938, in a suit for partition of joint Hindu family property awarded a house to the share of one J and his four minor sons. J failed to execute the decree. On November 23, 1949, an application was made by the appellants, the four sons of J, for execution of the decree stating that three of them had been minors till then and one of them was still a minor and so no question of limitation arose. The respondent objected that the application was barred under section 7 of the Indian Limitation Act. The appellants contended that section 7 did not apply to a partition decree and that section 7 was no bar as j could not have given a valid discharge of the liability under the decree in view of the provisions of 0. 32 of the Code of Civil Procedure. Held, that the application for execution was barred by limitation. J, the managing member of the family could have given a discharge of the liability under the partition decree by accepting possession on behalf of his minor sons without their consent and so time ran against them under section 7 from the date of the decree. Order 32, rr. 6 and 7 were no bar to j giving a discharge of the liability under the decree as it was neither a case of receipt of any money or movable property nor was there any question of entering into an agreement or compromise on behalf of the minors. Ganesha Row vs Tuljaram Row (1913) L.R. 40 1.A. 132, Parmeshwari Singh vs Ranjit Singh, A.I.R. 1939 Pat. 33 and Letchmatsa Chetty vs Subbiah Chotty, Mad. 920, referred to. 876

ule as found in rule 8(1)(a), enormous prejudice would be caused to the petitioners and others who are similarly situated, even though their appointments have been made by deliberate deviation from the rules. The just solution to it would be to treat the petitioners as persons duly appointed to the Services with effect from the date on which they were promoted to the Grade IV posts. [235 G H; 236 B] & ORIGINAL JURISDICTION: Civil Miscellaneous Petition No. 2604 of 1985. IN Writ Petition No. 1595 of 1979. (Under Article 32 of the Constitution of India.) Petitioner No. 1 in person. P.P. Rao, Uma Dutta and Miss C.K. Suchitra for Petitioner Nos. 2 to 25. Govinda Mukhoty and P.K. Gupta for the Intervener. R.K. Garg, R.K. Jain and Guptha Jain for the Respondents. F.S. Nariman, A.K. Ganguli, R.D. Agarwala and C.V. Subba Rao for the Respondents. (Union of India) The Judgment of the Court was delivered by 218 VENKATARAMIAH, J. The perennial dispute regarding seniority between direct recruits and promotees which exists in Almost all the departments of Government has not spared the Indian Economic Service and the Indian Statistical Service with which we are concerned in this case. This is the second phase of the battle which is being waged in this Court. Earlier certain persons who had been holding posts in Grade IV of these two Services had filed Writ Petition No. 1595 of 1979 under Article 32 of the Constitution of India praying for a writ, direction or order in the nature of mandamus directing the Union of India to confirm or regularise the petitioners in the posts held by them as and from the dates when they became due for confirmation or regularisation in accordance with the Indian Economic Service Rules, 1961 or the Indian Statistical Service Rules, 1961 and to consider them for all future promotions when due on the basis of such seniority. The said petition was filed in a representative capacity with the leave of the Court under Order I Rule 8 C.P.C. A few officers who had been recruited as direct recruits to the posts in Grade IV in the said departments were impleaded as respondents and they were sued in a representative capacity as representing all other direct recruits who were likely to be affected by the decision. After the above case was heard, the Court passed a short order on February 1, 1984 which reads thus : "We are not able to understand why the vacancies available to the departmental candidates under Rule 8(ii) of the Indian Economic and Indian Statistical Services Rules, 1961, have not been filled up on regular basis. We find that some of the departmental candidates (petitioners) have been holding the promotional posts on ad hoc basis for several years. mere appears to be no justification for keeping them 'ad hoc ' so long. We, therefore, issue a Writ of Mandamus directing the Union of India to fill up, within four weeks from today, the vacancies available to the departmental candidates under Rule 8(ii) with effect from the date from which the petitioners became entitled to be promoted on regular basis. Their seniority will be determined according to Rules. We wish to make it clear that there is no question of any rotation system being applied under the Rules, as they exist now. The 219 writ petition is disposed of in these terms. There will be no order as to costs." (Rule 8(ii) has to be read as Rule 8(1)(a)(ii)) The Union of India, as can be seen from the order set out above, was directed to comply with the directions contained therein within four weeks from the date of the order. On the expiry of four weeks, stipulated by this Court, the Union of India filed an application for extension of time to comply with the directions contained therein fully. Time was extended by the Court till April 30, 1984. On May 1, 1984 the Union of India filed before the Court two sets of seniority lists in respect of the above two Services namely, lists based on the principle of rotation and lists based on Rule 9 C of the Indian Economic Service/Indian Statistical Service Rules. Since on a perusal of the said lists it was found that the position of some of the departmental promotees who had already put in nearly 15 years of service in Grade IV was worse than V the position in which they were before the writ petition was filed and were facing imminent threat of reversion to the feeder posts from which they had been promoted several years ago, the Court directed the petition to come up for hearing before the Court on its re opening after summer vacation and directed that status quo should be maintained in the mean while. Then on July 24, 1984 the Court while declining to endorse either of the two seniority lists directed the Union of India to implement the order dated February 1, 1984 on or before 30th November, 1984. In the meanwhile the petitioners filed Civil Miscellaneous Petition No. 2604 of 1985 complaining that the Union of India had failed to comply with the order made by this Court and that action should be taken for contempt against it. While opposing the application for contempt, on behalf of the Union of India it was stated in the course of the affidavit sworn by Shri P.L. Sakarwal, Deputy Secretary, Department of Economic Affairs, New Delhi thus : "23. In view of the submissions made above this Respondent would urge that the directions of the Hon 'ble Court dated 1.2.84 in the matter of (i) filling the vacancies under Rule 8(ii) and (ii) to fix the seniority according to Rules without the application of rotation system, have been complied with bona fide and in a good faith. Rule 8(ii) of 220 the IES Rules/ISS Rules provides for the quota for the departmental promotees and also the manner in which the Select List for promotion by a duly constituted DPC presides over by a Member of UPSC has to be drawn. All the vacancies available to the departmental candidates under Rule 8(ii) up to the end of 1983 have already been given to them by issuance of Select Lists drawn from time to time. Action is in process to prepare further Select List in respect of the vacancies available to the officers till the end of the year 1984. As regards seniority, the Hon 'ble Court had ordered to fix the seniority according to the Rules and without the application of the rotation system. The revised seniority lists prepared by this Respondent and finalised after inviting objections etc. from the concerned officers have been framed according to the Rules i.e. in terms of the provisions of Rule 9 C of the IES Rules/ISS Rules and without application of the rotation system. This Respondent, would, therefore, urge with respect ad all humility that he has complied with the directions of the Hon 'ble Court bona fide ant in good faith. However, If there 18 any slip on the part of this Respondent in carrying out the directions of this Hon 'ble Court of if the Hon 'ble Court considers that the orders should have been executed in any other manner, this Respondent would tender unconditional apology ant will be duty bound to obey ant implement, such orders directions as this Hon 'ble Court may teem fit or pleaset to issue in the circumstance of the case. " In the meanwhile certain direct recruits also intervened in the course of the said petition ant requested that they should be heart before any order was passed by the Court on the contempt application. While the order passed by the Court on February 1, 1984 did not require any clarification at all, since the parties tried to place different interpretation on lt, prayer was mate by the Union Government as stated above seeking further clarifications in the light of certain recent decisions rendered by this Court, we gave opportunity to all the parties to make their submissions once again. Availing 221 themselves of the opportunity given by the Court learned counsel for the promotees and the direct recruits have virtually reargued the matter. It should be stated here that no specific stand was taken on this occasion by the Union Government except bringing to the notice of the Court the relevant provisions of law. On its behalf it was submitted very fairly by Shri F.S. Nariman, that there was no intention on the part of the Government or any of its officers to flout the order of the Court passed earlier and that if the Court found that there has been any mistake in the preparation of the lists of seniority, those lists would be prepared afresh in the light of any direction that may be given by the Court in the course of these proceedings. Having regard to the facts of the case and the events that have followed the order passed by this Court on February 1, 1984, we do not feel called upon to take any action for contempts against the Union Government or any of its officers for not obeying the orders of this Court. We have, however, found it necessary to consider the matter again in the light of the submissions made by the parties and issue fresh directions in this case. We feel that a detailed order is also called for in the circumstances of the case. The Indian Economic Service Rules, 1961 and the Indian Statistical Service Rules, 1961 (hereinafter referred to as 'the Rules ') which are more or less identical with regard to the questions involved in this case were notified on November 1, 1961 and these Services were constituted with effect from that date by encadering numerous posts carrying economic and statistical functions in the various ministries of the Government of India. These Services were meant to comprise a pool of officers having appropriate qualifications for performing the aforesaid technical functions involved in various posts. me strength of the various grades of the Indian Economic Service at the initial constitution of the Service, i.e., on November 1, 1961 was Grade 1 15, Grade II 15, Grade III 95 and Grade IV 199 Total 324 posts. me strength of the various grades of the Indian Statistical Service at the initial constitution of the Service, i.e., on November 1, 1961 was Grade I 8, Grade II 7, Grade III 54 and Grade IV 116 Total 185 posts. The officers of Grade I to Grade IV are classified as Class I Officers. The authorised permanent strength of each of 222 the Services is to be fixed by the Controlling Authority with the guidance of the Ministry of Finance in accordance with the provisions of the Rules. It is required to be based on the following principles: 1) it shall be assumed that 80 per cent of the total number of semi permanent posts are likely to be continued indefinitely in one form or another, and shall be provided for in the permanent strength; and 2) all the purely temporary posts and 20 per cent of the semi permanent posts shall be excluded for purposes of determining the permanent strength. The Ministry of Home Affiars (Department of Personnel and Administrative Reforms) advised by a Board known as the Indian Economic Statistical Service Board is designated as the Controlling Authority under rule 6 of the Rules. Initial constitution of both the Services was required to be done in accordance with rule 7. & der that Rule the Union Public Service Commission was required to constitute a Selection Committee with a Chairman or a Member of the commission as President, not more than two representatives of the partici pating Ministries and the Chief Economic Adviser in the Ministry of Finance (Department of Economic Affairs) to deter mine the suitability of departmental candidates for appointment to the different grades and to prepare an order of preference for each grade for the initial constitution of the Service. On receipt of the Committee 's report the Commission was required to forward its recommendations to the Government and such recommendations might include a recommendation that a person considered suitable for appointment to a grade might, if a sufficient number of vacancies were not available in that grade, be appointed to a lower grade. me departmental d i dates who were not absorbed at the initial constitution of the Service were to continue to work as on the date of the initial constitution and were given the opportunity to apply (and getting selected if they were found suitable) for future vacancies. We are informed that the notifications regarding the initial constitution of these two Services were issued by the middle of February 1, 1964 with effect from February 15, 1964. Future maintenance of these two Services is governed by 223 rule 8 of the Rules. Initially rule 8, which is relevant for the purposes of this case read as follows : "8.(1) Future maintenance of the Service after the initial constitution of the Service has been completed by appointment of departmental candidates or otherwise, vacancies shall be filled as hereinafter provided. (a) Grade IV Assistant Director. (i) Not less than 75 per cent of the vacancies in this grade shall be filled by direct recruitment through an open competitive examination to be held by the Commission in the manner prescribed in Schedule II. Provided that 25 per cent of the said quota for direct recruitment may be set apart for a maximum period of 5 years for absorption of officers considered suitable for appointment at the initial constitution of the Service but who could not be so appointed in the absence of vacancies. (ii) Not more than 25 per cent of the vacancies in this grade shall be filled by selection from among officers serving in offices under the Government in Economic posts recognised for this purpose by the Controlling Authority who shall prepare a list of such posts in consultation with the commission. The Controlling Authority may, in consultation with the Commission, add to or modify the list from time to time. The selection will be made from amongst those who have completed at least 4 years of service in those posts on the basis of merit with due regard to seniority by the Controlling Authority on the advice of the Commission. . " Rule 8(1)(a) now reads thus : "8.(1) Future maintenance of the service; after the initial constitution of the service had been completed by appointment of departmental candidates or otherwise and after promotions in accordance with sub rule (2A) of Rule 7 have taken place, vacancies shall be filled as hereinafter provided. 224 (a) Grade IV Assistant Director. (i) Not less than 75 per cent of the vacancies in this grade shall be filled by direct recruitment through an open competitive examination to be held by the Commission in the manner prescribed in Schedule II. Provided that 25 per cent of the said quota for direct recruitment may be set apart for a maximum period of 5 years for absorption of officers considered suitable for appointment at the initial constitution of the service but who could not be so appointed in the absence of vacancies. (ii) Not more than 25 per cent of the vacancies in this grade shall be filled by selection from among officers serving in offices under the Government in Economic posts recognised for this purpose by the Controlling Authority who shall prepare a list of such posts in consultation with the Commission. The Controlling Authority may, in consultation with the Commission, add to or modify the list from time to time. The selection will be made from amongst those who have completed at least 4 years of service on a regular basis in these posts on the basis of merit with due regard to seniority by the Controlling Authority on the advice of the Commission. Provided that if any junior person in an office under the Government is eligible and is considered for selection for appointment against these vacancies, all persons senior to him in that office shall also be so considered notwithstanding that they may not have rendered 4 years of service on a regular basis in their posts. " After the initial constitution or the two Services was completed it was found that a number of posts carrying Economic/Statistical functions could not be considered for inclusion in the officers ' Grades due either to misunderstanding or to inadvertence. Further as the process of formation of the Indian Economic Service and the Indian Statistical Service was prolonged for number of years and the need for appointing more officers in the said Departments during that long period 225 also arose gradually several posts carrying economic/statistical functions were created. Although rule 8 provided that not less than 75 per cent of the vacancies in Grade IV should be filled up by direct recruitment through an open competitive examination to be held by the Union Public Service Commission in the manner prescribed in Schedule II to the Rules and further provided that not more than 25 per cent posts of the vacancies in that grade should be filled by selection from among officers serving in The offices under the Government in Economic/Statistical posts recognised for that purpose by the Controlling Authority, no direct recruitment was resorted to till about the year 1968. In the meanwhile a large number of persons in the feeder posts were appointed to the posts in Grade IV from time to time from the year 1962 onwards although the orders promoting them stated that they had been promoted only temporarily. It is not disputed that all those promotees have been holding those posts continuously till now without being reverted to the feeder posts from which they had been promoted. Some have retired from those posts on attaining the age of superannuation. We shall reproduce below one of the notifications issued in connection with the promotion to the posts in Grade IV of such officers, some of whom are the petitioners in this petition. It reads thus : "GOVERNMENT OF INDIA PLANNING COMMISSION Yojana Bhawan, Parliament Street New Delhi 1, the 20th/23rd November '65 NOTIFICATION No. F.8(10)/65 ADM.I: The President is pleased to appoint the following Economic Investigators Grade I, Planning Commission, as Research Officers in the Commission in a temporary capacity with effect from the 6th November 1965 (forenoon), and until further order : Shri K.V. Vishwanathan Shri S.N. Padru Shri C.L. Kapur 226 Smt. K. Passi Shri Narendra Chaddha Shri R.N. Mokhey Shri N. Srinivasan Shri K. Suryanarayana Shri P.N. Radhakrishnan Shri B.R. Kharbanda Shri Kamla Prasad Shri M.M. Gupta Shri S.P. Kumar Sd/ (N.S. Gidwani) (Deputy Secretary to the Government of India) . . . . . . . . All these officers excepting Shri P.N. Radha Krishnan are either permanent or quasi permanent in the grade of Economic Investigators. Shri Radha Krishnan is quasi Permanent in the grade of Senior Computor. The promotion of all is in the direct line. . . . . . . . In another order of promotion issued while promoting another officer by name Jagdish Chandra on November 21, 1966 it was mentioned that his promotion to the post of Research Officer was in direct line of Economic Investigator Grade I/II. It should be stated here that although rule 8 (1) (a) provided that not less than 75 per cent of the vacancies in Grade IV of the two Services should be filled up by direct recruitment through an open competitive examination to be held by the Commission in the manner prescribed in Schedule II to the Rules and that not more than 25 per cent of the vacancies in the Grade could be filled up by a selection from among officers serving in offices under the Government in Economic/Statistical posts recognised for this purpose by the Controlling Authority, the prescribed quota of appointment from the two different sources, referred to above, was not maintained right from the commencement of the Constitution of the Services. me initial constitution of the two Services was completed under rule 7 of the Rules with effect from February 15, 1964 as mentioned earlier. Thereafter rule 7A was added. 227 That rule was added by a notification dated December 24, 1966 and it has been amended subsequently by a notification dated February 12, 1972. Rule 7A made special provision regarding certain departmental candidates who were to be absorbed in the two Services. It provided that notwithstanding anything contained in rule 8 of the Rules, the Controlling Authority on the advice of the Board should constitute a Selection Committee for the purpose of appointing officers who were departmental candidates to the Services in question. A departmental candidate who was not selected for appointment for any grade in the Services could continue to hold the post which he was holding then and might be considered by the Controlling Authority on the advice of the Board for appointment to the service at the subsequent stage or stages in consultation with the Commission. It further provided that any departmental candidate, referred to in sub rule (1) of rule 7A who did not on a selection to any Grade in the Service desire to be absorbed tn the service might continue to hold the post held by him immediately before the selection as if he had not been selected. The validity of rule 7A was questioned by some of the direct recruits, who were appointed in the year 1968 in the High Court of Delhi by a Writ Petition. We understand that the said writ petition has been transferred to the file of the Central Administrative Tribunal and the said writ petition is still pending. We are not concerned here with the merits of the contentions urged by the contesting parties in those proceedings. We are concerned in this case only with the question of seniority as between direct recruits and promotees. From the statements annexed to the counter affidavit filed by Shri V. Subramanian, Director in the Department of Economic Affairs, it is seen that in the Indian Economic Service there were 3 vacancies for direct recruits in the year 1964, 18 in the year 1965, 80 in the year 1966 and 12 in the year 1967. Nobody was recruited directly to those posts during those years. In the year 1968 there were 11 vacancies for direct recruits but 32 were recruited directly during that year. In 1969 there were 6 vacancies for direct recruits and 31 were recruited, in 1970 there were 33 vacancies for direct recruits, in 1971 there were 12 vacancies for direct recruits, in 1973 there were 25 vacancies for direct recruits, 'n 1974 there were 20 vacancies for direct recruits and in 1975 there were 11 vacancies for direct recruits. By the year 1984 in all 228 there were 435 vacancies for direct recruits out of which only 342 posts were filled up by direct recruitment. In all 93 posts intended for direct recruits remained unfilled and most of them were held all along by persons who had been promoted from the feeder posts. The position in the Indian Statistical Service was more or less the same. As against a total of 303 vacancies meant for direct recruits between the years 1964 and 1984 only 275 direct recruits were appointed. In this department also the posts which remained unfilled had been held by the persons who were departmental candidates. It is alleged in the counter affidavit filed on behalf of the Union of India of which the deponent is Shri P.G. Lele, Deputy Secretary in the Department of Personnel and Administrative Reforms that many of the departmental candidates had been allowed to hold posts including in Grade IV of the aforesaid Services purely on ad hoc and ex gratia basis. The relevant part of the counter affidavit is to be found in paragraphs 21 to 24 thereof. It is unfortunate that even though the promotees have been discharging their duties to the best of their ability and receiving salary and allowances from the Government for the services rendered by them, it is alleged in the course of the said counter affidavit that what was being paid to them was by way of grace. This statement adds insult to injury. If the Government felt that they were not competent to discharge their duties and they had not been appointed permanently to the posts held by them, it was open to it to revert them to their posts from which they had been promoted leaving it open to them to question the orders of reversion in Court. The Government was in need of their services and the petitioners have been holding these posts for nearly 15 to 20 years. It is not fair to say at this distance of time that the Government was only keeping them in their posts as a matter of grace. Be that as it may, it is seen that the Departmental Promotion Committee met only thrice between 1965 and 1584, i.e. 1970, 1972 and 1984 although under te rules and instructions issued by the Central Government on the advice of the Union Public Service Commission, the Departmental Promotion Committee had to meet annually. When the Departmental Promotion Committee met in the year 1970, it prepared a select list consisting of 33 names to fill 33 vacancies only in Grade IV from amongst those who had already been promoted to Grade IV temporarily and at that time only officers who had completed four years of regular service in the feeder posts as 229 on December 31, 1966 were considered although the Departmental Promotion Committee was meeting in the year 1970. If it had taken into consideration the service put in by the departmental candidates till the date on which it took up their cases for consideration for promotion many others who had been promoted on a temporary basis to Grade IV would have become eligible for consideration. By omitting to take the cases of those persons into consideration on the ground that they had not completed four years of regular service in the feeder posts as on December 31, 1966 the Departmental Promotion Committee violated Articles 14 and 16(1) of the Constitution of India. It is further seen that the Departmental Promotion Committee made its recommendations on the basis of the records of service and seniority of each of the departmental candidate. It is not known whether any of them were found to be unfit on the basis of their record of service only. It is, however, seen that the select list contained only 33 names because the Departmental Promotion Committee felt that they were the only vacancies for which it could make recommendations under rule 8(1)(a)(ii) of the Rules. If it had made recommendations to the Government in respect of all the vacancies which were available then, perhaps, the names of some others who were left out would have been included in the select list. Then after an interval of 12 years the Departmental Promotion Committee met in the year 1982. There again the same procedure was followed and the next meeting of the Departmental Promotion Committee, as already stated, was in 1984. For no fault of the petitioners and the officers similarly situated their cases for promotion were not considered every year and even those who have been found fit by the Departmental Promotion Committee for promotion had to wait for nearly 15 years to get into the 'regular ' service through a select list prepared by the Departmental Promotion Committee. In, compliance with our direction the Government has produced before the Court two lists showing the names of officers who were appointed to Grade IV posts of the Indian Economic/Statistical Service either regularly or on ad hoc basis arranged according to the dates from which they have been officiating in these posts continuously. large number of decisions were cited at the Bar by the learned counsel for the parties. Some of them are S.B. 230 Patwarthana & Ors. vs State of Maharashtra & Ors. [1977] 3 S.C.R. 775, Rajendra Narain Singh & Ors. vs State of Bihar & Ors. ; , Baleshwar Dass & Ors. etc. vs State of U.P. & Ors. [1981] 1 S.C.R. 449, A. Janardhana vs Union of India & Ors. ; , P.S. Mahal & Ors. vs Union of India & Ors. [1984] 3 S.C.R. 847, O.P. Singla & Anr. vs Union of India & Ors. ; , Karam Pal & Ors. etc. vs Union of India & Ors. ; , G.S. Lamba & Ors. vs Union of India & Ors. ; , Pran Krishoa Goswami & Ors. vs State of West Bengal & Ors. [1985] Supp. S.C.C. 221 and D.K. Mitra & Ors. vs Union of India & Ors. [1985] Supp. S.C.C. 243. We have carefully considered all the decisions cited before us. It is now well settled that it is permissible for the Government to recruit persons from different sources to constitute a service. It is also open to it to prescribe a quota for each source. Rules of recruitment framed on the above lines are perfectly legitimate and quite consistent with Articles 14 and 16 of the Constitution. It is also true that when the Rules of recruitment prescribe recruitment from different Services in accordance with the specified quota the Government is bound to appoint persons to the Service concern ed in accordance with the said Rules. The seniority of persons recruited from different sources will have to be regulated accordingly. So far there can be no controversy. But we are faced in this case with the problem of resolving conflicts which have arisen on account of a violent departure made by the Government from the Rules of recruitment by allowing those who were appointed contrary to the Rules to hold the posts continuously over a long period of time. The question is whether after such a long period it is open to the Government to place them in seniority at a place lower than the place held by persons who were directly recruited after they had been promoted, and whether it would not violate Articles 14 and 16 of the Constitution if the Government is allowed to do so. Promotions of officers have been made in this case deliberately and in vacancies which have lasted for a long time. A letter dated August 11, 1978 written by Shri S.D. Patil, Minister of State for Home Affairs, Personnel Department to Shri Ganga Bhakt Singh, Member of Parliament substantiates the conclusion. The relevant part of the letter reads : "Government resorted to making ad hoc appointments as it was separately considering proposals to re 231 Organise Grade IV of the two Services. Pending such reorganisation Govt. has taken a deliberate decision to restrict direct recruitment for the present. It is, therefore not correct to say that ad hoc appointments have been made due to nonavailability of direct recruits. I may add that but for his deliberate decision, most of the officers holding ad hoc posts in Grade IV would have continued to stagnate in the lower posts of Investigators. " At one stage it was argued before us on behalf of some of the respondents that the petitioners who have not been appointed in accordance with rule 8(1)(a)(ii) could not be treated as members of the Indian Economic Service or of the Indian Statistical Service at all and hence there was no question of determining the question to seniority as between the petitioners and the direct recruits. This argument has got to be rejected. It is true that the petitioners were not promoted ay following the actual procedure prescribed under rule 8(1)(a)(ii) but the fact remains that they have been working in posts included in Grade IV from the date of which they were appointed to these posts. The appointments are made in the name of the President by the competent authority. They have been continuously holding these posts. They are being paid all along the salary and allowances payable to incumbents of such posts. They have not been asked to go back to the posts from which they were promoted at any time since the dates of their appointment. The orders of promotion issued in some cases show that they are promoted in the direct line of their promotion. It is expressly admitted that the petitioners have been allowed to hold posts included in Grade IV of the aforesaid services, though on an ad hoc basis. (See Para 21 of the counter affidavit filed by Shri P.G. Lele, Deputy Secretary, Department of Personnel and Administrative Reforms). It is, therefore, idle to contend that the petitioners are not holding the posts in Grade IV of the two Services in question. It is significant that neither the Government has issued orders of reversion to their former posts nor has anybody so far questioned the right of the petitioners to continue in the posts which they are now holding. It would be unjust to hold at this distance of time that on the facts and in the circumstances of this case the petitioners are not holding the posts 232 in Grade IV. The above contention is therefore without sub stance. But we, however, make it clear that it is not our view that whenever a person is appointed in a post without following the Rules prescribed for appointment to that post, he should be treated as a person regularly appointed to that post. Such a person may be reverted from that post. But in a case of the kind before us where persons have been allowed to function in higher posts for 15 to 20 years with due deliberation it would be certainly unjust to hold that they have no sort of claim to such posts and could be reverted unceremoniously or treated as persons not belonging to the Service at all, particularly where the Government is endowed with the power to relax the Rules to avoid unjust results. In the instant case the Government has also not expressed its unwillingness to continue them in the said posts. m e other contesting respondents have also not urged that the petitioners should be sent out of the said posts. m e only question agitated before us relates to the seniority as between the petitioners and the direct recruits and such a question can arise only where there is no dispute regarding regarding the entry of the officers concerned into the same Grade. In the instant case there is no impediment even under the Rules to treat these petitioners and others who are similarly situated as persons duly appointed to the posts in Grade IV because of the enabling provision contained in the rule 16 thereof. Rule 16 as it stood at the relevant time read as follows : "16. m e Government may relex the provisions of these rules to such extent as may be necessary to ensure satisfactory working or remove ln equitable results. " Now rule 16 reads thus : "16. Powers to relex: me Government may in consultation with the Commission and for reasons to be recorded in writing relex any of the provisions of these rules with respect to any class or category of persons or posts and no such relaxation shall be given so as to have retrospective effect. " G.S. Lamba 's case (supra) may be carefully considered at this stage. In that case this Court was concerned with the Indian Foreign Service which was governed by the Indian Foreign Service, Branch 'B ' (Recruitment, Cadres, Seniority and Promotion) Rules, 1964. The said rules provided for recruitment to the said Service from three different Services, 233 (i) direct recruitment by competitive examination, (ii) substantive appointment of persons included in the select list promoted on the basis of a limited competitive examination and (iii) promotion on the basis of seniority. One of the Rules provided that the recruitment should be made from the above sources on the following basis: (i) 1/6th of the substantive vacancies to be filled in by direct recruitment, (ii) 33, 1/3% of the remaining 5/6 of the vacancies to be filled on the basis of results of limited competitive examinations and (iii) the remaining vacancies to be filled in by promotion on the basis of seniority. The Court found that the direct recruitment had rot been made for years, limited competitive examination had also not been held for years and promotions from the select list had been made in excess of the quota. It found that there was enormous departure from the rules of recruitment in making appointments over several years. The Court was of the view that the situation in this case was similar to the situation in two other earlier cases of this Court in A. Janarthana 's case (supra) and O.P. Singla & Anr. (supra). The Court felt that in the circumstances it should be presumed that the excess appointment by promotion had been made in relaxation of the Rules since there was power to relax the Rules similar to the power under rule 16 in the Rules with which we are concerned here. Justifying the above view the court observed at pages 458 459 thus : "It was however contended that it is not permissible to infer that promotions in excess of quota were given by relaxing the quota rule because the posts in Integrated Grade II and III were within the purview of the Union Public Service Commission and the proviso to Rule 29(a) mandates that power to relax is hedged in with a condition that it can be done after consultation with the Commission, and there is nothing to show that the Commission was ever consulted. Undoubtedly, the proviso to Ru e 29(a) requires that the controlling authority cannot relax any of the provisions of the rules in respect of posts which are within the purview of the Union Public Service Commission unless after consultation with the Commission. It was submitted that nothing is placed on the record by the petitioners to show that power to relax the quota 234 rule was exercised after consultation with the Union Public Service Commission. Assuming that there was no consultation, would the exercise of power to relax be vitiated and the appointments made in relaxation of the mandatory quota rule would be ab initio invalid. Commencing from the decision of the Privy Council in Montreal Street Railway Company vs Normandin AIR 1917 P.C. 142 it is well settled that 'when the provisions of a statute relate to the performance of a public duty and the case is such that to hold null and void acts done in neglect of this duty would work general inconvenience or injustice to persons who have not control over those entrusted with the duty and that at the same time would not promote the main object of the Legislature, it has been the practice to hold such provisions to be directory only, the neglect of them, though punishable, not affecting the validity o the acts done '. The view was expressed in the context of the failure to revise list of Jurors by the Sheriff according to the revised statues of Quebec and conviction was challenged on the ground of mistrial held by selecting Jurors from unrevised lists. The challenge failed. Coming home in State of U.P. vs Manbodan Lal Srivastava, [1958] S.C.R. 533 a Constitution Bench of this Court specifically held that where consultation with the Public Service Commission is provided as required by article 320(3) (c) of the Constitution such provisions is not mandatory and they do not confer any rights on public servants so that the absence of consultation or irregularity In consultation does not afford him a cause of action in a court of law. There are number of subsequent decisions to which our attention was called reiterating the same principle. Therefore assuming there was failure to consult the Union Public Service Commission before exercising the power to relax the mandatory quota rule and further assuming that the posts in Integrated Grade IT and III were within the purview of the Union Public Service Commission and accepting for the time being that the Commission was not 235 consulted before the power to relax the rule was exercised yet the action taken would not be vitiated nor would it furnish any help to Union of India which itself cannot take any advantage of its failure to consult the Commission. Therefore it can be safely stated that the enormous departure from the quota rule year to year permits an inference that the departure was in exercise of the power of relaxing the quota rule conferred on the controlling authority. Once there is power to relax the mandatory quota rule, the appointments made in excess of the quota from any given source would not be illegal or invalid but would be valid and legal as held by this Court in N.K. Chauhan and Ors. vs State of Gujarat, [1977] 1 S.C.R. 1037. Therefore the promotion of the promotees was regular and legal both on account of the fact it was made to meet the exigencies of service in relaxation of the mandatory quota rule and to substantive vacancies in service. The Court ultimately quashed the seniority list and directed the preparation of seniority list on the basis of length of continuous officiation in the cadre. The facts in this case being almost identical there is no reason why the view express in G.S. Lamba 's case (supra) should not be adopted here also. The continuance of these petitioners may be justified on the basis of the above quoted rule 16 onthe assumption that the Government had relaxed the Rules and appointed them to the posts in question to meet the administrative requirements. The enormity of the prejudice that is likely to be caused to the petitioners and others who were similarly situated can be demonstrated by setting out the effect of sticking to the quota rule as found in rule 8(1)(a) even though there has been a deliberate deviation from it. The result of applying the quota rule would be as follows: Petitioner No.1 who was promoted to Grade 17 on November 6, 1965 would be junior to a direct recruit of 1974 batch. Petitioner No.3 who was promoted to Grade IV on March 22, 1966 would become junior to a direct recruit of 1979 batch. Petitioner No.6 who was promoted to 236 Grade IV post in July 1, 1966 would become junior to direct recruits of 1982 batch. Petitioner No. 10 who was promoted to Grade IV on May 18, 1968 would become junior to direct recruits of 1982 batch. Petitioners Nos. 16 to 18 and 21 to 25 would continue to be treated as ad hoc appointees and will be junior to every body appointed till now into the service as they cannot be fitted any whf e even though they have put in 9 to 15 years of service in Grade IV. These startling results ought to shock anybody 's conscience. The only just solution to this problem is to treat the petitioners as persons duly appointed to the Service with effect from the day on which they were promoted to the Grade IV posts. As observed in D.R. Nim, I.P.S. vs Union of India ; when an officer has worked for a long period as in this case for nearly fifteen to twenty years in a post and had never been reverted it cannot be held that the officer 's continuous officiation was a mere temporary or local or stop gap arrangement even though the order of appointment may state so. In such circumstances the entire period of officiation has to be counted for seniority. Any other view would be arbitrary and violative of Articles 14 and 16(1) of the Constitution because the temporary service in the post in question is not for a short period intended to meet some emergent or unforeseen circumstances. Clause (b) of rule 9C of the Rules which deals with the question of seniority of promotees becomes irrelevant in the circumstances of this case as regards the promotees who have been holding the posts from a long time as stated above. The decision in A. Janardhana 's case (supra) and the decision in O.P. Singla 's case (supra) strongly support the above view. It is necessary to refer to them in great detail since in G.S. Lamba 's case (supra) the effect of the said decisions is set out very clearly. The decision in Karam Pal 's case (supra) is not of much assistance to the direct recruits. In that decision there was a specific finding that except for a period o ' two years i.e. in 1966 and 1970, direct recruitment had been made in accordance with the Scheme governing recruitment to the Central Secretariat Service and that there was substantial compliance with the rules of recruitment governing that Service. The 237 Court observed that in the absence of serious failure in implementing the relevant rules there was no ground to interfere with the inter se seniority of the officers in the Grades concerned. Hence that decision is distinguishable on facts from the present case. We are aware that the view we are taking may upset the inter se seniority between those promotees who were included in the Select List of 1970, 1982 and 1984 and those who were included later on or who have not been included at all till now. The existence of this possibility should not deter us from adopting a uniform rule in the case of all promotees and direct recruits to adjust the equities amongst them as regards their relative seniority in the light of the violent departure made by the Government both as regards direct recruitments and promotions which lt had to make every year under the Rules. The prejudice which the promotees included in the Select Lists might suffer is marginal and has to be ignored. Having given our anxious consideration to the submissions made on behalf of the parties and the peculiar facts present in this case we feel that the appropriate order that should be passed in this case is to direct the Union Government to treat all persons who are stated to have been promoted in this case to several posts in Grade IV in each of the two Services contrary to the Rules till now as having been regularly appointed to the said posts in Grade IV under rule 8(1)(a)(ii) and assign them seniority in the cadre with effect from the dates from which they are continuously officiating in the said posts. Even those promotees who have been selected in 1970, 1982 and 1984 shall be assigned seniority with effect from the date on which they commenced to officiate continuously in the posts prior to their selection. For purposes of seniority the dates of their selection shall be ignored. The direct recruits shall be given seniority with effect from the date on which their names were recommended by the Commission for appointment to such grade or post as provided in clause (a) of Rule 9 C of the Rules. A seniority list of all the promotees and the direct recruits shall be prepared on the above basis treating the promotees as full members of the Service with effect from the dates from which they are continuously officiating in the posts. This direction shall be applicable only to officers who have been promoted till now. This is the meaning of the direction given by the Court on February 1, 1984 which stated, 238 'we wish to make it clear that there is no question of any rotation system being applied under the Rules, as they exist now. ' All appointments shall be made hereafter in accordance with the Rules and the seniority of all officers to be appointed hereafter shall be governed by rule 9 C of the Rules. We are informed that some of the promotees and direct recruits who are governed by this decision have been promoted to higher grades. If as a result of the preparation of the seniority list in accordance with the decision and the review of the promotions made to higher grades any of them is likely to be reverted such officer shall not be reverted. He shall be continued in the higher post which he is now holding by creating a supernumerary post, if necessary to accommodate him. His further promotion shall however be given to him when it becomes due as per the new seniority list to be prepared pursuant to this decision. There shall, however, be a review of all promotions made so far from Grade IV to higher posts in the light of the new seniority list. If any officer is found entitled to be so promoted to a higher grade he shall be given such promotion when he would have been promoted in accordance with the new seniority list and he shall be given all consequential financial benefits flowing therefrom. Such review of promotions shall be completed within three months and the consequential financial benefits shall be paid within three months thereafter. In giving these directions we have followed more or less the directions given in P.S. Mahal & Ors. V. Union of India & Ors. (supra). We direct that the above directions shall be complied with within the period indicated above. The petition is accordingly disposed of.

The Indian Economic Service Rules, 1961 and the Indian Statistical Service Rules, 1961 were notified on November 1, 1961. These Services were constituted with effect from that date by encadering numerous posts carrying economic and statistical functions in various ministries of the Government of India. Both the Services have Grade I, Grade II, Grade III and Grade IV posts and Officers of Grade I to Grade IV are classified as Class I Officers. The authorised permanent strength of each of the Services is to be fixed by the Controlling Authority, constituted under Rule 6, in accordance with the Rules. Under Rule 7, the Union Public Service Commission was required to constitute a Selection Committee to determine the suitability of departmental candidates for appointment to the different grades and to prepare an order of preference for each grade for the initial constitution of both the Services. On receipt of the Committee ' 8 report, the Commission was required to forward its recommendations to the Government. The departmental candidates who were not absorbed at the initial constitution of the Service were given the opportunity to apply for future vacancies. Future maintenance of the two Services is governed by Rule 8. 212 After the initial constitution of the two Services was completed it was found that a number of posts carrying economic/statistical functions could not be considered for inclusion in the officers ' Grades. Further as the process of formation of the two Services was prolonged for a number of years and the need for appointing more officers in various Departments during that long period also arose gradually, several posts carrying economic/statistical functions were created. Although Rule 8 provided that not less than 75 per cent of the vacancies in Grade IV should be filled up by direct recruitment through an open competitive examination to be held be the Union Public Service Commission in the manner prescribed in Schedule II to the Rules and lt further provided that not more than 25 per cent posts of the vacancies in that Grade should be filled by selection from among officers serving in the offices under the Government in Economic/ Statistical posts recognized for that purpose by the Controlling Authority, no direct recruitment we resorted to till about the year 1968. In the meanwhile, a large number of persons in the feeder posts were appointed to the posts in Grade IV from time to time from the year 1962 onwards although the orders promoting them stated that they had been promoted only temporarily. Undisputedly, all those promotees have been holding those posts continuously till now without being reverted to the feeder posts from which they had been promoted. Some have been retried from those posts. Thus the prescribed quota of appointment from the two different sources was not maintained right from the commencement of the constitution of the Services. After completion of the initial constitution of the two services under Rule 7, Rule 7A was added and subsequently amended. Rule 7A made special provision regarding certain departmental candidates who were to be absorbed in the two Services. Between the years 1964 to 1984 in all there were 435 vacancies for direct recruitment in the Indian Economic Service out of which only 342 posts were filled up by direct recruitment. Out of 93 remaining unfilled posts most of them were held all along by persons promoted from the feeder posts. In the Indian Statistical Service as against a total of 303 vacancies meant for direct recruits between the years 1964 to 1984 only 275 direct recruits were appointed. The remaining 213 unfilled posts were held by the & departmental candidates. It was alleged that many of the departmental candidates had been allowed to hold posts including Grade IV of the two Services purely on ad hoc and ex gratia basis. Earlier certain persons holding posts in Grade IV of these two services had filed Writ Petition under Article 32 seeking direction/order to the Union of India to confirm and regularise the petitioners in the posts held by them as and from the dates when they had become due for confirmation or regularisation in accordance with the Indian Economic Services Rules 1961 or the Indian Statistical Service Rules 1961 and to consider them for all future promotions when due on the basis of such seniority. This Court on February 1 1984 directed the Union of India to fill up, within four weeks, the vacancies available to the departmental candidates under Rule 8 (1)(a)(ii) with effect from the date from which the petitioners become entitled to be promoted on regular basis, that their seniority will be determined according to Rules and that rotation system will not apply under the existing Rules. On May 1, 1984, after expiry of the extended time, the respondent Union of India filed two sets of seniority lists in respect of the two services, namely, (i) lists based on the principle of rotation, and (11) lists based on Rule 9C of the Rules. Since the lists were to the disadvantage of the departmental prouotees, the Court while declining to endorse either of the two seniority lists directed the respondent Union to implement the order dated February l, 1984 on or before 30th November, 1984. In the meanwhile the petitioners filed a petition for initiating contempt proceedings against the respondent Union of India which was resisted by the respondents Certain direct recruits also intervened and wanted to be heard before disposal of the contempt application. Opportunity was given to all the parties to make their submissions. Disposing of the petition, ^ HELD: 1. Having regard to the facts of the case and the events that have followed the order passed by this Court on February 1, 1984, no action for contempt against the Union Government or any of its officers for not obeying the orders of this Court would be taken. [221 B C] 214 2. The Union Government is directed to treat all persons who have been promoted to several posts in Grade (n ) in Indian Economic Service and Indian Statistical Service contrary to the Rules till now as having been regularly appointed to those posts in Grade (IV) under Rule 8(1) (a) (ii) and assign them seniority in the cadre with effect from the dates from which they are continuously officiating in those posts. Even those promotees who have been selected in 1970, 1982 and 1984, shall be assigned seniority with effect from the date on which they commenced to officiate continuously in the posts prior to their selection. For purposes of seniority the dates of their selection shall be ignored. The direct recruits shall be given seniority with effect from the date on which their names were recommended by the Commission for appointment to such grade or posts as provided in clause (a) of Rule 9 C. A seniority list of all promotees and direct recruits shall be prepared on the above basis treating the promotees as full members of the Service with effect from the dates from which they are continuously officiating in the posts. This direction shall be applicable only to officers who have been promoted till now, which means that rotation system will not be applicable under the Rules, as they exist now. All appointments shall be made hereafter in accordance with the Rules, and the seniority of all the officers to be appointed hereafter shall be governed by Rule 9 C. [237 D H: 238 A] 3. If as a result of the preparation of the seniority list as aforesaid any officer is likely to be reverted, such officer shall not be reverted. He shall be continued in the higher post which he is now holding by creating a supernumerary post to accommodate him. Further promotion shall be given to him when it becomes due as per the new seniority list to be prepared. There shall be a review of all the promotions made so far from Grade (IV) to higher posts in the light of the new seniority list. [238 B D] P.S. Mahal & Ors. vs Union of India & Ors. ; followed. When an officer has worked for a long period for nearly 15 to 20 years in a post and had never been reverted it cannot be held that the officer 's continuous officiation 215 was a mere temporary or local or stop gap arrangement even though the order of appointment may state so. In such circumstances the entire period of officiation has to be counted for seniority. Any other view would be arbitrary and violative of Articles 14 and 16(1) because the temporary service in the post in question is not for a short period intended to meet some emergent or unforseen circumstances. [236 C E] In the circumstances of the instant case, clause (b) of rule 9 C of the Rules which deals with the question of seniority of promotees becomes irrelevant as regards promotees who have been holding the posts from a long time. [236 E] 5. It is permissible for the Government to recruit persons from different sources to constitute a service. It is also open to it to prescribe a quota for each source. Rules of recruitment framed on the above lines are perfectly legitimate and quite consistent with Articles 14 and 16 of the Constitution. When the Rules of recruitment prescribe recruitment from different sources in accordance with the specified quota the Government is bound to appoint persons to the Service concerned in accordance with the Rules. me seniority of persons recruited from different sources will have to be regulated accordingly. [230 C E] In the instant case, the Government had made violent departure from the Rules of recruitment by deliberately allowing those who were appointed contrary to Rules to hold the posts continuously over a period of long time. [230 E F] 6. The petitioners were not promoted by following the actual procedure prescribed under rule 8(1)(a)(ii) but the fact remains that they have been working in posts included in Grade IV from the date on which they were appointed to these posts. The appointments are made in the name of the President by the competent authority. They are being paid all along the salary and allowances payable to incumbents of such posts. They have not been asked to go back to the posts from which they were promoted at any time since the dates of their appointment. me orders of promotion issued in some cases show that they are promoted in the direct line of their promotion. It was expressly admitted that the petitioners have been allowed to hold posts included in Grade IV of the said 216 Services, though on an ad hoc basis. Therefore, it cannot be said that the petitioners are not holding the posts in Grade IV of the two Services. Neither the Government has issued orders of reversion to their former posts nor has anybody so far questioned the right of the petitioners to continue in the posts which they are now holding. It would be unjust to hold at this distance of time that the petitioners are not holding the posts in Grade IV. However, it is not the case that whenever a person is appointed in a post without following the Rules prescribed for appointment to that post, he should be treated as a person regularly appointed to that post. Such a person may be reverted from that post. [231 B H; 232 A] In the instant case, where persons have been allowed to function in higher posts for 15 to 20 years with due deliberation it would be certainly unjust to hold that they have no sort of claim to such posts and could be reverted unceremoniously or treated as persons not belonging to the Service at all, particularly where the Government is endowed with the power to relax the Rules to avoid unjust results. The Government has also not expressed its unwillingness to continue them in the said posts. The other contesting respondents have also not urged that the petitioners should be sent out of the said posts. There is no impediment even under the Rules to treat the petitioners and others who are similarly situated as persons duly appointed to the posts in Grade IV because of the enabling provision contained in Rule 16. [232 B E] 7. If there is enormous departure from the Rules of recruitment in making appointments over several years, it should be presumed that the excess appointment by promotion had been made in relaxation of the Rules when power to relax the Rules is available. [233 C D] A.Janardhana vs Union of India & Ors. [1983] 2 S.C.R. 936; O.P. Singla & Anr. vs Union of India & Ors. ; ; G.S. Lamba & Ors. vs Union of India & Ors. ; ; D.B. Nim, I.P.S. vs Union of India followed. S.B. Patwardhan & Ors. vs State of Maharastra 217 State of Bihar & Ors. ; ; Baleshwar Das Ors. vs State of U.P. 7 Ors. etc. [1981] 1 S.C.R. 449; P.S. Mahal & Ors. vs Union of India & Ors. [1984] 3 S.C.R. 847; Pran Krishna Goswami & Ors. vs State of West Bengal Ors. [1985] Supp. S.C.C. 221; D.K. Mitra & Ors. vs Union of India & Ors. [1985] Supp. S.C.C. 243 referred to. Karam Pal Ors. vs Union of India & Ors. ; distinguished.

ition Nos. 4146 of 1978 and 546 47 of 1983. (Under Article 32 of the Constitution of India .) Rajinder Sachhar, Govind Das, T.S. Krishnamurthy lyer, A.K. Sanghi, Ravinder Bana, R.B. Misra, Miss A. Subhashini, Bhisamber Lai and Miss Gitanjali Mohan for the appearing parties. The Judgment of the Court was delivered by SAWANT, J. These three petitions raise some common issues, and hence they are being disposed of by this common judgment. W.P. No. 4146of 1978. This petition is filed by the promotee Income Tax Offi cers Group A seeking to challenge the Seniority Rules of 1973 on the ground that they were framed pursuant to a direction given by ,this Court in Bishan Sarup vs Union of India & Ors., decided on August 16, 1972. According to the petitioners, the said direction was given because for want of sufficient material, the Court had come to the conclusion that the quota for recruitment of the direct recruits and the promotees had broken down as the promotees were appointed in excess of their entitlement in the quota. According to the petitioners, the requisite material showing the contrary was in the possession of the Government but did not come forth, then. The said material shows that in fact the appointments of the promotees were short of their quota. The petitioners, therefore, claim that not only the 999 Seniority Rules of 1973 should be set aside, but the ap pointments of the promotees be made and their seniority be fixed, according to the Rules prevailing prior to the said Rules. The relevant facts necessary to dispose of the peti tion are as follows. Pursuant to the Rules propounded in their letter of September 29, 1944, the Government reorganised the existing Income Tax services into Class I and Class II. The Rules, among other things, laid down that the recruitment to the cadre of Income Tax Officers Group A will be from two sources, viz., direct recruitment and promotion, the quota for the two being 80% 20% respectively. In 1945, the Government framed fresh Recruitment Rules for the said cadre of Class I and Class II ITOs. Rule 3 of the said Rules reiterated that the recruitment to the said cadre will be from the two sources, viz., direct recruitment and promotion. Rule 4 of the said Rules, however, provided that the recruitment from the said sources will be made as per the discretion of the Government. This provision had the effect of virtually keeping in abeyance the recruitment quotas for the direct recruits and the promotees laid down in the Recruitment Rules of September 29, 1944. On September 9, 1949, the Government framed Seniority Rules. Rule 1(f)(iii) thereof provided that the promotees who had been certified by the Federal Public Service Commis sion in any calendar year shall be senior to all direct recruits who completed their probation during that year or after, and are confirmed with effect from the date in that year or after. On January 1, 1950, the Seniority Rules were revised and the aforesaid Rule 1(f)(iii) was amended as follows: "(f) The seniority of direct recruits recruited on the results of the examinations held by the Federal Public Service Commission in 1944, and subsequent years, shall be reckoned as follows: (i) Direct recruits of an earlier examination shall rank above those recruited from subsequent examination. (ii) Direct recruits of any one examination shall rank inter se in accordance with the ranks obtained by them at that examination. 1000 (iii) The promotees who have been certified by the Commis sion in any calendar year shall be senior to all direct recruits who complete their probation during that year or after and are confirmed with effect from a date in that year or after. Provided that a person initially recruited as Class II Income Tax Officer, but subsequently appointed to Class I on the results of a competitive examination conduct ed by the Federal Public Service Commission shall, if he has passed the departmental examination held before his appoint ments to Class I service, be deemed to be promotee for the purpose of seniority. By its letter of October 18, 1951, the Government revised the quotas of direct recruits and promotees (which was earlier laid down in their letter of September 29, 1944), from 80% and 20% to 66 2/3% and 33 1/3%. On September 5, 1952 the Government also revised further the Seniority Rule 1(f)(iii) of January 24, 1950 as follows: "(f) The seniority of direct recruits recruited on the results of the examinations held by the Federal Public Service Commission in 1944, and subsequent years, shall be reckoned as follows: (i) Direct recruits of an earlier examination shall rank above those recruited from a subsequent examination. (ii) Direct recruits of any one examination shall rank inter se in accordance with the ranks obtained by them at that Examination. (iii) Officers promoted in accordance with the recommenda tion of the Departmental Promotion Committee before the next meeting of the Departmental Promotion Committee shall be senior to all direct recruits appointed on the results of ' the examinations held by the Union Public Service Commission during the calendar year in which the Departmental Promotion Committee met and the three previous years. " It will thus be clear that this revision,,among other things, gave to the promotees, a weightage of three years in seniority. These Rules continued to operate till 1959. 1001 4. It appears that between 1959 and 1960, about 114 posts were upgraded to those of Income Tax Officers Group A, and the promotees were appointed to the said posts during the relevant period. One Jaisinghani, a direct recruit challenged the constitutional validity of Seniority Rule 1(f)(iii) and (iv) of 1952 Seniority Rules which had in effect given three years ' weightage to the promotees in the matter of fixation of their seniority, and also the improper implementation of the quota by the Government, by filing a writ petition before the Punjab High Court. The High Court rejected the writ petition, and in the appeal filed against the said decision, this Court, by its decision in S.G. Jaisinghani vs Union of India & Ors., ; held that the quota was fixed by the Government by its letter of October 15, 1951 in exercise of the power given to it under Rule 4 of the Recruitment Rules of 1945 and hence it was valid and proper. The Court also upheld the weightage given to the promotees under the Seniority Rules of 1952. The Court, however, directed that for future years, the roster system should be adopted by framing an appropriate rule for working out the quota between the direct recruits and the promotees, and that a roster should be maintained indicating the order in which appointments are made by direct recruitment and by promotion, in accordance with the percentage fixed under the statutory Rules for each source of recruitment. The Court gave these directions because the Court came to the conclu sion that the promotees were in excess of the prescribed quota for each of the years 1951 to 1956 and onwards, and that they had been illegally so promoted. The Court further held that the appellant Jaisinghani was entitled to a writ commanding the respondents to adjust the seniority of the appellant and other officers similarly placed like him, and to prepare a fresh seniority list in accordance with law after adjusting the recruitment for the period 1951 to 1956 and onwards, in accordance with the quota rule prescribed in the Government letter of October 18, 1951. The Court, howev er, made it clear that the said order would not affect such Class II officers who had been appointed permanently as Assistant Commissioners of Income Tax. Pursuant to the direction given by the Court, the Government prepared a Seniority List on July, 15, 1968. This Seniority List was challenged in Delhi High Court in two separate writ petitions, one filed by one B.S. Gupta, a promotee of 1962 and another by one M.C. Joshi, a direct recuit. The Delhi High Court by its decision of July 29, 1970 dismissed Gupta 's petition and substantially allowed Joshi 's petition and gave directions to prepare a fresh seniority List. Against the 1002 decision in both the petitions, Gupta filed two separate civil appeals. By its decision dated August 16, 1972 in the said appeals in B.S. Gupta case (supra) briefly known as 1st Gupta case, this Court held that the Seniority List was valid with regard to the promotions made upto January 15, 1959, since it was prepared on the basis of the quota rule of October 18, 1951 and the Seniority Rule 1(f)(iii) of 1952 Seniority Rules. The Court, however, held that the said List would not be valid for the period thereafter. The Court, therefore, set aside the said list to the extent it con cerned the period from 16.1. 1959 onwards and directed the Department to prepare a fresh seniority list, in the light of the observations made in the judgment. The Court also directed that the seniority list from January 15, 1959 should be prepared in accordance with a seniority rule to be framed afresh by the Government. The Court observed that the proceedings will have to be kept pending till such seniority list was prepared and filed before the Court. It is neces sary to state here that the Court had given the said direc tion because it had come to the conclusion that with the upgrading of a large number of posts and the appointments of the promotees made to them, the quota rule had collapsed, and with that, the seniority Rule giving weightage to the promotees had also collapsed. The decision to upgrade 100 posts was taken in January 1959 and the remaining 114 posts in the year 1960. The Court, therefore, held that the quota rule came to an end on January 16, 1959 when sanction to upgrade 100 temporary posts was given by the President and with that went the seniority Rule. In pursuance of the above direction, the Government framed the impugned Seniority Rules of 1973, and prepared a fresh seniority list on February 9, 1973, giving retrospec tive effect to the said Rules from January 15, 1959. The gist of the 1973 Seniority Rules was that the seniority of the direct recruits and promotees appointed on and from January 16, 1959 was to be fixed as follows: First promotee and then direct recruit and so on. The result of these Rules was that not only the seniority Rule but also the quota of the direct recruits and the promotees was changed from 66 2/3% and 33.1/3% to 50% and 50% or 1: 1. It may be mentioned here that the new seniority list was prepared by fixing the seniority upto 15th January, 1959 according to the old Seniority Rules, and the seniority from 16th January 1959 on the basis of the new Rules. However, 73 of the promotees who were promoted in excess of their quota between 1956 58 could not be accommodated as per the earlier quota rule, in the list of seniority prepared upto 15th January, 1959, and hence the seniority of the said 73 promotees was fixed according to the new seniority Rules which 1003 applied to the appointments made from 16th January, 1959. Both the new Rules and the new Seniority List were filed in this Court as per the earlier direction. The same Shri B.S. Gupta challenged both the validity of the new Seniority Rules of 1973 and as well as the new Seniority List. This Court by its decision dated 16th April, 1974 in Bishan Sarup Gupta etc. vs Union of India & Ors. etc. ; , , known as 2nd Gupta case, upheld both the Seniority Rules as well as the Seniority List. It further appears that one Kamal Kanti Dutta and others had also filed an independent writ petition challeng ing the Seniority List of February 9, 1973. It was dismissed by this Court by its decision dated 23rd April, 1980 in Kamal Kanti Dutta & Ors. vs Union of India & Ors., ; upholding the validity of the said Seniority List. While disposing of the said writ petition, this Court made the following observations on which a strong reliance is placed by the present petitioners: "It shall have been noticed that we have refused to recon sider our decisions not so much because of the view taken in the various cases cited by the learned Solicitor General, like Sajjan Singh vs State of Rajasthan, ; , 947,948 that this Court should not review its decisions too readily, as because on merits, we see no justification for reconsidering the judgment already rendered by this Court. No fresh facts are brought to our notice by way of discovery of new and important evidence which would justify reconsid eration of the decisions already rendered by this Court after the most careful examination of the competing conten tions. The Report of the Rajya Sabha Committee on petitions shows, as already indicated that the relevant files are still 'not traceable" That judgment was by a majority with Justice D.A. Desai delivering a dissenting judgment. Since the petitioners here are relying also upon some observations made in the dissent ing judgment, we may reproduce them here: "In the light of the materials now placed especially the files which were withheld from the Court and the Committee, the only view that I express is that enough compelling and 1004 necessary material has been placed on record making out a strong case for reconsideration of these decisions. " The Committee referred to in the aforesaid observation is the Rajya Sabha Petition Committee. The present petition had also come to be dismissed erroneously along with the Writ Petition of Kamal Kanti Dutta (supra). It was restored for hearing on September 9, 1980. On July 28, 1982, the Parliamentary Committee on Subordinate Legislation published its 12th Report wherein it referred to a letter of February 4, 1976 from the Minister of State for Finance. The Committee stated that the Seniori ty Rules of 1973 were unfair and hence they should be scrapped with effect from January 15, 1959 and that fresh equitable seniority rules be framed. The Committee recom mended that the artificial distinction between the ITO Group A and Group B should be abolished as they were per forming identical functions and were working on interchange able posts. The Committee also recommended the grant of the same weightage in seniority to the promotees from 15th January, 1959 as was available to them before that date. The Committee, further recommended an increase in the quota of promotions from Group B to Group A on account of an unprece dented stagnation of Group B service, as a direct result of the Seniority Rules of 1973. It does not appear that these recommendations were accepted. We are referring to these recommendations of the Committee because the petitioners have made a reference to them and not because they are legally binding. Thereafter, on February 16, 1983, the accompanying Writ Petitions, viz., Nos. 546 47 of 1983 were filed chal lenging (i) the validity of Section 117 of the Income Tax Act, 1961, (ii) the classification of Income Tax Officers in GroUp A and Group B Officers, (iii) the Seniority Rules of 1973 and (iv) the Seniority List prepared on their basis. The last two reliefs claimed in the said petitions are common to the present petition and hence they will be dis posed of along with the judgment in the present case. The first two reliefs and the reliefs claimed incidental thereto will be dealt with separately. It is further necessary to note that while admitting the accompanying petitions, the Court had passed the follow ing order: 1005 "Subject to the specific condition that the petitioners shall not be permitted to reopen whatever classification was made in the cadre of ITOs, in the past as also inter se seniority between direct recruits and promotees which had been upheld by the decisions of this Court in S.C. Jaising hani, B.S. Gupta and KK Dutta 's case, rule nisi limited to the question whether the classification of ITOs, into Group A and Group B section 117 of the IT Act, 1961 is viola tive of Articles 14 and 16 of the Constitution. Even if the issue is answered in affirmative, the petitioners will be entitled to the relief, if any, only prospectively for future implementation of the decisions from the date of the judgment in the Petition. This order will not preclude any contention that can and may be raised in the Writ Petition No. 4 146/78 H.K. Sajnani vs UOI & Ors., to be examined on merits. On May 3, 1983, this Court passed an order in CMP Nos. 13200 and 6762 of 1983 in both the present and the accompanying writ petitions as follows: "In allowing prayer (i) of CMP No. 6762/83, we direct Writ Petition Nos. 546 47/83 be heard alongwith Writ Petition No. 4146/78 and that the grounds challenging the validity of seniority rule 1973 as taken in Writ Petition Nos. 546 47/ 83 are allowed to be taken in Writ Petition No. 4146/78 in so far as the prayer (iii) of CMP is concerned, we direct the Government to file a statement in this Court before July 15, 1983 as to the result of the examination of the recom mendation of the Committee on Subordinate Legislation and decision and other measures taken by the Government thereon. On February 27, 1985, the Court gave direction to the Government in CMP No. 1903 of 1983 in the present Writ Petition to allow the petitioners inspection of the files relating to the vacancies. The inspection was completed on October 7, 1985 which according to the petitioners shows the following facts: (i) that the relevant record is available and was always available with the Government and that its production was deliberately withheld from this Court, (ii) that the promotions were all within quota and that there was no excess. Rather there was a deficiency in promotions, (iii) that the quota rule was adhered to from year to year right from the year 1951 upto the date of the judgment in the 1st Gupta case (supra), (iv) that the quota rule did 1006 not collapse on 15.1.1959, (v) that as required by the exigencies of the service, the quota rule was amended/re laxed in the years 1958 and 1959, (vi) that in applying the quota rule in pursuance of the man~ damus, the Government did not follow the principles decided by this Court in 1st Gupta case (supra) and committed the following errors: (a) The Government did not apply the quota to the vacancies existing at a particular point of time. Instead of doing so. it misinterpreted the quota rule of 66 2/3% and 33.1/3% as if it required that a ratio of 2:1 had to be maintained in the cadre of Income Tax Officers and as if there had to be one promottee against every 2 direct recruits. This erroneous interpretation was applied in clear breach of the principle laid down by this Court in the 1st Gupta case (supra). (b) Another error committed by the Government in applying the quota rule in violation of the principles decided by this Court in the 1st Gupta Case (supra) was that the sub stantive vacancies in the temporary posts which were a regular part of the cadre and which eventually became perma nent were not taken into account while applying the quota rule, with the result that the promotees were denied their share in such vacancies. The most harmful thing done by the Government was that it did not take into account substantive vacancies in temporary posts till 1963 for applying the quota rule and worked out the excess in promotions ignoring such vacancies. But, they started taking into account those very vacancies for direct recruitment from 1963 onwards. If such vacancies were taken into account prior to 1963 and the quota rule was applied to them, there would have been no excess in promotions as was erroneously worked out. On the contrary, there was a deficiency in promotions because of the incorrect application of the quota rule. (c) The promotees were not given their full quota even in the permanent vacancies which should have bee given to them inrespective of whether the direct recruitment was made in full. There was under utilisation of quota of direct re cruits with the result that the promotees were denied their legitimate share even in permanent vacancies. In these circumstances, the actual appointments were taken as vacan cies and were bound to result inevitably into excess of promotions. On the basis of these facts, which according to the petition 1007 ers were revealed in their inspection, their case is that their allegation, that the relevant files were available and yet were not produced before the Court and the further allegation that there were no excess promotions were borne out. This shows that the direction given in the 1st Gupta case (supra) to frame new rules and, hence, the new Seniori ty Rules of 1973 framed pursuant to these directions, were unwarranted, unjust and illegal. The petitioners further contend that the principle that the vacancies mean those the Government wants to fill is not compatible with the principle laid down in the 1st Gupta case (supra) that the promotees should get their share of the quota irrespective of whether the direct recruits ' quota is filled, or not. But in the present case, the con trary has happened, viz., the promotees ' quota is calculated on the basis of the appointments of the direct recruits causing thereby injustice to the promotees by depriving so many of them of their chances of promotion which were other wise available. It is also the contention of the petitioners that in fact, there were vacancies and the Government wanted to fill those vacancies. This is evidenced by the fact that when new posts were created for the purpose of assessment work, the direct recruits were not available and hence, the promotions were made from Group B to Group A, and even Group B Officers were appointed against Group A posts and they performed identical functions as of Group A Officers. This contention has also a bearing on the issue involved in Writ Petitions Nos. 546 47 of 1983 and we will deal with it in that con text, later. While these petitions were pending, the Government on January 24, 1988 amended the Income Tax Act, 1961 with effect from April 1, 1988 and, among other things, changed the designation of Income Tax Officers and Assistant Commis sioners as follows: Pre Amendment Post Amendment (a) Income Tax Officers Income Tax Officers (Group B) (b) Income Tax Officers Assistant Commissioners (Group A) (c) Assistant Commisioners Deputy Commissioner. The amendment also substituted Sections 116, 117, 118 and 120 with 1008 effect from the same date, i.e., April 1, 1978 and autho rised the Central Board of Direct Taxes to issue notifica tions authorising Chief Commissioners and Commissioners of Income Tax to classify the work of newly designated Income Tax Officers and Assistant Commissioners, and to provide for the jurisdiction of the Income Tax Officers and Assistant Commissioners on the basis of quantum of income. According to the petitioners, this was done to destroy the cause of action Writ Petition Nos. 546 47 of 1983. On May 12, 1988, the Government framed New Rules of Recruitment, among other things, providing for quota of 50% each to the promotees and direct recruits. In consequence, an application for amendment of Writ Petitions Nos. 546 47 of 1983 was filed raising additional grounds. It will thus be apparent that the whole foundation of the case of the petitioner promotees in the present petition is that the Seniority Rules of 1973 were made by the Government pursuant to the direction of this Court in the 1st Gupta case (supra) on August 16, 1972 and that direction was given by this Court because on the basis of the material produced by the Government, this Court had come to the conclusion that the promotees were promoted in excess of their quota. According to them, however, the new material which they have discovered shows that in fact there were not only no excess promotees but in fact there was a shortfall in their promotions as per their entitlement in the quota. Both on behalf of the Government as well as the respondent Union of India and the direct recruits, it is pointed out to us that the so called new material produced on behalf of the petitioner promotees far from proving their allegation, supports the conclusion to which this Court had arrived at in the 1st Gupta case (supra). In this connec tion, it is pointed out that admittedly, there were at the relevant time Class I and Class II posts of Income Tax Offi cers corresponding to Group A and Group B posts. Class I or Group A consisted of Grade I and Grade II Officers whereas Class II or Group B consisted of Grade II Officers. Group B Officers were entitled to be promoted first to Group A Grade II posts. Hence, the vacancies available for promotion to the promotees which ought to be taken into consideration at any point of time are the vacancies in Grade II posts of Class I or Group A. However, it is obvious from page 32 of Volume II of their petition, that the petitioner promotees have taken into consideration vacancies not only in Grade II posts but also in Grade I posts to show 1009 that in fact not only they were not promoted in excess but their promotions were short of the vacancies which were available to them in their quota. We may reproduce herein below the relevant table of the sanctioned strength, the vacancies, the quota for promotees, the actual number of promotions made and their deficit or excess in the quota since 1951 to 1958 as calculated by the petitioners on the said page 32. According to the petitioners, the figures in the table are taken from the newly discovered files: VACANCY POSITION FROM 1951 1958 Year Total Working Total Quota Actual Def Sanctioned Strength Vacancies of pro No. of icit Strength Gr. II motions promo ( ) tions. or Grade I Grade II Exc ess(+) 1951 216+200 = 416 77 + 98 = 175 241 80 1952 224+221 = 445 83 +113 = 196 249 83 49 ( ) 34 1953 224+221 = 445 130 +129 = 259 186 62 38 ( ) 24 1954 224+221 = 445 169 +157 = 326 119 40 31 ( ) 9 1955 224+221 = 445 154 +217 = 371 74 25 24 ( ) 1 1956 224+221 = 445 187 +214 = 401 44 15 25 (+) 10 1957 287+248 = 535 224 +184 = 408 127 42 26 ( ) 16 1958 290+248 = 538 213 +202 = 415 123 41 28 ( ) 13 97 10=87 Net Deficiency 23. It is clear from the above table that the petition er promotees have calculated the posts in the sanctioned strength not only in Grade II posts but also in Grade I posts. When the posts available to them for promotion were only in Grade II. Hence, their further calculations of the working strength, the vacancies and the quota available to them in the vacancies and of the deficiencies or the excess in the quota are erroneous. On behalf of the Government, the following calculations have been made for the relevant period from 1951 to 1958 on the basis of the actual vacan cies in the sanctioned strength of Grade II posts of Group A (Class I). These calculations show that in fact during the said period, the promotees were promoted to Grade II posts of Group A (Class T) in excess to the extent of 93. There fore, the deficiency of 97 which they have shown in their appointments during the said period is obviously wrong. The said table first handed over to us by Shri Govind 1010 Das, Counsel for the Government is prepared on the basis of the very same figures on page 32 of the Writ Petition. It, now, forms an annexure to the additional affidavit dated 23rd January, 1990 filed by one Ravi Kumar, Under Secretary, Department of Revenue, Ministry of Finance. The table is as follows: Year Sanctioned Working Vacancies Quota Actual Excess Grade II Strength of pro promo Class I Gr. II,Cl. I motion tion as 33% stated at 32. 1951 200 98 102 34 1952 221 113 108 36 49 13 1953 221 129 92 31 38 7 1954 221 157 64 21 31 10 1955 221 217 4 1 24 23 1956 221 214 7 2 25 23 1957 248 184 64 22 26 4 1958 248 202 46 15 28 13 93 24. The figures shown in the above table are self explanatory. Confronted with these figures, the petitioners came out with another . chart the relevant extract of which is as follows: Total Vacancies Direct Recruits Promotees Year Sanc Work Va Quo Actu Excess/ Quota Act Exce tion ing can ta als Shortage tual ss/ ed Stren cies pro Shor in Gr. in Gr. in Gr. motio tage II II II ns. 1 2 3 4 5 6 7 8 9 10 1952 221 113 108 72 33 ( )39 36 49 (+) 13 1953 221 129 92 61 28 ( )33 31 38 (+) 7 1954 221 157 64 43 52 (+) 9 21 31 (+) 10 1955 221 217 4 3 53 (+)50 1 24 (+) 23 1956 221 214 7 5 48 (+)43 2 25 (+) 23 1957 248 184 64 43 27 ( )16 21 26 (+) 5 1958 248 202 46 31 99 (+)68 15 28 (+) 13 385 258 340 + 82 127 221 + 94 1011 By producing this chart the attempt of the petitioners, is to show that the direct recruits were appointed in excess of their quota to the extent of 82 during the relevant period. The interesting feature of this chart, however, is that the petitioners admit that they were also appointed in excess of their quota during the period to the extent of 94 as against 93 shown in the chart prepared on behalf of the respondent Union of India (the difference of one being on account of the calculation of the excess as 5 for the year 1957 as against 4 calculated by the respondents for the same year). On the basis of this chart, it is contended that in view of the fact that both direct recruits and promotees were ap pointed in excess of their quota, it could not be said that the quota had broken down. In the first instance, the chart prepared by the petitioners themselves shows that the conclusion which was arrived at by this Court in the 1st Gupta case that the promotees were appointed in excess of their quota is cor rect, and demolishes the very foundation of their case in the present petition namely, that the newly discovered material shows that not only they were not appointed in excess of their quota, but were in fact short of it. Second ly, assuming that their figures of the appointment of direct recruits during the relevant period are correct (since so far, it was never their contention that the direct recruits were appointed in excess of their quota and, therefore, the respondents had no opportunity to meet it), that only strengthens the conclusion of this Court in the 1st Gupta case that the quota rule had broken down. The quota rule does not collapse only when the appointments from one source alone are disproportionately deficient or in excess. It was then contended on behalf of the petitioners that the Government 's method of working out the vacancies was wrong. It is not necessary for us to go into this alle gation and to find out the correct way of working out the vacancies. This is so because firstly, the petitioners have come to this Court by the present petition on the basis of the vacancies worked out by the Government but which vacan cies according to the petitioners, were suppressed. Second ly, their own chart shows that the vacancies were worked out by the Government by deducting the annual working strength from the sanctioned strength, every year. The quota of the promotees shown by the petitioners in their chart is further on the basis of the vacancies so arrived at and is not on the basis of the appointment of the direct recruits as is alleged by them which allegation is the basis of their other contention in the petition. Thirdly, it is to be remembered that in the present petition it 1012 is the petitioners ' contentions that the new figures of the deficiencies in the promotions have been worked out by the petitioners on the basis of the notings made in the missing files which were not available at the time this Court decid ed the 1st Gupta case (supra). Hence, even assuming that these notings have an intrinsic evidentiary value to prove the annual vacancies available on the relevant dates, the petitioners ' contentions stand disproved even on the basis of the said notings. Lastly, and this according to us is an equally damaging fact as far as the petitioners ' present case is concerned, the figures of the sanctioned strength and the vacancies which are worked out by this Court in the 1st Gupta case (supra) are almost identical with the figures shown by the petitioners themselves in their new chart with only a negligible difference at some points. This fact strikes at the very root of the present petition because the only ground on which the petitioners have approached this Court by way of this petition is that the figures of the annual vacancies were suppressed by the respondents from this Court and it is this suppression which had led this Court to come to the conclusion that the promotees were in excess of their quota and to give a direction to frame the new Seniority Rule and to prepare the fresh Seniority List. The so called new material, on the other hand, proves that the directions given in the 1st Gupta case (supra) were based on proper calculations and were justified. It is also not correct to say that this Court had given the direction in question only because there was an absence of material to show the annual vacancies in a year. This is clear from the following passage in the decision in the 1st Gupta case (supra) at pp 501 502: "In the absence of any material which gives us the actual vacancies in a year, we think that in order to imple ment the mandamus as far as it can possibly be done, it would be reasonable to accept the figures of appointments in those years as substantially representing the actual vacan cies. There is ' also a subsidiary reason why those figures may reasonably be accepted. It is true that the quota rule refers to vacancies but the vacancies are those vacancies which the Government wants to fill. It is the prerogative of the Government, reflected further in Rule 4 referred to above, whether any vacancy may be filled at all or not. Even if there are 100 vacancies in a particular year the Govern ment is not bound to fill all those vacancies. It may fill only 90 of them and nobody can insist that the Government shall fill up all the vacancies. Therefore, when 1013 the quota rule refers to vacancies it is implicit in the rule that the vacancies are vacancies which the Government wants to fill, whatever may be the actual number of vacan cies. The actual appointments are, therefore, in the absence of any evidence to the contrary, the correct measure of the vacancies which the Government wanted to fill. From that point of view also it will be permissible to proceed on the footing that the actual appointments represent the actual vacancies which the Government wanted to fill. For example, if in the year 1953, 53 posts were filled by direct recruits and 38 by promotees the total vacancies sought to be filled would be 91 in which case the promotees would be entitled to 30 vacancies. That is how the Government has proceeded to determine the excess for each year from 1953 to 1957 as shown at Annexure 'N ' (p. 26 Vol. 1 in C.A. No. 2060(n) 1971). In our opinion the procedure adopted by the depart ment in determining the excess number of promotees appointed in the several years is substantially correct. Annexure 'N ' begins with the year 1953. It should begin with the year 1952 and not 1953. Indeed the 5 year period starts from 1951 and ends with 1956 but since there was no promotion in 1951 the question of excess in that year does not arise. For the purposes of the mandamus the seniority list will have to be resettled from the year 1952 showing not merely the excess from the years 1953 to 1956 but from 1952 to 1956. At the end of 1956 the progressive total of the excess over the quota will be known and this excess, as already pointed out, is liable to be absorbed in the quota of the years succeed ing 1956." (Emphasis supplied) This is apart from the fact that as we have shown earli er, in fact the actual vacancies worked out by the Court approximated the actual appointments. And in any case, the quota for the promotees worked out on the basis of the said vacancies and the calculation of the excess of promotions on the basis of the said quota was very nearly correct and the so called new material would not have made any difference to the conclusion which was arrived at in that case. The other contention of the petitioners, namely, that while calculating the vacancies, the Government had calculated only the permanent posts and not the temporary posts has also no substance in it. It is not suggested that the figures of the sanctioned and the working 1014 strength of and the vacancies in Grade II posts of Group A (Class I) shown by the petitioners on page 32 of their petition or in the new chart do not include temporary posts. What is more, in fact in the 1st Gupta case (supra) one of the contentions of the direct recruits was that the quota rule should relate to vacancies only in permanent posts and not temporary posts. That contention was not accepted in that case either by the promotees or the Government. The court also pointed out in that case that there was nothing in the Rules of 1945 or the quota Rule of 1951 which said that the vacancies must be vacancies in permanent posts. The Court observed that indeed the whole cadre had consisted of permanent and temporary posts for years, and there was a difference between permanent vacancies in permanent and temporary posts on the one hand and the permanent and tempo rary posts on the other. It was also pointed out that a11 the direct recruits from 1948 onwards were initially ap pointed against temporary posts. The Court had, therefore, rejected in that case the direct recruits ' contention that the vacancies referred to in the quota Rule were vacancies only in the permanent posts. This shows that the Government had always counted the vacancies both in the permanent and the temporary posts and the promotees had accepted this as a fact then. There is no material placed before us to show that this was not so then. On the contrary, whatever materi al the petitioners have annexed to their petition and to which our attention was invited shows that in fact the Government had always calculated the vacancies on the basis of the sanctioned strength of both the permanent and tempo rary posts. We may refer only to two Annexures in this connection. The extract from File No. 20(22)56/Ad. VI which is Annexure 7 on page 125 of the petition shows that as on 1st July, 1956 the total sanctioned strength of Grade II posts of ITO (Class I) were calculated as 248 consisting of 207 permanent and 41 temporary posts. So also the nothing from File No. 22/4/58/Ad. VI which are Annexure 11 on page 155 of the petition mention the actual strength of Grade II posts of ITO (Class I) as 248 which consists of 207 perma nent and 41 temporary posts. Both the charts produced by the petitioners which we have discussed earlier show the sanc tioned strength of the said cadre for the years 1957 and 1958 each as 248. The vacancies and the quota of the direct recruits and promotees have also been worked out by the petitioners on the basis of this strength in both the said charts. This material, therefore, belies the petitioners ' contention that the Government had not taken into considera tion the temporary posts for working out the vacancies during the relevant period. In his affidavit dated January 31, 1967 filed in Jaisinghani case 1015 (supra), Shri R.C. Dutta, the then Finance Secretary had further clearly stated that the vacancies were calculated with reference to the following information: (i) addition to cadre strength, temporary or permanent as the case may be, and (ii) vacancies arising during a particular period as a result of death, retirement, promotion, resignation, removal etc. of the officers in particular posts. This has been the stand of the respondent Union of India from the beginning, and beyond making a bare allegation to the contrary, the petitioners have not placed any material in support of their said contention. The Chart produced by them on the contrary proceeds on the footing that the vacancies in both the temporary and the permanent posts had to be calculated. Much has also been made of the fact that the Parlia mentary Committee on Subordinate Legislation had, as pointed out above, recommended the reconsideration of the Seniority Rules and the Seniority List of 1973, as allegedly they had done injustice to the promotees. Apart from the fact that the said recommendations have not legally binding effect, they were also not accepted by the Government. In his letter of October 31, 1976 addressed to the Chairman of the Commit tee on Subordinate Legislation, the then Minister of Finance had stated as follows: "I have gone through the Eighth Report of the Committee on Subordinate Legislation submitted to the Lok Sabha on 7th May, 1986. I am afraid, however, there is hardly any scope for the Government to take any significant action in the matter as the alleged grievances of the promotee officers of the Income tax Department are unreal and imaginary. In the past, the prospects, position and power enjoyed by the promotees happened to be better only because of a systematic and persistent violation of Rules. The said violation of Rules itself led to prolonged litigation which repeatedly went upto the Supreme Court. It was finally laid to rest in B.S. Gupta 's case when the Supreme Court approved the Seniority Rules, 1973 and Seniority List. These Rules and the Seniori ty List were prepared in accordance with the Supreme Court 's own directive and were approved by it after giving ample opportunities to both the sides to present their case. These Rules were declared by the Supreme Court to be 'just and fair '. It is significant that 1016 the promotees themselves admittedly could not propose a better alternative. The Seniority Rules, therefore, call for no change. As for quota, originally the promotees were given only 20% of the Group 'A ' vacancies. Unfilled vacancies were to be carned over as part of direct recruitment quota for the subsequent year. The intention obviously was to maintain certain standard of quality in the personnel sanctioned to the service. Between 1951 to 1958 the quota was raised to 1/3rd in favour of the promotees. In 1973, the promotion quota was raised to 30% which is the highest in any service under the Central Government. The question of weightage is inextricably linked with that of quota. The weightage allowed to the promotees earli er was in view of the low quota of 20% or 33 1/2% available to them at that time. When the Rules were revised and thee quota of promotees was enhanced to 50% the weightage given in the matter of promotion was simultaneousIy withdrawn. The Supreme Court itself upheld its abolition and observed that the promotees could not "after obtaining the benefit of a higher percentage of recruitment to Class I service, legiti mately object to the abolition of weightage enjoyed formerly in the matter of seniority. " The letter is annexed to the additional Affidavit of Ravi Kumar (supra). It will thus be seen that even the Government had inde pendently come to the conclusion as early as in 1986 that neither the Rules of Seniority nor the Seniority List of 1973 had done injustice to the promotees. In fact, the Rules of 1973 had raised the quota of the promotees from 33 1/3% to 50%. The seniority of the promotees was adjusted upto 15th January, 1959 on the basis of the earlier quota Rule and the seniority of those who were appointed later and of those who were found in excess of their quota upto that date, were adjusted according to the new Rules. Two other contentions advanced on behalf of the petitioners on the basis of the alleged new material were that firstly, while calculating the vacancies in the post of Grade II Officers in Group A, the vacancies in all the posts above the said post were not taken into 1017 account, and secondly, the number of vacancies should not have been equated with the number of posts the Government filled but should have been calculated on the basis of their actual existence. According to the petitioners, if both these factors had been taken into consideration at the time of the decision in the 1st Gupta case (supra), the Court would not have found promotees in excess of their quota. To some extent these contentions are interlinked. The first contention proceeds firstly on the basis that the notings in the relevant files made by the Officer con cerned have an intrinsic evidentiary value to prove the actual vacancies in the different categories and secondly presumes that the number of vacancies as calculated in Grade II posts of Group A there did not already reflect the vacancies in the higher posts. In the absence of sufficient material before us, it is not possible to accept such pre sumption. The second contention need not even be considered in the present case, for as has been pointed out earlier, the actual vacancies approximated the appointments made during the relevant period. Hence, whether the quota was calculated on the basis of the actual vacancies or on the basis of the appointments made, it would have made no difference to the conclusion that this Court had arrived at in the 1st Gupta case (supra) that the promotions were in excess of the quota. What is more, even this argument has been answered by this Court in that case as shown above, and we see no reason to differ from the view taken there on the point. There appears to be an obvious confusion on the part of the peti tioners with regard to what this Court has stated in the earlier part of the judgment in the 1st Gupta case (supra). Read with the passage which we have quoted from the said judgment, what this Court wanted to convey in the earlier part of the judgment was that when the Government decides to fill in the vacancies, it is not necessary to defer the appointments from one source pending the appointments from the other source. But that is when the Government decides to fill in the vacancies and not before it. In the result, we find no substance in the petition and dismiss the same. The Rule stands discharged. In the circumstances, however, there will be no order as to costs. WRIT PETITION NOS. 546 47 OF 1983. As stated earlier while narrating the facts of the earlier petition, these petitions are filed by two Income Tax Officers for them 1018 selves and as the representatives of the All India Federa tion of Income Tax Gazetted Service Association. The Federa tion represents all the Group B ITOs and all ITOs in Group A, Assistant Commissioners and Commissioners promoted from Group B. Among the parties to the petitions is respondent No. 4 the Indian Revenue Service Association representing directly recruited Group A Officers and Assistant Commis sioners and Commissioners promoted from directy recruited Group A ITOs. The main grievance of the petitioners is that the classification of ITOs into two classes, namely, Group A and Group B is discriminatory and violative of Articles 14 and 16 of the Constitution because (a) the classification is not made on an intelligible differentia and (b) the differentia has no relationship to the object sought to be achieved by the Income Tax Act, 1961 inasmuch as the Officers belonging to the two Groups do identical work and perform identical functions. It is also the contention of the petitioners that their work and posts are interchangeable, and in practice they form one cadre. By maintaining the differentiation, allege the petitioners, the Government in effect is denying equal opportunity, equal pay and equal status to Officers doing identical work and performing identical functions. To attack the classification, the petitioners had also chal lenged the constitutional validity of Section 117 of the Income Tax Act, 1961 before its amendment by the Direct Tax Laws (Amendment) Act, 1987. After the amendment of the said section by the amending Act of 1987, they have amended their petition and have challenged not only the amended provision of the said section but also the amendment made to Section 116, 118 and 120, and the Recruitment Rules of 1988 and the notifications, circulars and orders issued pursuant thereto. The attack against the amended sections and the Rules of 1988, notifications etc. is on the ground that they are violative of Articles 14 and 16 of the Constitution. In addition, they have also challenged the amended provisions on the ground that they are mala fide and are enacted to destroy the cause of action in their petition. In this context, they have also attacked the Seniority Rules and Seniority List of 1973. In support of their contention that the amended provisions of the Act are mala fide they contend that by amending the Act, the Government took the power to itself to frame the new Recruitment Rules of 1988 and to issue the relevant notifications, circulars and orders whereby the classification of the Income Tax Officers in Class I and Class II could be justified. In this connection, it is pointed out that it is by virtue of these new powers that the Government for the first 1019 time got an authority to demarcate the jurisdiction of the powers of Class A and Class B ITOs and thus to justify the said classification. In the absence of the amendment and the Rules, Notifications, Circulars and Orders issued pursuant thereto, the said classification was unjustifiable in law and was liable to be struck down. It is, therefore, also contended that the said classification assuming it is justi fied, can only act prospectively from 1st April, 1988 from which date it is brought into operation, and would not justify the classification of Officers prior to the said date, and hence those Officers who belonged to Group B on the day prior to the coming into operation of the amended provisions, should be treated as belonging to Group A. 35. We are not impressed by this contention. In the first instance, the presumption underlying this contention is that the provisions of the Act prior to its amendment by the amending Act of 1987 did not permit such classification, which presumption is patently incorrect. While the provi sions of sub section (1) of Section 117 prior to its amend ment gave power to the Central Government to appoint, among others, the Income Tax Officers of Class I service, the provisions of sub section (2) thereof vested power in the Commissioner to appoint as many ITOs of Class II service as might be sanctioned by the Central Government. It was, however, contended that in spite of these clear provisions of sub sections (1) and (2) of the unamended Section 117, they had to be read down to deny the power to appoint ITOs of Class II or Group B. This was so because, according to the petitioners, the provisions of Sections 116, 118 and 124 as they stood then, only referred to Income Tax Officers as one class and did not make a distinction between them as Class I and Class II Officers. In the first instance, it is an elementary rule of the interpretation of Statutes that no provision of a statute should be read as redundant. No reason is ascribed by the petitioners to ignore the specific provisions of Section 117(1) and (2) except that the two classes of officers mentioned therein were not referred to in the other provisions of the Act. Secondly, when the legislature had made a special provision for the two classes vesting in two different authorities the power to appoint them, it must be presumed that the legislature had a defi nite objective in view. While making the provision for Class II ITOs, the legislature seemed to be aware of the fact that there may be different categories of assessees and assessments requiring different standards of equipment, skill and talent to deal with them, and it was therefore necessary to invest the Central Government with the power to appoint and to sanction the appointment of the different classes of officers to meet the requirement. This power vested by the legislature to appoint different classes 1020 of officers carried with it also the power to demarcate the duties, functions and responsibilities of the two. Whether in fact there is such a division of powers, functions and responsibilities or not, has nothing to do with the validity of the power to make the classification. If in spite of such classification, the different classes in fact exercised the same powers and performed the same duties and functions, it may invite abolition of the classification. But it cannot invalidate the power to classify. Hence, we are not im pressed by the contention that the legislature had no power to classify the Income Tax Officers into two classes under the unamended provisions of the Act. If therefore the legislature had itself classified the Officers into two grades or categories and given the power to the Government to appoint, and/or to sanction their appointments, as the case may be, under the unamended provi sions of the Act, it can hardy be argued that the amending Act was passed mala fide to destroy the cause of action in the present petitions. This is apart from the fact that no legislation can be challenged on the ground that it is mala fide. Hence the challenge to the amended provisions of the Act and the Rules, notifications, circulars and orders issued pursuant to it, must fail. 1t is not further suggest ed that the Rules, notifications, circulars, orders etc. are ultra vires the Act. There is, therefore, no merit in this attack. Coming now to the second contention 'which is the main foundation of the present petitions, namely, that the Officers of the two classes in fact perform the same func tions and duties, and exercise the same powers and have the same jurisdiction and, therefore, there is no justification for the said classification, it is first necessary to exam ine the facts relied upon by the petitioners in support of this contention. According to the petitioners, the Officers of the two classes were always performing the same duties and function, and exercising the same power and jurisdic tion. Their posts were also interchangeable. In fact, many of the Officers belonging to Group B functioned as Officers belonging to Group A. Even after the amendment, which has demarcated the jurisdiction of the two classes on the basis of income, the basic function of making the assessment remain the same and there is no change in the nature of job performed by them. It is also submitted that once a case comes under the jurisdiction of an Income Tax Officer, the Officer continues to exercise his jurisdiction over the said case even if in subsequent years the same assesee files a return of higher income. Hence, the very classification of Officers based on the return of income is totally arbitrary and violative of the petitioners ' fundamental rights under Articles 14 and 16 of the Constitution. It is 1021 further pointed out that in fact the number of regular promotions from Group B to Group A during the period 1973 to 1982 were only 585 as against the ad hoc promotions of 1197 during the same period. Similarly, during the period 1982 to 1985, the number of regular promotions were 262 as against the further ad hoc promotions of 200 during the same period. This shows that the Income Tax Officers of Group B were doing the work of Officers belonging to Group A in a large number though on an ad hoc basis. This further shows that although there was a need for regular promotion of the Officers from Group B to Group A, the Government was using Group B Officers in a large number to perform the duties of Group A Officers without giving them regular promotion and was thus maintaining an artificial distinction between the two groups without justification. As has been stated in the affidavit filed on behalf of respondents 1 & 2, although both Group A and Group B Officers have equal powers, the ITOs of Group A are general ly placed in charge of important wards and cases carrying higher responsibilities, whereas the Officers belonging to Group B are normally entrusted with less important wards and cases. A large majority of them have to deal with summary assessments only. It is further pointed out that under the Act, prior to its amendment of 1987, the power to appoint the Officers belonging to Group A, i.e. Class I was vested in the Central Government while the power to appoint Offi cers belonging to Group B, i.e., Class II was vested in the Commissioner of Income Tax. The same distinction in the appointing authorities continues even after the amendment. The Assistant Commissioner, i.e., the former ITOs of Group A are appointed by the Central Government whereas the power to appoint Income Tax Officers, i.e., the former Group B Offi cers, can be vested by the Central Government in the Board or a Director General or a Chief Commissioner or a Director or Commissioner. The respondents further deny that there was ever an interchangeability of the two posts, and contend that they always remained separate. They point out that in fact, the post of Group A. Officers has two grades, i.e., Grade I and Grade II. Grade II post of Group A has always been a promotional post for Group B Officers. Their scales of pay have also been different and have been fixed keeping in view the distinction between the two Groups which belong to two different cadres. This Court had in fact in K.M. Bakshi vs Union of India, AIR 1962 SC 1139 gone into the matter pertaining the distinction between the two Groups of Officers, and had upheld the said classification. There is further no dispute that the posts of Income Tax 1022 Officer Group A junior scale or Grade II, are filled 50% by direct recruitment through the Civil Service Examination held by the Union Public Service Commission and 50% by promotion on the basis of selection by the Departmental Promotion Committee from Income Tax Officers Group B who have rendered not less than 5 years ' service in that post. The appointments to the posts of Income Tax Officers Group B are made 100% by promotion from Income Tax Inspectors who belong to Grade C or Class I11 service. The appointment to the posts of Income Tax Inspectors are made 33 1/3% by direct recruitment and 66 2/3% by promotion from the lower group of Class C service. The result has been that the present strength of about 2,500 ITOs of Group B consists of all but 185 promotees (who were recruited ad hoc only in one year, i.e., in 1969) from the lower GroupC posts. What is more, as pointed out above, the Income Tax Officers Group B, and Income Tax Officers Group A junior scale, belong to two different cadres and not to the same cadre of Income Tax Officer. Hence those who joined the lower Group C service cannot claim equality in conditions of service with Group A Officers who are either recruited directly on the basis of the Civil Services Examination or are promoted from Group B on the basis of seniority cum merit. It is also pointed out on behalf of the respondents that after changing the designation of the Income Tax Au thorities and designating the former ITOs of Group A and Group B as Assistant Commissioners and ITOs respectively, their jurisdictions have been regulated. The basic principle followed in demarcating the jurisdiction of the two classes of Officers is the quantum of the return of income/loss as on 1st April of the Financial Year. If the return of income/loss is of Rs.5 lakhs and above, it goes to the Deputy Commissioner; if of Rs.2 lakhs and above but below Rs.5 lakhs, it goes to the Assistant Commissioner (i.e., the former Group A Officers); and if it is below Rs.2 lakhs, it goes to the Income Tax Officers (the former Group B Offi cers). It is also pointed out that the Government has since issued a notification on March 30, 1988 making the Income Tax Officers and Tax Recovery Officers subordinate to the Assistant Director or Assistant Commissioner. Further, whereas Assistant Commissioners of Income Tax (former ITOs of Group A) are now empowered to writ off a sum upto Rs. 1,000 if they are convinced that the amount is irrecovera ble, in similar circumstances, the ITOs, i.e., former Offi cers belonging to Group B, are empowered to writ off an amount upto Rs.500 only. When the assessment is made under sub section (3) of Section 143 or Section 147 for the rele vant assessment year, the power to issue notice under Sec tion 148 is vested only in an Assessing Officer of the rank of 1023 Assistant Commissioner or Deputy Commissioner. Section 274(2) of the Act prescribes monetary limits regarding the powers of the Income Tax Officer and Assistant Commissioner for imposing penalty. That provision shows that Income Tax Officer (i.e., the former Group B Officer) has authority to impose penalty upto Rs. 10,000, whereas the Assistant Com missioner (former Group A Officer) has the authority to impose penalty upto Rs.20,000 without the prior approval of the Deputy Commissioner. The material placed on record by the respondents, thus, shows that the distinction between Group A and Group B Officers has been in existence from the very beginning. The distinction has been maintained statutorily with distinct powers and jurisdiction, hierarchical position and eligibil ity qualifications. The sources of their appointment and the authorities vested with the power to appoint them have also been different. The distinction between the two further has been made on the basis of the class of work and the respon sibility entrusted to each. The work which is of more than a routine nature and which involves a detailed investigation either on account of the class of the assessees or of the complexities of the returns filed, is entrusted to the Officers belonging to Group A (now Assistant Commissioners) while the assessment work of a summary or routine nature or of the assessees filing routine returns or returns involving simple transactions is entrusted to Officers belonging to Group B (now ITOs). Although, therefore, apparently the outfit of the function and its procedural part is the same, in practice the assessments differ from assessees to asses sees, summoning different degrees of knowledge, application of mind, resourcefulness, acumen and taken to scrutinize them. Hence, merely because sometimes, on account of the exigencies of work the Officers belonging to Group B were entrusted with the work of the Officers of Group A, it cannot be claimed that the two posts are of an equal rank. The handling of the higher category of work may entitle an Officer of the lower rank to emoluments of the higher post. But that cannot obliterate the distinction between the two posts. To accept the plea of the petitioners to equate the two posts or to merge them on that account, is to negate the whole statutory scheme and also to ignore the fact that the Group B post (i.e., the present post of the ITO) is an intermediate post between that of the Income Tax Inspector and the Group A post (i.e, the present post of Assistant Commissioner) which is a promotional post for Officers belonging to Group B. The Group A post is further a selec tion post and the promotee has to satisfy certain qualifica tions to be eligible for being considered for the said post. The two posts, therefore, always belonged to 1024 two different cadres carrying different scales of pay and other service conditions. Thus, this is not a case of the two posts being equal in status or of belonging to the same class. The distinction between the two is ordained by the Statute and is necessary for its proper implementation. By the very nature of the operation involved, the administra tion has to have the power to classify the work and to appoint personnel with different skill and talent to execute the different types of work. The legislature being mindful of this need has deliberately created the two classes of officers as is evident from the provisions of Section 117 even prior to its present amendment. Even after the amend ment the said distinction has been maintained. The fact that this distinction has all along been real and not nominal is clear from the difference in the power and jurisdiction statutorily vested in the two classes of Officers. Hence, the intention of the legislature to have the two classes of Officers to discharge different types of work is manifest and in practice the distinction has always been maintained. It is only when the exigencies of the work required that some officers belonging to Group B were promoted on ad hoc basis to the posts of Group A officers. Such exigencies occur in every organisation, and to cope up with them the authorities have to improvise. That, however, cannot equate the two unequal posts. The very same argument for equating these two class es of Officers was advanced in K.M. Bakshi vs Union of India, (supra). It was pointed out by this Court in that case that the Income Tax services were reconstituted by an order of the Government of India dated September 29, 1944, and later on in 1953, Section 5 of the Income Tax Act was amended to give effect to this reconstitution. One of the features of the reconstitution was that in place of one class of Income Tax Officers two classes came into exist ence, namely, Class I and Class II ITOs. Class I Officers were eligible to be promoted to the higher post of Commis sioners and Assistant Commissioners, and Class II Officers could obtain such promotion only after having first reached the status of Class I Officers. A percentage of the vacan cies in the posts of Class I Officers was to be filled by promotion of Class II Officers, and the rest by direct recruitment. It was also pointed out that Class I post being a promotional post for Class II Officers, the two posts were not equal. Dealing with the argument of equal pay for equal work, the Court pointed out that if that argument were to be accepted literally, even the incremental scales of pay fixed dependent upon the duration of an Officer 's service could not be justified. It appears that in that case the Court was called upon to deal with a bland assertion that the two posts were equal and it was not contended that 1025 the duties and functions discharged by them were equal in nature and hence the Court had no occasion to deal with the said contention. We have already pointed out above that there is a difference in the nature, scope and responsibili ty of the duties entrusted to the two Officers justifying the differentiation. This is apart from the fact that the matter has now been set at rest by the Rules, notifications, circulars and orders which have been issued demarcating clearly the functions and jurisdiction of the two. As has been held in Federation of All India Customs and Central Excise Stenographers (Recognised) & Ors. vs Union of lndia & Ors. ; , the differentiation in two classes can be justified on the basis of "the nature and the type of the work done . . The same amount of physical work may entail different quality of work, some more sensitive, some requiring more tact, some less it varies from nature and culture of employment. The problem about equal pay cannot always be translated into a mathemat ical formula. If it has a rational nexus with the object sought for . . a certain amount of value judgment of the administrative authorities who are charged with fixing the pay scales has to be left with them and it cannot be interfered with by the Court unless it is demonstrated that either it is irrational or based on no basis or arrived mala fide either in law or in fact". The Court there found that in the light of the averments made and the facts point ed out, it was not possible to say that the differentiation there was based on no rational nexus with the object sought to be achieved. The Court noted that the differentiation was justified on the dissimilarity of the responsibility, confi dentiality and the relationship with public etc. though there was similarity in the functional work. The court further observed there that often the difference in the functions and the responsibilities is a matter of degree and the administration is required to make a value judgment while classifying the posts and fixing the different condi tions of service for them. So long as the value judgment is made bona fide, it is not questionable. The same view has been reiterated by this Court in V. Markendeya & Ors. vs State of Andhra Pradesh & Ors. , ; 44. At the cost of repetition, we may state that in the present case the distinction between the two posts is made by the statute itself and that distinction has been in existence since long. The appointing authorities of the two posts are different. In fact, the Group A post (the present post of the Assistant Commissioner) had two grades, viz., Grade I and Grade II, and Grade II post was a promotional post for 1026 officers belonging to Group B (the present ITO). The nature of work entrusted to the two classes of posts, the responsi bility which goes with it and the power and jurisdiction vested in them vary. The mere fact that some Group B offi cers are capable of performing the work of Group A officers and in fact on some occasions in the past they were appoint ed ad hoc or otherwise, to discharge the work of Group A officers cannot equate the two posts. Such a demand, to say the least, is irrational for if this contention is accepted, in no organisation the hierarchy of posts can be justified. After the 1987 Amendment, further, the situation has changed and the duties, functions, jurisdiction and power of the officers have been rationalised clearly demarcating the spheres of work of the two. In an organisation of this kind, with contrywide offices dealing with various categories of assessees and incomes, some dislocation, functional overlap ping and want of uniformity in the assignment of work during some period is not unexpected; and it does appear that during some period, the situation in the Department was out of joint. That is why steps were taken to straighten it out by amending the Act and making the rules and issuing the relevant notifications. circulars and orders. If during this period on account of the exigencies of service, some ad hoe appointments of Group B officers were made to Group A posts, Grade II or Group B officers were required to perform the same functions and discharge the same duties as Group A officers, they can at best claim the emoluments of Group A officers, but certainly not the equalisation of the two posts on that account. Since the alleged equality of posts was the founda tion of the other contentions raised in the petitions, the said contentions must also fail and need not be dealt with separately. The contentions which are common to the earlier petition have already been dealt with. In the circumstances, we find no substance in these petitions. The petitions are, therefore, dismissed and the rule granted in each is discharged with no order as to costs. Before parting with these petitions, we cannot help observing that although the issues raised in a11 these petitions were set at rest by this Court conclusively earli er, the petitioners thought it necessary to tax the precious time of the Court by approaching it once again on grounds which were least justified. We hope and trust that this decision puts a final lid on the alleged grievances of the petitioners and no new pretexts are found hereafter to take up the same contentions under other garbs. Y.LaI Petitions dismissed.

The main petition has been filed by the Income tax Officers Group A, challenging the Seniority Rules of 1973, which were framed by the Department pursuant to the direc tions given by this Court in an earlier case B.S. Gupta vs Union of India, [1975] Supp. SCR 491. The circumstances that led to the filing of the instant petitions may be stated thus: The Government by virtue of the Rules propounded in its letter dated 29th September 1944, re organised the Income tax services into Class I and Class II. The said Rules inter alia laid down that recruitment to the cadre of Income tax Officers Group A shall be from two sources i.e. direct recruitment and promotion, the quota for the two being 80% and 20% respectively. In 1945, the Government framed fresh recruitment rules wherein it was provided that the recruit ment from the said sources will be made as per the direc tions of the Government, in effect, keeping the recruitment quotas in abeyance. In September, 1949, the Government framed Seniority Rules and it was laid down that the promo tees who had been certified by the Federal Public Commis sion, in any calendar year, shall be senior to all direct recruits who completed their probation during that year or after and are confirmed with effect from the date in that year or after. In the year 1950, the Seniority Rules were again revised and the concerned Rule 1(f)(iii) was amended. By its letter dated 18.10.1951, the Government revised the quotas of direct recruits and promotees, in that, in the case of direct recruits the quota was reduced from 80% to 66 2/3% while in the case of promotees, the quota was en hanced from 20% 10 33 1/3% and also amended the Rule 1(f)(iii) of 1950 Rules. This revision, in effect, gave 3 years ' weightage in seniority to the promotees. These rules continued to 995 operate till 1959. Between 1959 and 1960, 114 posts were upgraded to those of Income Tax Officers Group 'A ' and the promotees were appointed to the said posts during that period. One Jaisinghani, a direct recruit challenged the consti tutional validity of Rule 1(f)(iii) and (iv) of 1952, Sen iority Rules by means of a writ petition in the High Court, which gave 3 years ' weightage to the promotees in the matter of fixation of their seniority and the implementation of quota. The High Court rejected the writ petition. In appeal, this Court held that the quota having been fixed by the Government in exercise of the powers conferred on it under Rule 4 of the 1945 Rules, the same was valid. The Court also upheld the weightage given to the promotees under the 1952 Rules. The Court further directed that roster system should be adopted by framing an appropriate rule for working out the quota system between the direct recruits and promotees. It may be mentioned that the court gave this direction because it was of opinion that the promotees were in excess of the prescribed quota for each of the years 1951 to 1956, and that they had been illegally appointed. It was therefore directed that the seniority of Jaisinghani and others simi larly placed be re adjusted and the Government should pre pare a fresh seniority list in accordance with law. Pursuant to the direction given by the Court, the gov ernment prepared seniority list which was challenged in the Delhi High Court by two separate writ petitions one by B.S. Gupta, a promotee of 1962 and another by M.C. Joshi, a direct recruit. The High Court dismissed the writ petition of Gupta but substantially allowed the one filed by Joshi. In appeal this court by its order dated 16.8.1972 in Gupta 's case AIR 1972 SC 262, held that seniority list was valid with regard to the promotions made upto January 15, 1959 but the same was not valid for the period thereafter. The court accordingly set aside the list to the extent it concerned the period from 16.1.1959 and directed the Department to prepare a fresh seniority list in accordance with the obser vations and directions of this Court. The court came to the conclusion that with the upgrading of large number of posts and appointments of the promotees, the quota rule had col lapsed and with that seniority rule giving weightage to the promotees had collapsed. The court held that quota rule came to an end on 16.1.1959. In pursuance of the aforesaid direc tion, the government frame the impugned 1973 Rules and prepared a fresh seniority List on February 1973, giving retrospective effect to the Rules from 15.1.1959. The Gov ernment also challenged the quota of direct recruits and promotees, making it 50% for each of them i.e. 1:1. Seniori ty of officers upto 15.1.59 was fixed as per old Rules and the 996 seniority from 16.1.1959 was fixed as per new rules; 73 promotees though promoted between 1956 58 could not be accommodated under the old rules, their seniority was fixed under the new rules. In the present petitions, the petitioners contend that this Court gave its direction in Gupta 's case ; ; because for want of sufficient material the court had come to the conclusion that the quota for recruitment of direct recruits and promotees had broken down as the promo tees were appointed in excess of their entitlement though the requisite material showing the contrary was in posses sion of the government, which was suppressed. It is asserted by them that the material shows that in fact the appointment of the promotees was short of their quota. Hence they claim that not only the 1973 Rules be set aside but the appoint ments of the promotees be made and their seniority be fixe daccording to the rules prevailing prior of the said Rules. In the connected writ petitions, besides these contentions, validity of amendment of Sec. 117 of the Income Tax Act; and classification of Income Tax Officers in Group A and Group B officers have also been questioned. Dismissing the writ petitions this Court held: HELD: It is clear from the table that the petitioners promotees have calculated the posts in the sanctioned strength not only in Grade II but also in Grade I Posts when the posts available to them for promotion were only in grade I1. Hence, their further calculations of the working strength, the vacancies and the quota available to them in the vacancies and of the dificiencies or the excess in the quota are erroneous. [1009F] Even the Government had independently come to the con clusion as early as in 1986 that neither the Rules of sen iority nor the Seniority List of 1973 had done injustice to the promotees. In fact, the Rules of 1973 had rised the quota of the promotees from 33 1/3% to 50%. The seniority of the promotees was adjusted upto 15th January, 1959 on the basis of the earlier quota Rule and the Seniority of those who were appointed later and of those who were found in excess of their quota upto that date, were adjusted accord ing to the new Rule. [1016F G] What this Court wanted to convey in the earlier part of its judgment was that when the Government decides to fill in the vacancies, it is not necessary to defer the appointments from one source pending the appointments from the other source. But that is when the Government 997 decides to fill in the vacancies and not before it. [1017F] Power is vested in the legislature to appoint different classes of officers and this carries with it also the power to demarcate their duties, functions and responsibilities. Whether in fact there is such a division of powers, func tions and responsibilities or not, has nothing to do with the validity of the power to make the classification. [1019H; 1020 A] The distinction between Group A and Group B Officers has been in existence from the very beginning. The distinction has been maintained statutorily with distinct powers and jurisdiction, hierarchical position and eligibility qualifi cations. The sources of their appointment and the authori ties vested with the power to appoint them have also been different. The distinction between the two further has been made on the basis of the class of work and the responsibili ty entrusted to each. The work which is of more than a routine nature and which involves a detailed investigation either on account of the class of assessees or of the com plexities of the returns filed, is entrusted to the officers belonging to Groups Group A (now Assistant Commissioners) while the assessment work of a summary nature or of returns involving simple transactions is entrusted to Officers belonging to Group B (now ITOs). [1023C E] By the very nature of the operation involved, the admin istration has to have the power to classify the work and to appoint personnel with different skill and talent to execute the different types of work. The legislature being mindful of this need has deliberately created the two classes of officers as is evident from the provisions of Section 117 even prior to its present amendment. Even after the amend ment the said distinction has been maintained. After 1987 amendment the situation has further changed and the duties, functions, jurisdiction and powers of the officers have been rationalised clearly demarcating the spheres of work. In an organisation of this kind, with country wide offices dealing with various categories of assessees and incomes, some dislocation functional overlapping and want of uniformity in the assignment of work during some period is not unexpected; and it does appear that during some period, the situation in the Department was out of joint. That is why steps were taken to straighten it out by amending the Income Tax Act and making the rules and issuing the relevant notifications, circulars and orders. [1024B; 1026B C] If during this period on account of the exigencies of service, some ad hoc appointments of Group B officers were made to Group A posts, 998 and Grade 1I or Group B officers were required to perform the same functions and discharge the same duties as Group A officers, they can at best claim the emoluments of Group A officers, but certainly not the equalisation of the two posts of that account. [1026D E] S.G. Jaisinghani vs Union of India and Ors., ; ; B.S Gupta etc. vs Union of India and Ors/ etc. ; , ; Kamal Kanti Dutta and Ors. vs Union of India and Ors. , [1980] 3 SCR III; K.M. Bakshi vs Union Of India, AIR 1962 SC 1139; Federation of A11 India Customs and Central Excise Stenographers (Recognised) and )rs. vs Union of India and Ors. , ; ; V. Markandeya and Ors. vs State of Andhra Pradesh and Ors. , ; , referred to.

Appeal No. 167 of 1955. section N. Kherdekar, N. K. Kherdekar and A. G. Ratna. parkhi, for the appellant. N. C. Chatterjee, section A. Sohni and Ganpat Rai, for respondent No. 1. 1960. August 23. The Judgment of the Court was delivered by KAPUR J. This is an appeal by special leave against the judgment and decree of the High Court at Nagpur passed in second appeal No. 1720 of 1945 confirming the decree of the District Judge. In the suit out of which this appeal has arisen the appellant was defendant No. 1 and the respondents were the plaintiff and defendant Nos. 2 and 3 and the dispute relates to pre emption on the ground of co occupancy which falls under Ch.XIV of the Berar Land Revenue Code, 1928, hereinafter called the Code. On April 10, 1943, D. B. Ghaisas and his mother Ramabai entered into two contracts of sale with the appellant, one in regard to Survey Nos. 5, 14 and 16 for a sum of Rs. 10,000 out of which Rs. 2,000 was paid as earnest money and the other in regard to Survey No. 15/1 for Rs. 8,500 out of which Rs. 500 was paid as earnest money. On April 16, 1943, the vendors executed a registered sale deed in regard to Survey No,%.5, 14 and 16 and the balance of the price 32 250 was paid before the Registrar. On April 22, 1943, the vendors executed a lease of Survey No. 15/1 for 14 years in favour of Kisanlal and Sitaram who were defendant Nos. 2 and 3 in the suit and are respondents Nos. 2 and 3 in this appeal. On April 24, 1943, the vendors executed a fresh agreement of sale in respect of the same field which according to the agreement was to be diverted to non agricultural purposes and thereafter a sale deed was to be executed when it was so diverted. The appellant was to pay the costs of the diversion as well as the premium. In pursuance of this agreement the vendors applied to the Deputy Commissioner, Akola, on August 12, 1943, for diver sion under section 58 of the Code and sanction was accorded on January 22, 1944, subject to payment of premium of Rs. 9,222 and other conditions. The appellant 's case is that as agreed the vendors were paid this money for deposit and it was deposited in the Treasury under Challan No. 68 but there is no finding in favour of the appellant although the trial court and the District Judge seem to have proceeded on the premises that this amount was deposited but in the cir cumstances of this case it is not necessary to go into this matter. On September 11, 1943, i.e., before the sale deed was executed the respondent, Sridhar, brought a suit for pre emption against the appellant on the allegation that he had a co occupancy in the Survey number in dispute being the owner of Survey No. 15/2. In the plaint it was alleged that the transaction of contract under the documents of April 10, 1943, and April 24, 1943, constituted a sale and therefore it was subject to respondent Sridhar 's prior right of pre emption. It was also alleged that the price was not fixed in good faith. These allegations were denied. Both the trial court and the District Judge held that respondent Sridhar was entitled to preempt and determined the fair consideration to be Rs. 3,306. The suit was therefore decreed by the trial court and on appeal by the District Judge. The appellant took an appeal to the 251 High Court which also confirmed the decree of the subordinate courts. The decree of the subordinate courts was Confirmed and against that judgment the appellant has come to this court in appeal by special leave. The first question for decision is whether a right of pre emption had accrued to respondent Sridbar under the provisions of the Code. Previous to the cession of Berar by the Nizam of Hyderabad to the British Government in 1853, the Mohammedan rule of preemption was, according to one view, in force in the province of Berar and it continued to be so till the Berar Land Revenue Code of 1896 came into operation as from January 1, 1897. On the other hand, according to the view of two writers on the Berar Land Revenue Code of 1896, the Mohammedan law origin of the right of pre emption does not seem to be well founded. In the annotation of the Berar Land Revenue Code of 1896 Mr. E. section Reynolds wrote in 1896 that although the right of pre emption in regard to agricultural land on occupancy tenures bad been recognised in Berar the right was not based on Mohammedan law nor did it appear to be ancient and immemorial custom. According to Hirurkar (Land Revenue Code, pp.126 127) also the right of pre emption was not based on the Mohammedan law and did not originally exist in Berar. It 252 seems to have been brought from the land laws of the Punjab or the North West Provinces. In the Berar Settlement Rules and Berar Sub tenancy Rules of 1866 the right of pre emption attached to relinquishment of shares in the case of ryots of joint holdings and applied to co sharers and this is different from the rule of Mohammedan law. By section 205 of the Berar Land Revenue Code of 1896 the right of pre emption arose when a co occupant in any Survey number was transferred by sale, foreclosure of mortgage or relinquishment in favour of a specified person for valuable consideration and it vested in every other co occupant of the Survey number. It will thus be seen that the right of pre emption, which under Mohammedan law attaches to sales only, was also applicable to foreclosure of mortgages and relinquishment for valuable consideration. In the year 1907 the Transfer of Property Act (IV of 1882) was extended to the province of Berar. In 1928, the Code was re enacted and it further extended the provisions in regard to pre emption in Ch. Under section 174 pre emptive rights arise in respect of transfers of unalienated land held for agricultural purposes and before an occupant could transfer the whole or any portion of his interest he had to give notice of his intention to all other occupants. Under sections 176 to 178, the right of pre emption arises in the case of transfers by way of sale, usufructuary mortgages, by lease for a period exceeding fifteen years or in the case of final decrees for foreclosure in a case of mortgage by conditional sale. Under a. 183 every occupant in Survey number shall have the right to pre empt the interest transferred by civil suit. Under section 184 the right also arises in the case of an exchange. Thus it will be seen that the right of pre emption has been by statute extended far beyond what was contemplated under Mohammedan law and also beyond what was recognised in the Berar Settlement Rules, Berar Subtenancy Rules and in the Code of 1896. The High Court held that the word sale in section 176 of the Code had a wider connotation than what it had under section 54 of the Transfer of Property. That 253 was based on the judgment of Vivian Bose, J. (as he then was), in Jainarayan Ramgopal Marwadi vs Balwant Maroti Shingore (1) which had been approved in later judgments of that court. It was also of the opinion that the transaction in dispute gave rise to the exercise of the right of pre emption under the rule laid down in Begum vs Mohammad Yakub (2) and as in the instant case there was in reality a sale although a registered sale deed had not been executed the right of pre emption could not be defeated by the device that the vendors and the appellant adopted. According to section 2 of the Transfer of Property Act which at the relevant time was in operation in Berar section 54 is not one of the sections within ch. 2 of that Act and therefore it overrides Mohammedan law and the provisions of that section, being exhaustive as to modes of transfer, govern all sales in that province and no title passes on a sale except as provided in that section. Sale is there defined as transfer of ownership for a price paid or promised or part paid or part promised and in the case of sale of tangible immoveable property of Rs. 100/ or more sale can only be made by a registered instrument. That is clear from the language of the section itself where it is stated : Section 54 Sale how made: " Such transfer, in the case of tangible immoveable property of the value of one hundred rupees and upwards, or in the case of a reversion or other intangible thing, can be made only by a registered instrument ". It was held by the Privy Council in Immudipattam Thirugnana section O. Kondema Naik vs Peria Dorasami (3) which was a case of a zamindari estate that it could not be transferred except by a registered instrument. But it was submitted that sale when used in connection with the general law of pre emption is not to be construed in the narrow sense in which it is used in the Transfer of Property Act and that that had been accepted by the Judicial Committee in Sitaram Bhaurao Deshmukh vs Jiaul Hasan Sirajul Khan(4) where (1) A.I.R. 1939 Nag. (3) (1900) 28 I.A. 46. (2) All. 344. (4) (1921) 48 I.A. 475. 254 the observations of Sir John Edge, C. J., in Begum vs Mohammad Yakub (1) had been approved. In Sitaram Deshmukh 's case (2) one of the two Mohammedan co sharers in Bombay by an agreement dated October 14, 1908, agreed to sell his share to a Hindu. The agreement was expressly subject to a right 'in the co sharer to pre empt. The vendor informed his co sharer that he had sold his share and the latter thereupon, after the customary formalities on October 15, 1908, claimed to recover the share from the pur chaser. The sale deed was executed on November 9, 1908, and then a suit was filed by the pre emptor. It was held that the co sharer had the right to pre empt in accordance with the intention expressed by the parties to the sale and that intention was to be looked at to determine what system of law was to apply and what was to be taken to be the date of the sale with reference to which the formalities were performed. The question there really was as to what was to be taken as a sale sufficient to justify the pre emptor in proceeding at once to the ceremonies and it was in that connection that the following observation of Sir John Edge in Begum vs Mohammad Yakub (1) were quoted : " The Chief Justice, Sir John Edge, there observes, in connection with the question whether the Transfer of Property Act, which required registration, bad altered the principle of the Mohammedan Law, which determined what was a sale for the purposes of the date in reference to which the ceremonies should be performed; " I cannot think that it was the intention of the Legislature in passing Act No. IV of 1882 " (the Transfer of Property Act) " to alter directly or indirectly the Mohammedan law of pre emption as it existed and was understood for centuries prior to the passing of Act IV of 1882 ". That at all events is in harmony with the conclusion come to by the High Court at Bombay. The conclusion is, that you are to look at the intention of the parties in determining what system of law was to be taken as applying and what was to be taken to be (1) All. 344.(2) (1921) 48 I.A. 475.255 the date of the sale with reference to which the ceremonies were performed " But it was argued for the respondents that the Privy Council had not only approved the observation of Sir John Edge, C. J., in Begum vs Mohammad Yakub(1) but has also approved the view of the Calcutta High Court in Jadu Lal Sahu vs Janki Koer (2). That was a case from Bihar where the right of pre emption under Mohammedan Law was judicially recognised in regard to Hindus also. The question whether the sale which was to be preempted was the one under section 54 of the Transfer of Property Act or the one under the principles of Mohmmedan Law does not seem to have been the point raised in that case. In the latter case the kabala was on July 28, 1904 and the ceremonies were performed after that date. In the Allahabad case, Begum vs Mohammad Yakub (1), there was a verbal sale of a house which was followed by possession but there was no registered document. No doubt there the learned Chief Justice in the majority judgment did say that to import into the Mohammedan Law of pre emption the definition of the word " sale " with restrictions contained in section 54 of the Transfer of Property Act would materially alter Mohammedan Law of preemption and afford fraudulent persons to avoid the law of pre emption; with this view Bannerji, J., did Dot agree. Mahmood, J., in Janki vs Girjadat (4) though in a minority (four judges took a different view) was of the opinion that a valid and (1) All. 344. (2) Cal. (3) (1921) 48 I.A. 475. (4) All. 256 perfected sale was a condition precedent to the exercise of the right of pre emption and until such sale had been effected the right of pre emption could not arise. Section 17 read with section 49 of the Registration Act shows that a transfer of immoveable property where it is worth Rs. 100 or more requires registration and unless so registered the document does not affect the property and cannot be received in evidence. The following observations of Mahmood, J., from Janki vs Girjadat (1) are very apposite: " If a valid and perfected sale were not a condi tion precedent to the exercise of the pre emptive right, consequences would follow which the law of pre emption does not contemplate or provide for. In this very case, supposing the so called vendor, notwithstanding the application of the 15th August, 1882 (which cannot amount to an estoppel under the circumstances) continues or recenters into possession of the property it is clear that the so called vendee would have no, title under the so called sale, to enable him to recover possession the transaction being, by reason of section 54 of the Transfer of Property Act, ineffectual as transfer of ownership. The right of pre emption being only a right of substitution, the successful pre emptor 's title is necessarily the same as that of the vendee and if the vendee took nothing under the sale the preemptor can take nothing either; and it follows that if the vendee could not oust the vendor, the preemptor could not do so either, because in both cases the question would necessarily arise whether the sale was valid in the sense of transferring ownership. Again, if notwithstanding a pre emptive suit such as this, the so called vendor, who has executed an invalid sale which does not in law divest him of the proprietary right, subsequently executes a valid and registered sale deed in favour of a co sharer other than the preemptor or in favour of a purchaser for value without notice of the so called contract for sale it is difficult to conceive how the preemptor, who has succeeded in a suit like the present, could resist the claim of such purchaser for possession of the property ". (1) All. 257 Under section 54 of the Transfer of Property Act a contract for sale does not of itself create any interest in or charge on immoveable property and consequently the contract in the instant case created no interest in favour of the vendee and the proprietary title did not validly pass from the vendors to the vendee and until that was completed no right to enforce pre emption arose. As we have said earlier wherever the Transfer of Property Act is in force Mohammedan Law or any other personal law is inapplicable to transfers and no title passes except in accordance with that Act. Therefore when the suit was brought there was no transfer by way of sale which could be subject to preemption. It was next contended that the appellant was guilty of fraud in that in order to defeat the right of the preemptors a deed of sale was not executed although as a matter of fact price had been paid, possession had passed and for all intents and purposes the appellant had become the owner of the property and that conduct such as this would defeat the very law of preemption. The right to pre empt the sale is not exercisable till a pre emptible transfer has been effected and the right of pre emption is not one which is looked upon with great favour by the courts presumably for the reason that it is in derogation of the right of the owner to alienate his property. It is neither illegal nor fraudulent for parties to a transfer to avoid and defeat a claim for pre emption by all legitimate means. In the Punjab where the right of pre emption is also statutory the courts have not looked with disfavour at the attempts of the vendor and the vendee to avoid the accrual of right of pre emption by any lawful means and this view has been accepted by this court in Bishan Singh vs Khazan Singh (7) where Subba Rao, J., observed: " The right being a very weak right, it can be defeated by all legitimate methods, such as the vendee allowing the claimant of a superior or equal right being substituted in his place ". In the present case the transaction of sale had not (7) ; ,884. 33 258 been completed until February 1, 1944, when the sale deed was executed. There are no equities in favour of a pre emptor, whose sole object is to disturb a valid transaction by virtue of the rights created in him by statute. To defeat the law of pre emption by any legitimate means is not fraud on the part of either the vendor or the vendee and a person is entitled to steer clear of the law of pre emption by all lawful means. It was then submitted that the sale deed had as a matter of fact, been executed on February 1, 1944; but respondent Sridhar brought the suit not on the cause of action arising on the sale dated February 1, 1944, but on the transaction of April 10, 1943, coupled with that of April 24, 1943, which being mere contracts of sale created no interest in the vendee and there was no right of pre emption in respondent No. I which could be enforced under the Code. Mr. Chatterji urged that it did not matter if the sale took place later and the suit was brought earlier but the suit as laid down was one to pre empt a sale of April 1943 when, as a matter of fact, no sale had taken place. If respondent Sridhar had based his right of pre emption on the basis of the sale of February 1, 1944, the appellant would have taken such defence as the law allowed him. The defence in regard to the conversion of the land from agricultural into non agricultural site which negatives the right of pre emption would then have become a very important issue in the case and the appellant would have adduced proper proof in regard to it. The right of pre emption is a weak right and is not looked upon with favour by courts and therefore the courts could not go out of their way to help the pre emptor. In our opinion the judgment of the High Court was erroneous and we would therefore allow this appeal, set aside the judgment and decree of the High Court and dismiss the suit with costs throughout.

The vendors executed an agreement for sale in respect of a certain survey number which according to the agreement was to be diverted to non agricultural purposes and thereafter a sale deed was to be executed. In pursuance to the said agreement the vendors applied for diversion which was sanctioned subject to the payment of premium and other conditions. Before the sale deed was executed respondent No. 1 Sridhar brought a suit for pre emption against the appellant on the ground that he had a co occupancy in the survey number in dispute being the owner of the adjoining survey number. The suit was decreed and on appeal the High Court inter alia held that the transaction was a sale which was subject to pre emption and that the failure to execute and register a sale deed was a subterfuge to defeat the right of pre emption. The question for decision was (1) whether a right of pre emption had accrued to respondent Sridhar under the provisions of the Berar Land Revenue Code, 1928, and (2) whether the appellant was guilty of fraud in that in order to defeat the right of pre emption the deed of sale was not executed, but for all intents and purposes the appellant had become the owner of the property. Held, that the right of pre emption in Berar did not arise from Mohamedon Law and did not exist till it was brought from Land laws of the Punjab or North West Provinces. The right of pre emption under the Berar Land Revenue Code extended to transactions of sale, usufructuary mortgages and leases for 15 years or more and right under Mohamedon Law applies only to sales. The word sale has no wider connotation under section 176 of the Berar Land Revenue Code than it has in the Transfer of Property Act. After the application of Transfer of Property Act to Berar a transaction of sale could not be effective except through a registered instrument. The contract of sale in the instant case created no interest in favour of the appellant and the proprietary title did not validly pass from the vendors to the appellant and until that was completed no right to enforce pre emption arose. The transfer of 249 property, where the Transfer of Property Act applied, had to be under the provisions of the Transfer of Property Act only and neither the Mohamedon Law nor any other personal law of transfer of property could override the statute law. There are no equities in favour of a pre emptor, whose sole object is to disturb a valid transaction by virtue of the right created by statute. Held, further that it is neither illegal nor fraudulent for the parties to a transfer, to avoid and defeat a claim for preemption by all legitimate means and a person is entitled to steer clear of the laws of pre emption by all lawful means.

Civil Appeal No. 1207 of 1975. (Appeal by special leave from the judgment and order dated 5 8 1975 of the Punjab & Haryana High Court in Letters Patent Appeal No. 459/75). J.S. Wasu, Adv. General, Punjab and O.P. Sharma, for the appellants. V.C. Mahajan and S.S. Khanduja, for respondent No. 1. P.K. Pillai, for respondent No. 1. The Judgment of the Court was delivered by KHANNA, J. This is an appeal by special leave by the State of Punjab against the order of the Punjab & Haryana High Court, whereby at was directed that the Minister in charge of Irrigation Department be impleaded as a party in the writ petition filed by V.P. Duggal respondent. The Minister was also directed to file his affidavit. In the writ petition filed by him, Duggal respondent challenged notification dated January 29, 1974 fixing the seniority of the engineers n the Irrigation Department of the Punjab Government. During the course of the heating of the writ petition, an order was made by the High Court on November 18, 1974 that the Minister concerned might give a personal hearing to the parties and thereafter pass the necessary order in the matter. The Minister concerned thereafter heard the parties and made a speaking order on February 18, 1975 affirming the earlier seniority list. The writ petition was thereafter amended, and 97 in the amended petition, Duggal respondent also challenged the validity of .the later order of February 18, 1975. At the resumed hearing of the writ petition, the learned Judge hearing the petition directed that the Minister con cerned be impleaded as a party in the petition, as in the view of the learned Judge, allegation had been made against the Minister that he had deviated from the normal procedure while passing the impugned order dated February 18, 1975 inasmuch as he had dealt with the matter directly and by passed the Secretary of the Department. Direction was also issued that the Minister should file an affidavit in regard to the allegations made in the petition. At the hearing of the appeal before us, the learned Advo cate General for the State of Punjab has contended that the allegations made in the amended petition do not disclose any personal animus on the part of the Minister concerned and as such the High Court was in error in directing that the Minister be impleaded as a party. The learned Advocate General has also assailed the direction of the High Court in sofar as the Minister has been called upon to file his personal affidavit. As against that, Mr. Mahajan on behalf of Duggal respondent has urged that looking to the facts of the case if the High Court came to the conclusion that the Minister was a necessary or proper party, this Court should not interfere in the matter. We have given the matter our consideration, and it seems to us that the direction for the impleading of the Minister as a party was given by the High Court with a view to apprise the Minister of the allegations made in the petition and thus to afford him an opportunity of controverting those allegations, if he so deemed proper. Taking the totality of the facts and circumstances of the case, we do not feel persuaded to interfere with the order of the High Court adding the Minister as a party to the writ petition. The High Court was, however, in our opinion in error in direct ing that the Minister concerned should file his affidavit. It is essentially for the Minister concerned to decide in the light of the allegations made in the petition as to whether he should or should not file an affidavit. We, therefore, decline to interfere with the order made by the High Court insofar as it has directed that the Minister be impleaded as a party. The other part of the order whereby the Minister concerned was directed to file his personal affidavit is set aside. The appeal shall stand disposed of accordingly. The parties in the circumstances shall bear their own costs. M.R. Appeal partly allowed.

The respondent challenged the validity of a Government Notification, and also the Minister 's order upholding the same. At the hearing, the High Court directed that the concerned Minister be impleaded as a party, and file his personal affidavit. Challenging the directions, the appel lant contended before this Court, that the allegations against the Minister did not disclose any personal ammus on his part, and he was not liable to be added as a party or to file his affidavit. Partly allowing the appeal, the Court, HELD: The direction for the impleading of the Minister as a party was given by the High Court with a view to ap praise the Minister of the allegations made in the petition and thus to afford him an opportunity of controverting those .allegations, if .he so deemed proper. We decline to interfere. It is essentially for the Minister concerned to decide in the light of the allegations made in the petition as to whether he should or should not file an affidavit. [97 E F]

Appeal No. 103 of 1952. Appeal under article 133(1) (c) of the Constitution of India from the Judgment and Order, dated the 10th August, 1951, of the High Court of Judicature for Rajasthan at Jodhpur (Wanchoo and Bapna JJ.), in D. B. Civil Miscellaneous Application No. 21 of 1951. K. section Hajela, Advocate General of Rajasthan, for the appellant. No appearance for the respondents. March 17. The Judgment of the Court was delivered by GHULAM HASAN J. This appeal is brought under a certificate granted by the High Court of Rajasthan under article 133(c) of the Constitution of India against a judgment and order of that High Court in writ petition under article 226 holding the appointment of one Shri Sukhdeo Narain as invalid and directing that all proceedings taken by him as the Industrial Court under section 7 of the Industrial Disputes Act (No. XIV of 1947) are null and void. 1130 We are informed that Shri Sukhdeo Narain has ceased to work as an Industrial Tribunal and the present appeal, therefore, becomes infructuous, but we are invited by the Advocate General on behalf of the State of Rajasthan who is the appellant before us to decide the question as to the validity of the appointment, as it is likely to affect other awards made by tribunals under the Industrial Disputes Act. We accordingly proceed to give our decision. The question involved in the case is whether the appointment of Shri Sukhdeo Narain is invalid because he does not fulfil the qualifications laid down for a tribunal under section 7(3) of the Industrial Disputes Act. Section 7(3) hereinafter referred to as the Industrial Act says: " Where a tribunal consists of one member only, that member, and where it consists of two or more members, the chairman of the tribunal, shall be a person who (a) is or has been a Judge of a High Court; or (b) is or has been a District Judge . . . . . " The Industrial Act was applied to Rajasthan by the Rajasthan Adaptation of Central Laws Ordinance, 1950 (Ordinance IV of 1950), by the Rajpramukh on January 24, 1950. By this adaptation section 7 of the Industrial Act came to be applied to Rajasthan. Shri Sukhdeo Narain was appointed on October 9, 1950, by a notification which ran as follows: "In exercise of the powers conferred by section 7 of the Industrial Disputes Act, 1947.(XIV. of 1947) the Government of Rajasthan is pleased to constitute an Industrial Tribunal consisting of Shri Sukhdeo Narain, a retired Judge of the High Court of the erstwhile Jodhpur State for the adjudication of an Industrial dispute in the Mewar Textile Mills Ltd., Bhilwara, in Rajasthan. " The appointment of Shri Sukhdeo Narain was objected to by the respondent on the ground that, the 1131 words "a Judge of a High Court" in section 7(3) mean " a Judge of the High Court of Judicature for Rajasthan established under the Rajasthan High Court Ordinance, 1949" and as Shri Sukhdeo Narain had been a Judge of the High Court of the former State of Jodhpur, he could not be held to be Judge of the High Court under section 7(3) of the Industrial Act. This objection was upheld by the High Court. Though the appointment of Shri Sukhdeo Narain in the notification was based upon the fact that he was a retired Judge of the High Court of Jodhpur, in arguments it was also contended before the High Court that even if he was not qualified for appointment as a former Judge of a High Court, he was certainly qualified for appointment as a former District Judge. The High Court repelled this contention. It appears that the United State of Rajasthan came into existence on April 7, 1949, and the United State of Matsya was integrated with it on May 15, 1949. Section 5 of Ordinance No. IV of 1950 lays down that: " For the purpose of the application of any Central law to Rajasthan, unless there be anything repugnant in the suject or context, (ix) references therein to other civil, criminal and revenue courts, to public offices, and to Judges, Magistrates, officers or authorities shall be deemed to be references to such courts, offices and Judges, Magistrates, officers or authorities of or in Rajasthan. " The High Court held that the word "Rajasthan" as defined in Ordinance I of 1949 means the United State of Rajasthan and "the Judges an d other officers" mentioned in section 5(ix) must be held to be those in the service of the United State of Rajasthan. Accordingly they held that Shri Sukhdeo Narain could not be held to be a District Judge within the meaning of section 7(3) (b) and his appointment as an Industrial Tribunal under that section was, therefore, invalid. We are of opinion that this appeal can be decided on a short ground. The Industrial Disputes (Appellate Tribunal) Act (XLVIII of 1950) came into force on May 20, 1950. By section 34 it was provided that the 1132 Industrial Disputes Act, XIV of 1947, shall be amended in the manner specified in the Schedule and the Schedule substituted sub section (2) to section (1) of the Industrial Act as follows : "It extends to the whole of India except the State of Jammu and Kashmir. " As we have already stated the appointment of Shri Sukhdeo Narain was made on October 9, 1950, i.e., after the Industrial Disputes Act had become applicable to Rajasthan. It is not necessary therefore to invoke the provisions of Ordinance. IV of 1950 in deciding the question of the validity of the appointment. The argument based on section 34 of Act XLVIII of 1950 was put forward before the High Court at the time of the hearing of the application for leave to appeal and it was contended that in view of section 34 the provisions of Rajasthan Adaptation of Central Laws Ordinance, 1950, namely section 5, subsections (vii) and (ix), stood amended or repealed but the High Court observed that even if this argument had been raised before them in appeal, it would have made no difference. It has been contended before us by Mr. Hajela, the learned Advocate General on behalf of the State, that after the Industrial Disputes Act of 1947 was extended to Rajasthan by section 34 of the Industrial Disputes (Appellate Tribunal) Act, XLVIII of 1950, the provisions of the former stood amended by section 34 and could not be read subject to section 5 of the Rajasthan Adaptation of Central Laws Ordinance IV of 1950. We think there is force in this contention. The effect of section 34, as we have already indicated, was to extend the territorial application of the , to the whole of India including Rajasthan the exception being the State of Jammu and Kashmir only. This being so the words "A Judge of a High Court and a District Judge" used in section 7(3) (a) and (b) respectively of the , must be held now to include "A Judge of the High Court and a District Judge in the former State of Jodhpur". There is now no room for the application of section 5 of Ordinance IV of 1950 according to which a Judge of the High Court 1133 and a District Judge could only. mean a Judge of the High Court for Rajasthan established under the Rajasthan High Court Ordinance 1949 and a District Judge of or in Rajasthan within the meaning of section 5(ix) of Ordinance No. IV of 1950. Accordingly we hold that the appointment of Shri Sukhdeo Narain was perfectly valid. We accordingly set aside the order of the High Court but without costs, as the respondent is not, represented.

Held, that under section 7(3) (a) and (b) of the Industrial Disputes Act (XIV of 1947) as amended by section 34 of the Industrial Disputes (Appellate Tribunal) Act (XLVIII of 1950) the phrase "a Judge of a High Court and a District Judge" includes a Judge of the High ,Court and a District Judge in the former State of Jodhpur.

il Appeal No. 3 107 of 1991. From the Judgment and Order dated 14.8. 1990 of the Gauhati High Court in Civil Rule No. 407 of 1985. H.N. Salve. K.S. Parihar and H.S. Parihar for the Appellant. P.K. Goswami, Kailash Vasdev and M.J. Paul for the Respondents. The Judgment of the Court was delivered by KANIA, J. Special Ieave granted. Counsel heard. 462 This is an appeal filed by the Reserve Bank of India, by special leave. The contesting respondent, being respondent No. 1, is an association of its officers at its Gauhati unit. The respondent association (referred to hereinafter as "the respondent") represents the interests of 45 officers belonging to Grades A to C employed in the appellant bank at its unit at Gauhati. It appears from the affidavit filed on behalf of the appellant that there was difficulty in per suading officers of the appellant posted outside the North Eastern region to accept transfers to the unit of the appel lant in the North Eastern part of the country which unit was located at Gauhati in Assam. It also emerges from the record that the Gauhati station was regarded as a hardship station by the officers who were transferred to the Gauhati unit from other regions of the country. The Government of India found a similar difficulty in persuading its officers to accept postings in the NorthEastern region and they were given substantial incentives to accept transfers to the North Eastern region. We are not here concerned directly with the actual benefits granted by the Government of India but what is material is that such benefits had to be given by the Government of India. By a letter dated December 9, 1983, certain incentives and allowances were provided by the appellant to its officers posted at Gauhati who were not from the North Eastern regions. Those allowances were gener ally known as special duty allowances. We are not much concerned with the details as to how the special duty allow ances were calculated but the main special duty allowance basically comprised 25% of basic pay, subject to a maximum of Rs.400 per month. These allowances were also known as special compensatory allowances or remote locality allow ances. By a Memorandum issued by the appellant on April 11, 1985, an adhoc increase in salary was effected for non local officers and an option was given to them either to choose the adhoc increase or the special duty allowances for the period during which they were posted at Gauhati. The re spondent demanded the extension of the said benefit to the local officers by its letter dated May 10, 1985. We may mention here that the local officers who were posted at the Gauhati did get an extra allowance in addition to their salaries but it was considerably smaller than the main compensatory allowance paid to the officers from outside the NorthEastern region who were transferred to Gauhati. Certain other benefits were also allowed to non local officers transferred to Gauhati but there is no need to refer to them in detail. The appellant declined to allow the same allow ances to local officers posted at Gauhati as were given to the officers from other regions transferred to Gauhati as stated earlier. It is this decision which gave rise to the writ petition from the decision in which this appeal arises. 463 It was the contention of the respondent before the Gauhati High Court that all the officers of the appellant bank posted at Gauhati, whether they were from the North Eastern region or outside had to live in the same conditions and suffer from the same hardships, and hence, if any allow ance was given to the officers transferred from outside to the Gauhati office, the very same allowance should also be given to the local officers posted at Gauhati. In the coun ter filed in the High Court by the appellant bank, the Deputy Chief Officer of the appellant bank averted that the hardships faced by the non local officers are greater than those faced by the local officers. The scheme of adhoc incentives was introduced to tide 'over the problem of adequately staffing the Gauhati office. Non local officers experienced difficulties in getting accommodation, getting familiar with the language and so on, and some incentives had to be given to them to mitigate the hardships experi enced by them on transfer to Gauhati. It was clarified that the said incentives were temporary and because of the pecu lier circumstances prevailing at the moment in the North Eastern region which was regarded as a difficult region. It was accepted that considerable difficulties would have to be suffered by the officers posted there who hailed from places outside the NorthEastern region. The contention of the appellant bank failed to find favour with the High Court which took the view that all officers at Gauhati suffered from substantially the same hardship and it pointed out that, for example, even officers from outside from Tripura who were posted at Gauhati would suffer almost the same degree of hardship as officers transferred to Gauhati from regions other than the North Eastern regions although Tripu ra was in the North Eastern region. The High Court took the view that the local officers of the appellant bank, Gauhati were discriminated against and directed that they must be given the same benefits as the non local officers trans ferred to Gauhati. It is the correctness of the view taken by the High Court which is sought to be impugned before us in this appeal. We are of the opinion that the High Court was, with respect, in error in taking the view that officers from the North Eastern region who were posted at Gauhati. either on transfer or otherwise, sufferred the same hardships as officers from other regions transferred to Gauhati. The hardship and inconvenience sufferred by an officer of the appellant bank who was transferred to Gauhati from regions other than the North Eastern region, would certainly be more acute than those suffered by local officers posted at Gau hati. His mother tongue might completely be different in speech and, even as far as the script is concerned, from the 464 language used by the local people at Gauhati. He and his family members would, therefore. find it very difficult to communicate freely with the local people. His children might find it difficult to get admission to a school and pursue their education at Gauhati. They would be unfamiliar with the surroundings and the customs of the people. The hard ships faced by an officer say from the Western or Southern regions of India or North India posted at Gauhati would be qualitatively as well as quantitatively greater than the hardships faced by the local officers posted at Gauhati. It may be that some of the officers coming from the North Eastern region may also face considerable hardships when posted at Gauhati but the fact that there might be a few such officers would not render the payment of special allow ance, exclusively to officers transferred from distant regions discriminatory and bad in law. The High Court was, therefore, not justified in coming to the conclusion that all the officers of the appellant bank posted at Gauhati sufferred from the same degree of hardship. A person trans ferred from outside the North Eastern region to Gauhati would normally have to face more severe difficulties than an officer from the North Eastern region posted in Gauhati or, at the least, the appellant bank could reasonably take that view. Moreover, as pointed out by the appellant bank in the counter that they were finding it difficult to persuade their officers from outside to accept transfers to Gauhati and it is common knowledge that an office of a large bank cannot be run efficiently by officers a large number of whom have been posted there by transfers against their will and under the threat of disciplinary action. The work done by them could hardly be expected to be satisfactory. After all, the appellant, the Reserve Bank of India, is a banking institution and if in the interest of efficiency and proper working it bona fide took the decision, in the circumstances set out earlier, to grant some extra benefits to the non local officers transferred to Gauhati with a view to main tain efficient working of its unit at Gauhati, in our opin ion, they cannot be treated as being guilty of any unlawful discrimination. In the result, we allow the appeal and set aside the order of the High Court. The writ petition filed by respond ent No. 1 is dismissed. There will be no order as to costs throughout. V.P.R. Appeal allowed.

By a letter dated December 9, 1983 certain incentives and allowances were provided by the appellant to its offi cers posted at Gauhati who were not from the North Eastern region. Those allowances were generally known as special duty allowances and the main special duty allowance com prised 25% of basic pay, subject to a maximum of Rs.400 per month. By a Memorandum issued by the appellant on April 11, 1985, an ad hoc increase in salary was effected for non local officers and an option was given to them either to choose the ad hoc increase or the special duty allowances for the period during which they were posted at Gauhati. The respondent demanded the extension of the said bene fits to the local officers by their letter dated May 10, 1985. When the appellant bank declined to allow the benefits to the local officers, the respondent association challenged the Memorandum dated April 11, 1985 in a writ petition in the High Court, contending that all the officers of the appellant bank posted at Gauhati, whether they were from the North Eastern region or outside had to live in the same conditions and suffer from the same hardships, and hence, if any allowance was given to the officers transferred from outside to the Gauhati Office, the very same allowance should also be given to the local officers posted at Gau hati. The appellant bank averred in its counter that the scheme of ad hoc incentives was introduced to tide over the problem of adequately staffing the Gauhati office; that the non local officers experienced difficulties in getting accommodation, getting familiar with the language and so on, and some incentives had to be given to them to mitigate the hardships experienced by them on transfer to Gauhati; that the said incentives were temporary and because of the pecul iar circumstances 461 prevailing at the moment in. the North Eastern region, which was regarded as a difficult region. The High Court allowed the petition, holding that all officers at Gauhati suffered from substantially the same hardship and that the local officers of the appellant bank at Gauhati were discriminated against and directed that they must be given the same benefits as the non local officers transferred to Gauhati. Allowing the appeal by special leave filed by the.bank, this Court, HELD: 1.01. The hardship and inconveniences suffered by an officer of the appellant bank who was transferred to Gauhati from regions other than the North Eastern region would certainly be more acute than those suffered by local officers posted at Gauhati. [463G H] 1.02. Some of the officers coming from the North Eastern region may also face considerable hardship when posted at Gauhati but the fact that there might be a few such officers would not render the payment of special allowance, exclu sively to officers transferred from distant regions discrim inatory and bad in law. [464B C] 1.03. The Reserve Bank of India, is a banking institu tion and if in the interest of efficiency and proper work ing, it bona fide took the decision to grant some extra benefits to the non local officers transferred to Gauhati with a view to maintain efficient working of its unit at Gauhati, they cannot be treated as being guilty of any unlawful discrimination. [464E F]

Civil Appeal Nos. 392 95 of 1988. Appeal under Section 130E(b) of the Central Excise and Salt Act, 1944 from the order dated 15.12.1986 of the Customs Excise and Gold (Control) Appellate Tribunal, New Delhi in Appeal Nos. C/2130 to 2132/86 C & 1027/83 and order No. 757 760/86. B. Datta, ASG, Mrs. Indira Sawhney and P. Parmeshwaran for the Petitioners. The Judgment of the Court was delivered by SABYASACHI MUKHARJI, J. These appeals under Section 643 130E(b) of the (hereinafter called the Act) are against the order dated 15th December, 1986 passed by the Customs, Excise and Gold (Control, Appellate Tribunal (hereinafter called CEGAT). These appeals are related to a dispute regarding the duty of custom imposed on the respondent. The department had levied duty on the product known as 'Sancticizer 429 ' imported by the respondent. The respondent had contested this duty and filed a claim for the refund. The Assistant Collector of Customs rejected this claim. The Assistant Collector on test found it to be organic compound (easter type) inform of colourless viscose liquid and as per 7.0.046m should be considered as polymeric plasticizer. The Appellate Collector found that Chapter 38 of the was residuary in nature. According to him, if the item was not covered by any other chapter of the then it would fall under Chapter 38. The Appellate Collector further found that linear polysters were covered by CCCN 39.01(E). The Appellate Collector held that the impugned goods are formed by the condensation of diabasic acid within dihydric alcohols and were similar to the poly condensation product of terphthalic acid or Adipic acid with ethanediel covered by above mentioned CCCN headings. The Appellate Collector held this CCCN headings corresponds to 39.01/06 of the . The Appellate Collector upheld the decision of the Assistant Collector. The respondent challenged the aforesaid order of the Appellate Collector before the Tribunal. The Tribunal allowed the appeals relying on the two decisions of the Tribunal one being Bhor Industries Ltd. vs Collector of Customs, Bombay, and the other Collector of Customs, Bombay vs Bhor Industries Ltd. and another, The Tribunal was of the view that the product was classifiable under the heading 38.01/19(6) of the . The decision of the Tribunal was later on followed by the subsequent decision referred to hereinbefore. In Bhor Industries Ltd. vs Collector of Customs, Bombay (supra), the Tribunal observed that these are ordinarily liquids and, in rare instances, solids, as simple high boiling solvents for the polymers. These are neither resins nor do they seem to be plastic materials; on the other hand, these are added to resins to impart better flexibility or plastic properties to them. It was further observed that there was no evidence had been produced before the Tribunal to show that Sancticizer was a resin or plastic material as defined in Explanatory Notes to C.C.C.N. It was neither similar to resols or polysiobutylene to attract the mischief of Note 2(c) to Chapter 39 nor a separately defined Chemical Compound so as to fall within Chapters 28 or 29 of 644 . Hence, it was classifiable not under Heading 39.01/06 as it stood before its amendment in 1978 but under 38.01/19(6) of as "plasticizer, not elsewhere specified". The Tribunal in its decision considered the technical leaflet on the product. Sancticizer 429 was described as a medium high molecular polyester plasticizer made from a glycol reacted with a dibasic acid. Among the properties claimed for the product are good low temperature flexibility, excellent electrical properties, outstanding migration resistance, humidity, stability and resistance to oil and solvant extraction. It is said to be an excellent plasticizer for making oil resistant high temperature PVC wire and cable compounds. It is also stated to be useful for plasticizing ethyl cellulose, mitrocellulose, acrylic caulking compunds, and adhesive systems based upon polyvinyl accetate, styrene butadiene, and acrylic latices. Reference was also made to Kirk othmer 's "Encyclopaedia of Chemical Technology" 3rd edition page 111, where it was observed as follows: "A plasticizer is incorporated in a material to increase its workability, flexibility, or distensibility. Addition of a plasticizer may lower the melt viscosity, the second order transition temperature, or the elastic modulus of the plastic. For effectiveness with polymeric materials, a plasticizer needs to be initially mixed with the polymer either by dissolution of the resin in the plasticizer or the plasticizer in the resin, by heat or dissolving both in a common solvent and subsequent evaporation of the solvent. In "Plastics materials" (4th edition, page 80), J.A. Brydson refers to plasticizers ordinarily liquids and in rare instances solids as simply high boiling solvents for the polymer. The action is explained by saying that plasticizer molecules insert themselves between polymer molecules reducing but not eliminating polymer polymer contacts and generating additional free volume; also as some interaction between polymers and plasticizers off setting the spacing effect; or both. " The Tribunal came to the conclusion that plasticizers were not resins; these are added to resins to impart better flexibility or plastic properties to the latter. Nor did they seem to be plastic materials by themselves. The Tribunal found that Sancticizer 429 which is admitedly a plasticizer would, therefore, not have fallen for classification 645 under Heading No. 39.01/06 of the Customs Tariff Schedule as it stood prior to its amendment in 1978. The said reasoning was reiterated by the Tribunal in the decision of Collector of Customs, Bombay vs Bhor Industries Ltd. and another. There, the Tribunal observed that as per various technical authorities, plasticizers are not resins. Rather, these are added to resins to impart better flexibility or plastic properties to them. These are not plastic materials by themselves either. Further, goods under reference are not similar to resols or polysiobutylenes. Therefore, their classification under Heading 30.01/106 of the , prior to and even after its amendment in 1978, should not be applicable. Furthermore, not being separately defined chemical compounds, these would also not fall within Chapter 28 or 29 of the Act. Since these are not specified elsewhere, their appropriate classification would be under Heading No. 39.01/19(6) as "Plasticizers, not elsewhere specified". It is well settled in these matters how a good is known in the trade and treated in the trade literature is relevant and significant and often decisive factor. In that view of the matter, the Tribunal was right in the view it took. These appeals fail and are accordingly dismissed. N.V.K. Appeals dismissed.

The respondents who imported 'Sancticizer 429 ', contested the levy of duty by the Department and filed a claim for refund, which was rejected by the Assistant Collector on the ground, that on ted the product was found to be organic compound (easter type) of colourless viscose liquid and as per 7.0.046 should be considered a polymeric plasticizer. On appeal, the Appellate Collector came to the conclusion that Chapter 38 of the was residuary in nature and that if the item was not covered by any other Chapter of the Tariff Act only then it would fall under the said Chapter. He also found that linear polysters were covered by CCCN 39.01(E) and that the goods in question are formed by the condensation of diabasic acid within dihydric alcohols and were similar to the polycondensation products of terphthalic acid or adipic acid with ethanediel covered by the aforesaid CCCN headings, which corresponds to 39.01/06 of the . The Appellate Collector upheld the decision of the Assistant Collector. The respondent appealed to the Customs Excise and Gold Control Appellate Tribunal which allowed the appeals taking the view that plasticizers were not resins, but are added to resins to impart better flexibility of plastic properties to the latter, that 'Sancticizer 429 ' is admittedly a plasticizer and would therefore not have fallen for classification under Heading No. 39.01/06 of the Customs Tariff Schedule as it stood before amendment in 1978 and that the product was classifiable 642 under heading 38.01/19(6) of the Tariff Act. Dismissing the Appeals of the Revenue, this Court, ^ HELD: 1. As per various technical authorities, plasticizers are not resins. These are added to resins to impart better flexibility or plastic properties to them. These are not plastic materials by themselves either. [644H] 2. The goods under reference in the instant case, are not similar to resols or polysiobutylenes. Their classification under Heading 39.01/06 of the , prior to and even after its amendment in 1978, should not be applicable. Not being separately defined chemical compounds, these would also not fall within Chapter 28 or 29 of the Act. Since these are not specified elsewhere their appropriate classification would be under Heading No. 38.01/19(6) as "Plasticizers, not elsewhere specified". [645C] 3. In these matters how a good is known in the trade and treated in the trade literature is relevant and significant and often decisive factor. [645D] "Encyclopaedia of Chemical Technology" 3rd Edition page 111 referred to. Bhor Industries Ltd. vs Collector of Customs, Bombay, and Collector of Customs, Bombay vs Bhor Industries Ltd. and another, approved.

Appeals Nos. 307 to 309 of 1958. Appeals from the judgment and order dated August 1, 1956, of the Orissa High Court in O. J. C. Nos. 16, 19, 137 and 61 of 1954. C.B. Aggarwala and P. C. Aggarwala, for the appellant (In C. As. 307 to 309 of 58). N.C. Chatterjee, J. H. Umrigar and T. M. Sen, for the respondents (In all the appeals). September 21. The Judgment of the Court was delivered by SHAH J. This is a group of three appeals filed with certificate of fitness under article 132 of the Constitution issued by the High Court of Judicature, Orissa. The Legislature of the Province of Orissa enacted the Orissa Agricultural Income tax Act XXIV of 1947 hereinafter referred to as the Act providing for the levy of income tax on agricultural income derived from lands situated in the Province of Orissa. This Act was brought into operation from July 10, 1947. By section 3, agricultural income tax at the rate or rates specified in the schedule was made payable for each financial year on the total income of the previous year of every person. By the proviso to that section, agricultural income of the Central Government or of the State Government or of any local authority was exempt from 'taxation. Section 2, cl. (1), defined a " person " as inclusive of a Ruler of an Indian State. The appellant in these three appeals is the former Ruler of the State of Sonepur. After 781 the establishment of the Dominion of India on August 15, 1947, the appellant as the Ruler of the State of Sonepur executed an instrument of accession to the., Dominion restricted to three subjects Defence, External Affairs and Communications. On December 15, 1947, he executed a merger agreement whereby the territory of the State of Sonepur became merged with the territory of the Dominion of India. By virtue of the merger agreement, the Government of India acquired full sovereign rights over the territory of the State, but ownership of private properties belonging to the appellant and full enjoyment thereof were under the agreement guaranteed to him under article 3. In exercise of the powers conferred by the Extra Provincial Jurisdiction Act 47 of 1947, the Government of India by notification dated March 23, 1948, delegated to the Provincial Government of Orissa full powers to administer the merged States of Orissa including the State of Sonepur. The Government of the Province of Orissa applied to the merged States section 1 of the Act as from January 19, 1949, and by notification dated April 1, 1949, the remaining provisions of the Act. In the meantime, by amendment, two new sections, section 290(A) and section 290(B) were incorporated in the Government of India Act, 1935. The Governor General of India was thereby given power to direct by order that a merged State shall be administered in all respects as if it formed part of the Governor 's Province specified in the order. The Governor General of India exercising authority under sections 290(A) and 290(B) issued on July 27, 1949, an order providing that the merged Orissa States including the State of Sonepur shall be administered in all respects as if they formed part of the Province of Orissa with effect from August 1, 1949. On December 30, 1949, the Governor of Orissa promulgated Ordinance No. IV of 1949 providing inter alia that the Agricultural Income tax Act, 1947, be applied to the merged Orissa States. This Ordinance was later replaced by the Orissa Merged States (Laws) Act, XVI of 1950. The appellant was then called upon by the Agricultural 782 Income tax Officer to furnish a return of his agricultural income. The appellant disputed his liability to pay the agricultural income tax and declined to furnish the return. The Agricultural Income tax Officer then proceeded to make enquiries about the income received from the lands held by the appellant and assessed him to pay tax for the years 1949 50 to 1953 54. He also imposed a penalty upon the appellant for failure to submit his returns for the years 1949 50 and 1950 51. Against the order assessing him to tax and directing him to pay penalty, the appellant preferred appeals to the Assistant Collector of Agricultural Income tax, Sambalpur. The appeals were dismissed by that officer. Revision applications to the Collector of Commercial Taxes, Cuttack and to the Board of Revenue were unsuccessful. The appellant filed four petitions in the High Court of Orissa, being petitions Nos. 17, 16, 19 and 137 of 1954 challenging the assessments made by the taxing authorities for the years 1949 50, 1950 51, 1951 52 and 1952 53 respectively, and two more petitions being petitions Nos. 18 and 138 of 1954 against orders imposing penalty for the years 1949 50 and 1950 51 respectively. These six petitions and certain other petitions were heard by a Division Bench of the Orissa High Court. The High Court held that by the guarantee of full ownership, use and enjoyment of the private properties under the merger agreement the Properties of the appellant were not rendered immune from liability to pay tax imposed by the Act and that in the absence of an express provision, his income from lands was liable to pay agricultural income tax. The High Court also held that even though the appellant was the Ruler of a former Orissa State, he was a " person " within the meaning of the Act and was liable to pay agricultural income tax. The learned Judges therefore dismissed the petitions challenging the liability of the appellant for the assessment years 1950 51, 1951 52 and 1952 53 to pay agricultural income tax, and they cancelled the order of assessment in respect of the year 1949 50 and the orders imposing penalty in respect of years 1949 50 and 783 1950 51. Against the orders dismissing the applications for setting aside the assessments in respect of years 1950 51, 1951 52 and 1952 53, these appeals have been preferred with certificate granted by the High Court under article 132 of the Constitution. The appellant was undoubtedly the Ruler of an Indian State before August 15. 1947, but by reason of the merger agreement executed by him on December 15, 1947, his sovereignty was extinguished. By article 1 of the terms of the merger agreement, the appellant ceded to the Dominion of India full and exclusive authority, jurisdiction and power for and in relation to the governance of the State and agreed to transfer the administration of the State on the appointed day and as from the said day, the Dominion Government became competent to exercise the power, authority and jurisdiction in relation to the governance of the State in such matters and through such agency as the Government thought fit. By article 3, the appellant remained entitled to full ownership, use and enjoyment of all private properties (but not of the State properties) belonging to him on the date of the merger. By article 5, the Dominion Government gua ranteed the succession according to law and customs, to the gadi of the State and to the personal rights, privileges, dignities and titles of the appellant. It was provided by article 4 that " the Raja, the Rani, the Rajmata, the Yuvraja and the Yuvrani shall be entitled to all personal privileges enjoyed by them whether within or outside the territories of the State, immediately before the 15th day of August, 1947 ". The appellant contends that as a Ruler of the State of Sonepur, he was, before merger of his State, immune from liability to taxation in respect of his private property both within his territory and outside. He claims that he was so immune in respect of his property within his State as a Ruler and in respect of his property outside the State by the rules of International Law which, he submits, protect from taxation the properties of a Ruler of a State, situate in a foreign State. The appellant says that by articles 4 and 5, the Dominion Government guaranteed to him all 784 his personal rights, privileges, dignities and titles enjoyed within or without the territory immediately before the 15th August, 1947, and that any attempt to tax his private property by the State of Orissa or by the Union Government violates that guarantee. The appellant submits that to give effect to this guarantee, all legislation must be interpreted in the light of the merger agreement which he claims is incorporated in article 362 of the Constitution and he must be held exempt from liability to pay tax even though no express provision in that behalf has been made by the Legislature. In our view, there is no force in the contentions raised by the appellant. The privileges guaranteed by articles 4 and 5 are personal privileges of the appellant as an ex Ruler and those privileges do not extend to his personal property. In dealing with a similar contention raised on the interpretation of article 4 of the merger agreement entered into by the Ruler of Khairagarh (which was in material terms identical with the terms of article 4 of the agreement executed by the appellant), section R. Das, J., (as he then was), observed in Visweshwar Rao vs The State of Madhya Pradesh(1): " The guarantee or assurance to which due regard is to be had is limited to personal rights, privileges and dignities of the Ruler qua a Ruler. It does not extend to personal property which is different from personal rights ". The Act imposes on the agricultural income of "every person " liability to pay agricultural income tax. By the proviso to section 3, agricultural income of the Central Government, State Government and of local authorities is exempt from tax, but this exemption is not extended to any other body or person. It is true that in the definition of the expression " person " as originally enacted in section 2, cl. (1), a Ruler of an Indian State was expressly included and by the Adaptation of Laws Order, 1950, reference to Rulers of Indian States was deleted as from January 26, 1950. But by that amendment, an intention to exclude the Rulers of Indian States from liability to pay (1) , 1054. 785 agricultural income tax was, in our judgment, not evinced. Between the dates on which the Act wag enacted and the Adaptation of Laws Order, 1950. several political events of far reaching effect had taken place, in consequence of which the appellant bad ceased to be a Ruler of an Indian State. On January 26, 1950, the date on which the Adaptation of Laws Order, 1950, became operative, there were in, existence no Indian States. The sovereign rights of the erstwhile Rulers of the Indian States were extinguished, and their territories were merged in the, Indian Union. The amendment in the definition of "person " in section 2, cl. (i), of the Act was made not with) the object of excluding the Rulers of former Indian States from liability to pay tax: it was only made to; delete a clause which, in view of political changes, had no practical significance. Liability to pay tax is imposed by the Act and there is in the Act no express exemption in favour of the appellant. The claim of the appellant to exemption on the ground that he is not a " person " cannot therefore be sustained. Article 362 of the Constitution provides: "In the exercise of the power of Parliament or of the Legislature of a State to make laws or in the exercise of the executive power of the Union or of a State, due regard shall be bad to the guarantee or assurance given tinder any such covenant or agreement as is referred to in article 291 with respect to the personal rights, privileges and dignities of the Ruler of an Indian State ". Article 291 of the Constitution deals with the privy purse of the Rulers under any covenant or agreement entered into by the Ruler of any Indian State before the commencement of the Constitution payment whereof is free from tax as has been granted or assured by the Government of the Dominion of India. Article 362 recommends to the Parliament and the State Legislatures in making laws after the Constitution " to have due regard to the guarantee or assurance given under any covenant or agreement ". Even though article 362 is not restricted in its recommendation to agreements relating to the privy purse and 786 covers all agreements and covenants entered into by the Rulers of Indian States before the commencement of the Constitution whereby the personal rights, privileges and dignities of the Ruler of an Indian State were guaranteed, it does not import any legal obligation enforceable at the instance of the erstwhile Ruler of a former Indian State. If, despite the recommendation that due regard shall be had to the guarantee or assurance given under the covenant or agreement, the Parliament or the Legislature of a State makes laws inconsistent with the personal rights, privileges and dignities of the Ruler of an Indian State, the exercise of the legislative authority cannot, relying upon the agreement or covenant, be questioned in any court, and that is so expressly provided by article 363 of the Constitution. The plea of the appellant that he was not seeking to enforce the terms of the merger agreement and that be was merely resisting the claim made by the authority appointed by the State of Orissa to levy a tax inconsistently with the terms of the merger agreement, has no substance. In truth, the appellant sought by his petitions under article 226 of the Constitution to enforce the terms of article 4 of the merger agreement. By his petitions, the appellant contended that in enacting the Agricultural Income tax Act and in seeking to enforce it against him, the State of Orissa acted contrary to the terms of the merger agreement and he asked the High Court to enforce the terms of the merger agreement. On the grounds therefore that liability to pay agricultural income tax in respect of his private property is imposed upon the appellant by section 3 of the Act, and the immunity claimed by the appellant is not one of the personal rights or privileges within the meaning of the merger agreement and that the claim made by the appellant is not justiciable, the objection raised by the appellant to liability to pay agricultural income tax assessed under the Act cannot be sustained. Two subsidiary contentions which were sought to be raised before us may be briefly referred to. It was urged that of the forty two villages of which the 787 appellant is held by the assessing authority to be the holder, two were in the year 1945 transferred by him to the Yuvrani (the appellant 's son 's wife) and on that,, account, the income of those villages was not liable to be taxed in his hands. It appears from the assessment order that this contention was raised before the Agricultural Income tax Officer and that officer rejected the contention relying upon section 14, cl. (1), of the Act. It is unnecessary for the purpose of these appeals to decide whether the assessing officer was right in the view which he took. In the petitions filed by the appellant in the High Court, this plea was not raised and no relief was claimed by him in respect of the income of the two villages. The question was never mooted before the High Court and the State of Orissa had no opportunity of meeting the claim now sought to be made by the appellant. On the ground that the question was never raised in the High Court, we reject this contention. It was also urged that whereas the assessing officer has found that the appellant had lands in forty two villages, in the inventory of properties submitted by the appellant to the Government, only eighteen villages were set out and this inventory was accepted by the Government of India. Relying upon this premise, the appellant contends that he is liable to pay tax in respect of his income from these eighteen villages and no more. But even this plea was never raised in the High Court and we cannot, in dealing with these appeals, enter upon an enquiry into a question which was never raised on which no evidence was led, and on which no finding was given by the High Court. On the view taken by us, appeals Nos. 307, 308 and 309 of 1958 fail and are dismissed with costs. There will be one hearing fee. Appeals dismissed.

On December 15, 1947, the Ruler of the erstwhile State of Sonepur, the appellant, executed a merger agreement whereby the Government of India acquired full sovereign rights over the territory of the State, but ownership and full enjoyment of private properties belonging to the appellant and the personal rights, privileges, dignities etc., enjoyed by him immediately before August 15, 1947, were guaranteed to him under articles 4 and 5. On July 27, 1949, the Governor General of India issued an order providing that the merged Orissa States including the State of Sonepur shall be administered in all respects as if they formed part of the Province of Orissa. The Orissa Agricultural Income tax Act, 1947, had in the meantime been enacted by the Legislature of the Province of Orissa and by virtue of an Ordinance promulgated by the Governor of Orissa on December 30, 1949, the Act became applicable to the merged Orissa States. Section 2(1) of the Act defined a " person " as inclusive of a Ruler of an Indian State, but by the Adaptation of Laws Order, 195o, reference to Rulers of Indian States was deleted as from January 26, 195o. The appellant contended that he was not liable to be assessed to tax on agricultural income under the provisions of the Act because (1) as a Ruler of the State of Sonepur, he was, before merger of his State, immune from liability to taxation in respect of his private property and that his immunity from taxation was Guaranteed by articles 4 and 5 of the agreement of merger; and (2) that by virtue of the amendment of section 2, cl. (1), of the Act, he was not a "person" within the meaning of the Act and therefore he was not liable to pay agricultural income tax. Held: (i) that the amendment in the definition of "person" in section 2, Cl. (i), of the Act was made not with the object of excluding the Rulers of former Indian States from liability to pay tax, but only to delete a clause which in view of political changes which had taken place since the Act was enacted had no practical significance. The appellant could not claim exemption from taxation on the ground that he was not a " person ", in the absence of an express exemption clause in the Act. 780 (2)that the privileges guaranteed by articles 4 and 5 of the agreement of merger were only personal privileges of the appellant as an ex Ruler and that these privileges did not extend to his private property. Vishweshwar Rao vs The State of Madhya Pradesh, , followed. (3)that the claim made by the appellant of immunity from taxation relying upon the agreement of merger was not justiciable.

: Special Leave Petition (Crl.) No. 1383 of 1978. From the Judgment and Order dated 3 1 1978 of the Punjab and Haryana High Court in Crl. A. No. 1039/74. K. L. Jogga and L. N. Gupta for the Petitioner. Hardev Singh for the Respondent. The Order of the Court was delivered by SHINGHAL, J. We have heard learned counsel for the parties at length. Accused Bachan Singh, Gurnam Singh and Chanan Singh were convicted by the Sessions Judge of Gurdaspur of an offence under section 304 Part I read with section 149 I.P.C. and were sentenced to rigorous imprisonment for 10 years and a fine of Rs. 1000/ . They were also convicted of an offence under section 148 I.P.C. and sentenced to rigorous imprisonment for 2 years. The remaining two accused Ravail Singh and Vir Singh were convicted of an offence under section 304 Part I read with section 149 I.P.C., but they were sentenced to rigorous imprisonment for 5 years and a fine of Rs. 500/ . Further, they were convicted of an offence under section 147 I.P.C. and were sentenced to rigorous imprisonment for 1 year. An appeal was filed by the accused against their conviction and sentence; and the State filed an appeal for their conviction and sentence under section 302 I.P.C. A revision petition was filed under 647 section 401 Crl. P.C. for enhancement of the sentence of imprisonment and fine "to meet the ends of justice". The High Court of Punjab and Haryana made an express order on December 9, 1974 that the revision petition would be heard alongwith the criminal appeal (No. 1039 of 1974) filed by the accused. By its impugned Judgment dated January 3, 1978, the High Court dismissed the appeal which was filed by the accused, but enhanced the sentence of Bachan Singh, Gurnam Singh and Chanan Singh accused under section 304 Part I read with section 149 I.P.C. to rigorous imprisonment for life and of accused Ravail Singh and Vir Singh under the same section to rigorous imprisonment for 10 years. While making that order, the High Court observed that the State appeal "for enhancement of punishment" was "partly accepted". That is why all the five accused have applied to this Court for special leave under article 136 of the Constitution. It has been argued by learned counsel for the accused that the High Court committed an error of law in enhancing the sentence of the accused without giving them a reasonable opportunity of showing cause against such enhancement and without allowing them to plead for their acquittal or for reduction of the sentence as contemplated by sub section (3) of section 377 of the Code of Criminal Procedure. It appears to us, however, that as the State Government did not file an appeal against the sentence under sub section (1) of section 377 Cr.P.C, and as it is not disputed before us that its appeal was directed against the acquittal of the accused for the offence under section 302 I.P.C., there is no justification for the argument that the High Court committed an illegality in not complying with the requirement of sub section (3) of that section for giving the opportunity to the accused of showing cause against the enhancement of the sentence or of pleading for their acquittal or for reduction of the sentence. As has been stated, a petition was filed under section 401 Cr. P.C. for enhancement of the sentence, and it was clearly maintainable as it was not permissible for the revision petitioner to file an appeal under section 377. It will be recalled that the High Court made an express order on December 9, 1974, for the hearing of the revision petition alongwith the appeal which had been filed by the accused. The fact therefore remains that the High Court had before it the above mentioned appeals which had been filed by the accused and the State, and the revision petition under section 401 Cr. P.C. for enhancement of the sentence. While that court dismissed the appeal of the 648 accused, and allowed the appeal of the State in part, it forgot to make a reference to the revision petition while drawing up the operative part of its order. That was an inadvertent mistake for, after reading the impugned judgment of the High Court, we have no doubt that it effectively disposed of both the appeals and the revision petition even though the wordings of the judgment in that respect were not quite appropriate. But, even otherwise, there is no merit in the grievance of the accused that they were not given the opportunity of showing cause against the enhancement of the sentence or to plead for their acquittal or for reduction of the sentence. The opportunity for pleading for acquittal was amply furnished at the hearing of their own appeal against their conviction, and the same appeal furnished them the necessary opportunity for pleading for the reduction of the sentence. That in fact was the subject matter of their appeal. It is not disputed before us that the High Court heard the State appeal against the acquittal of the accused, alongwith the appeal which was filed by the accused, and that furnished further opportunity to the accused to plead for their acquittal, or reduction of sentence, or to show cause against the enhancement of the sentence. There is thus no force in the argument to the contrary. It has to be appreciated that in respect of the petition which was filed under section 401 Cr.P.C. for the exercise of the High Court 's powers of revision, it was permissible for it to exercise the power of a Court of Appeal under section 386 for enhancement of the sentence, and if that had been done, there is no justification for the argument that the enhancement was illegal. There is another reason for this view. It was permissible for the High Court under section 397 Cr. P.C. to call for and examine the record of the proceeding before the trial court for the purpose of satisfying itself as to the correctness, legality or "propriety" of any finding, "sentence" or order, recorded or passed by that inferior court. The High Court 's power of revision in the case of any proceeding the record of which has been called for by it or which otherwise comes to its knowledge, has been stated in section 401 Cr. P.C. to which reference has been made above. That includes the power conferred on a Court of Appeal under section 386 to enhance or reduce the sentence. So when the record of the case was before the High Court in connection with the two appeals and the revision petition referred to above, there was nothing to prevent the High Court from invoking its powers under section 397 read with section 401 Cr. P.C. and to make an order for the enhancement of the sentence. 649 There is thus no force in the argument to the contrary. All the same, we gave an opportunity to the learned counsel for the accused to advance his arguments on question of sentence and all that he was able to argue was that as the accused had undergone a portion of the sentence and, as the offence was committed in 1972, the High Court was not justified in enhancing the sentence. As is obvious, both these arguments are untenable and inconsequential because of the concurrent findings of the trial court and the High Court that the accused emerged from the house of accused Bachan Singh as soon as Sarup Singh (deceased) reached the place of occurrence, shouted that he should be taught a lesson for getting liquor recovered from them and beat him with their respective weapons. It has been found further that while accused Vir Singh caught hold of the hair of the deceased and Ravail Singh caught hold of his legs and felled him on the ground, Gurnam Singh, who was armed with a datar, dealt belows on his right knee while Chanan Singh gave a kirpan blow on his left hand, and then accused Gurnam Singh gave a blow on his right knee while Chanan Singh gave a kirpan blow on his left hand and he, Gurnam Singh and Bachan Singh dealt further blows on his left leg near the knee, as a result of which the left leg was completely severed from the body. It has also been concurrently found that the accused took away the chopped off leg of the deceased after wrapping it in his turban, and that he succumbed to the injuries soon after. The facts and the circumstances which have thus been established by the evidence of Pal Singh P.W.4, and Nishan Singh P.W.5, on which reliance has been placed by both the courts, justify the view taken by the High Court that the accused deserved the sentence awarded to them by it. Learned counsel for the accused tried to argue that the conviction of the accused was not justified on the merits, and took us through the finding in regard to the motive for the offence, the nature of the medical evidence, the plea of self defence taken by accused Bachan Singh and the relationship of eye witnesses Pal Singh P.W.4 and Nishan Singh P.W.5 with the deceased. Apart from the fact that there was no occasion for us to consider those arguments, we have no hesitation in saying that they are without merit. In the view we have taken, the petition for special leave is dismissed. V.D.K. Petition dismissed.

Against their conviction and sentence passed by the Sessions Judge, Gurdaspur, the appellants preferred an appeal to the High Court. The State filed an appeal for their conviction and sentence under section 302 I.P.C. A revision petition was also filed under Section 401 Crl. P.C. for enhancement of the sentence of imprisonment and fine "to meet the ends of justice". Though the High Court made an express order on December 9, 1974 that the revision petition would be heard along with the criminal appeal, the High Court by its impugned judgment dated January 3, 1978, dismissed the appeal filed by the accused, but enhanced the sentence of Bachan Singh, Gurnam Singh and Chanan Singh accused under Section 304 Part I read with Section 149 I.P.C. to rigorous imprisonment for life and of accused Ravail Singh and Vir Singh under the same section to rigorous imprisonment for 10 years. While making that order, the High Court observed that the State appeal "for enhancement of punishment" was partly accepted, without reference to the revision petition. Hence the petition for special leave under Article 136 of the Constitution on the ground that the High Court committed an error of law in enhancing the sentence of the accused without giving them a reasonable opportunity of showing cause against such enhancement and without allowing them to plead for their acquittal or for reduction of the sentence as contemplated by sub section (3) of section 377 of the Code of Criminal Procedure. Dismissing the petition the Court, ^ HELD: 1. The revision petition under section 401 Crl. P.C. for enhancement of the sentence was maintainable as it was not permissible for the revision petitioner to file an appeal under section 377. The High Court effectively disposed of both the appeals and the revision petition even though there was an inadvertent mistake in not making a reference to the revision petition in the judgment. [647 F G, 648 B] 2. The opportunity for pleading for acquittal was amply furnished to the accused at the hearing of their own appeal against their conviction, and the same appeal furnished them the necessary opportunity for pleading for their acquittal or the reduction of the sentence. That, in fact, was the subject matter of their appeal. The fact that the appeal filed by the State 5 625SCI/79 646 against the acquittal of the accused under section 302 I.P.C. was heard along with their appeal against conviction and sentence, itself furnished an opportunity to show cause against the enhancement of the sentence. [648 C D] 3. (a) In the petition filed under section 401 Crl. P.C. for the exercise of the High Court 's power of revision, it was permissible for it to exercise the power of a Court of appeal under section 386 for enhancement of the sentence. [648 E F] (b) It was also permissible for the High Court under Section 397 Crl. P.C., to call for and examine the record of the proceedings before the trial court for purpose of satisfying itself as to the correctness, legality or "propriety" of any finding, "sentence" or order recorded or passed by that inferior Court. The High Court 's power of revision under section 401 Crl. P.C. in the case of any proceeding the record of which has been called for by it or which otherwise comes to its knowledge includes the power conferred on a court of appeal under section 386 to enhance or reduce the sentence. So when the record of the case was before the High Court in connection with the two appeals and the revision petition there was nothing to prevent the High Court from invoking its power under section 397 read with 401 Crl. P.C. and to make an order for the enhancement of the sentence. [648 F H]

ION: Civil appeal No. 3419 (NCE) of 1981 From the Judgment and order dated the 14th October, 1981 of the Punjab and Haryana High Court in Election Petition No. 40 of 1980 Soli J. Sorabji, K. P. Bhandari section C. patel and Dr. Ruksana Swamy for the appellant. G. section Grewal and R. A. Gupta for the Respondent. The Judgment of the Court was delivered by SABYASACHI MUKHARJI, J. The appellant and the respondents contested the election to Punjab Legislative Assembly held in May, 1980 from Muktsar Constituency. Polling was held on 31st May, 1980 and the result was declared on 1st June, 1980 in which the appellant secured 29600 votes and respondent No. 3 secured 30003 votes. The other candidates got only nominal votes. There was thus a difference OF 403 votes in favour of the respondent No. 3. Respondent No. 3 was declared elected. The election of respondent No. 3 was challenged by an election petition alleging that the respondent No. 3 had indulged in corrupt practice in the said election and as such his election was liable to be set aside and he was liable to be disqualified for corrupt practice. Corrupt Practice make the election liable to be set aside under section 101 (l) (b) of the Respondent of the People Act, 1951, hereinafter called the Act which is as follows: "100. Grounds for declaring election to be void 1. Subject to the provisions of sub section (2) if the High Court is of opinion (a) . . (b) that any corrupt practice has been committed by a re 165 turned candidate or his election agent or by any person with the consent of a returned candidate or his election A agent; or" What are deemed to be corrupt practices are indicated in section 123 of the Act. Sub section (3) of the said section is as follows: "The appeal by a candidate or his agent or by any other person with the consent of a candidate of his election agent to vote or refrain from voting for any person on the ground of his religion, race, caste, community or language of the use, or appeal to religious symbols or the use of, or appeal to, national symbols, such as the national flag or the national emblem, for the furtherance of the prospects of the election of that candidate or for prejudically affecting the election of any candidate: Provided that no symbol allotted under this Act to a candidate shall be deemed to be a religious symbol or a national for the purpose of this clause". It may be mentioned that before the amendment Act, 40 of 1961, effected on 12th September, 1964, sub section (3) of section 123 of the Act was as follows: E "The systematic appeal by a candidate or his agent or by any other person, to vote or refrain from voting on grounds of caste, race, community or religion or the use of, or appeal to, religious symbols or the use of, or appeal to, national symbols, such as the national flag or the national emblem, for the furtherance of the prospects of that candidate 's election". As a result of this amendment, inter alia, the expression "systematic" has been deleted and only "appeal" by a candidate or his agent or by any other person with the consent of the candidate or his election agent to vote or refrain from voting for any person on the ground of his region, race caste, community or language or color continues to be corrupt practice. The statement of objects and reasons for introducing amendments in section 123, 125, 139 and 141. Of the Act in 1961 stated inter.alia, as follows . "For curbing communal and separatist tendencies in 166 the country it is proposed to widen the scope of the corrupt practice mentioned in clause (3) of section 123 of the 1951 Act and to provide for a new corrupt practice (See sub section (3) and (3A) of section 123) and a new electoral offence for the promotion of feelings of hatred and enmity on grounds of religion, race, caste, community or language (See new section 125) ". Therefore even a single appeal by a candidate or his agent or by any other person with the consent of the candidate or his election agent to vote or refrain for voting from any person on the ground of his religion, race, caste or community etc. would be corrupt practice. The allegations against respondent No. 3 were that he, his election agent and other per on with his consent had appealed to the voters of the constituency in the name of religion, namely Sikh religion for voting in his favour or to refrain from voting in favour of the appellant. In brief it is alleged that Hukamnamas, the nature, the content and the effect of which we will examine later, were issued urging the voters to vote for respondent No. 3 and not to vote for the appellant. It was further alleged that in the meetings, inter alia, at ( 1) Muktsar, (2) Khokhar and (3) Harika Kalan speeches were delivered by eminent public persons appealing to the voters that as respondent No. 3 was the candidate of the Akal Takht and his nomination was supported by the Hukamnama of Akal Takht, the people should vote for him and not to vote for him would be a against the tenets of the Sikh religion and would be blasphemous act against the Sikh religion In publications like Akali Times the same view was propounded and it was indicated that lndira Congress was always against Sikh people and Sikh religion and as such to vote for Congress (1) would be to vote against Sikh religion, were pointed out at the meetings. It was emphasised before us that a Hukamnama for a Sikh is of great consequence and disobedience to Hukamnama entails great misfortune. It is necessary, however, to examine in detail the actual evidence adduced in support of these allegations. The learned Judge of the High Court of Punjab and Haryana on an analysis of the nature of the Hukamnama as well as examination of the evidence adduced before him came to the conclusion that neither was it established that respondent No. 3 had appealed in the name of religion in terms of section 123 of the Act nor was the learned Judge convinced 167 about the veracity or the correctness of the evidence adduced on behalf of the appellant as to what happened in the three meetings. A The learned Judge accordingly came to the conclusion that the appellant had failed to prove the corrupt practice alleged against respondent No. 3. The learned Judge emphasised that allegations of corrupt practices in an election petition are in the nature of quasi criminal charges and must be proved beyond reasonable doubt as such. The learned judge was of the opinion that the appellant had not succeeded in proving The said charges beyond reasonable doubt. He accordingly dismissed the said election petition. Being aggrieved by the said decision and judgment of the learned Judge, this appeal has been preferred by the appellant under section 116A of the said Act. Before we examine the actual contentions and the evidence, it may be appropriate to bear in mind the principles enunciated in two decisions of this Court on the principle underlying section 123(3) of the Act. D Ambika Sharan Singh vs Mahant Mahadev and Giri and others(l was an appeal against the order of the High Court of Patna declaring the appellant 's election from Barhara Assembly Constituency, Bihar, void under section 100(l) of the Act. At the time of the general election in February, 1967, the appellant was the Minister of State in the Finance Department of the State of Bihar. There were in all eight candidates contesting from Barhara Constituency. The poll day was 15th February, 1967. Having obtained 21,791 votes against 20,243 votes obtained by respondent No. 1, the appellant was declared elected. F In the election petition filed by respondent No. 1 thereafter, he made a number of ALLEGATIONS of diverse corrupt practices giving particulars thereof in more than ten schedules. The appellant denied all these allegations and filed a recriminatory petition under section 97 of the Act. The High Court after examining the evidence held the appellant guilty of three corrupt practices, namely of distributing money to Harijan voters in various villages as bribery of having canvassed on their basis of his caste, namely, Rajput, and of having procured the assistance of four gazetted officers named (1)11969] 3 S.C.C. 492. 168 therein. We are concerned with the second corrupt practice alleged i.e. having canvassed on the basis of his caste. Before this Court, the question involved was whether the High Court was correct in holding the appellant guilty of three corrupt practices. The High court after considering the evidence held inter alia that there was sufficient evidence to show that the compaign on the basis of caste was carried on at numerous places and at some places by appellant himself and at some places by others in his presence and at others by several workers of the appellant including his election agent. The High Court felt that the conclusion was inevitable that all this was done with the appellant 's consent, direct or implicit. This Court held that the High Court was right in its conclusion and the appellant was proved to have committed corrupt practice falling under section 123(3) of the Act. Dealing with the allegations of appeal in the name of religion, this Court observed at page 497 of the report in paragraph 12 and 13 thus: "Para 12 Indian leadership has condemned electoral campaign on the lines of caste and community as being destructive of the country 's integration and the concept of secular democracy which is the basis of our Constitution. lt is this condemnation which is reflected in Section 123(3) of the Act. Inspite of the repeated condemnation, experience has shown that where there is such a constituency it has been unfortunately too tempting for a candidate to resist appealing to sectional elements to cast their votes on caste basis. The contention of counsel, however, was that there was on the other hand the danger of a frustrated candidate mustering a number of his followers to testify falsely in a vague manner that his opponent had campaigned on the basis of his caste or community. There fore, before such an allegation is accepted, the Court must be on guard against such a possibility and must demand adequate particulars. A witness deposing to such an allegation must point out when, where and to whom such an appeal was made. That, said counsel, was not done and therefore the evidence of witnesses however numerous should not have been accepted. Para 13 But where the allegation is that such canvas sing was widespread and at several places it would be 169 impracticable to call upon the election petitioner to give the names of persons alleged to have been approached with A such an appeal and the actual words spoken to each of them. If such an appeal is made ' for instance, at a meeting it would be difficult for a witness to name those to whom such an appeal is made, It is for this reason that courts in England have made a distinction between bribery to voters and treating them. In the latter class of cases, names of persons treated by the candidate have not been demanded though the election petitioner would be ordered to specify the character and extent of the alleged corruption. This is so even though the English Law of elections emphasises the individual aspect of the exercise of undue influence, whereas what is material under our law is the commission of an act which constitutes corrupt practice. (See Halsbury 's Laws of England, 3rd ed., Volume 14, p. 278). A command by a religious head to his followers that it was their primary duty to support a particular candidate was held sufficient to vitiate the election and it was not considered necessary to have the names of the persons to whom the command was addressed. " In that case before this Court there were other contentions lmpeaching the evidence and indicating the improbabilities of the case against the appellant. This Court after elaborate discussion came to the conclusion that the allegation of appealing in the name of religion namely appealing on the basis of caste was proved in the facts and circumstances of that case. It was argued that Barhara constituency was a composite constituency and therefore if the appellant and his agent were to campaign on caste basis, those belonging to other castes would be alienated against him and as such an appeal instead of advancing his cause would prove detrimental to it. This Court found this submission to be untenable because it is not impossible that the candidate inclined to campaign on the caste basis would concentrate on his votes and at the same time leave his party propaganda machine to campaign amongst the rest of the population. It would not, therefore, be correct to say that such a campaign would be improbable and therefore evidence that such canvassing was conducted should have been rejected. In the instant case before us, similar contentions were urged namely Muktsar was a mixed constituency namely there were Hindu 170 votes and Sikh votes, according to one calculation practically divided equally. It was submitted that appeal in the name of Sikh religion by the appellant in such a situation was unlikely. As mentioned in the aforesaid decision of this Court, if there is conclusive evidence to that effect, then such a theory would not outweigh the facts proved. It was then, submitted that Akali Party was in alliance with C.P.I. (M) and it was most improbable that when one of the allied parties was a Marxist Party, the candidate of Akali Dal would appeal in the name of religion. This for the reasons indicated before is also not an acceptable view. These are only probabilities of a situation but if there is direct evidence of propaganda or campaign by candidate in the election in the name of religion, the probabilities of such a campaign not being made in view of other surrounding circumstances, cannot outweigh the direct evidence if the Court is otherwise inclined to accept such direct evidence. In Ziyauddin Burhanuddin Bukhari vs Brijmohan Ramdas Mehra and ors. ,(l) the appellant, a candidate of Muslim League defeated respondent No. 3, Shauket Chagla, the Congress candidate in the Maharashtra State Assembly Election. Respondent No. 1, a voter filed an election petition, inter alia, alleging that the appellant had appealed to the voters to refrain from voting for respondent No. 2 on the ground of religion and that the appellant had promoted feelings of enmity or hatred between different classes of citizens of India on ground of religion. The various appeals to the voters on the ground of religion made by the appellant had been set out in different sub paragraphs It is not necessary to set out in detail the actual allegations made in that case as these were relevant for the purpose of that case only. It may however be pointed out that it was stated about Chagla that "at the moment we are in SUCH a war in which our opponent is such a person who is playing WITH our religious affairs, He considers us to be a community whose conscience is dead". It was further alleged that Chagla 's wife Nalini was a Hindu and his son Ashok Chagla used to attend the mosque as well as the temple and he should be excluded from Muslim localities. It was further alleged that he was neither a good Hindu nor a true Muslim so neither God nor Bhagwan was pleased with him. (1) 11975] SUPPI. S.C.R. 281. 171 It was observed by this Court that our Constitution makers intended to set up a Secular Democratic Republic. Our political A history made it particularly necessary that the basis of religion, race, caste, community, culture, creed and language which could generate powerful emotions depriving people of their powers of rational action should not be permitted to be exploited lest the imperative conditions for preservation of democratic freedoms were disturbed. Section 123(2) and (3) and (3A) was enacted to eliminate from the electoral process appeals to those divisive factors which arouse irrational passions that run counter to the basic tenets of our Constitution. Due respect for the religious beliefs and practices, race, creed, culture and language of other citizens is one of the basic postulates of our democratic system. The line has to be drawn by the court between what is permissible and what is prohibited after taking into account the facts and circumstances of each case interpreted in the context in which the statements or acts complained of might have been made. The court has to examine the effect of the statements made by the candidate upon the minds and feelings of the ordinary average voters of this country. This Court in that decision reiterated at page 297 of the report as follows: "The Secular State, rising above all differences of religion, attempts to secure the good of all its citizens irrespective of their religious beliefs and practices. It is neutral or impartial in extending its benefits to citizens of all castes and creeds. Maitland had pointed out that such a state has to ensure, through its laws, that the existence or exercise of a political or civil right or the right or capacity to occupy any office or position under it or to perform any public duty connected with it does not depend upon the profession or practice of any particular religion. Therefore, candidates at an election to legislature which is a part of "the State", cannot be allowed to tell electors that their rivals are unfit to act as their representatives on grounds of their religious professions or practices. To permit such propaganda would be not merely to permit undignified personal attacks on candidates concerned but also to allow assaults on what sustains the basic structure of our Democratic State. " H 172 Keeping in background these principles, it would be necessary to refer to the allegations, the evidence and the conclusions of the High Court on this point in order to decide this appeal. It was alleged that Hukamnama was issued by Shri Akal Takbt on its official letter head bearing its religious symbol and seal on 1st March, 1980, according to which the working Committee of the Akali Dal was dissolved and a 7 member Ad hoc Committee was appointed under the Chairmanship of Sant Harchand Singh Longowal which was conferred with the full powers of Akali Dal. Shri Akal Takht is situated within the precincts of Harmandir Sahib (Golden Temple). Guru Granth Sahib installed in Harmandir Sahib is brought every day late in the evening to Shri Akal Takht for sukh Asan. Another Hukamnama, dated 6th October, 1979 was issued. Said Hukamnama which is Exh. P and appears at pages 17 and 18 of Part II of the Paper Book stated that in view of the resignations tendered to the Jathedar of Sri Akal Takht, on 27th September, 1979, certain decisions were taken. It further stated in one of the items that in view of the coming Parliamentary elections and the unity of the panth and its high priests, after scrutinising the list of the delegates, they would in their supervision conduct the election of the President of Shiromani Akali Dal. It was publicised to the entire Sikh R community that Shiromani Akali Dal should be considered as Supreme in the Panth. It further stated that the legislators elected on the Panth ticket were being instructed to run the Punjab Government unitedly under the leadership of Sardar Parkash Singh Badal, the Chief Minister and maintain the prestige of the Panth. It was further stated that all the members of the Shiromani Committee will have to work unitedly under the leadership of Jathedar Gurcharan Singh Tohra, for the betterment of management of gurdwaras and to speed up the preachings of Sikhism. The said document further stated that a seven member committee was being constituted for distribution of tickets and adjustments with other parties in the coming Lok Sabha elections. The names of seven members were given which included Sant Harchand Singh Ji Longowal, section Jagdev Singh Ji Talwandi, section Parkash Singh Ji Badal and others. Sant Harchand Singh Ji Longowal was appointed as Chairman of the Committee. It further stipulated that the Sikh, who defied the propriety of Akal Takht and offers 'Ardas ' would be punished. He should present himself at Sri Akal Takht and get himself absolved and further directed that persons opposing the above decision, made for maintaining the unity of the Panth, would be dealt with severely. It is further alleged that on 173 16th November, 1979, Hukamnama was issued by Akal Takht on its official letter head with religious symbol and seal wherein punishment was imphsed by Akal Tkht on Jathedar Jagdev Singh Talwandi and Jathedar Umra Nangal. These appear as Exh. P2 at pages 19 and 20 of Part I1 of the Paper Book. On 29th February, 1980, a letter was written which is Exh. P 3 and appears at page 21 of Part II of the Paper Book. This letter contains the proposal of some leaders of Akali Party about the formation of seven Member Ad hoc Committee and disbanding of the Working Committee of the Akali Dal. On 1st March, 1980 Hukamnama which is Exh. P 4 at page 22 of Part II of the Paper Book was alleged to have been issued by Akal Takht on its official letter head bearing its religious symbol and seal. This Hukamnama gives approval to the aforesaid proposal and made an official announcement that the seven Member Ad hoc Committee would from that date take upon all the responsibilities of the Shiromani; Akali Dal. Respondent No. 3 states in his evidence that he was not originally a candidate of Akali Dal but his candidature was taken up at a subsequent stage and he was given a ticket by the seven member committee to contest the election. This is corroborated by Exh. P 29/A because 2nd May, 1980 was the last date for submitting nomination and on 3rd May, 1980, respondent No. 3 was given ticket by the seven Member Ad hoc Committee for Muktsar Constituency. See pages 90 92 of Part III of the Paper Book being the statement of Dayal Singh. Shri Dayal Singh gave evidence on behalf of the appellant and he claims to be the Secretary of Akali Dal of which the President was Jagdev Singh Talwandi. According to him Harchand Singh 's name was included in the list Exh. P.W. 29/A and not Exh. P 4/1 On 5th May, 1980 the last date for withdrawal of candidature expired. On 14th May, 1980, election meeting was addressed in village Thandwala by section Parkash Singh Badal, a member of the seven Member Ad hoc Committee appointed by the Akal Takht and by respondent No. 3, the elected candidate. There were articles in Akali Times by Surjit Singh, Chief Editor on 16th May, 1980. These articles were to the effect that it was a religious commitment for every Sikh to cast his vote for Akali Dal or to the candidate supporter by the Akali Dal. One of the statements in the article 174 was that Indira Congress was an anti Sikh organisation. On 18th May, 1980, it was further stated in the said Akali Times that a Sikh cannot be supporter of that organisation and to have commitment with the Congress was a sin against Sikh Community 's interest. In view of the nature of the points urged in this appeal, it would be appropriate to refer to some portions of the writings in Akali Times which were alleged to have been highlighted at several election meetings by respondent No. 3. One of the articles is Annexure P 5 which appears at page 23 of Part II of the Paper Book. It is headed thus "A Supporter of Indira Congress (1) cannot be a Sikh". It is stated inter alia: "It becomes a religious commitment for every Sikh to treat his vote a property of the Akali Dal and should stick to it by all means. To be a Sikh, is to adhere to the Guru. To follow the Sikhism is not a small thing, it is gift bestowed by the Almighty Vaheguru. Those, who are admitted into the Sikhfold, they protect this faith even at the cost of their lives". "There are certain leaders in the Indira Congress, who look Sikh by appearance. And they, for their selfish and political motives, claim to be Sikhs. There is no dearth of such persons who declare themselves to be supporters of Punjab Panjabi language and its culture, and also they pretend to be protectors of the Sikh interests. Actually they are wolves in sheep 's clothing". There were several other articles to that effect which have all been exhibited. It is manifest that propaganda on religious lines was carried on. It is not necessary to set out in detail all the contents of the various articles. As an example one article may be mentioned which was headed as "A Sikh cannot be a Supporter of Indira Congress". The article inter alia contained the following "According to the press reports, the police is harassing Sant Bhinderwala, with the pretext of enquiry. This is being done because the Nirankaries are pressing to harass the Sikh leaders. On the other hand, the threatening letters received in the office of Shiromani Gurdwara Prabandhak Committee, and about which all the Indian Newspapers have published reports and which is being condemned by all Sikhs, no leader of the Indira Congress has even spoken about that. On the one hand the highest agency of police, the C. B. I. is conducting enquiry, about the murder of Baba Gurbachan Singh and if the Nirnkaries are not satis 175 fied with that, then a special committee is instituted, but on A the other hand, the Governor of Punjab Mr. Hathi on the instance of Central Govt. is not going to appeal in the High Court against the murders of thirteen Sikhs. This is such a political policy which means opposition of the sikhs and discrimination against the sikhism. I am told many times by my friends that the attitude of the former Prime Minister Mr. Morarji Desai was also anti sikh. This is true and the Akali Times has many times wrote about it. But the opposition of Morarji Desai confirms my argument because Morarji Desai also belongs to the same congress stock to which Indira Gandhi belongs. In case of rule in India there can be many differences between Indira Gandhi and Morarji Desai but their anti sikh attitude is common. Mr. Indira Gandhi never tried to prove that she has no enmity with the sikhs. With these state of affairs, the sikhs, living in Punjab and out of it, should think it seriously that their political and religious life can then only be saved if the akali dal rules in Punjab. In the coming elections, the support of Indira Congress by any sikh will be a stab in the back of sikh interests". lt is alleged that on 24th May, 1980, respondent No. 3, the elected candidate, addressed election meetings in villages Khokhar and Harika. Respondent No. 3 mentioned to the gathering that he was a candidate of Akal Takht. On 25th May, 1980, it was further alleged that election meeting was held at Muktsar. This meeting was admittedly addressed by Shri Parkash Singh Badal and respondent No. 3. There certain statements were made with which we shall deal later. 31st May, 1980 was the date of polling. The result was declared on 1st June, 1980. The petitioner/appellant filed the election petition on 16th July, 1980, and on 14th October, 1980 the petition was dismissed. In support of the contentions in this appeal, it was alleged by counsel that the concept of secular democracy is the basis of the Indian Constitution. The paramount and basic purpose underlying section 123 (3) of the Act is the concept of secular democracy. Sec 176 tion 123 (3) was enacted so as to eliminate from the electoral process appeals to divisive factors such as religion, caste, etc. which give vent to irrational passions. It is essential that powerful emotions generated by religion should not be permitted to be exhibited during election and that decision and choice of the people are not coloured in any way. Condemnation of electoral campaigns on lines of religion, caste, etc. is necessarily implicit in the language of section 123 (3) of the Act. Consequently, the section must be so construed as to suppress the mischief and advance the remedy. Legislative history of this section is important from this point of view. The statement of objects and Reasons of the Amending Act, 1961 clearly mentions the object of the amendment . It was ' for curbing communal and separatist tendencies in the country. It is proposed to widen the scope of the corrupt practice e mentioned in clause (3) of section 123 of 1951 Act and to provide for a new corrupt practice". In order to determine whether certain activities come within the mischief of section 123 (3), regard must be had to the substance of the matter rather than to the mere form or phraseology. The inhibition of section 123 (3) should not be permitted to be circumvented indirectly or by circuitous or subtle devices. The court should attach importance to the effect and impact of the acts complained of and always keep in mind the paramount purpose of section 123 (3) namely to prevent religious influence from entering the electoral field. The nature and consequence of an act may not appear on its very face but the same can be implied having regard to the language, the context, the status and position of the person issuing the statement, the appearance and know religion of the candidate, the class of persons to whom the statement or act is directed, etc. We have to examine the facts of this case in. the background of these principles. It was contended on behalf of the appellant that section 123 (3) of the Act had been violated for three different reasons: (a) Sponsorship of the respondent No. 3 and distribution of election ticket to him for the Assembly elections by the Akal Takht, which is "the supreme religious authority of the Sikhs". (See in this connection statement of P. W. 25 Giani Pratap Singh at page 69 of Part III of the Paper Book! 177 Appeal to religion, says counsel for the appellant, is implicit in the very act of sponsoring of respondent No. 3 as a candidate at t he election by Akal Takht on account of the unique religious position it occupies and the tremendous religious authority and influence it wields amongst the sikhs. b) Issue of Hukamnama (exhibit P. 4) by the Jathedar of the Akal Takht in the matter of Assembly elections having regard to the circumstances in which it was issued, indicates that the approval of the Akal Takht was obtained in order to give this decision a colour of religious authority. (See in this connection the evidence of Giani Pratap Singh, P. W. 25 at page 70 of Part III of the Paper Book). (c) It is further urged that appealing to the voters at election meetings held in Muktsar, Khokhar and Harika Kalan by referring to the Hukamnama, to the writings in the Akali Times and exhorting them to vote for respondent No. 3 by applying to the religious sentiments and warning them of the consequences of not doing so constitute appeal to religion. As these contention were not accepted by the learned Trial Judge, it would be necessary to analyse the evidence and the reasons of the learned Trial Judge for not accepting these in order to deter mine the contentions urged in this appeal. Whether it was a Hukamnama or not and whether in this case Hukamnama in the proper sense was issued by Shri Akal Takht directing casting of the votes in favour of respondent No. 3 and if so, what were the consequences of such Hukamnama, are questions that have been canvassed before us. Sub section (3) of section 123 prohibits "appeal by a candidate or his agent or by any other person with the consent of a candidate or his election agent to vote or refrain from voting for any person on the ground of his religion, race, caste, community or language". The other part of sub section (3) of section 123 which defines corrupt practices is not relevant for the present purpose. It will be necessary in this case to examine in detail the concept of Shri Akal Takht amongst the Sikhs. In this case we have the evidence of the learned professors and certain well known text books dealing with this question. H 178 A on behalf of respondent No. 3, it was urged that in order to constitute a Hukamnama proper, there were certain conditions precedent which were required to be fulfilled namely there should be a meeting of Sarbat Khalsa i.e. a meeting of all the Sikhs and secondly a unanimous decision must be arrived at and than it should be followed by the approval of Shiromani Gurdwara Prabandhak Committee and the decision should be announced from Shri Akal Takht. If only these conditions were fulfilled, submits counsel for respondent No. 3 then a Hukamnama proper with all the consequences of disobedience of Hukamnama by a Sikh can be said to follow. lt was urged on behalf of the respondent No. 3 that it was not open to the appellant to raise this contention because in the election petition, it was stated that Hukamnama was issued. Respondent No. 3 had not stated in his written statement that these conditions were required to be fulfilled before a proper Hukamnama could be issued. It was urged that respondent No. 3 was himself a Sikh and was a member of the Akali Dal and must have known the prerequisites, yet he did not raise these conditions. On the other hand on behalf of the respondent No. 3 it was submitted that in paragraph 9 of the written statement filed by respondent No. 3, this point has been raised and it was said that no Hukamnama has been issued in favour of respondent No. 3. The author, Harjinder Singh Dilgeer in his book "Glory of the Akal Takht" quotes at page 97 historian C. H. Loehlin in his book "The Sikh and their Scriptures" at p. 1 thus: "The Akal Takht is 'a preaching centre ' and also the seat of political and religious conferences. In fact today the Akal Takht is the symbol of political activity of the Sikhs. All great Sikh movements have been led from the seat of the Sikhs". At page 99 in Appendix lI, the author described "Sarbat" as meaning whole. Sarbat Khalsa means collectivity of the Sikh people. It is a theo political doctrine, by means of which the Sikhs assume the powers and the status of the centralised conscience and will of the people. Sarbat Khalsa was first used for the gathering of all Sikhs on the days of Diwali and Baisakhi at Shri Akal Takht, Amritsar. After 1721, the Sarbat Khalsa gathered twice in a year 179 before Shri Akal Takht. Sarbat Khalsa used to discuss the questions of Panthic interest at such gatherings and, gurmatas out of the consensus of such meetings were passed. The author of that book records that Sarbat Khalsa has made many important decisions which have changed the history of the Punjab. These include acceptance of jagir (1733), to build a fort at Amritsar (1747),to from Dal Khalsa (1748) to attack Lahore (1760) etc. The usage of the term Sarbat Khalsa began in the middle of the eighteenth century. Previously, according to the author, every individual could participate in the meetings of Sarbat Khalsa. Later on the right got vested in the leaders of the Misls. According to the author, the last meeting of the Sarbat Khalsa was held in 1805. It discussed the dispute of Lord Lake and Holkar. After this Maharaja Ranjit Singh, according to this author, stopped political meetings and started taking decisions on the advice of his ministers only. The author states that even in the twentieth century, the major Sikh organisations (the Akali Dal and the section G. P. C.) have opted not to revive this institution and they decide major Sikh questions in the All Sikh Parties ' meetings. D Hukamnama according to the same author in Appendix IV at page 1022 is a word used for the Royal letters issued by the Mughal emperors, but it has a wider meaning for the Sikhs. Whereas the Mughal orders were carried out under compulsion, the Sikh Hukamnama was acted upon as a matter of pride. Not only the performance of the Guru 's order but even the darshan (a look at of the Guru 's Hukamnama was considered as an honour. In that Appendix IV of the said book the author gives several instances of Hukamnamas used. According to the author, historians believe that the step of constructing the Akal Takht near Hari Mandir was due to Guru 's idea of keeping temporal and spiritual centres near each other so that both should influence each other. The author also refers that after the construction of Akal Takht, Guru Hargobind issued Hukamnama (see also in this connection. The Sikh Religion Vol. IV, p.3 by M.A. Macauliffe). Kushwant Singh in his book "A History of The Sikhs Volume I: 1469 1839 at page 63 discussed the Akal Takht of Hargobind as follows: 180 " Across the Harimandir, he built the Akal Takht (the throne of the Timeless God), where, instead of chanting hymns of peace, the congregation heard ballads extolling feats of heroism, and, instead of listening to religious discourses. discussed plans of military conquests." He further mentions that Guru 's abode in fact became like that of an Emperor. He sat on a throne and held court. He went out with a royal umbrella over his head and was always accompanied by armed retainers. It has been described that by this time, the Akal Takht had become a spiritual place, a military centre a political office, a court, a place for gatherings, a durbar and a throne issuing Hukumnamas (the royal letters). It has been stated in the said book at page 32 that Sikhs used to assemble before the Takht twice a year and the congregation was called the Sarbat khalsa (the whole khalsa) and the decisions of the Sarbat khalsa were called Gurmatas. It was contended before the learned judge on behalf of the appellant that the documents Exh. P 1, Exh. P 2 and Exh. P 4 were issued by Akal Takht and were therefore Hukamnamas. It was contended that these documents showed that the candidates were to be nominated by the seven members of the Committee appointed by Akal Takht and they were the candidates of Akal Takht. It was urged that Akal Takht was the highest religious authority and it was bounded duty of all Sikhs to vote for the candidates nominated by Akal Takht. According to him Sikh voters could not deny the dictate of Akal Takht. On the other hand learned counsel for respondent No. 3 urged that such Hukamnama was not Hukamnama of Akal Takht but the letters written by the Jathedar of Akal Takht. The learned Judge came to the conclusion that it was not necessary to go into the question as to whether Exhibits P l and P 2 were Hukamnamas or not as these were issued long before the Assembly elections and the portions of the petition relating to these were ordered to be deleted. Whether Exhibit P 4 was a Hukamnama or not, there was some dispute and the learned Judge referred to the oral evidence of Dr. Fauja Singh, Professor of History, Punjabi University, Patiala, who was examined i n the Election Petition No. 32 of 1980 (section Satnam Singh Bajwa vs Sujagar 181 Singh Sakhwan and another decided on 24th March, 1981). He had deposed that Akal Takht was founded by Guru Hargobind Sahib, the Sixth Guru in 1606 A.D. On that occasion he put two swords one called the sword of 'Miri ' and the other called the sword of 'Piri '. 'Miri ' and 'Piri are Persian words and connote the temporal authority and spiritual authority respectively. The significance of putting these two swords was to indicate the close relationship between religion and its practice. Since Guru Arjan Dev, the Fifth Guru, was subjected to torture by the Mughal Emperor Jahangir a strong reaction against that act of tyranny was witnessed amongst the Sikhs. It was with that background that the Sixth Guru decided to militarize the community along side of continuing to impart religious teachings. Ever since the foundation of Shri Akal Takht it has held a unique position in Sikh religion and Sikh history. During the eighteenth century, meetings of 'Sarbat khalsa ' were invariably held at Shri Akal Takht twice a year on Baisakhi and Diwali days. At these gatherings, unanimous resolutions used to be passed which were known as 'Gurmatas '. All this has been set out here in before and it is not necessary to examine in any further details. It is undisputed that Shri Akal Takht enjoys a unique position amongst the Sikhs. There is, however, difference of opinion between Dr. Fauja Singh and Giani Partap singh regarding its powers as noted by the learned Trial Judge. Dr. Fauja Singh had stated that it was a symbol of both political and religious powers whereas Giani Partap Singh had stated that it was supreme religious authority. Dr. Fauja Singh had been the Professor and the Head of the Department of Sikh History in the Punjabi University from 1967 78 and since 1978 he is the Director, Punjab Historical studies. He is a scholar of great repute and well versed in Sikh history. He has been teaching the subject since long. The learned Judge felt that his statement should be preferred and came to the conclusion that Akal Takht was a symbol of political and religious powers. It was found, according to the learned Judge on the evidence, that Exhibit P 4 was not taken in the form of 'Gurumata. ' on the other hand, it was decision taken by the leaders of Akali Party at Fatehgarh Sahib written by Jathedar Sadhu Singh on the letter head of Shri Akal Takht who announced it. The learned judge came to the conclusion that there was no decision regarding the selection of candidates. The learned judge was of the view that if the statement of Dr. Fauja Singh was read, it cannot be held that the same was a Hukamnama of Shri Akal H 182 Takht. The learned Judge referred to the view taken by P.C. Jain, J. in election Petition No. 32 of 1980). In our opinion it is not a technical question whether exhibit P 4 was a Hukamnama or not. It is a question in the present controversy which has to be judged from a broader perspective. As noted before in these matters the Court has to examine the effect of the statements made by the candidate on his behalf upon the minds and the feelings of the ordinary average voters of this country. See Ziyauddin Burhanuddin Bukhari vs Brijmohan Ramdas Mehra & Ors. (supra). It is undisputed that Shri Akal Takht enjoys a unique position amongst the Sikhs. it is indubitable that any communication from Shri Akal Takht which is represented by eminent members of the Sikh community as Hukamnama would have great religious persuasive value even though strictly speaking it might or might not be a Hukamnama. For the purpose of this appeal, it is not necessary for us to decide whether in strict textual sense and strict rules of the Sikh community P 4 was a Hukamnama or not. It was alleged that Sardar Parkash Singh Badal represented it to be so and it was so represented by the candidate himself and having regard to the background, it cannot be said that it did not have the effect of a Hukamnama on the community at large of inducing them to believe that ignoring the claim of the candidate nominated by Shri Akal That and represented to be supported by Hukamnama would be an act of sacrilege on the part of a good Sikh. These questions should be very broadly decided. It would not be an appeal to religion if a candidate is put up by saying 'vote for him ' because he is a good Sikh or he is a good Christian or he P is a good Muslim, but it would an appeal to religion if it is publicised that not to vote for him would be against Sikh religion or against Christian religion or against Hindu religion or to vote for the other candidate would be an act against a particular religion. It is the total effect of such an appeal that has to be borne in mind in deciding whether there was an appeal to religion as such or not. In each case, therefore, the substance of the matter has to be judged. In the case of Shubnath Deogram vs Rant Narain Prasad and others,(l) this Court reiterated that in substance it would be an appeal on the ground of religion if the act in question has the [1960] I S.C.R. p. 953. 183 effect of giving the impression that it would be irreligious not to A vote for a particular party or person. Mr. Justice Subba Rao, however, dissented from majority view on an examination of the facts of that case. This question, however, has to be kept in view within proper limits and religious leaders have right freely to express their opinion on the comparative merits of the contesting candidates and to canvass for such of them as he considered worthy of the confidence of the electorates. (See in this connection the observations of this Court in the case of Ram Dial vs Sant Lal and others.(l) In Kultar Singh vs Mukhtiar Singh,(2) this Court observed that in considering as to whether a particular appeal made by a candidate falls within the mischief of section 123 (3) of the Act, the courts should not be astute to read the words used in the appeal anything more than what can be attributed to them on its fair and reasonable construction. In the light of these discussions for the purpose of this appeal, it is not necessary to accept the submissions on behalf of the appellant that mere sponsorship of the respondent No. 3 and distribution of election ticket to him for the Assembly election in the manner proved would amount to an appeal to religion as such without considering the other facts and circumstances and how it was put to the people or to the electorate. For this purpose it would be necessary to refer to the evidence of meetings at three places. Regarding the meeting at Thandawal, counsel for the appellant did not press it before us. The first meeting which we have to consider is the meeting at Muktsar. P.W. 12, Hardam Singh gave evidence about Muktsar. His village falls in Muktsar constituency and he stated that S or 6 days before the date of the poll, a meeting was organised by the supporters of respondent No. 3 at Muktsar at about S P.M. He attended the meeting. According to him this meeting was addressed by Shri Parkash Singh Badal, ex Chief Minister, Punjab, Sant Harchand Singh Longowal and respondent No. 3 himself. It was stated that Shri Badal made a speech at about 6.30 P.M. He exhorted the audience to vote for respondent No. 3 because he was a Gur Sikh. He said that he had been put (1) [1959] Supp. 2 S.C.R. p. 748. (2) [1964] 7 S.C.R. p, 790. 184 up as a candidate under the orders of the Akal Takht and it was the religious duty of the Sikhs to vote for him. He also showed one paper to the audience which according to him was a Hukamnama issued by the Akal Takht. He further stated that there was good work done by respondent No.3 and he would continue to do so if he was elected. It is deposed by P.W. 12 that Sant Harchand Singh Longowal also made a similar speech. Thereafter, respondent No. 3 spoke and said that he was a candidate of Akal Takht and it was the duty of the Sikhs to vote for him. He was cross examined but nothing very substantial came out of it. He reiterated in his cross examination that Shri Badal told the audience that they should vote for respondent No. 3 because he had been set up a candidate of Akal Takht. Shri Longowal and respondent No. 3 also spoke. He denied the suggestion that he was not present at that meeting. P.W. 13 also gave evidence about the meeting at Muktsar. Me corroborated that Shri Parkash Singh Badal, Harchand Singh Longowal and respondent No. 3 addressed the meeting. His evidence was more in corroboration with what has been stated. He however did not hear the speech of the respondent No. 3 as he had left the meeting before that. He stated in his cross examination that four or five persons belonging to his village had accompanied him to the meeting. There was however nothing in substance with . what has been stated. As against this on behalf of the appellant, three persons gave evidence namely R.W. 1, R.W. 2 and R.W. 8 R.W. 1 stated that there was a meeting in Muktsar about a week before the polling at about 8.00 P.M. which lasted upto 1.00 P.M. Meeting, according to him, was addressed by Shri Prakash Singh Badal and Shri Harcharan Singh Fatanwalia. According to this witness whose name was Kashmiri Lal, Sant Longowal was neither present nor addressed the meeting. According to him, Shri Parkash Singh Badal only dwelt upon the achievements of his government and the fact that no Inspector was allowed to harass the voters particularly the city voters. Other speakers who addressed the meeting represented Janta Party, Communist Party and Bhartiya Janata Party. According to him, in the meeting majority of the audience were Hindus, as Muktsar town comprised of almost 70% of Hindu population. In cross examination he stated that he was a member of Muktsar Municipal committee and he was a member of the C.P.I. and C.P.I. 185 had entered into alliance with Akali Party. The other facts stated by him are not relevant on this point. A Krishan Kumar son of Shri Jagan Nath who was also a Municipal Commissioner, Muktsar was R.W. 2 and he spoke in favour of respondent No. 3. According to him, Shri Fatanwalia and Shri Badal spoke but they spoke about the achievements of their party and no appeal was made in the name of Akal Takht or in the name of religion. According to him, Hindus outnumbered Sikhs by three times. He also admitted that he was a member of the Communist Party of India (Marxist). R.W. 8, the respondent No. 3 himself was the next person C who gave evidence in support of himself. He said that Shri Parkash Singh Badal visited Muktsar on 25th of May, 1980 and addressed a public meeting there. That public meeting was addressed by Chaman Lal Joghi, Raj Kumar Girdhar, Roshan Lal Joshi, Paras Ram Bagga, Jagroop Singh and by him. The above said Hindu gentlemen belonged to the Janata Party whereas Jagroop Singh belonged to the Communist Party. The audience, according to him, consisted of 75 per cent of the Hindus and 25 per cent of the Sikhs. Shri Badal had merely said that he had been the Chief Minister of the State for a long time and if he was elected, he would serve the people well. He admitted that he himself was relative of Shri Parkash Singh Badal his daughter was married to the younger brother of Shri Badal. The learned Judge has rejected the evidence on ground of improbability and on the ground that the evidence was not satisfactory because the witnesses had not stated that version to the appellant nor were these allegations mentioned in the petition. The learned judge was further of the opinion that in a constituency or place where Hindu population outnumbered the Sikh population, it was unlikely that appeal in the name of Sikh religion would be made. As against this, the following facts will have to be borne in mind: Shri Prakash Singh Badal had not chosen to come and deny the allegations. Indisputably he was present at the meeting. He would have been the best person to deny the allegations made about that meeting. It is not a question of merely proving a fact by adverse presumption. In case where there is positive evidence to 186 prove a fact and there is no denial by the person who is most competent to deny that fact and no reason was given for his not giving evidence especially in the background of his eminence and his position, his relationship with respondent No. 3 and especially in view of the respondent No. 3 had in fact been nominated by the same group on behalf of the Sikh community with which Shri Prakash Singh Badal was so intimately connected would lead to the conclusion that the evidence advance(l on behalf of the appellant must be accepted. If that is accepted then the following facts emerge: (1) it was represented to the electorate that respondent No. 3 was a nominee of Akal Takht by no less a person than the former Chief Minister of the State in the presence of the candidate himself: (2) the candidate himself made the said statement. It follows therefore that an appeal to vote for respondent No. 3 in the name of Akal Takht with all the consequences of Hukamnama of Akal Takht was highlighted before the electorate. The next meeting which is material is the meeting at Khokhar. Here also P. W. 17 Makhan Singh gave evidence. His village falls in Muktsar constituency. He said that the supporters of respondent No. 3 had convened a meeting at Khokhar at about 12 noon about 6 or 7 days prior to the date of poll. The meeting was held in the village Gurdwara. Respondent No. 3 accompanied by Shri Baldev Singh Sibia and 4/5 other persons had come to attend the meeting. Respondent No. 3 addressed the meeting first. At the outset he tendered an apology to the audience and said that he had promised to bring Shri Prakash Singh Badal to address this meeting but he could not come as he was busy with the election work in other constituencies. Respondent No. 3 showed a paper and described it as a Hukamnama issued by the Akal Takht. He stated that he had been given a ticket because he was a Gur Sikh and it was the "religious duty of the Sikhs to vote for him", and he also showed some back issues of Akali Times and said that most of the things were written in these papers but he wanted to give a gist of the same. He stated that any Sikh who cast his vote in favour of Indira Congress did not deserve to be called a Sikh. He also said that right to vote was a sacred trust in favour of the panth and whoever exercised this right against the order issued by the Panth, would he regarded as a traitor to the panth. He mentioned the Gurus. In cross examination he stated that he owned thirty acres of land and his village 187 was at a distance of two miles from village Khokhar. According to him 10 or 12 Hindus were also present in the meeting. He said that A he did not know if it was an offense to ask people to vote on the ground of religion. The next witness was P. W. 18, Malkiat Singh. His village also fell in Muktsar constituency and he spoke that in the Gurdwara of village Khokhar, meeting was held at about 12 noon. He also corroborated that respondent No. 3 and Shri Baldev Singh Sibia addressed this meeting. There was corroboration of the evidence of this witness. In cross examination there was not much damage done to his testimony. The next witness was P. W. 19, Guranditta Singh. He spoke of a meeting about 5/6 days prior to the date of poll and the meeting was held at about noon time in the village Gurdwara n village Khokhar. Respondent No. 3 and Shri Baldev Singh Sibia addressed the meeting. He more or less reiterated what was stated by the other witnesses. In cross examination he stated that about 10 to 15 Hindus were present. He further stated that 2 or 3 days after the meeting, the appellant had visited his village and solicited his vote but he had replied that he had made a tour of 2/3 villages along with panthak candidate and for that reason he was not in a position to promise to cast his vote for him. The witness for respondent No. 3 was one R. W. 6. She was Smt. Gurmit Kaur wife of Malkiat Singh. She denied that any meeting was held in their village and that she was always in the village throughout the election. Learned Judge found it difficult to rely on his evidence. We do not see any intrinsic improbability in accepting his testimony especially in the absence of good rebuttal evidence. The next village is village Harika Kalan about which P. W. 19 Guranditta Singh gave evidence. To prove meeting at Harika Kalan statement of three witnesses Guranditta Singh, P. W. 19, Sant Singh s/o Arjan Singh, P. W. 20 and Gurdev Singh s/o Bhajan SIngh, P. W. 21 were relied. The latter two witnesses belonged to village Harika Kalan. The first one making the statement regarding the meeting at Harika Kalan as well as meeting at village Khokhar. P. W. 20 deposed that an election meeting was held by the supporters of res 188 pondent No. 3 in village Harika Kalan about 5/6 days before the date of polls at village Gurdwara. Similar statement was made by Makhan Singh, P. W. 17 regarding the meeting at Khokhar. In cross examination, he admitted that he did not meet the petitioner till the date of his evidence and no one approached him to find out as to whether he attended the meeting or not. The respondent No.3 called one Balla Singh, Sarpanch resident of Harika Kalan, P. W. S and Smt. Gurmit Kaur resident of Khokhar P. W. 6. Both the witness were interested in him. Learned Judge did not find it possible to accept their testimony. In a matter of this nature, the evidence naturally is mostly oral. Therefore specially where the charge is a grave one; namely corrupt practice which if proved would disentitle the candidate to contest the election for some time to come, the Courts must proceed with caution. An election once held ought not to be treated in a light hearted manner and defeated candidate should not get away with it by filing election petition. See in this connection the observations of Krishan Iyer, J. in Rahim Khan vs Khurshid ,Ahmed & Ors. ( See also the decision in the case of Ch. Razik Ram vs Ch. J. section Chauhan & ors.(2) Reference was also made to the opinion of this Court in Kanhaiyalal vs Mannalal & Ors(3). and M. Narayana Rao vs G. Venkata Reddy & ors(4). Taking into account the totality of the evidence in the back ground of the fact that some communications from Akal Takht call it Hukamnama or any other name were issued and the issues of editorials of Akali Times, which were mentioned by Shri Parkash Singh Badal as stated by the witness on behalf of the appellant and which is not denied by Shri Parkash Singh Badal, we are of the opinion that in this case appeal in the name of religion was made on behalf of respondent No. 3. Though some facts stated in the oral evidence about the meetings had not been stated in the petition but when evidence were tendered and were not shaken in cross examination and the versions have a ring of truth in the back (1) [1975] I S C.R. 643. (2) A. I R.1975 S.C. 567. (3) 11976] 3 section C. R. 808. (4) I.S.C.R. 490. 189 ground of other facts, we are of the opinion that the case of appeal to religion by the respondent No. 3 has been proved in this case. A This conclusion becomes irresistible in view of absence of any express denial by Shri Parkash Singh Badal and in the absence of any explanation for not calling him as a witness on this point. Several decision of this Court have laid down various tests to determine the standard of proof required to establish corrupt practice. While insisting on standard of strict proof, the Court should not extend or stretch this doctrine to such an extreme extent as to make it well. nigh impossible to prove an allegation of corrupt practice. Such an approach would defeat and frustrate the very laudable and sacrosanct object of the Act in maintaining purity of the electoral process (See the observations in the case of Ram Sharan Yadav vs Thakur Muneshwar Nath Singh and ors. (Civil Appeal No. 892 (NCE) of 1980). In the premises the respondent No. 3 was guilty of corrupt practice as mentioned in sub section (3) of section 123 of the Act. In the result his election is set aside and the seat is declared vacant. The findings of this Court about the corrupt practice of respondents No. 3 be forwarded to the President of India for appropriate action under section 8A of the Act. A point was made about the petition being not properly verified inasmuch as the source of information had not been mentioned. On behalf of the appellant, counsel drew our attention to section 83 of the Representation of the People Act, 1951. This point was examined by a Division Bench of the Calcutta High Court in the case of Padmabati Dasi vs Rasik Lal Dhar.(1) I am of the opinion that a proper reading of that decision would indicate that for a proper verification of an affidavit or a petition based on certain information, the source should be indicated but I do not wish to examine this question any further because no objection at the initial stage was taken and specially in view of this Court 's decision in Ziyauddin Burhanuddin Bukhari vs Brijmohan Ramdas Mehra and ors. (supra) and in Hardwari Lal vs Kanwal Singh (2) on an appropriate occasion, this question may require a fuller consideration. The decision of the learned Trial Judge is set aside and the appeal is allowed. Respondent No. 3 will pay the costs of this appeal. A.P.J. Appeal allowed. (1) I.L.R. XXXVII Calcutta, 259 at 260.

The expression "systematic" has been deleted from sub section (3) of section 123 of the Representation of the People Act 1951 by the Amending Act by a candidate or his agent or by any other person with the consent of the candidate or his election agent or by any other person on the ground of his religion, race, caste, community or language etc. would be a corrupt practice. 160 The appellant challenged the election of respondent No. 3 to the Punjab Legislative Assembly on the allegations of corrupt practice. It was contended that section 123(3) of the Representation of the People Act had been violated for three reasons, namely, (a) Sponsorship of respondent No. 3 and distribution of election ticket to him for the Assembly elections by the Akal Takht, "the supreme religious authority of the Sikhs", (b) Issue of Hukumnama (Ex.p 4) by the Jathedar of the Akal Takht in the matter of Assembly elections having regard to the circumstances in which it was issued, indicated that the approval of the Akal Takhat was obtained in order to give his decision a colour of religious authority and (c) Appeal to the voters at election meetings by referring to the Hukamnama, to the writings in the Akali Times and exhorting them to vote for respondent No. 3 by applying to the religious sentiments and warning them of the consequences of not doing so. It was further alleged that an ex Chief Minister of the State as well as the respondent No. 3 himself had represented to the voters at different election meetings that respondent No. 3 had been sponsored by the Akal Takht. Respondent No.3 denied the aforesaid allegations and contended that the alleged Hukamnamas were not Hukamnamas of Akal Takht. The High Court held that Akal Takht was a symbol of political and religious powers and the documents alleged to be the Hukumnamas of Akal Takhat, but contained decision of the leaders of the Akali Party written on the letter head of the Akal Takhat and announced by a Jathedar, and the appellant had not succeeded in proving the charges of corrupt practice. The election petition was accordingly dismissed. The contentions raised in the High Court were reiterated by the appellant before this Court. In addition, it was contended (i) The documents shown at the meetings were Hukumnamas and having regard to the background it cannot be said that it did not have the effect of Hukumnama on the community at large of inducing them to believe 158 ignoring the claim of the candidate nominated by Shri Akal Takht and represented to be supported by Hukamnama would be an act of sacrilege on the part of a good Sikh; and (ii) Respondent No. 3 being a Sikh and a member of the Akali Dal and having known of the conditions precedent which were required to be fulfilled before a proper Hukumnama could be issued had not chosen to raise these contentions in his written statement. It was also urged that the concept of secular democracy is the basis of the Indian Constitution and that the paramount and basic purpose under lying section 123 (3) of the Act is the concept of secular democracy. Section 123 (3) was enacted to eliminate from the electoral process, appeals to divisive factors such as religion, caste, etc. which give vent to irrational passions. It is essential that powerful emotions generated by religion should not be permitted to be exhibited during election and that decision and choice of the people are not coloured in any way. Condemnation of electoral campaigns on lines of religion. caste, etc. is necessarily implicit in the language of section 123 (3) of the Act. Consequently the section must be so construed as to suppress the mischief and advance the remedy. 161 Respondent No. 3 contested the appeal, and it was urged: (i) in order to constitute a Hukumnama proper there were certain conditions precedent, A which were required to be fulfilled, namely, there should be a meeting of Sarbat Khalsa, that is, a meeting of all the Sikhs and secondly anunanimous decision must be arrived at which should be followed by the approval of Shiromani Gurdwara Prabandhak Committee and the decision should be announced from Shri A kal Takht and that in the instant case no such Hukamnama held been issued; (ii) the constituency was a mixed constituency equally B divided into Hindu votes and Sikh votes and an appeal in the name of the Sikh religion in such a situation was unlikely; and (iii) the Akali Party was in alliance with CPI (M) and it was most improbable that when one of the allied parties was a Marxist Party, a candidate of Akali Dal would appeal in the name of religion. Allowing the appeal, C ^ HELD :1. Respondent No. 3 was guilty of corrupt practice under section 123 (3) of the Representation of the People Act, 1951. [189D] 2. As a result of amendment of sub section (3) of section 123 of the Act even a single appeal by a candidate or his agent or by any other person with the consent of the candidate or his election agent to vote or refrain from voting for any person on the ground of his religion, race, caste, community or language would be corrupt practice. [1656] 3. Section 123 (2), (3) and (3A) of the Act were enacted to eliminate from the electoral process appeals to those divisive factors which arouse irrational passions that run counter to the basic tenets of the Constitution. Due respect for the religious beliefs and practices, race, creed, culture and language of other citizens is one of the basic postulates of our democratic system. The line has to be drawn by the court between what is permissible and what is prohibited after taking into account the facts and circumstances of each case interpreted in the context in which the statements or acts complained of might have been made. The court has to examine the effect of statements made by the candidate upon the minds and feelings of the ordinary average voter. [171B D] F Ambika Sharan Singh vs Mahant Mahadev and Giri and others, and Ziyauddin Burhanuddin Bukhari vs Brijmohan Ramdas Mehra and Ors. [1975] Suppl. S.C.R. 281, relied upon. With a view to curb communal and separatist tendencies, section 123 (3) of the Act has been amended in 1961. In order to determine whether certain activities come within the mischief of section 123 (3), regard must be had to the substance of the matter rather than to the mere form or phraseology. The inhibition of section 123 (3) should not be permitted to be circumvented indirectly or by circuitous or subtle devices. The court should attach importance to the effect and impact of the acts complained of and always keep in mind the paramount purpose, namely, to prevent religious influence from entering the electoral field. The nature and consequence of an act may not appear n its very face but the same can be implied having regard to the language, H 162 the context, the status and position of the person issuing the statement, the appearance and known religion of the candidate, the class of persons to whom the statement of act is directed, etc. [176C F] 5. It would not be an appeal to religion if a candidate is put up be saying vote for him because he is a good Sikh or he is a good Christian or he is a good Muslim, but it would be an appeal to religion if it is publicised that not to vote for him would be against Sikh religion or against Christian religion or against Hindu religion or to vote for the other candidate would be an act against a particular religion. It is the total effect of such an appeal that has to be borne in mind in deciding whether there was all appeal to religion as such or not. In each case, therefore, the substance of the matter has to be judged. [182E G] This question, however, has to be kept in view within proper limit and religious leaders have right freely to express their opinion on the comparative merits of the contesting candidates and to canvass for such of them as he considered worthy of the confidence of the electorates. [183B] Shubnath Deograrm vs Ram Narain Prasnd an(l others, , Ram Dial vs Sant Lal and others, [1959] Supp. 2 S.C.R., 748 and Kultar Shingh vs Mukhtiyar Singh; , , followed. Whether the documents said to be Hukamnamas were actually Hunkamnamas or not should not be decided in a technical manner. in these matter the Court has to examine the effect or the statements made by the candidate on his behalf upon the minds and the feelings of the ordinary voters of the country. It is undisputed that Shri Akal Takht enjoys a unique position amongst the Sikhs. It is indubitable that any communication from Shri Akal Takht which is represented by eminent members of the Sikh community as Hukamnama would have great religious persuasive value even though strictly speaking it might or might not be a Hukamnama. [182A D] Zyauddin Burhanuddin Bukhari vs Brijmohan Ramdas Mehra Glory of the Akal Takht, p. 97 by Harjinder Singh Dilgeer, Singh The Sikh Religion Vol. IV, p. 3 by M. A. Macauliff and a A History of the Sikhs by Khuswant Singh Vo. 1: 1469 1839, p. 63, referred to. From the evidence on record, in the background of the fact that some communications from Akal Takht call it Hukamnama or any other name were issued and the issues of editorials of Akali Times were pointed out by the ex Chief Minister at the meetings, and the same had not been denied by him, it is apparant that appeal in the name of religion was made on behalf of the respondent No. 3. Though some facts stated in the oral evidence about the meetings had not been stated in the petition, but when evidence was tendered and was not shaken in cross examination and the versions have a ring of truth in the background of other facts, the factum of appeal to religion by the respondent No. 3 has been proved. This conclusion becomes irresistible in view of absence of any express denial by the ex Chief minister and in the absence of any explanation for not calling him as a witness on this point, [188 E to 189A] 163 8. It is not a question of merely proving a fact by adverse presumption. A In cases where there is positive evidence to prove a fact and there is no denial by the person who is most competent to deny that fact and no reason was given for his not giving evidence the conclusion is that the evidence advanced must be accepted. In the instant case, in the background of his eminence and his position, as the ex Chief Minister, his relationship with respondent No. 3 and especially in view of the fact that respondent No. 3 had in fact been nominated by the same group on behalf of the Sikh community with which the ex. Chief Minister was so intimately connected leads to the conclusion that the evidence advanced on behalf of the appellant must be accepted. It is clear that the ex Chief Minister as well as the elected candidate himself represented to the electorate that respondent No. 3 was a nominee of the Akal Takht and that an appeal to vote for respondent No. 3 in the name of Akal Takht with all the consequences of Hukamnama of Akal Takht was highlighted before the electorate [185H; 186A D1 C 9. In matters of this nature, the evidence naturally is mostly oral. Especially where the charge is a grave one, namely, corrupt practice which if proved would disentitle the candidate to contest the election for sometime to come, the Court must proceed with caution. [188C] Rahim Khan vs Khurshid Ahmed & ors., [1975] I S.C.R. 643 and Ch. Razik Ram vs Ch. I.S. Chauhan & ors., A.I R. 1975 S.C. 667, relied upon. Kanhaiyalal vs Mannalal & ors. ; , and M. Narayama Rao vs G. Venkata Reddy & ors., [1977]1 S.C.R. 493, referred to, 10 While insisting on standard of strict proof, the Court should not extend or stretch this doctrine to such an extreme extent as to make it well nigh impossible to prove an allegation of corrupt practice. Such an approach would defeat and frustrate the very laudable and sacrosanct object of the Act in maintaining Purity of the electoral process. [189B] Ram Saran Yadav vs Thakur MIJneshawar Nath Singh & ors. (Civil Appeal No. 892 (NCE) of 1980), relied upon. The contentions of the respondent No. 3 that since it was a mixed constituency and his party was in alliance with CPI (M), it was unlikely and improbable to make an appeal in the name of religion, are rejected for the reason that if there is conclusive evidence to that effect then such a theory would not outweigh the facts proved. These are only probabilities of a situation but if there is direct evidence of propaganda or campaign by candidate in the election in the name of religion, the probabilities of such a campaign not being made in view of other surrounding circumstances, cannot outweigh the direct evidence if the Court is otherwise inclined to accept such direct evidence. [170B.C] Ambika Sharan Singh vs Mahant Mahadev and Giri and others, , followed. For a proper verification of an affidavit or a petition based on certain informations, the source should be indicated. But in the instant case? 164 this question was not examined further because no objection at any stage was taken. [189 Ziyauddin Burhanuddin Bukhari vs Brijmohan Ramdas Mehra & ors Padmabati Dasi vs Rasik Lal Dhar. I.L.R. XXXVII Calcutta 259 at 260 and Hardwari Lal vs Kanwal Singh, followed.

l Appeal No. 2054/69. (Appeal by Special Leave from the Judgment and Order dated the 5 8 1969 of the Punjab and Haryana High Court in Regular Second Appeal No. 983 of 1969). V.C. Mahajan, Mrs. Urmila Kapoor and Miss Kamlesh Bansal, for the appellants. Ram Sarup and R. A. Gupta, for respondent No. 1. The Judg ment of the Court was delivered by JASWANT SINGH, J. This appeal by special leave which is directed against the judgment and order dated September 24, 1969, of the High Court of Punjab and Haryana at Chandigarh, passed in R.S.A. No. 983 of 1969 arises in the following circumstances : Bhawani Dass, respondent No. 2 herein, who owned agri cultural land measuring 50 kanals and 6 mafias comprised in Khewat No. 223, Khatauni No. 467 468, situate in village Kohlawas, Tehsil Dadri, District Mohindergarh, sold the same to Munshi, Dina and Rani Dutt, appellants before us, in lieu of Rs.10,000/ by means of registered sale deed (Ext. D 1) dated October 17, 1966. Alleging that he held as a non occupancy tenant under Bhawani Dass the aforementioned land on the date of its sale to the appellants and had continued to do so and as such had a preferential right of its purchase under clause Fourthly of section 15(1)(a) of the Punjab Pre emption Act, 1913 (Punjab Act 1 of 1913) which still applies to the State of Haryana, Richpal, re spondent No. 1 herein, brought a suit on October 17, 1967 for possession of the said ' land by pre emption, in the Court of the Sub Judge, Charkhi Dadri. The suit was resist ed by the appellants contending inter alia that the plain tiff respondent was neither a nonoccupancy tenant of the land in question under Bhawani Dass, vendor, nor was he in possession of the land either on the day of the aforesaid sale or on the day of the institution off the suit. After settling the necessary issues and recording the evidence adduced by the parties, the trial court by its judgment dated February 1, 1969, decreed the suit in favour of the plaintiff pre emptor on payment of Rs. 10,000/ (the consid eration of the aforesaid sale) plus Rs. 727/ (the costs incurred by the vendees appellants on the stamps, registra tion fee etc.) holding that he had been a tenant at will under the vendor from Kharif, 1957 to Rabi, 1968; that he was forcibly dispossessed after the sale; that wrongful eviction of a tenant could be of no consequence in the eye of law; that the plaintiff pre emptor continued to hold his rights as a tenant, including the right to immediate posses sion and cultivation of the land notwithstanding his wrong ful ouster therefrom by the vendees who could not be allowed to take advantage of their own wrongs and the former must be deemed to continue in legal possession of the land which was comprised in his tenancy under the vendor on the date of the sale right upto the date of the suit and the date of the decree of the trial court in his favour. The trial court further held that 'a tenant 's eviction can only be had under sections 7 and 7A of the Pepsu Tenancy and Agricul tural Lands Act, 1955, and there is nothing on the record of the case to even insinuate that the plaintiff 's tenancy 3 which subsisted at the time of the impugned sale was ever determined or terminated under section 7 or 7A of the Act and the plaintiff who was in physical possession of the land in suit as a tenant at the time of the sale has to be taken to be in legal possession up till the present moment '. In conclusion, the trial could held that the mere act of forcible dispossession of the plaintiff pre emptor at the hands of the vendees after the sale could not have the effect of divesting him of his right to hold the land which he had acquired as a tenant of the vendor and in the eye of law he must be presumed to have continued to be a tenant all along and as such had a preferential right of pre emption. The judgment and decree passed by the trial court was affirmed in appeal not only by the Additional District Judge, Gurgaon, but also by a learned Single Judge and Letters Patent Bench of the High Court. Aggrieved by these decisions the vendees appellants have, as already stated, come up in further appeal to this Court. The sole point that has been urged before us on behalf of the appellants is that as according to the decision of this Court in Bhagwan Das vs Chet Ram(1) the plaintiff pre emptor has to prove his subsisting right of pre emption on all the three material dates viz.(1) the date of sale, (2) the date of institution of the suit and (3) the date of passing of the decree and in the instant case, he failed to file a suit in the revenue court for recovery of possession of the suit land within one year of the date of his dispos session as contemplated by section 50 of the Punjab Tenancy Act 1887 not only his remedy was destroyed but his right and title was also extinguished at the expiry of that period on the general principles underlying section 27 of the , which may not in terms be applica ble to the present case. Though the learned counsel for the appellants cited a few cases in support of his contention but did not unfortunately bring to our notice the decision of this Court in Dindyal & Anr. vs Raja Ram (2) which may in an appropriate case require reconsideration by a larger bench of this Court, we think, he cannot be allowed canvass the aforesaid point. A reference to the record of the case shows that the point now sought to be agitated before us was not raised by the appellants either in their written state ment or in the grounds of the three appeals preferred by them before the courts below. All that appeals from the record to have. been urged by them in the grounds of the aforesaid appeals was that the evidence had not been proper ly appraised and that in the absence of any lease deed in his favour or any receipt evidencing payment of rent by him to the vendor, mere entries in the khasra girdawaries were not enough to establish that the plaintiff pre emptor was a tenant of the suit land under the vendor at the time of the sale. The suit land being situate in the district of Mohindergarh which formed part of the territories of the erstwhile of Pepsu, the case, as rightly observed by the court of first instance, was governed by sections 7 and 7A of the Pepsu Tenancy and Agricultural Lands Act, 1955, which in view of section 4 of that Act have an overriding effect and provide as under : "4. Act to over ride other laws Save, as otherwise expressly provided in this Act, the provisions of this Act (1) ; (2) 4 shall have effect notwithstanding anything inconsistent therewith contained in any other law for the time being in force or any instru ment having effect by virtue of any such law or any usage, agreement, settlement, grant, sanad or any decree or order of any court or other authority. Termination of tenancy. (1) No tenancy shall be terminated except in accord ance with the provisions of this Act or except of any of the following grounds, namely : (b) that the tenant has failed to pay rent within a period of six months after it falls due; Provided that no tenant shall be ejected under this clause unless he has been afforded an opportunity to pay the arrears of rent within a further period of six months from the date of the decree or order directing his ejectment and he had failed to pay such ar rears during that period; (c) that the tenant, not being a widow, a minor, an unmarried woman, a member of the Armed Forces of the Union or a person incapa ble of cultivating land by reason of physical or mental infirmity has after commencement of the President 's Act sublet without the consent in writing of the landowner, the land comprising his tenancy or any part thereof; (d) that the tenant has, without sufficient cause, failed to cultivate personally such land in the manner and to the extent customary in the locality in Which such land is situat ed; (e) that the tenant has used such land or any part thereof in a manner which is likely to render the land unfit for the purpose for which it was leased to him; (f) that the tenant, on demand in writing by the landowner, has refused to execute a kabuliyat agreeing to pay rent in respect of his tenancy in accordance with the provisions of sections 9 and 10. (2). . . . . 7A. Additional grounds for termination of tenancy in certain cases. (1) Subject to the provisions of sub sections (2) and (3), a tenancy subsisting at the commencement of the Pepsu Tenancy and Agricultural Lands (Second Amendment) Act, 1956 may be terminated on the following grounds in addition to the grounds specified in section 7, namely : (a) that the land comprising the tenancy has been reserved by the land owner for his personal cultivation in accordance with the provisions of Chapter II: (b) that the landowner owns thirty standard acres or less of land and the land falls within the permissible limit; 5 Provided that no tenant shall be ejected under this subsection (i) from any area of land if the area under the personal cultivation of the tenant does not exceed five standard acres, (ii) from an area of five standard acres, if the area under the personal cultivation of the tenant exceeds five standards acres. until he is allowed by the State Government alternative land of equivalent value in stand ard acres. (2) No tenant, who immediately preceding the commencement of the President 's Act has held any land continuously for a period of twelve years or more under the same land owner or his predecessor in title, shah be ejected on the grounds specified in sub section (1) (a) from any area of land, if the area under the personal cultivation of the tenant does not exceed fifteen standards acres, or (b) from an area of fifteen standards acres, if the area under the personal cultiva tion of the tenant exceeds fifteen standard acres; provided that nothing in this sub section shall apply to the tenant of a landowner who both, at the commencement of the tenacy and the commencement of the President 's Act, was a widow, a minor, an unmarried woman, a member of the Armed Forces of the Union or a person incapable of cultivating land by reason of physical or mental infirmity. Explanation. In computing the period of twelve years, the period during which any land has been held under the same land owner or his predecessor in title by the father, brother or son of the tenant shall be included. (3) For the purpose of computing under sub sections (1) and (2) the area of land under the personal cultivation of a tenant, any area of land owned by the tenant and under his personal cultivation shall be included. " It cannot, in view of the above noted provisions of law and the decision of this Court in Rikh Ram & Anr. vs Ram Kumar & Ors.(1) be disputed that an order or decree direct ing eviction of a tenant is necessary to be obtained to bring about a determination of the tenancy. A fortiori, a person who has been in possession of land with the right to possess it continues to hold the 'land and to be a tenant in spite of having been wrongfully put out of possession espe cially if he has initiated proceedings for recovery of possession. As in the instant case, it has been concur rently found by all the courts below that the plaintiff pre emptor was a tenant of 'the suit land on the date of sale (1) 6 and it has not been alleged much less proved that his tenancy was, thereafter determined or terminated on any of the grounds set out in sections 7 and 7A of the Pepsu Tenan cy and Agricultural Lands Act, 1955 and he had admittedly applied to the Tehsildar for restoration of his posses sion, he cannot but be deemed to be a tenant of the suit land on the date of the sale as well as on all other materi al dates and thus fully qualified and entitled to pre empt the land. We must fairly state that our judgment is based on the provisions of law brought to our notice by counsel and our conclusion is confined to the interpretation of the Acts referred to above. For the foregoing reasons, we do not find any merit in this appeal which is dismissed. In the circumstances of the case, we leave the parties to bear their own costs of this appeal. P.B.R. Appeal dismissed.

Section 7 of the Pepsu Tenancy and Agricultural Lands Act, 1955, which deals with termination of tenancy, provides that no tenancy shall be 'terminated except on any of the grounds mentioned in the section. Section 7 gives additional grounds for termination of tenancy in certain cases. Respondent No. 2 sold his land to the appellants. Claiming that he was a non occupancy tenant under respondent No. 2, respondent No. 1 filed a suit for possession of the land by pre emption. The trial Court decreed the suit in favour of the plaintiff pre emptor holding that he had been a tenant at will on the date of the sale and that he was forcibly dispossessed after the sale. The District Judge as well as the High Court upheld the trial Court 's decision. It was contended on behalf of the appellants that the pre emptor had to prove his subsisting right of pre emption on the date of sale, date of institution Of the suit and date of passing of the decree and since the plaintiff had failed to file a suit for recovery of possession under section 50 of the Punjab Tenancy Act, 1887 his right and title had been extinguished. Dismissing the appeal, HELD: The plaintiff cannot but be deemed to be the tenant of the suit land on the date of sale as well as on all other material dates and is thus fully qualified and entitled to pre empt the land. [5H] The point now sought to be raised was not raised by the appellant in the Courts below. In view of the provisions of sections 7 and 7A of the Pepsu Tenancy and Agricultural Lands Act, 1955, which have an over riding effect and the decision of this Court in Rikki Ram & Anr vs Ram Kumar & Ors it cannot be disputed that an order or decree di recting eviction of a tenant is necessary to be obtained to bring about a determination of the tenancy. A fortiori, the person who has been in possession of the land with the right to possess it continues to hold the land and be a tenant in spite of having been wrongfully put out of posses sion specially if he has initiated proceedings for recovery of possession. [3E & 5F] Since in the instant case, it has been concurrently found by the Courts below that the plaintiff pre emptor was a tenant of the suit land on the date of sale and it has not been alleged that his tenancy was thereafter determined or terminated on any of the grounds set out in sections 7 and 7A of the Act and the plaintiff had applied to the Tehsildar for restoration of possession, he could not but be deemed to be a tenant of the suit land on the date of the sale as well as on all other material dates and thus fully qualified and entitled to pre empt the land. [5G] Rikki Ram & Anr. vs Ram Kumar & Ors. followed. Bhagwan Das vs Chet Ram ; and Dindyal & Anr. vs Rajaram referred to. 2

Civil Appeal No. 2613 of 1980. Appeal by Special leave from the Judgment and Order dated the 18th April, 1980 of the Delhi High Court in Regular Second Appeal No. 33 of 1977. Petitioner in Person. Anand Prakash, C.S. Vaidyanathan, Probir Chowdhry Ms. Laxmi Anand and Samir Prakash for the Respondent. The Judgment of the Court was delivered by PATHAK, J. This appeal by special leave is directed against a judgment of the High Court of Delhi dismissing the appellant 's second appeal. The appellant was appointed in 1968 to the post of Research Officer of the Institute of Constitutional and Parliamentary Studies, New Delhi, as a society registered under the , and was later designated as Assistant Director. Subsequently, he was given additional charge of the Library of the Institute. In March, 1974 the appellant submitted a bill of Rs. 350 to the Institute claiming reimbursement of medical expenses incurred by him in the delivery of a child to his wife during the previous month. The Institute, however, framed a charge on November 5, 1974 against the petitioner, alleging that he was attempting to draw the sum by tendering a false bill. A member of the Executive Council of the Institute was appointed to enquire into the charge and the appellant participated in the enquiry proceedings. During the pendency of the proceedings the appellant appealed to the Executive Council of the Institute to change the Enquiry officer but, it is alleged by the appellant, while the appeal was pending consideration 155 the appellant received a Memorandum dated July 17/18, 1975 from the Executive Chairman of the Institute placing the appellant under suspension. The Enquiry officer completed his report on August 9, 1975 holding that the charge of presenting a false bill was proved against the appellant. On October 15/16, 1975 a second charge was framed against the appellant alleging that he was guilty of disobeying an officer order requiring him to hand over charge of the Library. The appellant was also served with a notice of the same date, along with a copy of the enquiry report, requiring him to show cause why he should not be dismissed from service. The appellant then filed a suit for declaration and injunction in the Court of the learned Subordinate Judge, Delhi on November 15, 1975 and obtained an ex parte order restraining the Institute and its officers from dismissing him. When the matter came on for final disposal on August 24, 1976 the learned Subordinate Judge dismissed the suit without trial on the preliminary point that it was not maintainable. He expressed the view that the appellant 's remedy lay in damages and not in a suit for declaration. The appellant appealed, and during the pendency of the appeal the learned Senior Subordinate Judge passed an order dated August 28, 1976 declining to grant an ex parte stay order. On September 3, 1976 the Institute filed a reply stating that the stay application had become infructuous as the appellant had been dismissed from service. The appeal filed by the appellant was dismissed by the learned Senior Subordinate Judge on January 22, 1977, who endorsed the view of the trial court that the remedy of the appellant lay in damages instead of by a suit for declaration. The appellant filed a second appeal in the High Court of Delhi. During the pendency of the appeal he moved an application for amendment of the plaint. On April 18, 1980 the High Court rejected the amendment application and also dismissed the second appeal. And now this appeal. The appellant attempted to place his case before us on its merits, but strong objection was taken by the respondents to the maintainability of the appeal on the ground that the order dismissing the appellant had not been challenged by him, that the order had become final and that the continued existence of the order constituted an impediment to the consideration of the reliefs claimed in the suit. The appellant strenuously urged that the appeal continues to survive, and he attempted to establish that among the reliefs claimed in his amendment application filed in the High Court he had included a relief for declaring the order of dismissal invalid and, he said, the amendment had been wrongly refused. Shortly before 156 concluding his submissions in this Court, he filed an application in this appeal praying for amendment of the plaint by the inclusion of such relief. We have examined the record of the case and we find that at no stage upto the dismissal of his second appeal did the appellant attempt to include a relief in his plaint against the order of dismissal. On the contrary, the reliefs sought to be included through the amendment application filed in the High Court proceeded on the assumption that the appellant was still continuing in service, for we find that one of the reliefs specifically mentioned in the amendment application was: "(c) "A decree for perpetual injuction he granted to the plaintiff against the defendants, restraining the defendants from dismissing the plaintiff from the post of Assistant Director and Incharge of the Library of the Institute and taking any action on the basis of the enquiry report or show cause notice and holding any second enquiry on the basis of the second charge sheet or taking any action whatsoever in these matters." Plainly, once an order of dismissal was passed against him, a different cause of action arose and it was not possible for the appellant to maintain the proceeding on the original cause of action. The original reliefs claimed in the suit consisted of a decree of declaration that the proceedings taken against the appellant upto the framing of the second charge on October 15/16, 1975 were invalid, and a decree for perpetual injunction restraining the respondents from dismissing the appellant. The appellant contended that the order of dismissal had not been served on him and, therefore, no occasion had arisen for challenging the order. It was alleged that an unsigned copy of an order of dismissal had been received by him and nothing more. We cannot accept the contention, because we find ample evidence on the record indicating that the appellant treated the order served on him as an effective order and that otherwise also he was aware that he had been dismissed. Indeed, he took proceedings in court charging the respondents with contempt of court for passing an order of dismissal while his suit was still pending. As regards the application now filed before us praying for leave to amend the plaint, we are constrained to reject it inasmuch 157 as it is for the first time throughout this protracted proceeding commencing with the institution of the suit in 1975 that the appellant is now seeking to include the relief although he had come to know several years ago that he had been dismissed. No circumstance has been shown explaining why the appellant should be permitted at this late stage to amend the plaint. It has also not been established by the appellant that if a suit is filed now against the order of dismissal it would be within the period of limitation. Upon the aforesaid considerations, we are of opinion that the present appeal is liable to be dismissed as not maintainable. We find it unnecessary to enter into the question whether the charge framed against the appellant, on the basis of which he has been dismissed, stands proved. We express no opinion in the matter. While concluding, we may record that the appellant claims arrears of pay from the Institute. We believe it would be just and proper that the Institute should examine the claim of the appellant, and if it finds that any amount is due to the appellant it should make payment thereof with all reasonable expedition. It is hoped that in this regard the Institute will not seek the advantage of any technical objection, including the period of limitation. In the result, the appeal is dismissed as not maintainable. There is no order as to costs. H.S.K. Appeal dismissed.

The appellant who was found guilty of a charge in an enquiry was served with a notice to show cause why he should not be dismissed from service. A second charge was also framed against the appellant. The appellant filed a suit for declaration and an injunction and obtained an exparte order restraining the respondent and its officers from dismissing him. The Subordinate Judge dismissed the suit as not maintainable. The appellant filed an appeal before the Senior Subordinate Judge. In reply to the stay application it was stated that the stay application had become infructuous as the appellant had been dismissed from service. The Senior Subordinate Judge dismissed the appeal. The appellant filed a second appeal in the High Court and during the pendency moved an application for amendment of the plaint. The High Court rejected the amendment application and dismissed the appeal. In this appeal the appellant urged that among the reliefs claimed in his amendment application filed in the High Court he had included the relief for declaring the order of dismissal invalid. The appellant filed an application praying for amendment of the plaint by the inclusion of such a relief. Dismissing the appeal, HELD: The appeal is not maintainable. Once an order of dismissal was passed against him, a different cause of action arose and it was not possible for the appellant to maintain the proceedings on the original cause of action. The original reliefs claimed in the suit consisted of a decree of declaration that the proceedings taken against the appellant upto the framing of the second charge on October 15/16, 1975 were invalid, and a decree for perpetual injunction restraining the respondents from dismissing the appellant. At no stage upto the dismissal of his second appeal did the appellant attempt to include a relief in his plaint against the order of dismissal. On the contrary, the reliefs sought to be included through the amendment application filed in the High Court proceeded on the assumption that the appellant was still continuing in service. [156 E F; B C] 154 The Court is constrained to reject the application praying for leave to amend the plaint inasmuch as it is for the first time throughout this protracted proceeding commencing with the institution of the suit in 1975 that the appellant is now seeking to include the relief although he had come to know several years ago that he had been dismissed. No circumstance has been shown explaining why the appellant should be permitted at this late stage to amend the plaint. It has also not been established by the appellant that if a suit is a filed now against the order of dismissal it would be within the period of limitation. [156;H 157 A B]

CIVIL Appeal No. 2609 of 1983. Appeal by Special leave from the Judgment and order dated the 1st July, 1982 of the Bombay High Court in Appeal No. 215 of 1981. D. V. Patel, T. U. Mehta, H. J. Zaveri for the Appellants. As the matter brooked no delay, after granting special leave to appeal. we proceeded to hear the appeal on merits. When hearing was over. we pronounced the following order and stated that the reasons would follow. The order reads as under: "The appeal is allowed and the order made by the learned Single Judge as well as the Division Bench of the Bombay High Court rejecting the Judge 's Summons taken out by the appellants is set aside and the Judge 's Summons is granted to the extent indicated herein. The appellants shall deposit Rs. 1,50,000 by or be fore March 1, 1983 in this Court. Respondent No. 2 Smt. Sabita V. Adapa shall hand over vacant and peaceful possession of the property being a shop Nos. 8/9 on the ground floor of the building formerly known as 'Jagmohan Building No. 2 ' or as 'Ayaz Mansion ' and now styled as 'Ram Kutir ' situated at Station Road, Andheri, Bombay 400058 to the liquidator on or before February 28, 1983 who shall forthwith hand over possession on March 1, 1983 to the appellants, after taking a statement from the appellants that they have deposited the amount Rs. 1, 50, 000 in this Court as herein indicated. On respondent No. 2 handing over vacant and peaceful possession of the afore mentioned shops to the liquidator by or before February 28, 1983, the liquidator shall forthwith refund to her the security deposit of Rs. 28,800 deposited by the second respondent with the liquidator. Respondent No. 2 will be at liberty to remove all furniture and fixtures placed by her in the suit shop without Causing damage to the property. The amount of Rs. 1, 50, 000 to be deposited by the appellants in this Court will with the consent of the appellants be disbursed according to the direction to be given by this Court to the needy and the deserving creditors of the Chit Centre Pvt. Ltd. already ordered to be wound up 660 by the High Court. Neither the liquidator nor the creditors of Chit Centre Pvt. Ltd. have any right to claim this amount of Rs. 1,50,000 or any part thereof as it is an ex gratia payment made by the appellants for alleviating the misery if any of some of the hard hit creditors of Chit Centre Pvt. Ltd. The distribution of the aforesaid amount will be at the absolute discretion of this Court. The appeal is allowed to the extent herein indicated with no order as to costs. " These are the reasons. On a winding up petition filed under the , a learned Company Judge of the Bombay High Court made an order on September 23, 1974 winding up Chit Centre Private Ltd. ( 'Company ' for short). The Company had its office in shops bearing Nos. 8 and 9 on the ground floor of the building formerly known as 'Jagmohan Building No. 2 ' or as 'Ayaz Mansion ' now known as 'Ram Kutir '. On the winding up order being made, the official Liquidator who was appointed as Liquidator of the Company while taking possession of the assets of the Company also took possession of the office premises of the Company. It is in this manner that the Liquidator acquired possession of shops Nos. 8 and 9, the premises involved in this appeal. Subsequently, the Liquidator sought direction of the court on April 25, 1979 whether the premises should be let out on lease or licence or whether the furniture and fixtures in the premises should be sold ? The Court gave a direction that the premises be given on caretaker basis after obtaining a proper document on a compensation not less than Rs. 2, 250 per month. Pursuant to this direction the Liquidator invited offers from persons willing to occupy the premises on terms and conditions laid down by the Court. On July 2, 1980, the Liquidator sought the direction of the Court whether to accept the offer of M/s Modern Caterers represented by respondent No. 2 herein, Smt. Sabita V. Adapa. The Company Judge by his order dated July 3, 1980 directed the Liquidator to accept the offer as modified by the Court of the second respondent. The Liquidator there upon entered into an agreement on July 29, 1980 with the second respondent and gave possession of the premises to the second respondent on terms and conditions set out in the agreement. Appellants herein are the Landlords of the building of which the premises involved in this appeal formed part. Appellants took 661 out Judge 's summons praying for a direction to the Liquidator to terminate the caretaker 's agreement entered into with the 2nd respondent under the directions of the Court, and to hand over vacant and peaceful possession of the premises to the appellants. There were other prayers in the Judge 's summons with which we are not concerned in this appeal. The learned Company Judge repelled the contention of the appellants that the so called caretakers ' agreement entered into by the Liquidator with the 2nd respondent was in contravention of the various provisions of the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947 as amended in 1973 ( 'Rent Act ' for short) and held that in substance and in form it was a caretaker 's agreement which was permissible. Accordingly, the learned Judge rejected the Judge 's summons in respect of both the prayers. Appellants preferred an appeal to the Division Bench of the High Court. The Division Bench held that appellants were not entitled to the notice in respect of the report submitted by the Liquidator for directions in respect of the premises and further observed that the appellants had no right to the present possession of the premises, more so, because the appellants had already filed a suit for eviction in the Small Causes Court at Bombay against the official Liquidator and on this short ground the appeal was dismissed. Hence this appeal by special leave. The Company is already ordered to be wound up by the order of the Court dated September 23, 1974. The name of the Company clearly spells out the objects for which it was formed. The name of the Company was Chit Centre Pvt. Ltd. The Company had undertaken the business of floating prize chit schemes. The nature of business in modern times is sufficiently well known and does not require elaboration. The Company had set up an office for carrying on this business and the office was set up in premises taken on lease. The business of the Company of floating prize chit schemes came to a stand still, the moment it was ordered to be wound up. It is not the Liquidators ' case that he is carrying on business of the Company which is being wound up with the permission of the Court under sec. 457 of the . 457 enables the Liquidators in a winding up by the Court, with the sanction of the court, amongst others, to carry on the business of the Company so far as may be necessary for the beneficial 662 winding up of the Company. If the floating of the schemes for prize A chits came to a stand still, the moment the Company was ordered to be wound up, there was no question of the business of the Company to be carried on by the Liquidator and that too for the beneficial winding up of the Company. Whether to carry on the business of the Company which is ordered to be wound up is not a matter left to uncontrolled discretion of the Liquidator. The Liquidator undoubtedly has the power under sec. 457 to carry on the business of the Company, if it is necessary for the beneficial winding up of the Company. And this power can be exercised not at the discretion of the Liquidator but with the sanction of the court. Reliance was placed on In re Batey; Ex parte Emmanuel(1) wherein it was observed that the power to carry on the business can only be exercised for the purpose of the beneficial winding up of the Company not because the creditors may think that the business will be a very profitable one and that the longer it is carried on the better it will, and that they will make a profit from it. Reliance was also placed on Panchmahals Steel Ltd. vs Universal Steel Traders,(2) wherein it was held that amongst others ' the Liquidator with the sanction of the court has the power to carry on business of the Company so far as may be necessary for the beneficial winding up of the Company. It is true that the Liquidator cannot carry on business for any other purpose except the purpose for which the power is conferred upon him, namely, for the beneficial winding up of the Company. He cannot carry on any business on the ground that it would be beneficial to the creditors or the contributors. The jurisdictional fact which must be ascertained and established for the exercise of the power by the Liquidator to carry on business of a Company, is that carrying on of the business of the Company is necessary for the beneficial winding up of the Company. ' However, the language of the section being unambiguous and clear, one does not need the assistance of precedents to come to a conclusion that the Liquidator with the sanction of the court can carry on the business of the Company only to the extent that such carrying on of the business is necessary for the beneficial winding up of the Company. Let it at once be made clear that there is no order of the Court brought to our notice which accorded the Court 's sanction to the exercise of the power to carry on the business of the Company by 663 the Liquidator, and we posed a question as to which business of the Company was to be carried on by the Liquidator? The business of A floating prize chits scheme has come to a stand still, the moment the Company was ordered to be wound up. It is not for a moment suggested that a Liquidator was to float some prize chit schemes or that a pending scheme was to be continued or perused by him. That is not even the Liquidator 's case nor was it so contended before the learned Company Judge. The Liquidator has adopted a contradictory posture which the learned Company Judge has unfortunately overlooked. If the Liquidator wanted to exercise power under Sec. 457 (1) (b) to carry on business of the Company so far as necessary for its beneficial winding up, the business which was to be carried on must be the business of the Company. Giving premises on lease, licence or under caretaker 's agreement was not the business of the Company. If some other business of the Company was to be carried, the use of the office premises would be necessary for carrying on the business of the Company. If possession of the premises was to be retained for carrying on the business of the Company, the Liquidator could not have sought the direction of the court to hand over possession under. any nomenclature such as lease, licence, caretaker 's agreement or any other facade to the second respondent. Now if the Liquidator wanted to exercise power under Sec. 457 (1) (b), he ought to have, with reference to the object clause in the Memorandum of Association of the Company, shown that giving on lease or licence or under caretaker 's agreement was part of the routine business of the Company. Such is not the case here. In fact, as the business has come to a grinding halt, the office premises are of no use to the Liquidator. He has therefore, devised a scheme by which he can knock out the compensation for the use and occupation of the premises, not necessary for the use of the Company, in contravention of the Rent Act and unfortunately the Court accorded sanction of this venture of the Liquidator disregarding the relevant provisions of the . The Company was a tenant or a lessee of the premises of which the appellants are the landlords. The date of the commencement of the lease is not made available to us, but it is also not claimed on behalf of the Liquidator that there was lease of long duration. If so, the Company was a statutory tenant under the Rent Act. The statutory tenancy confers the right to be in possession but 664 if the tenant does not any more require use of the premises, the provisions of the Rent Act and especially Secs. 13 and 15 completely prohibit giving the possession of the premises on licence or on sublease. The learned Company Judge therefore spelt out a third way of parting with the possession by the Liquidator, namely, that he may give the premises to the second respondent under a caretaker 's agreement. This caretaker 's agreement appears to us to be an euphemism for collecting compensation which is nothing else but the charge for use and occupation of the premises exclusively by the second respondent. Whether it is sub lease or licence does not call for decision. For the purpose of the present proceedings it is enough for us to say that the Company and its Liquidator no more needs. the premises for its own use. The Liquidator does not need the use of the premises for carrying on the winding up activities of the Company because he sought direction for parting with possession. We are not impressed by the learned Judge saving that there is some third mode of parting with possession of the premises exclusively in favour of the second respondent, namely, caretaker 's agreement which appears to us to be a facade to wriggle out of the provisions of the Rent Act. The Rent Act is no doubt enacted for protecting the tenants, and indisputably its provisions must receive such interpretation as to advance the protection and thwart the action of the landlord in rendering tenants destitutes. But this does not imply that the court should lend its aid to flout the provisions of the Rent Act so as to earn money by unfair and impermissible use of the premises. And that is what the Liquidator sought to do and the Court extended its help to the Liquidator. This, in our opinion, is wholly impermissible. The learned Company Judge could not have authorised the Liquidator to enter into such an agreement and therefore his order is liable to be set aside. In the appeal before the Division Bench, this aspect was not at all examined because it h stated that this aspect was not canvassed before the Bench hearing the appeal. The point we have examined goes to the root of the matter and, therefore, we consider it immaterial whether the point was examined at the hearing of the appeal. The learned Company Judge could not have permitted holding on to possession of the premises, not needed for efficiently carrying on winding up proceedings. The only course open to him was to direct the Liquidator to surrender possession to landlords and save recurring liability to pay rent. Before we part with this judgment, we must 665 take note of one submission that was made on behalf of the respondent. It was said that the creditors and members of the Company in liquidation have suffered huge losses and if the Liquidator would have been permitted to enter into an agreement with the second respondent, it would fetch a steady income which would have gone towards mitigating the hardships of the creditors and members of the Company. The accounts of the Company in liquidation were not brought to our notice nor can we permit violation of law howsoever laudable the object of such act may be. However, we must record a statement made on behalf of the appellants when the aforementioned argument was being examined by us. It was said that the second respondent was to pay Rs. 2,500 per month as compensation under the directions of the Court. That would have fetched the Liquidator an income of Rs. 30,000 per year and deducting the costs, expenses and taxes, the Liquidator may have been able to realise at least Rs. 25,000 per year. The learned counsel for the appellants submitted that adopting a multiplier of six, assuming that roughly six years was the period for which the agreement would have been renewed from year to year, the appellants unconditionally offered to deposit Rs. 1,50,000 in the Court to be distributed at the discretion of this Court amongst the creditors of the Company in liquidation. We recorded this offer in our order disposing of the appeal. We are now informed that the amount has been deposited. The Liquidator is accordingly directed to submit the list of the creditors of the Company with the names, addresses and claims admitted by him within 4 weeks from today when the matter will appear again on board for directions. These are the reasons which persuaded us to allow the appeal and make the order extracted at the commencement of this judgment. H.S.K. Appeal allowed.

The respondent, official liquidator, after being appointed by the Company Judge of the High Court, as Liquidator of a Company, took possession of the office premises of the Company. The Liquidator sought direction of the Company Judge whether the premises should be let out on lease or licence. The Company Judge gave a direction that the premises be given on caretaker basis. Under that direction the Liquidator entered into an agreement with the second respondent and gave possession of the premises to the second respondent. The appellants, who were the land lords of the building OF which the office premises of the Company formed part, took out Judge 's summons praying for a direction to the Liquidator to terminate the caretaker 's agreement and to hand over vacant possession of the premises to the appellants. The appellants contended that the so called caretaker 's agreement was in contravention of the various provisions of the Bombay Rents, Hotel, and Lodging House Rates Control Act, 1947 as amended in 1973 ( 'Rent Act ' for short). The Company Judge held that in substance and in form the agreement entered into by the Liquidator with the second respondent was a caretaker 's agreement which was permissible. A Division Bench of the High Court dismissed the appeal preferred by the appellants. Allowing the appeal, ^ HELD: The Company Judge could not have authorised the Liquidator to enter into caretaker 's agreement with the second respondent. The Liquidator does not need the use of the premises for carrying on the winding up activities of tho Company because he sought direction for parting with possession. The only course open to the Company Judge was to direct the Liquidator to surrender possession of the premises to the appellants.[664 F; B C; H] 658 Section 457(1) (b) of the gives power to the Liquidator in a winding up by the Court, with the sanction of the Court, to carry on the business of the Company so far as may be necessary for the beneficial winding up of the Company. If the Liquidator wanted to exercise power under sec. 457(1) (b) to carry on business of the company so far as necessary for its beneficial winding up, the business which was to be carried on must be the business of the Company. Giving premises on lease, licence or under caretaker 's agreement was not the business of the Company. Since the Company 's business of floating prize chit schemes came to a stand still, the moment the Company was ordered to the wound up, there was no question of the business of the Company to be carried on by the Liquidator and that too for the beneficial winding up of the Company. [661 H; 663 C G] In re Batey; Ex parte Emmanuel, [1881] 17 Ch. Division 35 and Panchmahals Steel Ltd. vs Universal Steel Traders, at 722, referred to. The company was a tenant or a lessee of the premises of which the appellants are the land lords. The date of the commencement of the lease is not made available, but it is also not claimed on behalf of the Liquidator that there was lease of long duration. If so, the Company was a statutory tenant under the Rent Act. The statutory tenancy confers the right to be in possession but if the tenant does not any more require use of the premises, the provisions of the Rent Act and especially Secs. 13 and 15 completely prohibit giving the possession of the premises on licence or on sub lease. The Company Judge, therefore, spelt out a third mode of parting with possession of the premises by the Liquidator namely, a caretaker s agreement. This appears to be a facade to wriggle out of the provisions of the Rent Act. The Rent Act is no doubt enacted for protecting the tenants, and indisputably its provisions must receive such interpretation as to advance the protection and thwart the action of the landlord in rendering tenants destitutes. But this does not imply that the court should lend its aid to float the provisions of the Rent Act so as to earn money by unfair and impermissible use of the premises. [663 H; 664 A F]

N: Criminal Appeal No. 170 of 1979. Appeal by Special Leave from the Judgment and order dated 10 11 1978 of the Punjab and Haryana High Court in Criminal Misc. No.4352 M of 1970. H. D. Hardy, D. D. Sharma, Vasu Deo Sharma and Subhash C. Mittal, for the Appellant. H. section Marwah and M. N. Shroff for Respondent No. 1. A. N. Mulla and section K. Gambhir for Respondent No. 2. 152 The Judgment of the Court was delivered by FAZAL ALI, J. This appeal by Special Leave is directed against a judgment of the Punjab and Haryana High Court dated 10th November, 1978 by which the High Court accepted the revision filed before it and set aside the order of the Sessions Judge and directed him to conclude the trial according to law. The points in controversy arise in the following circumstances: The appellant Rohtas was being prosecuted under Section 302 of the Indian Penal Code for having caused the death of one Subhash on 23rd December, 1974. The trial proceeded before the Sessions Judge and after the evidence was concluded the case was adjourned to the 5th May, 1978 for recording the statement of the appellant. At this stage it appears to have been pointed out to the Sessions Judge that he had no jurisdiction to try the appellant as the appellant happened to fall within the provisions of the Haryana Children Act, 1974, for short, to be referred to as the Haryana Act. Thereafter the Sessions Judge remitted the matter to the Committing Magistrate directing him to hold an enquiry as to whether or not the appellant Rohtas was a child within the meaning of the provisions of the Haryana Act and after arriving at a finding that the appellant was a child, the Magistrate proceeded to try the case in accordance with the provisions of the Haryana Act. The brother of the deceased filed a revision before the High Court for quashing the proceedings against the appellant on the ground that the Sessions Judge and the Committing Magistrate were wrong in holding that the case of the appellant fell within the purview of Section 4 of the Haryana Act. The contention raised by the Revision Petitioner was based on the fact that although the Criminal Procedure Code of 1973, hereinafter to be referred to as the Code of 1973, contained provisions some of which were directly in conflict with the Haryana Act and other Central Acts, therefore, the Code of 1973 would prevail and the State Acts would stand over ruled by virtue of the provisions of Article 254 of the Constitution of India. This argument appears to have been accepted by the High Court on the ground that as the Haryana Act though passed with the previous consent of the President of India, so far as the State of Haryana is concerned, the Act was superseded by the Code of 1973 which was an Act passed by Parliament subsequent to the Haryana Act. Before scrutinising the contentions of the parties it may be necessary to examine and analyse some of the important and relevant provisions of the statute concerned. To begin with, even the previous Criminal Procedure Code of 1898 contained a special procedure for 153 the trial of persons who had committed offences and who were below the age of 15. Such accused could be tried by a Magistrate on whom powers are conferred by Section 8 Sub section 1 of the Reformatory Schools Act of 1897 which also provided for the custody trial or punishment of such youthful offenders. This Section was expressly repealed by Section 65 of the Haryana Act which reads as below: "Certain Central Acts not to apply: (1) The (Central Act 8 of 1897), and Sections 29 B and 399 of the Code of Criminal Procedure, 1898 (Central Act 5 of 1898), shall cease to apply to any area in which this Act has been brought into force. (2) The (Central Act 105 of 1956), shall not apply to any Children 's home, special School or observation home established and maintained under this Act. " This being the position, so long as the Haryana Act was to be in force in the State of Haryana, it is manifest that Section 29 B was put completely out of action and any trial of an accused who was a child within the meaning of the Haryana Act had to be conducted in the manner prescribed by the Haryana Act. For the purposes of this case it is not necessary for us to detail the procedure which was to be adopted by the Court under the Haryana Act. The fact remains, therefore, that until the passing of the Code of 1973 the Haryana Act held the field. The Haryana Act came into force on 1 3 1974. In fact the said Act received the assent of the President as far back as on 6th of February, 1974 and was published in the Haryana Gazette on the 12th of February, 1974 but under the provisions of Section 1 Sub section 3 of the Act it was to come into force on a date to be notified by the State Government and this was done on 1 3 1974. Thus the Haryana Act started operating w.e.f. 1 3 1974 and any offences committed thereafter by a child, as defined in the Act, were to be tried according to the Procedure laid down by the Haryana Act. so far as there is no dispute between the parties. The only difficulty that arises is that just about the time that the Haryana Act was passed the Code of 1973 was also passed by Parliament which completely revolutionised the entire Criminal Procedure Code of 1898. It is not disputed in the present case that the occurrence in the present case took place after coming into force of the Code of 1973 and if, therefore, the Code of 1973 applies to the present trial then it is obvious 154 that the trial has to be held not in accordance with the provisions of the Haryana Act but according to the provisions of the Code of 1973. So far as the Code of 1973 is concerned, it was amended by Act II of 1974 and came into force w.e.f. April 1, 1974. Section 4 of the Code of 1973 clearly lays down that all offences under the Indian Penal Code shall be investigated, inquired into, tried and otherwise dealt with according to the provisions of the said Code. Thus at the first sight the contention of the respondent that the accused was rightly ordered to be tried under the Code of 1973 appears to be sound. In the view that we have taken in this case and on a close and careful interpretation of Section 5 of the Code of 1973, we do not find it necessary to go into this point at all. In our opinion the provisions of Section 5 of the Code in the present case completely clinch the entire issue. Far from over ruling or colliding with the provisions of the Haryana Act, the Code of 1973 appears to have kept alive and fully endorsed the application of the Haryana Act or for that matter the provisions of any other Act passed by the State Legislature and which falls within the ambit of Section 5 of the Code of 1973 which may be extracted thus: "Nothing contained in this Code shall, in the absence of a specific provision to the contrary, affect any special or local law for the time being in force, or any special jurisdiction or power conferred, or any special form of procedure prescribed, by any other law for the time being in force. " It will thus be seen that Section 5 carves out a clear exception to the provisions of the trial of an offence under any special or local law for the time being in force or any special jurisdiction or power conferred or any special form of procedure prescribed by any other law for the time being in force. It is not disputed that the Haryana Act was in force when the Code of 1973 was passed and, therefore, the Haryana Act far from being inconsistent with Section 5 of the Code of 1973 appears to be fully protected by the provisions of Section 5 of the Code of 1973 as indicated above. In these circumstances, we are clearly of the opinion that the High Court was in error in holding that the Code of 1973 over ruled the Haryana Act and that the appellant should have been tried under the Code of 1973. We are satisfied that the view taken by the Sessions Judge on this point was correct and the case of the appellant should have been referred to the Magistrate concerned for trial in accordance with the provisions of the Haryana Act. 155 we, therefore, allow this appeal, set aside the judgment of the High Court and restore that of the Sessions Judge as a result of which the appellant will now be tried by the Magistrate empowered under the Haryana Act and in accordance with the provisions of that Act. The case is an old one. The Magistrate concerned should try to dispose of the same as expeditiously as possible. N.K.A. Appeal allowed.

The appellant was charged with an offence under Section 302 I.P.C. After the recording of evidence was concluded, it was pointed out that the Sessions Judge had no jurisdiction to try the appellant as the appellant happened to fall under the provisions of the Haryana Children Act, 1974. On remand, the Magistrate found the appellant was a child and proceeded to try him under the Haryana Act. In a revision petition filed by the brother of the deceased, the High Court held that the provisions of the Criminal Procedure Code 1973 prevailed over the provisions of the Haryana Act. Allowing the appeal, ^ HELD: The High Court was in error in holding that the Code of 1973 over ruled the Haryana Act and that the appellant should have been tried under the Code 1973. The view taken by the Sessions Judge on this point was correct and the case of the appellant should have been referred to the Magistrate concerned for trial in accordance with the provisions of the Haryana Act. [154G H] Section 5 carves out a clear exception to the provisions of the trial of an offence under any special or local law for the time being in force or any special jurisdiction or power conferred or any special form of procedure prescribed by any other law for the time being in force. The Haryana Act was in force when the Code of 1973 was passed and therefore the Haryana Act far from being inconsistent with section 5 of the Code of 1973 appears to be fully protected by the provisions of section 5 of the Code of 1973. [154E G]

il Appeal No. 71 of 1972. (From the Judgment and Order dated the 18th December, 1964 the Calcutta High Court in Matter No. 199/61). T.A. Ramachandran and D.N. Gupta, for the appellant. B.B. Ahuja and R.N. Sachthey, for respondent. The Judgment of the Court was delivered by KHANNA, J. This appeal on certificate is against the judgment of the Calcutta High Court whereby the High Court answered the following question referred to it under section 27 of the Wealth Tax Act in favour of the revenue and against the assessee appellant: "Whether on the facts and in the circum stances of the case, the provision of Rs.49,19,520/ made by the assessee for its tax liability less the amount of the last instalment of advance tax constituted a debt owed by the assessee within the meaning of clause (m) of section 2 of the Wealth Tax Act on the relevant valuation date ?" The matter relates to the assessment year 1958 59, the relevant valuation date for which was December 31, 1957. A sum of Rs.49,19,520/ was provided for in the books of the appellant for the dis 3 1546 SCI/76 296 charge of its tax liabilities. The appellant claimed the amount as a deduction in the computation of the net wealth. The claim was disallowed by the wealth tax officer, the Appellate Assistant Commissioner of Wealth Tax and the Tribunal. On an application filed by the appellant, the Tribunal referred the question reproduced above to the High Court. The High Court, while answering the question in favour of the revenue and against the assessee appellant, relied upon its earlier decision in the case of Assam Oil Co. Ltd. vs Commissioner of Wealth Tax, Central Calcutta(1). The decision in the case of Assam Oil Co, Ltd. relied upon by the High Court was reversed on appeal by this Court. Naturally therefore at the hearing of the appeal, Mr. Rama chandran, learned counsel for the appellant, has drawn our attention to that decision of this Court in the case of Assam Oil Co. vs Commissioner of Wealth Tax, Central Calcut ta(2). It was held in that case by majority that the amount set apart by the appellant company in its balance sheet as on December 31, 1956 as an estimated provision for meeting its tax liability, less the last instalment of the demand of the advance tax, was a debt owed by the appellant company on December 31, 1956, the relevant valuation date, within the meaning of section 2(m) of the Wealth Tax Act, 1957, and was deductible in computing its net wealth as on that date. Following that decision, we are of the view that the answer to the question referred by the Tribunal to the High Court should be in the affirmative in favour of the assessee appellant and against the revenue. Mr. Ahuja submits that the view taken by the majority in the case of Assam Oil Co. Ltd. needs reconsideration. This Bench, however, is bound by that decision. Following that decision, we accept the appeal, set aside the judgment of the High Court and answer the question referred by the Tribunal in the affirmative in favour of the assessee appellant and against the revenue. The parties in the circumstances shall bear their own costs of this Court as well as of the High Court. P.H.P. Appeal allowed.

The appellant made a provision for a sum of Rs.49,19,520/ in his books of account for the discharge of its tax liabil ities. The appellant claimed deduction of the said amount for computation of his net wealth on the ground that it was a debt owed by the assessee within the meaning of section 2(m) of the Wealth Tax Act. The claim was disallowed by the Wealth Tax Officer, the Appellate Asstt. Commissioner of Wealth Tax and the Tribunal. The High Court of Calcutta answered the reference in favour of the revenue and against the assessee relying on its earlier decision in the ease of Assam Oil Co. Ltd. Allowing the appeal by certificate, HELD: This Court has reversed the decision of Calcutta High Court in the case of Assam Oil Co. Ltd. In that case this Court held by majority that the amount set apart by an assessee in his balance sheet on the valuation date as an estimated provision for meeting its tax liability less the last instalment of the payment of the advance tax was a debt owed by the assessee within the meaning of section 2(m) of the Wealth Tax Act, 1957 and was deductible in computing its net wealth as on that date. The Court followed the said deci sion. [296C G] Assam Oil Co. vs Commissioner of Wealth Tax, Central Calcut ta, followed.

ivil Appeal No 3177 of 1982. From the Judgment and Order dated 24 ' 81 of the Orissa High Court in Original Jurisdiction Case No. 233 of 1977. N K Das and A P Mohanty for the Appellant G L. Sanghi R K Mehta, Ms. Mona Mehta and J R Das for the Respondents The Judgment of the Court was delivered by SHARMA, J. The question which arises in this appeal by special leave from the decision of the Orissa High Court in a writ case is whether the "estate" of Lord Jagannath has PG NO 734 vested in the State of Orissa as a result of the notification dated 18.3.1974 issued under section 3 A of the Orissa Estates Abolition Act, 1951 (hereinafter referred to as the Act) or the said notification is ultra vires and fit to be quashed. The writ petition in the High Court was filed by a number of persons claiming to be Sevaks and worshippers of Lord Jagannath, the presiding deity of the famous Jagannath temple. The management of the temple and the properties including the intermediary interest is in the hands of a trust which was impleaded as a respondent in the case. Besides, the State of Orissa and Collector, Puri, the Administrator, Jagannath temple, the Jagannath Committee were also made parties. They, however, do not support the writ petitioners and agree with the State that the "estate" has vested under the impugned notification. The Act was passed in 1952 for the purpose of abolishing all the rights in land of intermediaries between the raiyats and the State of Orissa by whatever name known and for vesting the same in the State. Section 3 authorises the State Government to declare by a notification any estate specified therein to have passed to and become vested in the State. The result of such a notification is dealt with in section 5. In substance the intermediary concerned is divested of the notified interests and becomes entitled to compensation to be computed in the manner indicated in the Act. By an amendment section 3 A was included in the Act permitting the State Government to issue a single notification in respect of a class or classes of intermediaries in the whole or a part of the State. By a further amendment in 1963 Chapter II A was inserted in the Act, making special provisions for public trusts. Clause (e) of section 13 A described "trust estate" as an estate the whole of the net income whereof is dedicated exclusively to charitable or religious purposes. Admittedly the estate belonging to Lord Jagannath is included in the expression "trust estate". Provisions were made in Chapter II A for entertaining claims and determining nature of the estates claimed to be trust estates and announcing the decision by notification. The effect of such a determination was, as mentioned in section 13 I(1) to save the estate from vesting under a notification issued under s 3 or 3 A. 4. A notification under section 3 of the Act was issued in respect to the estate of Lord Jagannath on 27.4.1963 and on the same date another notification under Chapter II A followed declaring the estate as trust estate. Consequently the deity was not divested of the estate. In 1970 Chapter PG NO 735 II A was repealed. In 1974 the Act was further amended and "trust estate" which was not included in the definition section of the original Act was defined in clause (oo) in the following terms (excluding the Explanation which is not relevant for the present case): 0"(oo) 'trust estate ' means an estate the whole of the net income whereof under any trust or other legal obligation has been dedicated exclusively to charitable or religious purposes of a public nature without any reservation of pecuniary benefit to any individual: Provided that all estates belonging to the Temple of Lord Jagannath at Puri within the meaning of the Shri Jagannath Temple Act, 1955 and all estates declared to the trust estates by a competent authority under this Act prior to the date of coming into force of the Orissa Estates Abolition (Amendment) Act, 1970, shall be deemed to be trust estates. On 18.3.1974 the impugned notification under section 3 A, as quoted below, was issued: "The 18th March 1974 S.R.O. No. 184/74 In exercise of the powers conferred by sub section (1) of section 3 A of the Orissa Estates Abolition Act, 195 l (Orissa Act I of 1952), the State Government do hereby declare that (i) the intermediary interests of all intermediaries whose estates have been declared as trust estates under Chapter Il A of the said Act; (ii) those in respect of which claims and references made under the said chapter were pending on the date of commencement of the Orissa Estates Abolition (Amendment Act, 1970 (Orissa Act 33 of 1970); and (iii) the intermediary interests of all intermediaries in respect of all estates other than those which have already vested in the State have passed to and become vested in the State free from all encumbrances. PG NO 736 (No. 13699 EA I ND 1/74 R) By order of the Governor S.M. Patnaik Commissioner cum Secretary to Government. " In this background the writ application was filed in the High Court challenging the notification. The High Court rejected the claim of the petitioner and dismissed the writ application by the impugned judgment. The learned counsel for the petitioner has contended that as a result of the decision under Chapter II A declaring Lord Jagannath 's estate a "trust estate" the same must be deemed to have been excluded from the scope of the Act, and this result in the eye of law became final and cotinued to remain effective even after the repeal of Chapter II A Reliance was placed on Section 5 of the Orissa General Clauses Act and it was argued that the right which the petitioner acquired under Section 13 1 as a result of the decision cannot disappear on the repeal of this Chapter The learned counsel proceeded to urge that as a result of the said decision the estate in question went completely out of the ambit of the Act and for this reason when in 1974 the Act was further amended it was considered necessary to define "trust estate" in Section 2 of the Act and to expressly include Lord Jagannath 's estate within the expression with a view to set at rest any controversy in this regard. According to the learned counsel the intention of the legislature is clearly to permanently spare the petitioner 's estate from the of the Act In our view the argument has no merit and must be rejected. It is true that an order was passed under s 13 G declaring the petitioner 's estate as a trust estate" and further by the insertion of clause (oo) in s 2 the petitioner 's estate continued to be a 'trust estate", but the question is as to what is the legal effect flowing from such a declaration This aspect is dealt within s 13 I, which is quoted as under (omitting sub section (2) which is not relevant in the present context): "13 1. Effect of orders passed under section 13 G: (I) All estates declared under this Chapter to be trust estates by the Tribunal or the High Court, as the case may be, shall he deemed to have been excluded from the operation of the vesting notification and never to have vested in the State in pursuance thereof." (emphasis added) PG NO 737 It is manifest from the language of the Section that it saves a ' 'trust estate" so declared under section 13 G from the operation of a notification issued under section 3 or 3 A, but does not extend the benefit any further The provisions do not confer protection from the Act itself and cannot be interpreted to clothe it with a permanent immunity from being vested by a later notification issued under the Act Such an estate could be vested in the State of Orissa by a subsequent notification was made clear by clause (b) of s 13 K which reads as follows: "(a) . (b) 'nothing in this Chapter shall be deemed to debar the State Government from vesting any trust estate by the issue of a notification under Section 3." Sections 7 A, 8 A, 8 D and X E of the Act include special provisions for a trust estate and unmistakably indicate that trust estates" are within the purview of the Act The benefit they receive from a declaration under section 13 G is limited and referable only to a vesting notification issued earlier. There is thus, no merit in the argument of the learned counsel for the appellant that the petitioner 's estate could not be vested in the State by a notification issued subsequently 7. We accordingly hold that there is no infirmity in the notification dated 18.3.1974 issued under section 3 A of the Act The appeal fails and is dismissed but in the circumstances without costs.

Orissa Estates Abolition Act, 1951 was enacted to abolish all the rights in the land of intermediaries between the raiyats and the State of Orissa by whatever name known and for vesting the same in the State. Section 3 authorises the State Government to declare by a notification any estate specified therein to have passed to and become vested in the same State, i.e., the intermediary concerned is divested of the notified interests and becomes entitled to compensation. By an amendment section 3 A was included in the Act permitting the State Government to issue a single notification in respect of a class or classes of intermediaries in the whole or a part of the State. By a further amendment in 1963 Chapter Il A was inserted in the Act making special provisions for public trusts. Clause (e) of s.13 A described "trust estate". provisions were made in Chapter II A for entertaining claims and determining the nature of the estates claimed to be trust estates and announcing the decision by notification. The effect of such a determination was. as mentioned in section 13 , to save the estate from vesting under a notification issued under section 3 or 3 A. A notification under section 3 of the Act was issued in respect of the estate of Lord Jagannath on 27 4 1963, and on the same date another notification under section 13 C., Chapter lI A followed declaring the estate as "trust estate". The consequence was the diety was not divested of the estate. In 1970 Chapter Il A was repealed. By insertion of clause (oo) in section 2 in 1974 the said estate continued to be "trust estate." On 18.3.1974 a notification under section 3 A was issued declaring the estate of the diety to have vested in the State. A writ petition was filed in the High Court challenging the validity of the said notification, which was dismissed. PG NO 732 PG NO 733 In the appeal to this Court, on behalf of the appellant it was contended that as a result of the decision under chapter Il A declaring Lord Jagannath 's estate a "trust estate" the same must be deemed to have been excluded from the scope of the Act and this decision became final and continued to remain effective even after the repeal ot ' Chapter II A. The right which was acquired under section 13 I cannot disappear on the repeal of Chapter Il A as the estate in question went completely out of the ambit of the Act. The intention of the Legislature to include Lord Jagannath 's estate within the expression "trust estate" in cl. (oo) in section 2 by the Amending Act 1974 was clearly to spare the said estate permanently from the mischief of the Act. Dismissing the appeal, this Court, HELD: l. There is no infirmity in the notification dated 18.3.1974 issue under. 3 A of the Act.[737El 2. It is manifest from the language of section 13 l that it saves a "trust estate" so declared under section 13 G from the operation of a notification issued under section 3 or 3 A, but does not extend the benefit any further. The provisions do not confer protection from the Act itself and cannot be interpreted to clothe it with a permanent immunity from being vested by a later notification issued under the Act. [737A BI 3. Sections 7 A, X A, 8 D and 8 E of the Act include special provisions for a trust estate and unmistakably indicate that "trust estates" are within the purview of the Act. The benefit they receive from a declaration under section 13 (. is limited and referable only to a vesting notification issued earlier. [737Dl

Appeal No. 807 of 1963. Appeal from the judgment and order dated September 4, 1961 of the Calcutta High Court Income tax Reference No. 85 of 1956. C.K. Daphtary, Attorney General, R. Ganapathy Iyer and R. N. Sachthey, for the appellant. A. V. Viswanatha Sastri and section C. Muzumdar, for the respondent. The Judgment of the Court was delivered by Subba Rao, J. This appeal by certificate raises the question of the construction of the provisions of section 23A of the Indian Incometax Act, 1922, hereinafter called the Act, before it was amended by the Finance Act, 1955. The relevant and undisputed facts may be briefly stated. Messrs. Gungadhar Banerjee & Co. (Private) Ltd., the respondent herein, is a private limited company. At the General Body Meeting of the Company held on December 6, 1948, the Directors declared a dividend at the rate of 5 1/2 per cent. per share. The said distribution of dividends related to the accounting year 1947 48 which ended on April 13, 1948. According to the balance sheet of the Company for that year the net profit for the said year was Rs. 1,28,112/7/5. The taxation reserve was Rs. 56,000. The profit 441 left was Rs. 72,000. The Directors declared a dividend at the rate of 51 per cent. per share thus making a total distribution of Rs. 44,000. On that basis the profit that was available for further distribution was Rs. 28,000. Though under the balance sheet the estimated tax was Rs. 66,000, the tax assessed for the year was Rs. 79,400. If the difference between the tax assessed and the estimated tax was also deducted from the profits, there would only be a sum of Rs. 4,000 that would remain as undistributed profits. The Income tax Officer assessed the total income of the assessee for the year 1948 49 at Rs. 2,66,766. After deducting the tax payable under the two heads, namely, I.T. of Rs. 81,517/13/0 and C.T. of Rs. 33,345/12/0, he held that a sum of Rs. 1,51,902/7/0 was available for distribution to the shareholders as dividends. As the amount distributed by the Company was below 60 per cent. of the profits available for distribution, the Income tax Officer, with the previous approval of the Inspecting Assistant Commissioner of Income tax, passed an order under section 23 A of the Act directing that the amount of Rs 1,07,902 (i.e., Rs. 1,51,902 minus Rs. 44,000= Rs. 1,07,902) shall be deemed to have been distributed as dividends as on the date of the annual general meeting of the Company. He found that, having regard to the profits earned in the earlier years and the capital and taxation reserves, payment of larger dividends would not be unreasonable. The assessee preferred an appeal to the Appellate Assistant Commissioner against the order made by the Income tax Officer under section 23A of the Act. By the time the appeal came to be disposed of, in an appeal against the order of assessment the assessed income was reduced by a sum of Rs. 80,926. Notwithstanding the said deduction, as the amount of Rs. 44,000 distributed by the Company was less than 60 per cent. of the balance of Rs. 1,64,440 arrived at on the basis of the revised calculation, the Appellate Assistant Commissioner held that an action under section 23A of the Act was justified. He further held that the assesee incurred no losses in the previous years, that in almost all the past assessments the assessee showed substantial profits, that the profits disclosed in the year of account were not small and that, therefore, the direction to pay a higher dividend was not unreasonable. On a further appeal, the Income tax Appellate Tribunal held that the amount of profits should be judged only from the balancesheet and that judged by the figures given thereunder a dividend to the extent of Rs. 64,000 being 60 per cent. of the assessed profits less income tax. could be distributed and that such distribution was not unreasonable. The Tribunal referred the following question under section 66(1) of the Act for the decision of the High Court of Calcutta: "Whether on the facts and in the circumstances of the case any larger dividend than that declared by the company could reasonably be distributed within the meaning 442 of Section 23A of the Indian Income tax Act and the application of Section 23A of the Indian Income tax Act was in accordance with law." The High Court held that the Tribunal went wrong in taking into consideration the past profits instead of the past losses, the taxation reserves without considering the past liabilities for taxation, and the profits for the year in question disclosed in the balance sheet, ignoring the actual tax assessed for that year. It came to the conclusion that, having regard to the smallness of the profits, the order of the Income tax Officer was not justified. In the result, it answered both parts of the question referred to it in the negative. Hence the appeal. Learned Attorney General, appearing for the Revenue, con tended that the balance sheet of a company on the basis of which dividends were declared was final and the profits disclosed thereunder would be the correct basis for the Income tax Officer acting under section 23A of the Act; and, as the balance sheet of the company for the relevant year showed a sum of Rs. 1,05,950 as "capital reserve brought forward", a sum of Rs. 5,73,161 as taxation reserve, and a sum of Rs. 56,000 as estimated tax, the Income tax Officer rightly held that the financial condition of the Company was sufficiently sound to warrant an order under section 23A of the Act. Alternatively he contended that if the respondent could be permitted to go behind the balance sheet to ascertain the real profit, the Department should also be likewise allowed to go behind the balance sheet to show that the commercial profit was larger and the reserves were in excess of the past liabilities and that in that event to remand the case for ascertaining the true state of facts. Mr. A.V. Viswanatha Sastri, appearing for the assessee Com pany, contended that the burden lies on the Revenue to establish that the dividend declared was not a reasonable one and that in the present case it had not discharged that burden. Idle further argued that for the purpose of "testing the smallness of the profit" the Income tax Officer had to take into consideration not the assessable Income but the commercial profit of the Company and that in the present case, having regard to the commercial profit, a declaration of a higher dividend would be unreasonable. He pleaded that, should this Court hold that the Income tax Officer could establish that the reserves were more than the liabilities, the assessee should also be permitted to prove what were its real, commercial profits and that the reserves were far less than the demands. The contentions of learned counsel turn upon the provisions of section 23A of the Act, before it was amended by the Finance Act of 1955. The material part of that section reads: "(1) Where the Income tax Officer is satisfied that in respect of any previous year the profits and gains distributed as dividends by any company up to the end of the 443 sixth month after its accounts for that previous year are laid before the company in general meeting are less than sixty per cent of the assessable income of the company of that previous year, as reduced by the amount of incometax and super tax payable by the company in respect thereof he shall, unless he is satisfied that having regard to losses incurred by the company in earlier years or to the smallness of the profit made, the payment of a dividend or a larger dividend than that declared would be unreasonable, make with the previous approval of the Inspecting Assistant Commissioner an order in writing that the un distributed portion of the assessable income of the company of that previous year as computed for income tax purposes and reduced by the amount of income tax and super tax payable by the company in respect thereof shall be deemed to have been distributed as dividends amongst the shareholders as at the date of the general meeting aforesaid, and thereupon the proportionate share thereof of each shareholder shall be included in the total income of such shareholder for the purpose of assessing his total income. " The section is in three parts: the first part defines the scope of the jurisdiction of the Income tax Officer to act under section 23A of the Act; the second part provides for the exercise of the jurisdiction in the manner prescribed thereunder , and the third part provides for the assessment of the statutory dividends in the hands of the share. holders. This section was introduced to prevent exploitation of juristic personality of a private company by the members thereof for the purpose of evading higher taxation. To act under this, section the Income tax Officer has to be satisfied that the dividends distributed by the Company during the prescribed period are loss than the statutory percentage, i.e., 60 per cent., of the assessable income of the Company of the previous year less the amount of Income tax and super tax payable by the Company in respect thereof. Unless there is a deficiency in the statutory percentage, the Income tax Officer has no jurisdiction to take further action thereunder. If that condition is complied with, he shall make an order declaring that the undistributed portion of the assessable income less the said taxes shall be deemed to have been distributed as dividends amongst the shareholders. But before doing so, a duty is cast on him to satisfy himself that, having regard to the losses incurred by the company in earlier years or "the smallness of the profit made," the payment of a dividend or a larger dividend than that declared would be reasonable. The argument mainly centered on this part of the section. Would the satisfaction of the Income tax Officer depend only on the two circumstances, namely, losses and smallness of profit? Can he take into consideration other relevant circumstances? What does the expression "profit" mean? Does it mean only the assessable income or does it mean commercial or 444 accounting profits? If the scope of the section is properly appreciated the answer to the said questions would be apparent. The Incometax Officer, acting under this section, is not assessing any income to tax: that will be assessed in the hands of the shareholders. He only does what the directors should have done. He puts himself in the place of the directors. Though the object of the section is to pre vent evasion of tax, the provision must be worked not from the standpoint of the tax collector but from that of a businessman. The yardstick is that of a prudent businessman. The reasonableness or the unreasonableness of the amount distributed as dividends is judged by business considerations, such as the previous losses, the present profits, the availability of surplus money and the reasonable requirements of the future and similar others. He must take an overall picture of the financial position of the business. It is neither possible nor advisable to lay down any decisive tests for the guidance of the Income tax Officer. It depends upon the facts of each case. The only guidance is his capacity to put himself in the position of a prudent businessman or the director of a company and his sympathetic and objective approach to the difficult problem that arises in each case. We find it difficult to accept the argument that the Income tax Officer cannot take into consideration any circumstances other than losses and smallness of profits. This argument ignores the expression "having regard to" that precedes the said words. On the interpretation of the words "having regard to" in section 23A of the Act, the decision of a Division Bench of the Bombay High Court, consisting of Chagla C. J., and Tendolkar J., in Sir Kasturchand Ltd. vs Commissioner of Income tax, Bombay City(1) was relied upon by the appellant. Chagla C.J., speaking for the Court, held in that case that "the reasonableness or unreasonableness of the payment of a dividend or a larger dividend has to be judged only with reference to the two facts mentioned in the section, viz., losses incurred by the company in earlier years and the smallness of the profit." To put the contrary construction, the learned Chief Justice said, "would be to import into it words which the Legislature did not think fit to insert in that section and to expand the ambit of the discretion exercised by the Income tax Officer." But the learned Chief of Justice did not expressly consider the scope of the expression "having regard to" found in the section. The Judicial Committee in Commissioner of Income tax vs Williamson Diamond Ltd.(2) had to consider the scope of section 21(1) of the Tanganyika Income tax (Consolidation) Ordinance, 27 of 1950, which was pari materia with section 23A of the Act. Adverting to the argument based upon the words "having regard to", their Lordships observed: "The form of words used no doubt lends itself to the suggestion that regard should, be paid only to the two matters mentioned, but it appears to their Lordships that it is (1) (2) 445 impossible to arrive at a conclusion as to reasonableness by considering the two matters mentioned isolated from other relevant factors. Moreover, the statute does not say "having regard only" to losses previously incurred by the company and to the smallness of the profits made. No answer, which can be said to be in any measure adequate, can be given to the question of "unreasonableness" by considering these two matters alone. Their Lordships are of the opinion that the statute by the words used, while making sure that "losses and smallness of profits" are never lost sight of, requires all matters relevant to the question of unreasonableness to be considered. Capital losses, if established, would be one of them. " With great respect, we entirely agree with this view. The contrary view unduly restricts the discretion of the Income tax Officer and compels him to hold a particular dividend reasonable though in fact it may be unreasonable. The expression "smallness of profit" came under the judicial scrutiny of this Court in Commissioner of Income tax, Bombay City vs Bipinchandra Maganlal & Co. Ltd.(1) Therein, Shah, J., speaking for the Court observed thus: "Smallness of the profit in section 23A has to be adjudged in the light of commercial principles and not in the light of total receipts, actual or fictional. This view appears to have been taken by the High Courts in India without any dissentient opinion. " The learned, Judge laid down the following test: "Whether it would be unreasonable to distribute a larger dividend is to be judged in the light of the profits of the year in question. " If the assessable income was the test and if the commercial profits are small, the learned Judge pointed out, the company would have to fall back either upon its reserves or upon its capital which in law it could not do. This decision is binding on us and no further citation in this regard is called for. These two concepts, "accounting profits" and "assessable profits", are distinct. In arriving at the assessable profits the Income tax Officer may disallow many expenses actually incurred by the assessee; and in computing his income, he may include many items on notional basis. But the commercial or accounting profits are the actual profits earned by an assessee calculated on commercial principles. Therefore, the words "smallness of profit" in the section refer to actual accounting profits in comparison with the assessable profits of the year. Another incidental question is whether for the purpose of ascertaining the net commercial profits the tax estimated or the tax actually assessed shall be deducted. In a case where an Income tax Officer takes action under section 23A of the Act before the tax for the relevant period is assessed, only the estimated tax can be deduct (1) , 296, p(N)4SCI 446 ed but, there is no reason why, when the tax had already been assessed before he takes action under this section, the estimated tax and not the real tax shall be deducted therefrom. In this view, in the present case to ascertain the commercial profits what should be deducted is not the tax shown in the balance sheet but the actual tax assessed, on the income of the Company. Another question raised is whether the balance sheet is final and both the parties are precluded from questioning its correctness in any respect. There is no provision in the Income tax Act which makes the balance sheet final for the purpose of section 23A of the Act or even for the assessment. It no doubt affords a prima facie proof of the financial position of the company on the date when the dividend was declared. But nothing prevents the parties in a suitable case to establish by cogent evidence that certain items were, either by mistake or by design, inflated or deflated or that there were some omissions. It does not also preclude the assessee from proving that the estimate in regard to certain items has turned out to be wrong and placing the actual figures before the Income tax Officer. But in this case no attempt was made before the Tribunal to canvass the correctness of the figures either on the debit side or on the credit side and we do not think we are justified to give another opportunity to either of the parties in this regard. Before the Tribunal there was no dispute that the actual tax assessed for the relevant year was much higher than the estimated tax shown in the balance sheet. Section 23A of the Act is in the nature of a penal provision. In the circumstances mentioned therein the entire undistributed portion of the assessable income of the Company is deemed to be distributed as dividends. Therefore, the Revenue has strictly to comply with the conditions laid down thereunder. The burden, therefore, lies upon the Revenue to prove that the conditions laid down thereunder were satisfied before the order was made: see Thomas Fattorini (Lancashire) Ltd. vs Inland Revenue Commissioners(1). In the present case the Revenue failed to discharge the said burden: indeed, the facts established stamp the order of the Income tax Officer as unreasonable. The assessment orders passed by the Income tax Officer are not before the Court. The balance sheet shows a net profit of Rs. 1,28,112/7/5 whereas the Income tax Officer has computed the assessable income at Rs. 2,66,766, which was later reduced in appeal by Rs. 80,925. There is no evidence on the record that the real commercial profits were artificially reduced in the balance. sheet. Nor is there evidence to show what part of the income assessed represents commercial profits, and what part the notional income. In the circumstances it must be assumed that the amount mentioned in the balance sheet correctly represented the commercial profits. (1) L.R. [1942] A.C.643. 447 From the figures already extracted at an earlier stage it is manifest that the net commercial profit was barely Rs. 4,000 and it is not possible to hold that it was not unreasonable for the Income tax Officer to make an order to the effect that the additional sum of Rs. 64,000 should be deemed, to have been distributed as dividends amongst the shareholders. In the result we hold that the order of the High Court is correct and dismiss the appeal with costs. Appeal dismissed.

As the dividend declared to be distributed by the respondentcompany at its General Body Meeting was below 60 per cent of the profits available for distribution, the Income Tax Officer, with the previous approval of the Inspecting Assistant Commissioner, passed an order under section 23 A of the Income Tax Act directing that a certain higher amount shall be deemed to have been distributed as dividends as on the date of the annual general meeting of the Company. He found that, having regard to the profits earned in the earlier years and the capital and taxation reserves, payment of larger dividend would not be unreasonable. This was affirmed, on assessees appeals by the Appellate Assistant Commissioner, and the Income tax Appellate Tribunal. The Tribunal referred the question to the High Court under sec. 66(1) of the Act, which concluded that having regard to the smallness of the profits, the order of the Income tax Officer was not justified and answered the question in the assessee 's favour. In appeal by certificate. HELD: Section 23A of the Income tax Act is in the nature of a penal provision. In the circumstances mentioned therein, the entire undistributed portion of the assessable income of the company is deemed to be distributed as dividends. Therefore, the Revenue has strictly to comply with the conditions laid down thereunder. The burden therefore, was upon the Revenue to prove that the conditions laid down thereunder were satisfied, before the order was made. Thomas Fattorini (Lancashire) Ltd. vs Inland Revenue Commis sion applied. In the present case the Revenue failed to discharge the said burden: indeed, the facts established stamp the order of the Income tax Officer as unreasonable. [446F, G] Though the object of the section is to prevent evasion of tax, the provision must be worked not from the stand Point of the tax collector but from that of a businessman. The reasonableness or the unreasonableness of the amount distributed as dividends is judged by business considerations, such as the previous losses, the present profits, the availability of surplus money and the reasonable requirements of the future and similar others. It is neither possible nor advisable to lay down any decisive tests for the guidance of the Income tax Officer. It depends upon the facts of each case. The only guidance is his capacity to put himself in the position of a prudent businessman. It is difficult to say that the Income tax Officer cannot take into consideration any circumstances other than losses and smallness of profits. This argument ignores the expression "having regard to" that precedes the said words in section 23A of the Act. [444B E] 440 Commissioner of Income tax vs Williamson Diamond Ltd. L.R. , applied. Sir Kasturchand Ltd. vs Commissioner of Income tax, Bombay City, , referred to. The words "smallness of profit" in section 23A of the Act refer to actual accounting profits in comparison with the assessable profits of the year. The two concepts "accounting profits" and "assessable profits" are distinct. In arriving at the assessable profits the Income tax Officer may disallow many expenses actually incurred by the assessee; and in computing his income he may include many items on notional basis. But the commercial or accounting profits are the actual profits earned by an assessee calculated on commercial principles. [445F H.] Commissioner of Income tax, Bombay City vs Bipinchandra Maganlal and Co. Ltd. (1961)41 I.T.R. 296, followed. In a case where an Income tax Officer takes action under section 23A of the Act before the tax for the relevant period is assessed, only the estimated tax can be deducted; but, there is no reason why, when the tax had already been assessed before he takes action under this section. the estimated tax and not the real tax shall be deducted therefrom. [445H 446B] There is no provision in the Income tax Act which makes the Balance Sheet final for the purpose of section 23A of the Act or even for the assessment. It no doubt affords a prima facie proof of the financial position of the company on the date when the dividend was declared. But nothing prevents the parties in a suitable case to establish by cogent evidence that certain items were, either by mistake or by design, inflated or deflated or that there were some omissions. [446B D]

No. 1 of 1970. Petition under article 32 of the Constitution of India for the enforcement of fundamental rights. J. P. Goyal and Sobhag Mal Jain, for the petitioners. Bishan Nar and R. N. Sachthey, for respondent No. 1. Bishan Narain, B. Datta, J. B. Dadachanji, O. C. Mathur and Ravinder Narain, for respondent Nos. 2 and 3. 7 64 The Judgment of the Court was delivered by P. Jaganmohan Reddy, J. The three Petitioners who are residents of Amritsar have filed this Petition under article 3 2 of the Constitution, challenging the Punjab Development of Damaged Areas Act 10 of 1951 (hereinafter called 'the Act ') as being violative of article 14, 19 ( 1 ) (f ) & (g) and 3 1 (2) of the Constitution of India. The first Petitioner carries on a Bakery business in a shop in Bazar Jallianwala near Chowk Phowara of which he is a tenant. The second Petitioner is the owner of a building consisting of a number of shops situated in Bazar Bikanarian while the third Petitioner is a tenant in occupation of a residential house situated in Bazar Sodhian. On 26th June 1962 the State Govt. declared by a Notification under Sec. 2(d) of the Act the entire area within the walled city of Amritsar to be a damaged area. In pursuance of the said Notification a number of schemes were formulated by the Improvement Trust of Amritsar. Two of such Schemes with which the Petitioners are concerned related to ( 1 ) Chowk Phowara cum Jallianwala Bagh and (2) Ghantaghar. The former Scheme was sanctioned by the State Govt., by a Notification dated the 17th July 1968, while the Ghantaghar Scheme was sanctioned by Notification of the 10th October 1969. Pursuant to these Notifications a Notice was issued on 26th November 1969 to the first Petitioner whose shop is covered by the Chowk Phowara cum Jallianwala Bagh Scheme to vacate the premises in his possession. A notice was also given to Petitioners 2 & 3 in respect of the buildings owned or occupied by them in the Ghantaghar area Scheme, asking them to appear before the Land Acquisition Collector the 3rd Respondent and explain the interest which they have in the respective premises sought to be acquired. It is contended by the Petitioners : (1) (a) that Sec. 2(d) offends article 14 of the Constitution inasmuch as the damaged area as defined under that Section furnishes no guidelines, is arbitrary, unguided, un canalised and discriminatory inasmuch as it enables the State. Government to pick and choose any area and declare it to be damaged area even though it may not at all be damaged while at the same time leaving out other areas similarly situated which are either not damaged or really damaged; that in any case the Notification under Sec. 2(d) is vague and therefore bad, (b) that the provisions regarding compensation are also discriminatory because property can be acquired at the discretion of the Improvement Trust either under the Punjab Town Improvement Act 1922 or under the Act even though the compensation payable under the provision of the former Act are advantageous as compared to those payable under the Act; (2) that the compensation provisions in the Act violate article 31 (2) as it stood at the time when 765 the Act was passed in 1951; (3) that the Acquisition under the Act cannot be said to be for a public purpose as not a single pie comes from the Govt. or is contributed by the local authority; and (4) that the impugned Notification sanctioning the two schemes is also void because once the Govt. had exercised the power by sanctioning Dharam Singh Market Scheme, the power ,of sanction under Section 5 is exhausted. In order to appreciate the several contentions it is necessary to examine the provisions of the Act but before we do so it may be useful also to briefly set out the legislative history of the enactment and the purpose for which it was enacted. Prior to the partition of India there were, serious communal rioting in March 1947 in some parts of Punjab, particularly in Amritsar These riots as well as those which subsequently took place on the eve of partition caused extensive damage to property and left a lot of debris and refuse which had to be cleared. The Governor of Punjab who had by a proclamation under Sec. 93 of the Govt. of India Act 1935 assuming to himself all powers vested by and under the said Act passed the Punjab Damaged Areas Act 11 of 1947 on 9th May 1947. The Act so passed would only have force for two years from the date on which the proclamation ceases to have effect unless sooner repealed or re enacted by an Act of the appropriate legislature. The rule of the Governor came to an end on 15th August 1947 and consequently the 1947 Act would cease to have, force on 15th August 1949. It appears from the statement of objects and reasons of the 1947 Act that Government finding that it had not adequate power to deal with dangerous or damaged buildings summarily, or to deal satisfactorily with debris, the materials of damaged or fallen buildings or to control salvage of property and its disposal or to indemnify teh Crown or the Local authorities or their employees for the action already taken in respect of the aforesaid matters, wanted to arm itself by emergency changes in the Laws regulating the administration of Urban areas and to provide in an orderly way for the custody and disposal of debris and salved property. The substantive portions of the Act were meant to come into force in any area to which their application may be considered desirable by the Provincial Government, on such date as may be notified. Under Sec. 2(c) the Damaged area was defined in much the same way as is defined in Sec. 2(b) of the present Act. It conferred power on the Provincial Government to declare by Notification any area or any portion thereof to be a damaged area. Under this provision the whole of the walled city of Amritsar was declared to be damaged area. As this. Act would have lapsed by the 15th August 1949, the East Punjab Damaged Areas Act 10 of 1949 was enacted which embodied practically the same provisions as 766 were contained in the 1947 Act. Under this Act no fresh Notification in respect of the area Notified in the 1947 Act was issue& and though Sections 1 to 3 of the 1949 Act came into, force immediately after its publication the other provisions of that Act were to come into force in any urban area as the State Govt. by Notification may appoint. These provisions however did not meet the need for planned development of the damaged areas had consequently the Damaged Area Ordinance 16 of 1950 was promulgated by the Governor of Punjab on the 1st December 1950. The Ordinance was replaced by the present Act. Though under sub. (2) of Section 1 the Act extends to the whole of Punjab sub sec. (3) was to come into force at once within the local area of Amritsar Improvement Trust and any other such areas as the Govt. may by Notification specify. 2(d) defines damaged area to be an area which the State Govt. by Notification may declare to be a damaged area and includes the area already notified by the East Punjab Damaged Area Act 1949. Section 2(e) defined 'The Improvement Trust ' or 'Trusts ' as an Improvement Trust constituted under the Punjab Town Improvement Act 1922 while Land under Sec. 2(f) include$ benefits to arise out of land or things attached to the earth or permanently fastened to anything attached to the earth. 3 empowers the Trust to frame a Scheme or Schemes for the development of the damaged area providing for all or any of the matters mentioned under Sec. 28 of the Punjab Town Improvement Act 1922 and any Scheme already framed or sanctioned in respect of a damaged area under the Provisions of that Act which shall be deemed to have been framed or sanctioned under the Act. Sections 4 & 5 then provide for the publication of the Scheme giving certain specified details calling for objections to the Scheme within a period prescribed. After considering the objections, if any, which may, be received by the Trust during the period prescribed the Trust may approve the scheme with or without modification and thereafter submit it to the State Govt. with a statement of objections received by it. The State Govt. may modify the scheme if necessary and notify it either in original or as modified. The Scheme so published shall be deemed to be the sanctioned scheme; such publications being conclusive evidence of the Scheme having been duly framed and sanctioned. Under Sec. 6 the Trust shall within 3 months from the date of the publication of the Scheme udder Sub Section 3 of Section 5 apply to the ' Collector for acquisition and if considered necessary for taking immediate possession of the whole or part of any damaged area comprised in the Scheme and on such application being made the Collector may forthwith deliver or caused to be delivered to it the possession of the damaged area. On such order being made by the Collector the damaged area vests in the Trust free from all encumbrances 767 but subject to payment in due course of compensation by the Trust in accordance with the provisions of the Act. The occupier of any building or any part of the building was to be, given at least 2 weeks notice or such longer notice as it considered reasonably sufficient to enable him to remove his movable property from such building without unnecessary inconvenience to him. Section 7 empowers the Collector, if he is himself a Magistrate and if not to apply to a Magistrate to remove obstruction and to deliver possession of the land to the Improvement Trust. Sec. 8 provides for marking and measuring. Sec. 9 requires the Collector to cause notices giving particulars as required under sub sec. (2) inviting claims lo be made to him for compensation. Sec. 1 1 requires the Collector to make an enquiry into the objections and claims made pursuant to the notice issued under sub sec. 2(b) of Sec. 9, and to determine: (a) the true area of the land; (b) the market value, at the time of publication of the Scheme under Section 4(1), of (i) the land, (ii) all material standing on them, and (iii) any sources of income derived from the land. (c) The value of plots, the material thereon and other sources of income remaining outstanding as notified by the State Government under Section 12; and (d) the extent of the interest of every person claiming compensation, and the market value of the interest of such persons at the time of publication of the scheme under Section 4(1). Under Sec. 12 the Trust shall as soon as possession of the land comprised in the sanctioned scheme is delivered to it proceed to execute the scheme but not later than 3 years of the sanction of the scheme submit for the scrutiny of the State Govt. an accurate statement which shall contain the following particulars (a) the actual cost of the scheme; (b) the income derived from the scheme; (c) the particulars and the estimated value of the plots and any material thereon that remain to be sold; and (d) the estimated value of the other sources of Income from the scheme which remain out 5 Ll 100SupCI/71 standing. 768 On the scheme being submitted to the State Govt., it shall after necessary scrutiny notify the details of he aforesaid statement. The manner in which compensation is to be computed and the award to be passed by the Collector and the payment of com pensation are provided for in Sec. 13 and 16. Section 14 provides for the Collector 's award to be filed and Sec. 15 empowers Trust either to notify its intention to make a reference to the Tribunal in the manner stated in Sec. 19 against the amount awarded by the Collector or place the amount awarded at his disposal. Sections 13 and 16 which deal with the calculation of the total compensation and its payment are as follows Sec. 13 : (1) After the statement has been notified under the preceding section, the Collector shall make an award apportioning compensation in the manner hereinafter prescribed, among all the persons known or be lieved to be interested in the land, of whom or of whose claims he has information, whether or not they have (2) Notwithstanding anything contained in any other law for the time being in force, the total compensation payable for any land acquired under this Act shall be the difference between (a) the income of the Scheme, which shall include the estimated value of the plots and the material thereon that remain to be sold and the other sources of income from the scheme which remain outstanding; and (b) the cost of the scheme, as notified in the statement under Sec. (3) subject to the provisions of the , or any other law on the subject for the time being in force, the compensation awarded in respect of the structures, if any, standing on the land comprised in the scheme shall be payable to the persons known or believed to be interested in those structures according to their respective interests as determined by the Collector under See. Explanation: In computing such compensation, the Collector shall assess the market value of the structures at the time of delivery of possession of the land to the Trust and deduct from such value the cost of demolishing them said removing the material from the site. 7 69 (4) The total compensation, less any deductions that may be necessary on account of the amounts, if any, payable under sub section (3), shall be paid to the various persons interested in proportion to the interests hold by them as determined by the Collector under sec. 1 1 (c). Provided that the amount paid to any person shall not be less than the market value of his, interest as determined by the Collector under Sec. 11 (1) minus the cost of demolition and removal incurred by the Trust. Sec. 16: From the amount placed at his disposal under section 15 the Collector shall, according to the award, tender payments to the persons interested and make payments to those who agree to receive the same, with or without protest. Sections 19 to 21 provide that the Trust or persons interested who receive compensation under protest, may require the Collector to make a reference to the Tribunal in respect of the measurement of the land, amount of compensation, the persons to whom it is payable, its apportionment among persons interested. A statement of the case is also required to be drawn up by the Collector on reference, and a notice to be given by the Tribunal to the persons interested. Under Sec. 23 the Tribunal has power to either maintain or modify the award passed by the Collector and order payment to the persons entitled to it, provided that it shall not question the amounts notified under Sec. 12. The award passed by the Tribunal is deemed to be a decree and the statement of the grounds therefore a Judgment within the meaning of sub section (2) and (9) of Section 2 of the Civil Procedure Code; and every award and order of the Tribunal is enforceable by the Court of the Senior Sub Judge within the local limits of its jurisdiction as if it were a decree made or passed by it. While Section 24 makes provision for the award of costs, Section 25 does not require the Trust to pay interest on any amount awarded as compensation and tendered in accordance with the order of the Collector. The provisions of the Act it may be noticed clearly indicate that they are reasonable and are designed to serve the interest of the general public namely to execute schemes in a planned manner for the improvement of the damaged areas of the city of Amritsar. They do not in any way violate the provisions of article 19(1) (f) & (g). This Court has in no uncertain terms laid down the test for ascertaining reasonableness of the restrictions on the rights guaranteed under article 19 to be determined by a reference to the nature of the right said to have been infringed, the purpose of the restrictions sought to be imposed, the urgency of the evil and the necessity 770 to rectify or remedy it all of which has to be balanced with the social welfare or social purpose sought to be achieved. The right of the individual has therefore to be sublimated to the larger interest of the general public, Applying this test it will be seen that persons who are affected by the Scheme are given an opportunity to fide their objections which have to be given due consideration by the Trust before finalising the scheme. Their objections are further considered by the Govt. before sanctioning the scheme. They have also a right to take part in the proceedings before the Collector in the enquiry into claims, for compensation, and are given notice of the award made by the Collector. The compensation payable to them is. more in the nature of a profit sharing scheme in that the minimum that they would be entitled for payment is the market value of the property which has come under the scheme and may even be entitled to, something more depending upon the income of the scheme and the expenditure incurred therefore. The total amount of compensation for any land so acquired under Sec. 13 (2) is the difference between the income of the scheme which is to include the estimated value of the buildings and the material thereon that remains to be sold, the profits on the plots sold and the other source of the income of the scheme as notified in the statement under Sec. 12, subject as we have pointed out earlier to the compensation in any case not being less than the market value of his interest as determined by the Collector under Sec. 11(d) minus the cost of the demolition and removal incurred by the Trust. The persons interested are further given a right to have their objections to the award fixing compensation, the area of the land demarcated and other matters as specified in Sec. 20 referred to the Tribunal. The award or any order passed by the Tribunal being deemed to be a Judgment and a decree under the Civil Procedure Code, the affected persons have therefore right of appeal provided under that Code, which will give the man opportunity to go up to the High Court and even to the Supreme Court. The fundamental rights to acquire, hold or dispose property or to carry on any occupation, trade or business guaranteed under article 19 (1) (f) & (g) is subject to the restrictions contained in clauses (5) & (6) of the said Article. The Act in our view complies substantially if not abundantly with the restrictions imposed on the ,exercise of the said fundamental rights. It is then contended that some buildings in these areas are newly build or that some of them are not damaged and hence the restriction is unreasonable but in our view this alone does not in any way justify an impediment being placed for a scheme which is designed to achieve a social purpose and is for the public good The compensation payable under the Act is 'also determined on principles similar to those under the Land Acquisition Act or the Punjab Town Improvement Act. There is however no justification 771 in the submission that option is given to acquire the area either under the Act or under the Punjab Town Improvement Act according to the discretion of the Trust which is without guide lines and arbitrary. This argument is devoid of force because what Section 3 empowers is that the Trust in framing a scheme may provide for all or any of the matters mentioned in Section 28 of the Punjab Town ' Improvement Act. It further declares that any scheme already framed under the Punjab Town Improvement Act is deemed to have been framed under the Act. This is far from saying that a discretion is given to the Trust to frame a Scheme either under the provisions of the Act or under the provisions of the Punjab Town Improvement Act, or that the provisions of the latter Act are more advantageous in the matter of compensation or in respect of any other matter. The section merely incorporates by reference some of the provisions of the other Act and is also an enabling one. There is also no validity in the contention that compensation is not payable for the buildings but only for the land because the definition of land under the Act is similar to that under Sec. 3(a) of the Land Acquisition Act and is comprehensive enough to include buildings also. It is next urged that compensation so determined is not im mediately payable because under the provisions of the Act the final compensation will only be determined after the scheme is submitted and sanctioned by the Govt. which may take several years and also there is a prohibition against payment of interest on the amount of compensation unlike that provided under the provisions of the Land Acquisition Act. It is true that the finalisation of the scheme will take time but under the provisions of sub see (2) of Sec. 12 the submission of the Scheme by the Trust is not to be later than 3 years which does not mean necessarily that it will take 3 years and may even take less if not obstructed by persons affected. In any case as we have said where the scheme is for the benefit of all those who have properties in the areas which are covered by the scheme and is on a profit sharing basis, there is no hardship or disadvantage particularly when the Petitioners as we shall point out presently are assured of, alternative accommodation and the allotment of newly built shops under the scheme. Though the actual schemes are not before us, it is stated in the counter of Respondent No '. 2 the Chairman of the Amritsar Improvement Trust that the Petitioners have been assured in writing by the Trust that, allotment of pacca shops as soon as the commercial building in Dharam Singh Market which is being constructed at an estimated cost of Rs. 26 lakhs is completed. In fact Ahata Bishan Dass and the adjoining scheme areas are ready. In the meanwhile many of the persons who have applied 772 for alternate accommodation have for the time being been ac commodated by the Trust in the stalls recently set up in Kesribagh in the immediate vicinity of the Trust office. Though the Petitioners 1 and 3 have not applied for alternative accommodation they have been assured that they will be treated alike with the said displaced occupiers of shops in case they apply for alternative accommodation. In so far as the petitioner No. 2 is concerned it is alleged that he is not an occupier of the building, as such there is no question of an alternative accommodation being given to him but this matter will have to be decided under the provisions of the Act. Be that as it may in fact the Chairman of the Amritsar Improvement Trust has appended to the counter a letter addressed to one Inder Singh Arora who has a shop in Bazar Jallianwala in Amritsar and who is also similarly situated like the petitioners. In that letter of 6 1 1970 he has stated as follows "Reference your discussion with/ the undersigned, It has been decided to offer you accommodation on the lines of commitments made by the Trust in High Court in letters Patent Appeal No. 187 soon as commercial buildings in Dharam Singh Market, Ahata Bishan Dass and the adjoining Scheme areas are ready,,/ the Trust would give preference to the oustees from the scheme area (Chowk Phowara to Jallianwala Bagh in Main Bazar and, other Markets) who are 5 years old to occupy shops of their choice at the rent which is fixed by the Trust for the particular shop. The rent fixed by the Improvement Trust may be the highest that can be fetched in the Market. At that rent the tenants may exercise their option to get tenancy rights in preference to others and in case they refuse to take the shops on rent so fixed by the Trust, the same would be given to others". These assurances are commitments and would equally apply to the Petitioners. We cannot envisage a more reasonable and fair treatment accorded to the persons who have been displaced as a result of the Improvement Schemes. The petitioners in spite of all these assurances have taken an unreasonable attitude in litigating and holding up a scheme that is beneficial for all those affected in the damaged areas by the two impugned schemes. in our view the compensation payable is neither inadequate nor illusory, but on the other hand is not less than the market value and may even be more. There is therefore no violation of article 31(2) of the Constitution. 773 The further contention that Sec. 2(d) is discriminatory of vague in that it does not indicate the criteria for determining what is a damaged area appears to us to be without force. We have seen the purpose for which the Act was passed by the Legislature which leaves little doubt that it was the damage caused by wholesale and serious rioting to buildings in certain urban ,areas in the State of Punjab and particularly in the area within the walled city of Amritsar which necessitated the framing and execution of schemes of improvement in those areas. In so far as the present petition is concerned it relates to two of the areas within the walled city of Amritsar. It is therefore not difficult to determine what is a damaged area for, if the whole of the walled city of Amritsar is a damaged area, any part thereof is equally a damaged area. There is nothing arbitrary nor is the power conferred on the State Govt. , unguided or un canalised nor for that matter can it be said that the Notification issued on the 26th June 1962 is vague. In so far as the contention that the impugned Notification sanctioning the two schemes are void as the power under Sec. 5 of the Act was exhausted because the Govt. had already exercised its power when it sanctioned Dharam Singh Market Scheme, the learned Advocate has (not chosen to address any arguments or to substantiate that contention. As such we find it unnecessary to deal with it. In our view none of the objections are sustainable either on the ground of discrimination under article 14 or on the scheme are being unreasonable or not in the interest of general public violating article 19 (1) (f) & (g) nor on the ground of the compensation payable being inadequate or insufficient so as to infringe the guarantee under article 31(2) of the Constitution of India. The petition is accordingly dismissed with costs. V.P.S. Petition dismissed.

In order to deal with extensive damage to property and to clear the debris and refuse caused by communal riots in 1947 in Punjab, statutes we 're enacted, giving suitable powers the last of which is the Punjab Development of Damaged Areas Act, 1951. Under section 2(d) of the Act the State Government declared by a Notification that the entire area within the walled city of Amritsar to be damaged area. The Improvement Trust formulated certain schemes which were sanctioned by the State Government. Thereafter, notice was issued to the first petitioner to vacate the shop in his possession and to the second and third petitioners to appear before the Land Acquisition Collector and explain the interest which they had in the, premises in their occupation sought to be acquired. In a petition under article 32, on the questions whether (1) the Act is violative of article 14, because (a) the power to declare an area as damaged is arbitrary, and (b) the property can be acquired at the discretion of the Trust either under the Punjab Town Improvement Act, 1922, or under the Act, compensation payable under the form& Act being more advantageous; (2) the restrictions imposed by the Act are unreasonable and violative of article 19(1 ) (f) and (g); and (3) the acquisition and compensation provisions of the Act violate article 31(2). HELD : (1) There is no violation of article 14. (a) The purpose of the Act is for framing and executing schemes of improvement in urban areas where damage has been caused to buildings by wholesale and serious rioting and hence, the power conferred on the State Government to declare an area damaged area is not arbitrary, unguided or uncanalised. If the whole of the walled city of Amritsar is a damaged area and part thereof is equally a damaged area. Therefore, it is not difficult to determine what is damaged area and the Notification in the present case is not vague. [773 A D] (b) No option is given to acquire the area either under the 1951 Act or Punjab Town Improvement Act according to the discretion of the Improvement Trust. The 1951 Act only provides that the Trust in framing a scheme may provide for all or any of the matters mentioned in section 28 of the Punjab Town Improvement Act, and that any scheme already framed under the latter Act is deemed to have been framed under 1951 Act. [771 A B] (2) The provisions of the Act are reasonable and are designed to serve the interest of the general public by executing schemes in a planned manner for the improvement of the damaged areas of the city and the restrictions imposed are protected by article 19(5) and (6) of the Constitution. [769 G H] 763 (a) Persons who are affected by a scheme are given an opportunity to file their objections which have to be given due consideration by the Improvement Trust before finalising the scheme, and by State Government before sanctioning the scheme. They have also the right to take part in, the proceedings before the Collector in the inquiry into claims for compensation. They are given notice of the award and are given a right to have their objections to the award fixing the compensation or the are ' I demarcated and other matters specified in section 20 referred to a Tribunal. The award, or any order passed by the Tribunal, is deemed to be a judgment 'and decree under the Civil Procedure Code, and affected persons have a right of appeal to the High Court and to this Court. [770 B F] (b) The fact that there are some newly built buildings which are not damaged would not make the provisions of the Act unreasonable nor justify an impediment being placed to a scheme which is designed to achieve a social purpose and is for the public good [770 G H] (c) The persons in occupation of shops have been assured in writing by the Improvement Trust of alternative accommodation and allotment of pucca shops as soon as possible. [771 H] (3) The compensation payable is neither inadequate nor illusory but on the other hand it is not less than the market value and may even be more. There is thus no violation of article 31(2) of the Constitution. [770 G 772 B] (a) The compensation payable to persons interested under the Act is more in the nature of a profit sharing scheme in that the minimum that they would be entitled for payment is the market value of the property which has come under the scheme and may even be more depending upon the income of the scheme and the expenditure incurred therefore. The com pensation is determined on principles similar to those under the Land Acquisition Act or the Punjab Town Improvement Act. [770 B C, H] (b) It cannot be contended that compensation is not payable for the buildings but only for the land, because, the definition of land under the Act is similar to that in section 3 (a) of the Land Acquisition Act and is comprehensive enough to include buildings also. [771 D] (c) The finalisation of the scheme will take time but under section 12(2) the submission of the scheme by the Trust is not to be later than three years. Therefore, it cannot be urged that the final compensation is not immediately payable and that it may take several years without any payment of interest during that time. In any case, the scheme is for the benefit of all those who have properties in the areas which are covered by the scheme and is on a profit sharing basis. There is thus no hardship or disadvantage. [771 E G]

vil Appeal No. 453 (NL) of 1984. From the Judgment and Order dated 19.5. 1983 of the Allahabad High Court in C.M .W.P. No. 8798 of 1980. K. Ramamurthi and R.D. Upadhyay for the Appellant. Anil Kumar Gupta for the Respondents. The Judgment of the Court was delivered by SHARMA, J. This appeal by special leave is directed against the judgment of the Allahabad High Court dismissing the appellant 's writ petition challenging an award of the Industrial Tribunal. The appellant was working as an Assistant Cashier in the Rampur Zila Sahkari Bank Ltd., when a reference of an industrial dispute was made under section 4 A of the U .P. Indus trial Disputes Act, 1947 (hereinafter referred to as the U.P. Act). The provisions of the U .P. Act relevant to the present case are similar to those of the Central Act, that is, the . Section 4 K of the U.P. Act, like the corresponding section 10 of the Central Act, empowers the State Government to refer industrial disputes to Labour Courts or Tribunals. During the pendency of the reference the appellant was put under suspension and served with a charge sheet in February 1976, which was followed by a domestic inquiry leading to the dismissal of 413 the appellant from service on 16.8. The U.P. Act in sections 6 E and 6 F incorporates provisions similar to those in ss 33 and 33 A of the Central Act. The appellant filed a complaint under section 6 F of the U.P. Act before the Industrial Tribunal, and the same was treated as a dispute referred to it and was finally disposed of by the Award which was im pugned before the High Court. The Tribunal, in the first instance, examined the case of the appellant on the question whether principles of natural justice had been followed in the domestic inquiry, and after hearing the parties. decided the issue by its order dated 23.2. 1979 in favour of the workman. Proceeding further the Tribunal asked the management to justify the order of punishment on merits. Accordingly, the parties led their evidence and the Tribunal recorded a finding that the charges levelled were established by the materials on the record and the workman, therefore, was not entitled to any relief. As stated earlier, the appellant challenged the award before the Allahabad High Court by filing a writ petition. By a well discussed judgment, which is now under challenge before us, the High Court dismissed the writ application. Mr. Ramamurthi, the learned counsel appearing in support of the appeal, has raised before us the following two points: (i) After recording its conclusion that the domestic inquiry was vitiated on account of violation of principles of natu ral justice, the Tribunal was under the duty of announcing its award in favour of the appellant; and since there was no application filed on behalf of the employer for permission to justify the punishment by leading evidence, the Tribunal exceeded its jurisdiction in asking the management to do so. (ii) In any event, the appellant was entitled to his salary for the period 16.8.1976 (that is, the date of his dismiss al) to 20.7. the date of the Award of the Tribunal. Mr. Ramamurthi contended that after the conclusion reached by the Tribunal that the domestic inquiry held by the employer was illegal. question of justification of the impugned punishment by fresh 414 materials could arise only if the management had applied to the court for permission to justify the punishment and, in the absence of such a prayer, the Tribunal did not have the power to call upon the employer to do so. In order to pro ceed further with the Reference for the above purpose, it was essential to have a pleading in this regard, along with an express prayer by the employer, and the Tribunal was not entitled to adopt an advisory role by informing the employer of its rights, namely, the right to adduce additional evi dence to substantiate the charges. The learned counsel heavily relied on the decision of this Court in Shankar Chakravarti vs Britannia Biscuit Co., ; , which was governed by the Central Act. As rightly urged on behalf of the appellant, a relevant decision under the Central Act must be held to apply to a case under the U.P. Act since the provisions of the two Acts are in pari mate ria. However, the case cited is not an authority for the point urged by the learned counsel and he, therefore, cannot take any aid therefrom. In the aforementioned case the Tribunal came to the conclusion that the inquiry was conducted in violation of the principles of natural justice and was, therefore, viti ated, and the award was pronounced rejecting the application of the management under section 33(2)(b) for approval of the action terminating the service of the employee. The employer challenged the award in a writ case before the Calcutta High Court on the ground that the Tribunal was under a duty to call upon the management to lead evidence in support of the correctness on merits of the order of punishment, which was not done. It was not a case of a prayer having been made by the employer which was rejected. This aspect has been spe cifically mentioned in the judgment and it was further observed that before the learned single Judge who heard the writ case no plea was raised about any denial of opportunity to the respondent Company "to lead evidence in proof of charges after the domestic inquiry was found to be defec tive". The writ petition was dismissed by the learned single Judge and the employer Company preferred a Letters Patent Appeal which was allowed by a Division Bench observing that after holding that the domestic inquiry was defective, it was incumbent upon the Tribunal to give an opportunity to the employer to lead evidence to prove the charges and as this was not done, the award was vitiated in law. This Court, in appeal, disagreed with the Division Bench of the High Court and reversed the judgment. It was held that if an opportunity is sought by the employer to adduce additional evidence to substantiate the charges of misconduct, the Tribunal or the Labour Court, as the case may be, should grant the 415 opportunity. "But if no such opportunity is sought nor there is any pleading to that effect no duty is cast on the Labour Court or the Industrial Tribunal suo motu to call upon the employer to adduce additional evidence to substantiate the charges. " It was pointed out that there was neither a plead ing in which any claim for adducing additional evidence was made "nor any request was made before the Industrial Tribu nal till the proceedings were adjourned for making the Award and till the Award was made". The judgment relied upon does not support the proposition formulated before us that in absence of a prayer the Tribunal is debarred from reminding the employer of his right to adduce additional evidence to substantiate the charges. We do not find any valid ground for accepting the stand of the appellant taken before us. The entire argument of the learned counsel is rounded on the decision of this Court in Chakravarti 's case which is clear ly distinguishable. As has been stated earlier, in that case the Court was not called upon to consider the point as urged before us and the judgment repeatedly made it clear that what was under consideration was whether a duty has been cast in law on the Labour Court or the Tribunal to afford an opportunity to the employer in absence of a request and the question was answered in negative leading to the conclusion that: ". if there is no such obligatory duty in law failure to give any such opportunity cannot and would not vitiate the proceedings. " 8. Analysing the situation, it appears that by asking the respondent to justify the punishment by adducing addi tional evidence. the Tribunal merely reminded the employer of his rights and the employer promptly availed of the opportunity. We do not find any illegality in the course adopted which could vitiate the Award. The first point is. therefore rejected. The second ground urged in support of the appeal appears to be well founded. The learned counsel is right in relying on the observations in Gujarat Steel Tubes Ltd. vs Gujarat Steel Tubes Mazdoor Sabha; , at p. 215, that if the order of punishment passed by the manage ment is declared illegal and the punishment is upheld subse quently by a labour tribunal, the date of dismissal cannot relate back to the date of the illegal order of the employ er. The appellant is, therefore entitled to his salary from 16.8. 1976 to 20.7. 1980 and the entire amount should be paid by the respondent Bank within a 416 period of three months from today. ' If the amount is not paid or offered to the appellant as directed, the respondent Bank will be liable to pay interest thereon at the rate of 12% per annum for the future period commencing on the date of expiry of three months from today till the same is rea lised. The appeal is allowed in part as indicated above. The parties shall bear their own costs. P.S.S. Appeal partly allowed.

The appellant, an employee of the respondent Sahkari Bank was put under suspension and served with a chargesheet during the pendency of the reference under section 4K of the U.P. It was followed by a domestic inquiry leading to his dismissal. Thereupon he filed a complaint under section 6 F of the Act before the Industrial Tribunal and the same was treated as a dispute referred to it. The Tribunal found that principles of natural justice had not been followed in the domestic inquiry. However, proceeding further it asked the management to justify the order of punishment on merits. The parties led their evi dence and the Tribunal recorded a finding that charges levelled were established. The High Court dismissed the writ petition challenging the award. In the appeal by special leave, it was contended for the appellant that after the conclusion reached by the Tribunal that the domestic inquiry held by the employer was illegal, question of justification of the punishment by fresh materi als could arise only if the management had applied for permission to justify the punishment and, in the absence of such a prayer the Tribunal did not have the power to call upon the employer to do so, and that in any event the appel lant was entitled to his salary from the date of his dis missal to the date of the award. Allowing the appeal in part, the Court, HELD: 1. By asking the respondent to justify the punish ment by adducing additional evidence the Tribunal merely reminded the employer of his rights. There was no illegality in the course adopted which could vitiate the award. [225F] 412 Shankar Chakravarti vs Britannia Biscuit Co., [1979] 3SCR 1165, distinguished. If the order of punishment passed by the management is declared illegal and the punishment is upheld subsequent ly by a labour tribunal, the date of dismissal cannot relate back to the date of the illegal order of the employer. [225H] In the instant case, the Tribunal had initially found that the domestic inquiry was vitiated on account of viola tion of principles of natural justice. The appellant was, therefore, entitled to his salary from the date of his dismissal, to the date of the award. [225D & H] Gujarat Steel Tubes Ltd. vs Gujarat Steel Tubes Mazdoor Sabha, ; , applied.

Civil Appeal No. 2649 of 1984. Appeal U/s 116A of the R.P. Act 1951 from the Judgment and Order dated 30.5.1984 of the Punjab & Haryana High Court at Chandigarh in E.P. No. 8 of 1982. H.L. Sibal, Kapil Sibal, Mrs. Madhu Tewatia Singh and N.M. Popli for the Appellant. S.N. Kacker and Ravinder Bana for the Respondents. by VARADARAJAN, J. This appeal by the first respondent in Election Petition No. 8 of 1982 on the file of the Punjab and Haryana High Court is filed against the judgment of the learned Single Judge, allowing the election petition and setting aside the appellant 's election to the Haryana Legislative Assembly from the Jind constituency in the election held on 19 5 1982. Out of 26 nomination papers filed, 24 were found to be valid and ultimately 14 candidates remained in the field. The real contest was between the appellant Brij Mohan, who was an independent candidate supported by the Lok Dal and the first respondent Manga Ram who contested as the Congress (I) candidate. In the counting which took place on 20 5 1982 it was found that the appellant had secured 27045 valid votes while the first respondent had secured 26899 valid votes and the appellant was accordingly declared elected. The first respondent filed the election petition challenging the p appellant 's election on the following grounds, namely: (I) corrupt practice of bribery as defined in section 123(1) of the Representation of People Act, 1951; (2) corrupt practice of publication of various statements relating to the personal character of the first respondent which were false; (3) result of the election in so far as it related to the appellant having been materially affected by en masse violation of the statutory provisions and (4) large scale receiption of void votes in favour of the appellant but for which the first respondent would have been declared elected. The first respondent prayed in the election petition for (I) the appellant 's election being set aside as void on the above grounds; (2) the appellant being declared to have committed corrupt practice and (3) the first respondent being declared to have been duly elected, 315 The learned Single Judge who tried the election petition allowed it with costs on only one ground and set aside the appellant 's election as void on that ground, namely, that he committed the corrupt practice of bribery by contributing a sum of Rs. 5100/towards the cost of construction of a temple for the backward classes in Kandela village in order to get the votes of the members of those classes cast in his favour in that election. It is, therefore, necessary to state the case of the parties briefly in regard to only this item of corrupt practice. The first respondent has alleged in the election petition that the appellant visited Kandela village on or about 16 5 1982 accompanied by his father Sita Ram and two others Ram Kishan and Amrit Lal and they contacted Dalip Singh, Sarpanch of the village and one Dewan Singh, Secretary of the backward classes. The appellant appealed to the backward class voters assembled at the house of one Dharam Singh for casting their votes in his favour. The voters present there included Dewan Singh, Hari Ram, Devi Ram, Fateh Singh and Mauji Ram. The voters told the appellant that they intended to cast their votes in favour of the Congress (I) candidate as they had always been in favour of the Congress (I) party. The appellant, thereafter, had a talk with the Sarpanch Dalip Singh and one Dharam Singh and subsequently stated, for inducing the voters to cast their vote in his favour, that he was prepared to give a donation of Rs. 5100 as he had been told that they needed some money for their mandir. Accordingly, he gave a sum of Rs. 5100 to the Sarpanch Dalip Singh who passed it on to Dharam Singh and Dewan Singh. The voters thereafter assured the appellant that they would vote for him and ensure that every vote belonging to their class will go in his favour. The appellant denied this allegation saying that he never visited Kandela village in the company of Sita Ram, Ram Kishan and Amrit Lal and never gave Rs. 5100 to the Sarpanch Dalip Singh and that the entire allegation in the election petition regarding this item of corrupt practice is false and mischievous. In regard to this item of corrupt practice there is evidence of the election petitioner/first respondent Mange Ram, P.W. 1, Dewan Singh, P.W, 16, Manuji Ram, P.W. 90, Fateh Singh, P.W. 91 and Prahlad, P.W. 92 on the side of the first respondent and of the appellant, R.W. 1 on the side of the appellant. The learned Single 316 Judge found that after a Commissioner appointed by the Court contacted P.W. 16 and obtained a register from him. P.W. 16 was suspended by the District Education Officer, Jind by an order dated 23 11 1982 and transferred to Narnaul situate 200 miles away from his original place which was his home town and he opined that it was done in order to overawe P.W. 16 so that he may not appear as a witness in this election petition. He further observed that "It was in his (appellant 's) interest to see that this witness did not come on record. If illegal pressure was brought to bear on a witness who had come to this Court to depose about this charge, normal inference and presumption would be that the pressure had been brought to bear upon him either by the party who was interested in seeing that damaging evidence was not led against him or by some one else at his instance. I am clearly of the view that respondent No. I had somehow or other secured that order of suspension and transfer of Dewan Singh, P.W. 16". We are wholly unable to appreciate this reasoning of the learned Judge. We do not see how the appellant was obliged to explain the circumstances under which P.W. 16 came to be suspended and transferred to Narnaul by the District Educational Officer 's order dated 23 11 1982 after the Commissioner appointed by the Court approached him and obtained a register from him or how the adverse inference could be drawn against the appellant by the learned Judge merely because the appellant was unable to explain how P.W. 16 came to be suspended and transferred by the District Educational Officer 's order dated 23 11 1982 after a register had been obtained from him by the Commissioner appointed by the Court and it came to be known that p. W. 16 may be examined as a witness in this election petition, We think that there is no justification whatsoever to draw any such adverse inference against the appellant. The appellant, R.W. 1 had denied that he had gone to Kandela village on 16 5 1982 either alone or in the company of Sita Ram and others. He has denied that he contacted the Sarpanch Dalip Singh and others and gave Rs 5100 as alleged in the election petition and that the voters of Kandela village held out any promise for casting their votes in his favour. In the cross examination on suggestion was made to R.W. 1 that he gave a sum of Rs. 5100 for the construction of a mandir for the backward class voters of Kandela village on 16 5 1982 or on any other date, to induce them to cast their votes in his favour, 317 The first respondent. P. W. l has stated in his evidence that the appellant visited Kandela village on 16. 1982 accompanied by the Sarpanch Dalip Singh, Hari Ram, Dewan Singh and others, that all of them and the members of the backward classes assembled in the house of the Backward Classes Samiti Chairman Dharam Singh, that the appellant gave Rs. 5100 to the members of the backward classes for the construction of a Viswakaram Mandir in the village and the Society passed a receipt for that amount and also made an entry in its own books of accounts kept in the regular course of business and that the members of the backward classes who received the amount promised to cast their votes in favour of the appellant. In his cross examination he has stated that the bribe money was paid by the appellant on 15.5.1982. It would appear from his evidence that he claims to have personal knowledge about the alleged visit of the appellant and others to Kandela village on 16.5.1982 and about the alleged payment of Rs. 5100 by the appellant for the construction of a temple for the backward classes people of the village in order to induce the voters of those classes to cast their votes in his favour. But in his affidavit verifying the election petition he has stated that the allegations made in para 9(d) of the election petition regarding this item of corrupt practice are based upon information received by him from Dewan Singh. Therefore, the evidence of P.W. I regarding this item of alleged corrupt practice is wholly unacceptable. Dewan Singh, P.W. 16 has stated in his evidence that he is the Secretary of the Managing Committee of a temple that was being constructed in Kandela village for the members of the backward, classes, that the appellant attended a meeting of the backward classes in Dewan Chand 's house on 15 5 1982, and volunteered to give a donation of Rs. 5100 for that temple provided the members of the backward classes cast their votes in his favour and that on 16.5.1982 one Madan Lal gave Rs. 5100 to the Temple Committee 's President Dharam Singh in his presence and he himself made the entry exhibit PW 16/2 about that payment in the Temple Committee 's cashbook, exhibit P.W. 16/1. He has admitted that the entire cash book, exhibit P.W. 16/1 is in his hand writing and does not bear the signature of any office bearer of the Viswakarama Samiti. But he has denied that he has got up this cash book in connivance with the first respondent for the purpose of this election petition. His evidence that the appellant offered on 15.5.1982 to give a sum of Rs. 5100 in the house of Dewan Chand and that it was given by one Madan Lal to Dharam Chand is inconsistent with the allegation in the election petition 318 that the appellant offered to give Rs. 5100 on 16.5.1982 as donation and gave it himself to the Sarpanch Dalip Singh and he passed it on to Dharama Singh. Therefore, the evidence of P.W. 16 regarding this item of alleged corrupt practice cannot be accepted. Mauji Ram, P,W. 90 has stated in his evidence that the appellant and his father and Sarpanch Dalip Singh collected the people belonging to black smith and carpenter communities in the house of the carpenter Diwana on 14.5.1982 and requested the people to cast their votes in his favour, that the people told the appellant and his two companions that they would inform that after discussing about the matter and asked the appellant and his companions to visit the village again on 16.5.1982, that accordingly the appellant and others came to the village on 16 5.1982 and asked the people to vote for the appellant, that the people told the appellant and his companions that they would vote for him if he gave money and that the appellant thereupon gave a sum of Rs 5100 to Dharma Lohar. The evidence of this witness is that the people asked for money to vote in favour of the appellant and that thereupon he gave Rs. 5100 to Dharma Lohar whereas the allegation in the election petition is that after the voters told the appellant that they intended to vote for the Congress (I) candidate as they had always been in favour of the Congress (I) Party the appellant had a talk with the Sarpanch Dalip Singh and one Dharam Singh and he subsequently stated, for inducing the voters to cast their votes in his favour, that he was prepared to give a donation of Rs. 5100 as he had been told that they needed some money for their mandir and that he accordingly gave Rs. 5100 to the Sarpanch Dalip Singh and he passed it to Dharam Singh and Dewan Singh There is thus a vital discrepancy between the pleading in the election petition and the evidence of P.W. 90. P.W. 90 has stated that he does not know whether any receipt was passed for the amount whereas P.W. 16 has stated in his evidence that Madan Lal gave Rs 51()0 to the Temple Committee 's President Dharam Singh in his presence on 16 5 1982 and he made an entry for receipt of that amount in exhibit PW. 16/2 in the cash book, exhibit P.W. 16/1 and P.W. ` I has stated in his evidence that the Society passed a receipt for the amount and also made an entry in the cash book about the money. It is significant to note that P.W. 90 was not cited as a witness in the list of witnesses filed by the first respondent on 11.11.1982 and 26.11.1982 and that he was examined as a witness only on 25.7.1983. In these circumstances, we think that no reliance would be placed on the evidence of P.W. 90 regarding this item of alleged corrupt practice. 319 Fateh Singh, P.W. 91 is yet another witness whose name was not mentioned in the list of witnesses filed by the first respondent on 11.11.1982. He has stated in his evidence that four or five days prior to the date of poll 19.5 1982, the appellant and his father and two others, Sarpanch Dalip Singh and Madan Lal, visited Kandela village and come to the house of Diwana Khati, that many voters belonging to the backward classes were summoned to that house and the appellant and his companions offered to donate some money to the temple provided the people assembled there and other members of the community voted for the appellant and they told them that they would discuss about the matter and let them know, that two or three days thereafter the appellant came by a car they assembled in the house of the black smith Dharama and that in his presence Madan Lal who came with the appellant gave Rs. 5100 to the Sarpanch Dalip Singh who in turn passed it on to Dharma Lohar and he promised that the members of his community would vote for the appellant. The evidence of this witness is not consistent with the allegation made in the election petition that the appellant gave a sum of Rs 5100 to the Sarpanch Dalip Singh and that he passed it on Dharam Singh and Dewan Singh. We are, therefore, unable to place any reliance on his evidence regarding this item of alleged corrupt practice. Then there remains the evidence of Prahalad, P.W. 92. He has stated that the appellant, came to Kandela village on 16.5.1982 alongwith the Sarpanch Dalip Singh and one Madan Lal of that village, that the appellant who had visited the village five days prior to the date of the poll suggested that the voters belonging to the community and the members of the Managing Committee should vote for him and stated that he would make some contribution for the temple funds and asked Madan Lal to give the money, that thereupon Madan Lal gave Rs. 5100 to the Sarpanch Dalip Singh and he passed it on to Dharma Lohar and undertook the responsibility to have votes cast in favour of the appellant and that the temple treasurer Ram Singh passed a receipt for the amount. The evidence of this witness that Madan Lal of Kandela village gave Rs. 5100 is inconsistent with the allegation made in the election petition that the appellant himself gave that amount. His evidence that it was given to Dalip Singh though consistent with the allegation made in the election petition and the evidence of P.W. 91 is inconsistent with the evidence of P.W. 90 that it was given to Dharma Lohar. We 320 are, therefore, unable to place any reliance on his evidence regarding this item of alleged corrupt practice. The evidence of P.Ws. 1, 16, 90, 91, and 92 referred to above is wholly unreliable and does not prove the corrupt practice of which the appellant has been found guilty by the learned Single Judge. We may state here that Mr. S.N. Kacker, Senior Advocate who appeared for the respondent, probably felt that the Judgment of the learned Single judge holding the appellant guilty of this item of corrupt practice is wholly indefensible and he candidly admitted that he will not advance any argument at all in favour of the first respondent. In these circumstances for the reasons mentioned above, we allow this appeal but without costs and set aside the judgment of this learned Single Judge who found the appellant guilty of this item of corrupt practice. M.L.A. Appeal allowed.

In the election held on 19.5.1982 to the Haryana Legislative Assembly from the Jind Constituency, the appellant was declared elected over his nearest rival respondent No. I with a margin of 146 votes. Respondent No. I challenged the appellant 's election inter alia, on the ground that the appellant and his father Sita Ram and two others Ram Kishan and Amrit Lal visited Kandela village on or about 16.5.1982 and contacted Dalip Singh, Sarpanch of the village and one Dewan Singh, Secretary of the Backward Classes. Thereafter all of them went to the house of one Dharam Singh where backward class voters including Dewan Singh, Hari Ram, Devi Ram, Fateh Singh and Mauji Ram had assembled. The voters told the appellant that they intended to cast their votes in favour of Congress (I) candidate as they had always been in favour of the Congress (I) party Then the appellant had a talk with the Sarpanch Dalip Singh and one Dharam Singh and subsequently stated, for inducing the voters to cast their vote in his favour, that he is prepared to give a donation of Rs. 5100 as he had been told that they needed some money for their mandir. Accordingly he gave a sum of Rs. 5100 to the Sarpanch Dalip Singh who passed it on to Dharam Singh and Dewan Singh. The voters thereafter assured the appellant that they would vote for him and ensure that every vote belonging to their class will go in his favour. Thus, the appellant was alleged to have committed the corrupt practice of bribery as defined in Section 123(1) of the Representation of People Act, 1951. The appellant had denied that he had gone to Kandela village on 16.5.1982 either alone or in the company of Sita Ram and others. He also denied that he had contacted the Sarpanch Dalip Singh and others and gave Rs. 5100 as alleged in the election petition and that the voters of Kandela village held out any promise for casting their votes in his favour. The High Court held that the appellant had committed that corrupt practice of bribery and set aside the election as void. 313 Allowing the appeal by the appellant, A ^ HELD: 1. As regards the corrupt practice of bribery, there is evidence only of P.Ws. 1, 16, 90, 91 and 92 which is wholly unreliable and does not prove the corrupt practice of which the appellant has been found guilty by the Learned Single Judge. [320B] 2(i) The first respondent P.W. 1 has stated in his cross examination that the bribe money was paid by the appellant on 15.5.1982. It would appear from his evidence that he claims to have personal knowledge about the alleged visit of the appellant and others to Kandela village on 16.5.1982 and about the alleged payment of Rs. 5100 by the appellant for the construction of a temple for the backward class people of the village in order to induce the voters of those classes to cast their votes in his favour. But in his affidavit verifying the election petition he has stated that the allegations made in para 9(d) of the election petition regarding this item of corrupt practice are based upon information received by him from Dewan Singh. Therefore the evidence of P.W. 1 is wholly unacceptable. [317C D] 2(ii) The evidence of P.W. 16 that on 15.5.82 the appellant offered to give a sum of Rs. 5100 in the house of Dewan Chand and that it was given by one Madan Lal to Dharam Chand is inconsistent with the allegation in the election petition that the appellant offered to give Rs. 5100 on 16.5.1982 as donation and gave it himself to the Sarpanch Dalip Singh and he passed it on to Dharama Singh. Therefore the evidence of P.W. 16 also cannot be accepted. [317H; 318A] 2(iii) The evidence of P.W. 90 is that the people asked for money to vote in favour of the appellant and that thereupon he gave Rs. 5100 to Dharma Lohar on 16.5.82 is contrary to the allegation in the election petition, There is thus a vital discrepancy between the pleading in the election petition and the evidence of P.W. 90. Moreover P.W. 90 has stated that he does not know whether any receipt was passed for the amount whereas P.W. 16 has stated in his evidence that Madan Lal gave Rs. 5100 to the temple Committee 's President Dharam Singh in his presence on 16.5.1982 and he made an entry for receipt of that amount in exhibit P.W. 16/2 in the cash book. In these circumstances no reliance could be placed on the evidence of P.W. 90. [319D; F G] 2(iv) The evidence of P.W, 91 is also not consistent with the allegation made in the election petition that the appellant gave a sum of Rs. 5100 to the Sarpanch Dalip Singh and that he passed in on to Dharam Singh and Dewan Singh. Therefore no reliance can be placed on his evidence also. [319D] 2(v) The evidence of P.W. 92 that Madan Lal of Kandela village gave Rs. 5100 is inconsistent with the allegation made in the election petition that the appellant himself gave that amount. His evidence that it was given to Dalip Singh though consistent with the allegation made in the election petition and the evidence of P.W, 91, is inconsistent with the evidence of P.W. 90 that it was given to Dharma Lohar. [319G H] 314

Appeal No. 337 of 1960. Appeal by special leave from the judgment and order dated January 19, 1960, of the Punjab High Court in Civil Revision No. 596 of 1959. N. section Bindra and D. Gupta, for the appellant. Gopal Singh, for the respondent. H. M. Seervai, Advocate General for the State of Maharashtra and R. H. Dhebar, for the Intervener. November 15. The judgment of B. P. Sinha, C. J., P. B. Gajendragadkar, J. and K. N. Wanchoo, J. was delivered by P. B. Gajendragadkar, J. J. L. Kapur, J. and K. Subba Rao, J., delivered separate judgments. 375 GAJENDRAGADKAR, J. This appeal raises for our decision a question of law of general importance under sections 123 and 162 of the , (hereafter called the Act). Originally the same point had been raised in another civil appeal before this Court, Civil Appeal No. 241 of 1955. The said appeal was the result of a dispute between Dowager Lady Dinbai Dinshaw Petit on the one hand and the Union of India and the State of Bombay on the other. Having regard to ' the importance of the point raised by the said appeal a Division Bench of this Court before whom it first came for hearing directed that it should be placed for disposal before a Constitution Bench, and accordingly it was placed before us. The appellant and the respondent in the present appeal then applied for permission to intervene because the same point arose for decision in this appeal as well; that is how this appeal was also placed before us to be heard after the Bombay appeal. After the Bombay appeal was heard for some days parties to the said appeal amicably settled their dispute and a decree by consent was passed. In the result the point of general importance raised by the said appeal fell to be considered in the present appeal; and so the appellant and the respondent in the said appeal asked for permission to intervene in the present appeal, and we directed that the arguments urged by Mr. Viswanatha Sastri and Mr. Seervai, for th appellant and the State of Bombay respectively, should be treated as arguments urged by interveners in the present appeal. Mr. Bindra, who appears for the appellant State of Punjab in the present appeal, and Mr. Gopal Singh who represents the respondent Sodhi Sukhdev Singh, have substantially adopted the arguments urged by Mr. Seervai and Mr. Sastri respectively and have also addressed us on the special facts in their appeal; that is how the point of law in regard to the scope and effect of sections 123 and 162 of the Act has to be decided in the present appeal. This appeal has been brought to this Court by special leave granted by this Court, and it arises from a suit filed by the respondent against the appellant on May 5, 1958. It appears that the respondent was 376 a District and Sessions Judge in the erstwhile State of Pepsu. He was removed from service on April 7, 1953, by an order passed by the President of India who was then in charge of the administration of the said State. The respondent then made a representation on May 18, 1955. This representation was considered by the Council of Ministers of the said State on September 28, 1955, because in the meantime the President 's rule had come to an end and the administration of Pepsu was entrusted to the Council of Ministers. The Council expressed its views in the form of a Resolution on the representation of the respondent; but before taking any action it invited the advice of the Public Service Commission. On receiving the said advice the Council again considered the said representation on March 8, 1956, and views on the merits of the representation were expressed by the Members of the Council. These were recorded in the minutes of the proceedings. Finally, on August 11, 1956, the representation was considered over again by the Council, and it reached a final conclusion in respect of it. In accordance with the said conclusion an order was passed which was communicated to the respondent. The order read thus: " Reference his representation dated the 18th May, 1955, against the order of his removal from service; the State Government have ordered that he may be re employed on some suitable post ". After this order was communicated to him the respondent filed the present suit against the appellant and claimed a declaration, inter alia, that his removal from service on April 7, 1953, was illegal, void and inoperative and prayed 'for the recovery of Rs. 62,700 6 0 as arrears of his salary. , The appellant disputed the respondent 's claim on several grounds. Issues were accordingly framed by the trial judge on January 27, 1959. Meanwhile the respondent had filed an application under O. 14, r. 4 as well as O. 11, r. 14 of the Civil Procedure Code for the production of documents mentioned in the list annexed to the application. The trial court issued notice against the appellant for the reduction of the said documents. 377 In reply to the notice Mr. E. N. Mangat Rai, Chief Secretary of the appellant, made an affidavit claiming privilege under section 123 of the Act in respect of certain documents whose production had been ordered, and gave reasons in support of the claim. On the same day Mr. Mangat Rai made another affidavit in which he gave reasons for claiming similar privilege in respect of certain other documents. The statements made in these affidavits were challenged by the respondent who submitted a counter affidavit. After the affidavits had thus been filed by the parties the trial court heard their arguments on the question of privilege, and on August 27, 1959, it upheld the claim of privilege made by the appellant for the production of some documents, and accepted the reasons given by Mr. Mangat Rai in support of the said claim of privilege. The respondent then moved the High Court of Punjab under section 115 of the Code of Civil Procedure and article 227 of the Constitution for the quashing of the said order. The petition for revision (C. R. 596 of 1959) first came up for decision before D. K. Mahajan, J., at Chandigarh. The learned judge took the view that the question raised by the petition was of considerable importance, and so he ordered that the papers should be placed before the learned Chief Justice to enable him to direct that the matter be decided by a larger Bench. Thereupon the petition was placed for decision before Dulat and Dua, JJ., who, after hearing the parties, reversed the order under revision in respect of four documents, and directed that the said documents be produced by the appellant. The appellant then applied to the High Court for a certificate under article 133 but its application was dismissed. It then came to this Court and applied for and obtained special leave to challenge the validity of the order passed by the Punjab High Court; and in the appeal the only question which has been urged before us is that having regard to the true scope and effect of the provisions of as. 123 and 162 of the Act the High Court was in error in refusing to uphold the claim of 48 378 privilege raised by the appellant in respect of the documents in question. The question thus posed will naturally have to be answered on a fair and reasonable construction of the two statutory provisions of the Act. It has, how ever, been very strenuously urged before us by Mr. J. Seervai that before proceeding to construe the said provisions it is necessary that the Court should bear in mind the historical background of the said provisions. His argument is that sections 123 and 162 as they were enacted in the Act in 1872 were intended to introduce in India the English Law in regard to what is commonly described as the Crown privilege in the same form in which it obtained in England at the material time; and so he has asked us to determine in the first instance what the true state of English Law was in or about 1872 A. D. In order to decide this question three representative English decisions must be considered. In Home vs Lord F. C. Bentinck (1) the Court was dealing with a claim made by H who had sued the president of the enquiry for a libel alleged to be contained in the report made by him. It appears that H was a commissioned officer in the Army and the Commander in Chief of the said Army had directed an assemblage of commissioned military officers to hold an enquiry into the conduct of H. According to H the said report contained libellous matter, and so he had sued the president of the enquiry. At the trial H desired that the report submitted by the court of enquiry should be produced and this request was resisted by the defendant on the ground that the document in question was a privileged commu nication. This plea was upheld. Dallas, C. J., referred to the precedents relevant to the decision of the point, and observed that the basis of the said precedents was that the disclosure would cause danger to the public good. He then considered the nature of the enquiry which had been directed against H, and observed that in the course of the enquiry a number of persons may be called before the court and may give information as witnesses which they would not choose to (1) ; : ; . 379 have disclosed ; but, if the minutes of the court of enquiry are to be produced on an action brought by the party, they reveal the name of every witness and the evidence given by each. Not only this but they also reveal what has been said and done by each member of the existing court of enquiry; and, according to ,the learned judge, the reception of the said minutes would tend directly to disclose that which is not permitted to be disclosed; and so, independently of the character of the court the production of the report was privileged on the broad rule of public policy and convenience that matters like those covered by the report are secret in their nature and involve delicate enquiry and the names of persons who ought to stand protected. The next decision to which our attention has been invited is Smith vs The East India Company (1). In that case the dispute with which the Court was concerned had arisen with respect to a commercial transaction in which the East India Company bad been engaged with a third party; and privilege was claimed in regard to the correspondence which had been carried oil by the defendant with the Board of Control. It was held that the said correspondence was, on the ground of public policy, a privileged communication, and so the Company were not bound to produce or set forth the contents of it in answer to a bill of discovery filed against them by the third party in relation to the transaction to which it referred. Lord Lyndhurst upheld the claim of privilege not because the correspondence purported to be confidential nor because it was official, but because of the effect of the provisions of c. 85 of Act 3 & 4 W. 4 on which the claim of privilege was founded. It was noticed that the Company had been prohibited from carrying on any commercial transactions except for the purpose of winding up their affairs or for the purposes of the Government of India; and it was held that the result of the relevant provisions, and particularly of is. 29 was that the Directors of the East India Company were required to make communication of all their (1) [1841] 1 Ph.50: 41 E.R. (Chancery) 550. 380 acts, transactions and correspondence of every description to the Board of Control. That is why a claim for privilege in respect of the said correspondence was upheld. This decision shows that a claim for privilege could have been made even for correspondence which had reference to a commercial transaction in circumstances similar to those in that case. The last decision on which considerable reliance has been placed by Mr. Seervai is the case of Beatson vs Skene (3). It may incidentally be pointed out that Chief Baron Pollock 's observations in this judgment are frequently cited in judicial decisions where the question of privilege falls to be considered. In that case the plaintiff had been a general who commanded a corps of irregular troops during the war in Crimea. Complaint having been made about the insubordination of troops the corps was placed under the superior command of V. Thereupon the plaintiff resigned his command. V directed S to inspect and report upon the state of the corps, and referred S for information to the defendant who was a Civil Commissioner. The defendant, in a conversation with S, made a defamatory statement respecting the conduct of the plaintiff. The plaintiff brought an action against the defendant for slander. The defence set up against the plaintiff 's claim was that what had passed between the defendant and S was a privileged communication. The jury had found a verdict for the defendant. A new trial was claimed by the plaintiff, inter alia, on the ground that the learned judge had declined to compel the production of certain documents. It appeared that the Secretary for War had been subpoenaed to produce certain letters written by the plaintiff to him and also the minutes of the court of enquiry as to the conduct of S in writing the letter to V. The plea for a new trial was rejected on the ground that the Court was of the opinion that the non production of the said documents furnished no ground for a new trial. There was a difference of opinion among the members of the Court on the question as to whether Bramwell, J., was justified in upholding the claim of privilege. , Pollock, (3) ; 381 C. B., Bramwell, B., and Wilde, B., held that the claim for privilege was properly upheld, whereas Martin, B., took a contrary view. Dealing with the claim made that the production of the documents would be injurious to the public service Pollock, C. B., observed that the general public interest must be considered paramount to the individual interest of a suitor in a Court of Justice, and he posed the question: How is this to be determined ? Then Pollock, C. B., proceeded to observe that the question must be determined either by a presiding judge or by the responsible servant of the Crown in whose custody the paper is; and he remarked that the judge would be unable to determine it without ascertaining what the document is and why the publication of it would be injurious to public service an enquiry which cannot take place in private, and which taking place in public may do all the mischief which it is proposed to guard against. He further held that " the administration of justice is only a part of the general conduct of the affairs of any State or nation, and we 'think is (with respect to the production or non production of a State paper in a Court of Justice) subordinate to the general welfare of the community". Martin, B., however, was of the opinion that whenever the judge is satisfied that the document may be made public without prejudice to the public service the judge ought to compel its production notwithstanding the reluctance of the head of the department to produce it. It would thus be seen that according to the majority view the question as to whether any injury to public interest would be caused by the production of the document could not be determined by the Court, because such an enquiry would tend to defeat the very purpose for which privilege is claimed, whereas, according to the minority view it was for the Court to hold an enquiry and determine whether any injury would follow the production of the document. Mr. Seervai contends that these decisions correctly represent the legal position in regard to the Crown privilege in England in the second half of the Nineteenth Century, and, according to him, when the 382 was drafted by Sir James Fitzjames Stephen he intended to make provisions in the Act which would correspond to the said position in the English Law. In other words, the argument is that sections 123 and 162 are intended to lay down that, when a privilege is claimed by the State in the matter of production of State documents, the total question with regard to the said claim falls within the discretion of the head of the department concerned, and he has to decide in his discretion whether the document belongs to the privileged class and whether its production would cause injury to public interest. It is in the light of this background that Mr. Seervai wants us to construe the relevant sections of the Act. In support of this argument Mr. Seervai has also referred us to the draft prepared by Sir James Fitzjames Stephen at the instance of Lord Coleridge for adoption by the English Parliament, and has relied on article 112 in the said draft. article 112 provides, inter alia, that no one can be compelled to give evidence relating to any affairs of State, or as to official communications between public officers upon public affairs, unless the officer at the head of the department concerned permits him to do so. It also refers to some other matters with which we are not concerned. This part of article 112 as framed by Sir James Fitzjames Stephen seems to include the provisions of sections 123 and 124 of the Act. It is significant that there is nothing in this Article which corresponds to section 162 of the Act. Mr. Seervai concedes that the draft prepared by Sir James Fitzjames Stephen was not adopted by Parliament, and even now there is no statutory law of evidence in England; even so, he contends that the intention which Sir James Fitzjames Stephen had in drafting the relevant sections of the must have been similar to his intention in drafting article 112, and that is another fact which we may bear in mind in construing the relevant sections of the Act. We ought, however, to add that though Mr. Seervai elaborately argued this part of his case he fairly conceded that recourse to extrinsic aid in interpreting a statutory provisions would be justified only 383 within well recognised limits; and that primarily the effect of the statutory provisions must be judged on a fair and reasonable construction of the words used by the statute itself. Let us now turn to section 123. It reads thus: " No one shall be permitted to give any evidence derived from unpublished official records relating, to any affairs of State, except with the permission of the officer at the head of the department concerned, who shall give or withhold such permission as he thinks fit." This section refers to evidence derived from unpublished official records which have a relation to any affairs of State, and it provides that such evidence shall not be permitted to be given unless the head of the department concerned gives permission in that behalf. In other words, as a result of this section a document which is material and relevant is allowed to be withheld from the Court, and that undoubtedly constitutes a very serious departure from the ordinary rules of evidence. It is well known that in the administration of justice it is a principle of general application that both parties to the dispute must produce all the relevant and material evidence in their possession or their power which is necessary to prove their respective contentions; that is why the Act has prescribed elaborate rules to determine relevance and has evolved the doctrine of onus of proof. If the onus of proof of any issue is on a party and it fails to produce such evidence, section 114 of the Act justifies the inference that the said evidence if produced would be against the interest of the person who withholds it. As a result of section 123 no such inference can be drawn against the State if its privilege is upheld. That shows the nature and the extent of the departure from the ordinary rule which is authorised by section 123. The principle on which this departure can be and is justified is the principle of the overriding and paramount character of public interest. A valid claim for privilege made under section 123 proceeds on the basis of the theory that the production of the document in 384 that, where a conflict arises between public interest and private interest, the latter must yield to the former. No doubt the litigant whose claim may not succeed as a result of the non production of the relevant and material document may feel aggrieved by the result, and the Court, in reaching the said decision, may feel dissatisfied; but that will not .affect the validity of the basic principle that public good and interest must override considerations of private good and private interest. Care has, however, to be taken to see that interests other than that of the public do not masquerade in the garb of public interest and take undue advantage of the provisions of section 123. Subject to this reservation the maxim silus populi est supreme les which means that regard for public welfare is the highest law is the basis of the provisions contained in section 123. Though section 123 does not expressly refer to injury to public interest that principle is obviously implicit in it and indeed is its sole foundation. Whilst we are discussing the basic principle underlying the provisions of section 123, it may be pertinent to enquire whether fair and fearless administration of justice itself is not a matter of high public importance. Fair administration of justice between a citizen and a citizen or between a citizen and the State is itself a matter of great public importance; much more so would the administration of justice as a whole be a matter of very high public importance ; even so, on principle, if there is a real, not imaginary or fictitious, conflict between public interest and the interest of an individual in a pending case, it may reluctantly have to be conceded that the interest of the individual cannot prevail over the public interest. If social security and progress which are necessarily included in the concept of public good are the ideal then injury to the said ideal must on principle be avoided even at the cost of the interest of an individual involved in a particular case. That is why Courts are and ought to be vigilant in dealing with a claim of privilege made under section 123. If under section 123 a dispute arises as to whether the 385 evidence in question is derived from unpublished official records that can be easily resolved ; but what presents considerable difficulty is a dispute as to whether the evidence in question relates to any affairs of State. What are the affairs of State under section 123 ? In the latter half of the Nineteenth Century affairs of State may have had a comparatively narrow content. Having regard to the notion about governmental functions and duties which then obtained, affairs of State would have meant matters of political or administrative character relating, for instance, to national defence, public peace and security and good neighbourly relations. Thus, if the contents of the documents were such that their disclosure would affect either the national defence or public security or good neighbourly relations they could claim the character of a document relating to affairs of State. There may be another class of documents which could claim the said privilege not by reason of their contents as such but by reason of the fact that, if the said documents were disclosed, they would materially affect the freedom and candour of expression of opinion in the determi nation and execution of public policies. In this class may legitimately be included notes and minutes made by the respective officers on the relevant files, opinions expressed, or reports made, and gist of official decisions reached in the. course of the determination of the said questions of policy. In the efficient admit of public affairs government may reasonably treat such a class of documents as confidential and urge that its disclosure should be prevented on the ground of possible injury to public interest. In other words, if the proper functioning of the public service would be impaired by the disclosure of any document or class of documents such document or such class of documents may also claim the status of documents relating to public affairs. It may be that when the Act was passed the concept of governmental functions and their extent was limited, and so was the concept of the words " affairs of State " correspondingly limited; but,. as 'is often 386 said, words are not static vehicles of ideas or concepts. As the content of the ideas or concepts conveyed by respective words expands, so does the content of the words keep pace with the said expanding content of the ideas or concepts,, and that naturally tends to widen the field of public interest which the section wants to protect. The inevitable consequence of the change in the concept of the functions of the State is that the State in pursuit of its welfare activities undertakes to an increasing extent activities which were formerly treated as purely commercial, and documents in relation to such commercial activities undertaken by the State in the pursuit of public policies of social welfare are also apt to claim the privilege of documents relating to the affairs of State. It is in respect of such documents that we reach the marginal line in the application of section 123; and it is precisely in determining the claim for privilege for such border line cases that difficulty arises. It is, however, necessary to remember that where the Legislature has advisedly refrained from defining the expression " affairs of State " it would be inexpedient for judicial decisions to attempt to put the said expression into a strait jacket of a definition judicially evolved. The question as to whether any particular document or a class of documents answers the description must be determined in each case on the relevant facts and circumstances adduced before the Court. " Affairs of State ", according to Mr. Seervai, are synonymous with public business and he contends that section 123 provides for a general prohibition against the production of any document relating to public business unless permission for its production is given by the head of the department concerned. Mr. Seervai has argued that documents in regard to affairs of State constitute a genus under which there are two species of documents, one the disclosure of which will cause no injury to public interest, and the other the disclosure of which may cause injury to public interest. In the light of the consequence which may flow from their disclosure the two species of documents can be described as innocuous and noxious respectively. According to Mr. Seervai the effect of section 123 387 is that there is a general prohibition against the pro duction of all documents relating to public business subject to the exception that the head of the department can give permission for the production of such documents as are innocuous and not noxious. He contends that it is not possible to imagine that the section contemplates that the head of the department G. would give permission to produce a noxious document. It is on this interpretation of section 123 that Mr. Seervai seeks to build up similarity between section 123 and the English Law as it was understood in 1872. In other words, according to Mr. Seervai the jurisdiction of the Court in dealing with a claim of privilege under section 123 is very limited and in most of the cases, if not all, the Court would have to accept the claim without effective scrutiny. On the other hand it has been urged by Mr. Sastri that the expression " documents relating to any affairs of State " should receive a narrow construction; and it should be confined only to the class of noxious documents. Even in regard to this class the argument is that the Court should decide the character of the document and should not hesitate to enquire, incidentally if necessary, whether its disclosure would lead to injury to public interest. This contention seeks to make the jurisdiction of the Court wider and the field of discretion entrusted to the department correspondingly narrower. It would thus be seen that on the point in controversy between the parties three views are possible. The first view is that it is the head of the department who decides to which class the document belongs; if he comes to the conclusion that the document is innocuous he will give permission to its production; if, however, he comes to the conclusion that the document is noxious he will withhold such permission; in any case the Court does not materially come into the picture. The other view is that it is for the Court to determine the character of the document, and if necessary enquire into the possible consequences of its disclosure; on this view the jurisdiction of the Court is very much wider. A third view which does not 388 accept either of the two extreme positions would be that the Court can determine the character of the document, and if it comes to the conclusion that the document belongs to the noxious class it may leave it to the head of the department to decide whether its production should be permitted or not ; for it is not the policy of section 123 that in the case of every noxious document the head of the department must always withhold permission. In deciding the question as to which of these three views correctly represents the true legal position under the Act it would be necessary to examine section 162. Let us therefore, turn to that section. Section 162 reads thus: " A witness summoned to produce a document shall, if it is in his possession or power, bring it to Court, notwithstanding any objection which there may be to its production or to its admissibility. The validity of any such objection shall be decided on by the Court. The Court, if it sees fit, may inspect the document, unless it refers to matters of State, or take other evidence to enable it to determine on its admissibility. " The first clause of section 162 requires that a witness summoned to produce a document must bring it to the Court and then raise an objection against either its production or its admissibility. It also authorises the Court, and indeed makes it its obligation, to decide the validity of either or both of the said objections. It is significant that the objections to the production or admissibility of evidence specified in section 162 relate to all claims of privilege provided by the relevant sections of Chapter IX of Part III of the Act. Section 123 is only one of such privileges so that the jurisdiction given to the Court to decide the validity of the objections covers not only the objections raised under section 123 but all other objections as well. Take for instance the privilege claimed under section 124 of the Act which provides that no public officer shall be compelled to disclose communications made to him in official confidence when he considers he considers that the public interest 389 would suffer by the disclosure. It is clear, and indeed it is not. disputed, that in dealing with an objection against the production of a document raised under section 124 the Court would have first to determine whether the communication in question has been made in official confidence. If the answer to the said question is in the negative then the document has to be produced ; if the said answer is in the affirmative then it is for the officer concerned to decide whether the document should be disclosed or not. This illustration brings out the character and the scope of the jurisdiction conferred on the Court dealing with an objection raised under section 162. The second clause of section 162 in terms refers to the objection as to the admissibility of the document. It seems to us that this clause should be construed to refer to the objections both as to the production and the admissibility of documents; otherwise, in the absence of any limitation on its power the Court would be justified in exercising its authority under, and discharging its obligation imposed by, cl. 1 of section 162 by inspecting the document while holding an enquiry into the validity of the objection raised against its production under section 123, and that would be inconsistent with the material provision in cl. 2 of section 162. That is why we hold that the second clause covers both kinds of objections. In other words, admissibility in the context refers both to production and admissibility. It may be added that " matters of State " referred to in the second clause are identical with " affairs of State " mentioned in section 123. Reading this clause on this assumption what is its effect ? It empowers the Court to inspect the document while dealing with the objection; but this power cannot be exercised where the objection relates to a document having reference to matters of State and it is raised under section 123. In such a case the Court is empowered to take other evidence to enable it to determine the validity of the objection. Mr. Seervai contends that the first part of cl. 2 which deals with the inspection of the document is confined to the objection relating to the production of the document, 390 and on that basis he contends that since inspection is not permissible in regard to the document falling under section 123 the Court can do nothing else but record its approval to, and uphold the validity of, the objection raised by the head of the department. In regard to the objection as to the admissibility of the said document, however, he concedes that the Court can take other evidence, if necessary, and then determine its validity. According to him, such evidence would be necessary and permissible when the objection to admissibility is based for instance on want of stamp or absence of registration. In our opinion, this con struction though ingenious is not supportable on a plain and grammatical construction of the clause read as a whole; it breaks up the clause artificially which is plainly not justified by rules of grammar. We are satisfied that the Court can take other evidence in lieu of inspection of the document in dealing with a privilege claimed or an objection raised even under section 123. If the privileged document cannot be inspected the Court may well take other collateral evidence to determine its character or class. In other words, the jurisdiction conferred on the Court to deal with the validity of an objection as to the production of a docu ment conferred by the first clause is not illusory or nominal ; it has to be exercised in cases of objections raised under section 123 also by calling for evidence permissible in that behalf. It is perfectly true that in holding an enquiry into the validity of the objection under section 123 the Court cannot permit any evidence about the contents of the document. If the document cannot be inspected its contents cannot indirectly be proved ; but that is not to say that other collateral evidence cannot be produced which may assist the Court in determining the validity of the objection. This position would be clear if at this stage we consider the question as to how an objection against the production of document should be raised under section 123. it is well settled and not disputed that the privilege should not be claimed under section 123 because it is apprehended that the document if produced would defeat the defences raised by the State. Anxiety 391 to suppress a document may be natural in an individual litigant and so it is checked and kept under control by the provisions of section 114 of the Act. Where, however, section 123 confers wide powers on the bead of the department to claim privilege on the ground that the disclosure may cause injury to public interest scrupulous care must be taken to avoid making a claim for such a privilege on the ground that the disclosure of the document may defeat the defence raised by the State. It must be clearly realised that the effect of the document on the ultimate course of litigation or its impact on the head of the department or the Minister in charge of the department, or even the government in power, has no relevance in making a claim for privilege under section 123. The apprehension that the disclosure may adversely affect the head of the department or the department itself or the Minister or even the government, or that it may provoke public criticism or censure in the Legislature has also no relevance in the matter and should not weigh in the mind of the head of the department who makes the claim. The sole and the only test which should determine the decision of the head of the department is injury to public interest and nothing else. Since it is not unlikely that extraneous and collateral purposes may operate in the mind of the person claiming the privilege it is necessary to lay down certain rules in respect of the manner in which the privilege should be claimed. We think that in such cases the privilege should be claimed generally by the Minister in charge who is the political head of the department concern ed; if not, the Secretary of the department who is the departmental head should make the claim; and the claim should always be made in the form of an affidavit. When the affidavit is made by the Secretary the Court may, in a proper case, require an affidavit of the Minister himself. The affidavit should show that each document in question has been carefully read and considered, and the person making the affidavit is satisfied that its disclosure would lead to public injury. If there are a series of documents included in a file it should appear from the affidavit that each one of the documents, whose disclosure is objected to, has been 392 duly considered by the authority concerned. The affidavit should also indicate briefly within permissible limits the reason why it is apprehended that their disclosure would lead to injury to public interest. This last requirement would be very important when privilege is claimed in regard to documents which prima, facie suggest that they are documents of a commercial character having relation only to commercial activities of the State. If the document clearly falls within the category of privileged documents Do serious dispute generally arises; it is only when Courts are dealing with marginal or border line documents that difficulties are experienced in deciding whether the privilege should be upheld or not, and it is particularly in respect of such documents that it is expedient and desirable that the affidavit should give some indication about the reasons why it is apprehended that public interest may be injured by their disclosure. It is conceded by Mr. Seervai that if the affidavit produced in support of the claim for privilege is found to be unsatisfactory a further affidavit may be called, and in a proper case the person making the affidavit whether be is a Minister or the Secretary should be summoned to face cross examination on the relevant points. Mr. Seervai, however, contends that the object of such cross examination must be limited to test the credibility of the witness and nothing more. We do not see why any such a limitation should be imposed on cross examination in such a case. It would be open to the opponent to put such relevant and permissible questions as he may think of to help the Court in determining whether the document belongs to the privileged class or not. It is true that the scope of the enquiry in such a case is bound to be narrow and restricted ; but the existence of the power in the Court to hold such an enquiry will itself act as a salutary check on the capricious exercise of the power conferred under section 123; and as some of the decisions show the existence of this power is not merely a matter of theoretical abstraction (Vide for instance, Ijjat Ali Talukdar vs Emperor (1)). (1) 393 Thus our conclusion is that reading ss.123 and 162 together the Court cannot hold an enquiry into the possible injury to public interest which may result from the disclosure of the document in question. That is a matter for the authority concerned to decide; but the Court is competent, and indeed is bound, to hold a preliminary enquiry and determine the validity of the objections to its production, and that necessarily involves an enquiry into the question as to whether the evidence relates to an affair of State under section 123 or not. In this enquiry the Court has to determine the character or class of the document. If it comes to the conclusion that the document does not relate to affairs of State then it should reject the claim for privilege and direct its production. If it comes to the conclusion that the document relates to the affairs of State it should leave it to the head of the department to decide whether he should permit its production or not. We are not impressed by Mr. Seervai 's argument that the Act could not have intended that the head of the department would permit the production of a document which belongs to the noxious class. In our opinion, it is quite Conceivable that even in regard to a document falling within the class of documents relating to affairs of State the head of the department may legitimately take the view that its disclosure would not cause injury to public interest. Take for instance the case of a document which came into existence quite some time before its production is called for in litigation; it is not unlikely that the head of the department may feel that though the character of the document may theoretically justify his refusing to permit its production, at the time when its production is claimed no public injury is likely to be caused. It is also possible that the head of the department may feel that the injury to public interest which the dis closure of the document may cause is minor or insignificant, indirect or remote; and having regard to the wider extent of the direct injury to the cause of justice which may result from its non production he may 394 decide to permit its production. In exercising his discretion under section 123 in many cases the head of the department may have to weigh the pros and cons of the problem and objectively determine the nature and extent of the injury to public interest as against the injury to the administration of justice. That is why we think it is not unreasonable to hold that section 123 gives discretion to the bead of the department to permit the production of a document even though its production may theoretically lead to some kind of injury to public interest. While construing sections 123 and 162, it would be irrelevant to consider why the enquiry as to injury to public interest should not be within the jurisdiction of the Court, for that clearly is a matter of policy on which the Court does not and should not generally express any opinion. In this connection it is necessary to add that the nature and scope of the enquiry which, in our opinion, it is competent to the Court to hold under section 162 would remain substantially the same whether we accept the wider or the narrower interpretation of the expression "affairs of State". In the former case the Court will decide whether the document falls in the class of innocuous or noxious documents; if it finds that the document belongs to the innocuous class it will direct its production; if it finds that the document belongs to the noxious class it will leave it to the discretion of the head of the department whether to permit its production or not. Even on the narrow con struction of the expression "affairs of State" the Court will determine its character in the first instance; if it holds that it does not fall within the noxious class which alone is included in the relevant expression on this view an order for its production will follow; if the finding is that it belongs to the noxious class the question about its production will be left to the discretion of the head of the department. We have already stated how three views are possible on this point. In our opinion, Mr. Seervai 's contention which adopts one extreme position ignores the effect of section 162, whereas the contrary position which is also extreme in character ignores the provisions of section 123. The view 395 which we are disposed to take about the authority and jurisdiction of the Court in such matters is based on a harmonious construction of section 123 and section 162 read together; it recognises the power conferred on the Court by cl. (1) of section 162, and also gives due effect to the discretion vested in the head of the department by section 123. It would thus be clear that in view of the provisions of section 162 the position in India in regard to the Court 's power and jurisdiction is different from the position under the English Law as it obtained in England in 1872. It may be true to say that in prohibiting the inspection of documents relating to matters of State the second clause of section 162 is intended to repel the minority view of Baron Martin in the case of Beatson (1). Nevertheless the effect of the first clause of section 162 clearly brings out the departure made by the Indian Law in one material particular, and that is the authority given to the Court to hold a preliminary enquiry into the character of the document. That is why we think that the arguments so elaborately and ingeniously built up by Mr. Seervai on the basis of the background of the breaks down in the light of the provisions of section 162. We may add that in substance and broadly stated the consensus of judicial opinion in this country is in favour of this conclusion. (Vide: e.g., Kaliappa Udayan vs Emperor (2); R. M. D. Chamarbaugwala vs Y. R. Parpia (3); Governor General in Council vs H. Peer Mohd. Khuda Bux & Ors. (4); The Public Prosecutor, Andhra vs Venkata Narasayya (5); and ljjat Ali Talukdar vs Emperor (6)). Therefore we think it is unnecessary to refer to these decisions in detail or to examine the reasons given by them in support of the conclusion reached by them. There are, however, two decisions which have struck a note of dissent, and so it is necessary to examine them. In W. section Irwin vs D. J. Reid (7) it appears that the Court was incidentally dealing with (1) ; ; (2) A.I.R. 1937 Mad. (3) A.I.R. 1950 Bom. (4) A.I.R. 1950 East Punjab 228. (5) A.I.R. 1957 Andhra 486. (6) I.L.R. [1944] 1 Cal 410. (7) (192I) I.L.R 396 the scope and effect of section 123 of the Act. In that case the plaintiff was one of the members of the committee, known as the Champaran Agrarian Enquiry Committee, and as such member he had effected a settlement between the indigo planters and the tenants about the partial refund of tawan or remission of sarabeshi. The defendant Irwin wrote three letters to the members after the settlement which taken together would import that his consent to the settlement was obtained by misrepresentation and all facts were not disclosed to him. Thereupon Reid filed a suit claiming Rs. 50,000 as damages against Irwin for making the said defamatory statements which according to him greatly injured his credit and reputation and had brought him into public odium and contempt. It appears that at the trial an attempt was made to compel the production of the minutes of the com mittee. The, said attempt failed because the Government of Bihar and Orissa claimed privilege under section 123. In appeal it was urged that the privilege should not have been upheld, but the appellant 's plea was not accepted by the Court. "The public officer concerned", observed Mookerjee, A. C. J., "and not the judge is to decide whether the evidence referred to shall be given or withheld. If any other view were taken the mischief intended to be avoided would take place as the judge could not determine the question without ascertaining the contents of the document, and such enquiry, if it did take place, must, for obvious reasons take place in public". In support of this decision the learned judge referred to some English decisions; amongst them was the case of Beatson vs Skene (1). It would be noticed that in making these incidental observations the Court has not considered the true effect of the provisions of section 162. Indeed no reference was made to the said section and the matter does not appear to have been seriously argued and naturally, because the point was not directly raised for decision. In this connection we ought to point out that in a subsequent decision of the said High Court in Ijjat Ali Talukdar 's case (2) a contrary view has been (1) ; (2) I.L.R. [1944] I Cal. 397 taken and it is the subsequent view which has prevailed in the Calcutta High Court thereafter. In Khawaja Nazir Ahmad vs The Crown (1) the High Court of Judicature at Lahore has held that when a privilege is claimed under section 123 the Court simply gives effect to the decision of the head of the department by adding its own command to it but the Court. has no power to examine the document in order to verify the correctness of the allegations or the grounds on which the privilege is claimed. Abdur Rahman, J., who delivered the judgment of the Bench in that case, has considered the relevant Indian and English decisions, and has based his conclusion substantially on the judgment of the House of Lords in Duncan vs Cammell Laird & Co. Ltd. (2), to which we will presently refer. The learned judge appears to have con strued section 162 in the manner suggested by Mr. Seervai. In fact Mr. Seervai 's argument was that the construction placed by Abdur Rahman, J. on section 162 had not been considered by the other Indian decisions when they brushed aside his conclusion. "I feel convinced", said Abdur Rahman, J., "that the objection as to the production of the document, apart from its admissibility (for want of registration or contravening the rule as to when secondary evidence of a document can be admitted if the document is merely a copy and not original) can only be decided by its inspection by the Court, followed, as it must necessarily. have been, by an order of production, although not in the sense of its contents having been disclosed to the party summoning the document at any rate at that stage". We have already indicated our reasons for not accepting this artificial construction of the second clause in section 162. This decision also has been dissented from by a Full Bench of the Lahore High Court in Governor General in Council vs H. Peer Mohd. Khuda Bux & Ors. (3) and the view taken by the Full Bench in that case prevails in the Punjab High Court ever since. In the course of arguments before us a large number of English decisions have been cited by the learned (1) Lah. (2) ; (3) A.I.R. 1950 East Punjab 228. 398 counsel appearing for both the parties. Having regard to the fact that our decision ultimately rests, as it must, on the construction of the relevant provisions of the Act, we do not think it necessary to refer to all the cases to which our attention was drawn; we propose to confine ourselves to three decisions which have made a substantial contribution to the discussion of the problem, and which represent three distinct and different trends of judicial opinion on the point with which we are dealing. The first case to which we would refer is the decision of the Privy Council in Robinson vs State of South Australia In that case the appellant had brought an action in the Supreme Court of South Australia against the respondent State claiming damages for alleged negligence in the care of wheat placed in the control of the State under the Wheat Harvests Acts, 1915 17. Upon an order for discovery the respondent State, by an affidavit made by a civil servant, claimed privilege in respect of 1892 documents tied in three bundles, and stated to be State documents comprising communications between officers administering the department concerned. There was exhibited to the affidavit a minute by the responsible Minister stating, inter alia, that the disclosure of the documents would be contrary to the interests of the State and of the public. The claim for privilege had been upheld by the Australian Courts but it was rejected by the Privy Council which held that the minute was inadequate to support the claim; it was too vague in the circumstances of the case, and was not a statement on oath showing that the Minister had himself considered each of the documents, or indicating the nature of the suggested injury to the interests of the public. The Privy Council, therefore, directed that the Supreme Court of South Australia should exercise its power under O. 31, r. 14, sub r. (2), to inspect the documents, because it thought that the said course was less likely to cause delay than an order for a further and better affidavit of documents. The litigation in that case had been preceded by another litigation, and on the (1) 399 facts thus disclosed the Privy Council was satisfied that the action in question was one of a large number which were then pending, and against which a similar relief was claimed, all being alike dependent for success upon the establishment of the same facts. That is how full discovery by the respondent had become "the immediately vital issue between the parties". Dealing with the merits of the privilege the Privy Council cited with approval Taylor 's observation that "the principle of the rule is concern for public interest, and the rule will accordingly be applied no further than the attainment of that object requires"(1). Lord Blanesburgh, who delivered the judgment of the Board observed that "it cannot be assumed that documents relating to trading, commercial or contractual activities of the State can never be claimed to be protected under this head of privilege", but he added that "the cases in which this is so must, in view of the sole object of the privilege, and especially in time of peace, be rare indeed". Then he referred to the fact that in view of the increasing extension of State activities into the spheres of trading business and commerce, and of the claim of privilege in relation to the liabilities arising therefrom which were frequently put forward, it is necessary for the Courts to remember that while they must duly safeguard genuine public interests they must see to it that the scope of the admitted privilege is not, in such litigation, extended. The judgment then proceeds to add that in truth the fact that documents if produced might have any such effect upon the fortunes of the litigation is of itself a compelling reason for their production one only to be overborne by the gravest considerations of State policy or security. Then the power of the Court to call for the production of documents for which privilege was claimed was examined in the light of previous decisions, and in the light of the provisions of O. 31, r. 14, sub r. "Where, as in the present case", it was observed, "the State is not only sued as defendant under the authority of statute, but is in the suit bound to give discovery, there seems little, if any, (1) Taylor on "Evidence", s.939. 400 reason why the Court in relation to this privileged class of its documents should have any less power than it has to inspect any other privileged class of its documents, provided of course, that such power be exercised so as not to destroy the protection of the privilege in any case in which it is found to exist". The procedure which should be adopted in claiming the privilege was then considered, and it was held that the affidavit produced, which in its sweep covered no fewer than 1892 documents in number, was of the vaguest generality and as such unsatisfactory. The Privy Council then considered the question as to whether a further opportunity should be given to the State to make a better affidavit but it thought that it would be inexpedient to adopt such a course because it ,would involve further serious delay, "without, it may be, advancing any further the final solution to the question at issue". That is why the Supreme Court was asked to exercise its power under the relevant rule to inspect the documents and then decide whether the privilege should be upheld or not. It is significant that even when giving such a direction their Lordships took the precaution of adding that the judge, in giving his decision as to any document, will be careful to safeguard the interest of the State and will not, in any case of doubt, resolve the doubt against the State without further enquiry from the Minister. It only remains to add that so far as Australia is concerned it does not appear that there is any statutory provision corresponding to section 162 of the Act, and so, even after this judgment was pronounced by the Privy Council, Courts in India have not given effect to the operative part of the order in regard to the inspection of the document by Courts having regard to the statutory prohibition imposed by section 162 in that behalf. This pronouncement of the Privy Council was subsequently criticised by the House of Lords in Duncan & Anr. vs Cammell Laird & Co. Ltd. (1). It appears that the submarine Thetis which had been built up by the respondents under contract with the Admiralty was undergoing her submergence tests in Liverpool Bay, and, while engaged in the operation of a 401 trial drive, sank to the bottom owing to the flooding of her two foremost compartments and failed to return to the surface with the result that all who were in her, except four survivors were overwhelmed. This unfortunate accident gave rise to a large number of actions against the respondents for damages for negligence. Pending the trial of the said claims the plaintiffs wanted discovery of certain specified documents to which the defendants objected, and the objection of the defendants was supported by Mr. Alexander who was the First Lord of the Admiralty 'in his affidavit made in that behalf. The documents to the production of which an objection was thus raised included (either in original or as a copy) the contract for the hull and machinery of the Thetis and other letters and reports. The Master before whom the objection was raised refused to order inspection. His decision was confirmed by Hilbery, J., sitting in Chambers, and the Court of Appeal unanimously confirmed the judge 's order. The plaintiffs, however, were given leave to appeal to the House of Lords; that is how the matter reached the House of Lords. Viscount Simon, L. C., who pronounced a composite judgment on behalf of himself and on behalf of Lord Thankerton, Lord Russel of Killowen and Lord Clauson, exhaustively considered the whole law on the subject of Crown Privilege; and in his speech he made the categorical statement that in his opinion the Privy Council was mistaken in regarding the Australian rule of procedure as having any application to the subject matter and in ordering the inspection of the documents which were in question before the Privy Council. Viscount Simon began his speech with the consideration of the previous decisions of the House of Lords, and held that the matter in substance was concluded by previous authorities in favour of upholding the objections. He observed that the common law principle is well established that, where the Crown is a party to a suit, discovery of documents cannot be demanded from it as a matter of right, though in practice, for reasons of fairness and. in the 51 402 interests of justice, all proper disclosure and production would be made. As a result of the examination of the several decisions Viscount Simon deduced the principle which has to be applied in such cases in these words: "Documents otherwise relevant and liable to production must not be produced if the public interest requires that they should be withheld. This test may 'be found to be satisfied either (a) by having regard to the contents of the particular document, or (b) by the fact that the document belongs to a class which, on grounds of public interest, must as a class be with held from production". In this connection he stated that public interest may be damnified where disclosure would be injurious to national defence, or to good diplomatic relations, or where the practice of keeping a class of documents secret is necessary for the proper functioning of the public service. Then he proceeded to examine the question as to whether when objection has been duly taken the judge should treat it as conclusive; and his answer was that an objection validly taken to production on the ground that this would be injurious to public interest is conclusive; but, of course, he proceeded to make pertinent observations for the guidance of those who are entrusted with the power to make a claim. It would be noticed that even this decision would not be of material assistance to us because, as we have repeatedly pointed out, our decision must ultimately rest on the relevant statutory provisions contained in the ; and so, the conclusion that a valid certificate issued by the Minister in charge is conclusive may not be strictly applicable to a claim for privilege similarly made by a Minister in charge in India. As we have already indicated, the preliminary enquiry contemplated by the first clause of section 162 has to be held by the Court, and it is after the Court has found in favour of the character of the document pleaded by the State that the occasion arises for the head of the department to exercise his discretion conferred by section 123. Incidentally, we may point out that Lord Thankerton and Lord Russel of Killowen, who were parties to this 403 decision, were also parties to the decision of the Privy Council in the case of Robinson (1). In regard to the decisions in the cases of Robinson (1) and Duncan (2 ) respectively, it may be permissible to make one general observation. In both these cases the nature of the documents for which privilege was claimed, the time at which the dispute arose and the other surrounding circumstances were very unusual and special though in different ways, and so, as often happens, the shift in emphasis from one aspect of the same principle to another and the strong language used took colour from the nature of the special facts. Incidentally we may also add that the epilogue to the decision in Robinson 's case (1) illustrates what untoward consequences may follow from an erroneous decision or a miscalculation as to the injury to public interest which may be caused by disclosure. * Nearly five years after the judgment in Duncan 's case (2) was pronounced, the Crown Proceedings Act (10 & 11 Geo. 6, c. 44) was passed in 1947, and the Crown Privilege recognised under the common law of England is now regulated by section 28 of the said Act. Section 28 which deals with discovery provides in substance that subject to the rules of court in any civil proceedings there specified the Crown may be required by the Court to make discovery of documents and produce documents for inspection, and that in such proceedings the Crown may also be required to answer interrogatories. This legislative invasion of the Crown 's prerogative is, however, subject to the proviso that the said section shall be without prejudice to any rule of law which authorises or requires the withholding of any document or the refusal to answer any question on the ground that the disclosure of the document or the answering of the question would be injurious to public interest. It would be noticed that section 28 read with the proviso confers on the Courts specified by it powers which are much narrower than (1) (2) ; *For a graphic account of the aftermath of the enquiry held by the Supreme Court of South Australia, pursuant to the Privy Council 's decision in Robinsons 's case (i), see "Law and Orders" by Sir C. K. Allen, 2nd Ed. ,P. 374, foot note 5a. 404 those which are conferred on the Indian Courts under cl. 1 of section 162 of the Act. In the decision in Duncan 's case (1) Viscount Simon had assumed that the law as laid down by the said decision was equally applicable to Scotland. This assumption has been seriously challenged by another decision of the House of Lords in Glasgow Corporation vs Central Land Board (2). In that case Viscount Simonds has referred to a large number of earlier decisions dealing with the relevant law as it is administered in Scotland and commented on the decision in Duncan 's case (1) by saying that the observations in the said case, in so far as they relate to the law of Scotland must be regarded as obiter dicta. "In the course of the present appeal", added Lord Simonds, "we have had the advantage of an exhaustive examination of the relevant law from the earliest times, and it has left me in no doubt that there always has been, and is now, in the law of Scotland an inherent power of the Court to override the Crown 's objections to produce documents on the ground that it would injure the public interest to do so", though he added that " very rarely in recent times has this inherent right been exercised". Lord Radcliffe, who agreed with the conclusion of the House with some reluctance, has made strong comments on the plea of privilege which is raised on behalf of the Crown in such matters. Adverting to the contention that the public interest may be injured by the production of the document Lord Radcliffe observed that more than one aspect of the public interest may have to be surveyed in reviewing the question whether a document which would be available to a party in a civil suit between private parties is not to be available to the party engaged in a suit with the Crown. According to Lord Radcliffe it was not unreasonable to expect that the Court would be better qualified than the Minister to measure the importance of such principles in application to the particular case that is before it. It is on that assumption that the Scottish Law has reserved to the Courts the duty of making some assessment of the relative (1) ; (2) (1956) Soots Law Times Reports 41. 405 claims of the different aspects of public interest where production of a document is objected to by the Crown. Then, in his characteristic style Lord Radcliffe has observed "I should think it a very great pity indeed if a power of this kind, a valuable power, came to be regarded as a mere ghost of theory having no practical substance, and the Courts abdicated by disuse in the twentieth century a right of control which their predecessors in the earlier centuries have been insistent to assert". The learned law Lord has also made some strong comment on the formula which has been evolved by Viscount Simon in Duncan 's case (1), and had stated, that the phrase "necessary for the proper functioning of the public service" is a familiar one, and I have a misgiving that it may become all too familiar in the future". The result of this decision appears to be that in Scotland, where the common law doctrine of the Crown Privilege is not strictly enforced, a privilege can be claimed by the Minister on grounds set forth by him in his affidavit. The certificate would be treated as very strong presumptive evidence of the claim made but the Court would nevertheless have inherent power to override the said certificate. It is unnecessary for us to consider the true nature and effect of this power because in India in this particular matter we are governed by the provisions of section 162 which confer power on Courts to determine the validity of the objection raised under section 123, and so there would be no occasion or justification to exercise any inherent power. Though we do not propose to refer to the other decisions to which our attention was invited, we may incidentally observe that the decision in Duncan 's case (1) has been followed by English Courts, but sometimes the learned judges have expressed a sense of dissatisfaction when they are called upon to decide an individual dispute in the absence of relevant and material documents. (Vide: Ellis vs Home Office (2)). Before we part with this topic we may also indicate, that it appears that in the long history of reported judicial decisions only on three occasions the right to (1) ; (2) 406 inspect documents has been either theoretically asserted or actually exercised in England. In Hennessy vs Wright (1), Field, J., observed that he would consider himself entitled to examine privately the documents to the production of which the Crown objected, and to endeavour by this means and that of questions addressed to the objector to ascertain whether the fear of injury to public service was the real motive in objecting. In point of fact, however, the learned Judge did not inspect the documents. From the judgment of the Court of Appeal in Asiatic Petroleum Co., Ltd. vs Anglo Persian Oil Co., Ltd. (2), it appears that Scrutton, J., had inspected the documents to the production of which an objection was raised. The learned judge has, however, added that having seen the documents he thought that the. government may be right in the view that they ought not to be produced to others, and that he would not take the res ponsibility of ordering them to be produced against the wishes of the government. In Spigelmann vs Hocker & Anr. (3), Macnaghten, J., inspected the document to the production of which an objection was raised. The result of these decisions is that in England a valid certificate issued by the Minister in support of the privilege claimed is conclusive; while in Scotland, though it would normally be treated as such, Courts reserve to themselves an inherent right to revise or review the certificate in a proper case. It now remains to consider whether the High Court was right in holding that the privilege claimed by the appellant in respect of the four documents in question was not justified, and that takes us to the consideration of the relevant facts in the present appeal. The documents of which discovery and inspection were claimed are thus described by the respondent: (1) Original order passed by Pepsu Government on September 28, 1955, on the representation dated May 18, 1955, submitted by Sodhi Sukhdev Singh; (2) Original order passed by the Pepsu Government (1) (2) (3) (1933 34) 1 Times L.R. 87. 407 on March 8/9, 1956, reaffirming the decision passed on September 28, 1955, referred to above; (3) Original order passed by the Pepsu Government in their cabinet Meeting dated August 11, 1956, revising their previous order on the representation of Sodhi Sukhdev Singh dated May 18, 1955; and (4) Report of the Public Service Commission on the representation of Sodhi Sukhdev Singh dated May 18, 1955, after the Pepsu Government 's decision on September 28, 1955. In dealing with this question and in reversing the order passed by the trial court by which the privilege had been upheld, the High Court has purported to apply the definition of the expression "affairs of State" evolved by Khosla, J., as he then was, in the case of Governor General in Council vs H. Peer Mohd. Khuda Bux & Ors. (1): "It is, therefore, sufficiently clear", said the learned judge, "that the expression "affairs of State" as used in section 123 has a restricted meaning, and on the weight of authority, both in England and in this country, I would define "affairs of State" as matters of a public nature in which the State is concerned, and the disclosure of which will be prejudicial to the public interest or injurious to national defence or detrimental to good diplomatic relations". It is this definition which was criticised by Aft. Seervai on the ground that it purported to describe the genus, namely, affairs of State, solely by reference to the characteristics of one of its species, namely, documents whose disclosure was likely to cause injury to public interest. Having adopted this definition the High Court proceeded to examine whether any injury would result from the disclosure of the documents, and came to the conclusion that it was difficult to sustain the plea that the production of the documents would lead to any of the injuries specified in the definition evolved by Khosla, J. On this ground the High Court allowed the contention of the respondent and directed the State to produce the documents in question. We have already held that in dealing with the (1) A.I.R. 1950 East Punjab 228. 408 question of privilege raised under section 123 it is not a part of the Court 's jurisdiction to decide whether the disclosure of the given document would lead to any injury to public interest;, that is a matter for the head of the department to consider and decide. We have also held that the preliminary enquiry where the character of the documents falls to be considered is within the jurisdiction and competence of the Court, and we have indicated how within the narrow limits prescribed by the second clause of a. 162 such an enquiry should be conducted. In view of this conclusion we must hold that the High Court was in error in trying to enquire into the consequences of the disclosure; we may add that the decision of the High Court suffers from the additional infirmity that the said enquiry has been confined only to the specified classes of injury specified by Khosla, J., in his definition which cannot be treated as exhaustive. That being so, we think the appellant is justified in complaining against the validity of the decision of the High Court. Let us then consider whether the documents in question do really fall within the category of documents relating to "affairs of State". Three of the documents the discovery of which the respondent claimed are described as original orders passed by the Pepsu Cabinet on the three respective dates. It is difficult to understand what was exactly meant by describing the said documents as original orders passed on those dates; but quite apart from it the very description of the documents clearly indicates that they are documents relating to the discussions that took place amongst the members of the Council of Ministers and the provisional conclusions reached by them in regard to the respondent 's representation from time to time. Without knowing more about the contents of the said documents it is impossible to escape the conclusion that these documents would embody the minutes of the meetings of the Council of Ministers and would indicate the advice which the Council ultimately gave to the Rajpramukh. It is hardly necessary to recall that advice given by the 409 Cabinet to the Rajpramukh or the Governor is expressly saved by article 163, sub article (3), of the Constitution; and in the case of such advice no further question need to be considered. The same observation falls to be made in regard to the advice tendered by the Public Service Commission to the Council of Ministers. Indeed it is very difficult to imagine how advice thus tendered by the Public Service Commission can be excluded from the protection afforded by section 123 of the Act. Mr. Gopal Singh attempted to argue that before the final order was passed the Council of Ministers had decided to accept the respondent 's representation and to reinstate him, and that, according to him, the respondent seeks to prove by calling the two original orders. We are unable to understand this argument. Even if the Council of Ministers had provisionally decided to reinstate the respondent that would not prevent the Council from reconsidering the matter and coming to a contrary conclusion later on, until a final decision is reached by them and is communicated to the Rajpramukh in the form of advice and acted upon by him by issuing an order in that behalf to the respondent. Until the final order is thus communicated to the respondent it would be open to the Council to consider the matter over and over again, and the fact that they reached provisional conclusions on two occasions in the past would not alter the character of the said conclusions. The said conclusions, provisional in character, are a part of the proceedings of the Council of Ministers and no more. The report received by the Council from the Public Service Commission carries on its face the character of a document the disclosure of which would lead to injury of public interest. It falls in that class of document which "on grounds of public interest must as a class be withheld from production". Therefore, in our opinion, the conclusion appears inescapable that the documents in question are protected under section 123, and if the head of the department does not give permission for their production, the Court cannot compel the appellant to produce them. We should have 52 410 stated that the two affidavits made by the Chief Secretary in support of the plea of the claim of privilege satisfied the requirements which we have laid down in our judgment, and no comment can be effectively made against them. The argument that in its pleadings the appellant accepted the description of the respondent that the document contained orders is hardly relevant or material. The affidavits show what these documents purport to be and that leads to the inference which irresistibly follows from the very descrip tion of the documents given by the respondent himself in his application by which he called for their production and inspection. Before we part with this appeal we may incidentally refer to another point which was argued at some length before us by both the learned counsel for interveners. Mr. Viswanatha Sastri contended that the provisions of section 162 can be invoked only where a witness has been summoned to produce a document and a privilege is claimed by him in respect of it. According to him the said provisions cannot be invoked where the Court is called upon to decide the validity of the claim of privilege at the stage of inspection of the documents. In other words, where the State is a party to the suit and an application for inspection of documents is made against it by its opponent, and a claim for privilege is put forward by the State, the Court is entitled under 0. 11, r. 19, sub a. (2), to inspect the documents for the purpose of deciding as to the validity of the claim of privilege. That is the clear provision of 0. 11, r. 19, sub r. (2), and the power conferred on the Court by the said provision is not subject to section 162 of the Act. This position is seriously disputed by Mr. Seervai. The procedural law in regard to discovery, production and inspection of documents is contained in 0. 11, rr. 12, 21. It is true that 0. 11, r. 19, sub r. (2) provides that in dealing with a claim of privilege "it shall be lawful for the Court to inspect the document for the purpose of deciding the validity of the claim of privilege". The question is, what is the effect of this provision when it is considered along with section 162 of the Act ? 411 Before briefly indicating our conclusion on this point we may observe that this contention does not appear to have been raised in any judicial decisions to which our attention was drawn. Indeed it appears generally to have been assumed that in the matter of deciding a claim for privilege made by the State the provisions of section 162 of the Act would apply whether the said claim is made at the earlier stage of inspection or later when evidence is formally tendered. That, however, is another matter. It is true that section 162 in terms refers to a witness who is summoned to produce a document and provides for the procedure which should be adopted and the powers which should be exercised in dealing with a privilege claimed by such a witness; but there is no doubt that the provisions of the Act are intended to apply to all judicial proceedings in or before any Court; that in terms is the result of section 1 of the Act, and the proceedings before the Court under 0. 11, r. 19, are judicial proceedings to which prima facie section 162 would. apply. Similarly, section 4, sub section (1), of the Code of Civil Procedure provides, inter alia, that in the absence of any specific provisions to the contrary nothing in the Code shall be deemed to limit or otherwise affect any special or local law in force; that is to say, in the absence of any provisions to the contrary the Evidence Act would apply to all the proceedings governed by the Code. Besides, it would be very strange that a claim for privilege to which 0. 1 1, r. 19 sub r. (2), refers is allowed to be raised under a. 123 of the Act, whereas, the procedure prescribed by the Act in dealing with such a claim by section 162 is inapplicable. If section 123 of the Act applies and a claim for privilege can be raised under it, prima facie there is no reason why section 162 should not likewise apply. But apart from these general considerations the relevant scheme of the Code of Civil Procedure itself indicates that there is no substance in the argument raised by Mr. Sastri. Order 27 prescribes the procedure which has to be adopted where suits are filed by ,or against the government; a plaint or written statement proposed to be filed by the government has to be 412 signed under r. 1 by such person as the government may by general or special order appoint in that behalf, which means that the government can only act through its agent duly appointed in that behalf. The Minister who is the political head of the department or the Secretary who is its administrative head is not the government; and so whenever the government sues or is sued and makes its pleadings it always acts through its duly authorised agents. The scheme of the relevant rules of 0. 27 is consistent with this position. Section 30 of the Code empowers the Court either on its own motion or on an application of a party to issue summonses to persons whose attendance is required either to give evidence or produce document, and to order that any fact may be proved by an affidavit. Order 4, r. 5, contemplates that, at the time of issuing the summons, the Court has to determine whether the summons should be for the settlement of issues only or for the final disposal of the suit; and the relevant form of the summons (No. 1 in First Schedule, Appendix B) shows that in the case of a suit against the government of a State a summons can be issued to compel the attendance of any witness and the production of any document. This shows that where the State is a party a summons may have to be issued to its appropriate officer calling upon him to produce the documents for inspection. The provisions of rr. 14, 15 and 16 of 0. 11 show that affidavits have to be filed by the parties, and the filing of affidavits which is permitted by 0. 19 is undoubtedly one mode of giving evidence. Order 16, r. 1, provides for the issue of a summons to persons whose attendance is required inter alia to produce documents; and r. 21 of the said order expressly provides that where any party to a suit is required to give evidence or to produce a document the provisions as to witnesses shall apply to him so far as are applicable. Thus there can be little doubt that where a privilege is claimed at the stage of inspection and the Court is required to adjudicate upon its validity, the relevant provisions of the Act 413 under which the privilege is claimed as well as the pro visions of section 162 which deal with the manner in which the said privilege has to be considered are equally applicable; and if the Court is precluded from inspecting the privileged document under the second clause of section 162 the said prohibition would apply as much to a privilege claimed by the State through its witness at the trial as a privilege similarly ' claimed by it at the stage of inspection. It is hardly necessary to point out that a contrary vie* would lead to this manifestly unreasonable result that at the stage of inspection the document can be inspected by the Court, but not at the subsequent stage of trial. In our opinion, the provisions of 0. 11, r. 19, sub r. (2), must, therefore, be read subject to section 162 of the Act. The result is that the appeal is allowed, the order passed by the High Court set aside and that of the trial court restored with costs throughout. KAPUR, J. I have read the judgment prepared by my learned brother Gajendragadkar, J., and agree with the conclusion but in my opinion the Court cannot take other evidence in regard to the nature of document, for which privilege is claimed, and my reasons are these: In India the law of privilege in regard to official documents is contained in section 123 of the which has to be read with section 162 of that Act. The various kinds of privileges claimable under the Evidence Act are contained in Chapter IX, two sections amongst these are sections 123 and 126, the former dealing with state privilege relating to "affairs of State" and the latter with communications with a legal adviser. In section 123 the opening words are "no one shall be permitted " and in the latter "no barrister etc., shall at any time be permitted In the other sections dealing with privilege the opening words are "no person shall be compelled This difference in language indicates that the legislature intended to place the privilege of the State in regard to official documents on a different footing than the other forms of privileges mentioned in the 414 Act in so far as it put a ban on the court permitting any evidence of the kind mentioned in. section 123 from being given, so that if, unwittingly any evidence mentioned therein was sought to be given, the court would not permit it unless the other conditions were satisfied. In section 123 the provision is against the giving of evidence which is derived from unpublished official records relating to any affairs of State except when the head of the department concerned in his discretion gives permission for the evidence to be given. The important words are "derived", "unpublished" and "affairs of State". The word "derived" means coming out of the source and therefore refers to original as well as secondary evidence of documents whether oral or documentary. The words " unpublished official records" are not very difficult of interpretation and must depend upon the circumstances of each case. If the record is shown to have already been published, it ceases to be an unpublished record. But the difficulty arises as to the meaning of the words "affairs of State", because the ban is put on evidence derived from official documents relating to affairs of State. At the time when the was enacted, affairs of State were confined to governmental or political activities of Government, but with the expanding of the activities of the State, which, because of the changed concept of the State, comprise also socioeconomic, commercial and industrial activities the words "affairs of State" must necessarily have a much wider meaning than it originally had. But the language of the sections remains the same and so also the limitation on the giving of evidence derived from such documents and therefore what was considered to be within the discretion of the head of the department to disclose or not to disclose still remains within his discretion and merely because the scope of the words "affairs of State" had been extended, the extent of the discretion has not thereby decreased or become limited and the words "who shall give or withhold such permission as he thinks fit" indicate that the discretion to remove the ban vests in the head of the department and no one else. 415 The real difficulty arises in the interpretation of the words "affairs of State". What are they? How is the meaning of the words to be determined and by whom? When a claim is made by a proper authority in a proper form, is that conclusive of the nature of the document or has the court to proceed to determine the efficacy of the claim by taking other evidence as to its nature or the effect of its disclosure. It was contended that the decision, whether the document belongs to the category falling within the expression "affairs of State" or not has to be of the court and not of the official mentioned in the section. In a way that is correct because the conduct of the trial must always remain in the hands of the court but what is implied in the contention raised was that the court must first decide whether the document belongs to the class comprised in the expression "affairs of State" and then the official concerned may give or withhold his consent. It was also submitted that in order to enable the court to determine the validity of the claim of privilege the official concerned, when making the claim, may have to state the nature of the document or at least the nature of the injury to the public interests or to the efficient working of the public service, as the case may be, which the disclosure of the document or evidence derived therefrom would result in. Section 162 of the Evidence Act was relied upon in support of the above contention. That section applies to all documents in regard to which claim of privilege of any kind may be claimable including that falling under section 123 and therefore the language of section 162 had necessarily to be wide. It has been described as not being clear by Bose, J., as he then was, in Bhaiya Saheb vs Ram Nath Bampratap Bhadupote (1). The section requires a witness summoned to produce a document to bring it to the court in spite of any objection which he may take to it& production or to its admissibility and the court is empowered to decide both the questions. It is the next part which is relied upon in support of the contention that the court can (1) I.L.R. , 247. 416 take other evidence to decide both the questions of production and the question of admissibility. The words are "the court, if it sees fit may inspect the document, unless it refers to matters of State,. or take other evidence to enable it to determine on its admissibility". It was argued that this part of the section empowered the court to take other evidence not only to decide the question of admissibility of the document but also its production. The language of this part of the section does not lend support to this contention because it gives discretion to the court to inspect the document or take other evidence to enable it to determine the admissibility of the document. The interposing of the words "unless it refers to matters of State", has reference to privilege under section 123 and therefore it disentitles the court to inspect the document. The sequence envisaged by the section is that a witness summoned to produce a document is bound to bring it to the court. He may then take objection to its production under any of the sections, viz., 121 to 131 or he may object to its admissibility and both these objections have to be decided by the court. Then comes the second part of the section. If the document refers to "matters of State" there is no distinction in the meaning of the word "matters" and "affairs of State" then the court may not inspect the document, but if the document is not of that class, then the court can inspect it and if it finds any objection to the admissibility, it may take other evidence to determine its admissibility. To take a concrete case, if a document is produced which is compulsorily registerable and it is not so registered, it would not be admissible in evidence under section 49 of the Registration Act, but evidence may be led as to its admissibility for certain purposes, e.g., section 53 A of the Transfer of Property Act. If it refers to that class of documents then the second, part of section 162 becomes applicable, i.e., the, court may inspect the document which will help it in deciding the question of privilege and admissibility. But if a claim is properly made by a proper official on the ground that it refers to matters of State, the court will stay its hands and refrain from inspecting it. 417 The words "or to take. its admissibility" on their plain language do not apply to production and consequently the taking of evidence must have reference to the admissibility of the document. All the High Courts in India are in accord that the Supreme court will not inspect the document if it relates to matters of State. If that is so it would be difficult to sustain the contention that it can decide the question whether the matter relates or does not relate to affairs of State. If the original cannot be inspected, no other evidence can be produced as to its contents. The effect of this prohibition is not only as if the document had been destroyed, but as if it never existed. If that is the position, then it becomes difficult to see how the question of its production can be decided by the court by taking other evidence or how the court can decide whether a particular document falls within the prohibition imposed by section 123 of the Evidence Act. In this connection the words of Lord Kinnear in The Lord Commissioner of the Admiralty vs Aberdeen Steam Trawling & Fishing Co., Ltd. (1) are quite apposite. It was there said: "I think it is not improbable that even if an officer of the department were examined as a witness, we should not get further forward, because the same reasons which induced the department to say that the report itself ought not to be produced might be thought to preclude the department from giving explanation required". If the court cannot inspect the document, if no secondary evidence can be given as to its contents and if the necessary materials and the circumstances which would indicate the injury to the public interests or detriment to the proper functioning of the services cannot be before the court it cannot be in a position to decide whether the document relates to affairs of State or not and the logical conclusion would be that the court is debarred from overruling the discretion of the head of the department concerned, because the court cannot say whether the disclosure or non disclosure would be detrimental or not. If, on the other (1) , 343. 53 418 hand, the contention is accepted that the court can decide by taking other evidence as to whether the document relates to the affairs of State then the discretion to ban its production by the head of the department must necessarily become illusory. If the court takes upon itself the task of deciding the nature of the document, then it will be taking upon itself the very grave duty of deciding a vital question as to what are the affairs of State without having the necessary material before it or without knowing the exigen cies of the public service or the effect of the disclosure of the State secret or how far the disclosure will injure the public interests and it may thus unwittingly become the instrument of giving publicity to something which the head of the department considered injurious to the public interests, the law having given to the head of the department concerned to make this determination ' No doubt the discretion is wide and covers all classes of documents which may fall within the phrase "affairs of State", some noxious and others innocuous and may even appear to be unduly restrictive of the rights of the litigant but if that is the law the sense of responsibility of the official concerned and his sense of fair play has to be trusted. The second. part of section 162 therefore cannot be said to permit the taking of other evidence, ie., other than the document to determine the question of its production when it is of the category falling under section 123. That part does not entitle the court to determine the nature of the document or the adequacy of the reasons which impelled the proper official to claim privilege. It would be relevant Co quote the observations of Isaacs, J., in Marconi 's Wireless Telegraph, Co. vs The Common. wealth "I distinctly adverted to the necessary fact that: the right of discovery given, to the litigant for the furtherance of public justice must be subject to the still higher consideration of the general welfare that the order to make proper discovery does not destroy the privilege of public interest, and, that the ground of, public policy may intervene and ', prevent the injury, to (1) (1913) 16 C.L.R. 178, 201. 419 the community which coercive 'disclosure might produce. If that were not so, every gun in every fort and every safe in the Treasury would be open through the medium of the Court to the observation of any ,plaintiff of any nationality who could make a prima facie case of the infringement to which it was relevant. One of the authorities to which I referred in that connection was the judgment of Turner, L. J. in Wadeer vs East India Co., at p. 191 and that, judgment is, I think, of great value in this case also". It will be helpful to refer to the law on the subject in England as laid down in English cases because the basis of the Indian Law is the law of that country. The question of privilege has been described by Viscount Simon L. C., in Duncan vs Cammell Laird & Co., Ltd. (1) as a question of high constitutional importance because it involves a claim by the Executive Government to restrict the material which might otherwise be available for the court trying the case and this description was repeated by the House of Lords in the Scottish case Corporation of Glasgow vs Central Land Board (2). It may be the material which a party to the litigation may desire in its own interest and without which equal justice may be prejudiced. The question of privilege may not only arise in cases where the State is party to the suit but may equally arise where the contestants in a suit are private parties and whether as a party to the suit or not the State may decline to produce a document. In Dun can 's case (1) the privilege of the crown, though it was described as not a happy expression, was upheld on the ground that the interest of the State must not be put in jeopardy by the production of a document which would injure it and which is also a principle to be observed in administering justice, "quite unconnected with the interests or claims of the particular parties in litigation and, indeed, is a rule upon which the Judge if necessary, insist even though no objection is taken at all. " The sort of grounds to afford justification for. withholding the documents were,given by Viscount Simon as follows. (1) ; (2) 1956 S.C. I (H.L.), 420 "It would not be a good ground that, if they were produced the consequences might involve the department or the government in Parliamentary discussion or in public criticism, or might necessitate the attendance as witnesses or otherwise of officials who have pressing duties elsewhere. Neither would it be a good ground that production might tend to expose a want of efficiency in the administration or tend to lay the department open to claims for compensation. In a word, it is not enough that the minister or the department does not want to have the document produced. The minister, in deciding whether it is his duty to object, should bear these considerations in mind, for he ought not to take the responsibility of with holding production except in cases where the public interest would otherwise be damnified e.g. where disclosure would be injurious to national defence, or to good diplomatic relations or where the practice of keeping a class of documents secret is necessary for the proper functioning of the public service. " Thus the documents, which are protected from production, are those the production of which would be prejudicial to the public interests or those which belong to that class which as a matter of practice, are kept secret for the proper maintenance of the efficient working of the public service. Objection has been taken to the authority of this rule enunciated by Viscount Simon L. C., on the ground that it is in serious conflict with another principle that the proper administration of justice is also a matter of public interest, i. e., "fiat justitia ruat caelum" but as was said by Viscount Simonds in Glasgow Corporation vs Central Land Board (1), "The paramountcy of the public interest has been recognized and preserved". This principle, which was re enunciated by Viscount Simon, L. C., had been the law of England for over a century before Duncan 's case (2). In Earl vs Vass (3) it was held that public officers are not entitled or compellable to produce written communications made by them officially relative to the character and conduct of a party applying (1) ; (2) ; (3) 421 for a public office when the production is demanded in an action for damages against the writer. Lord Eldon L. C., at p. 230 observed: "I apprehend, in all cases in which it has been held, upon the principle of public policy, that you shall not be compellable to give evidence of, or produce s such instruments that is, wherever it is held you are not on grounds of public policy, to produce them you cannot produce them and that it is the duty of the judge to say you shall not produce them. " Lord Eldon referred with approval to the decision in Home vs Lord William Bentinck (1) which was of the year 1820. The principle there laid down was that production of instruments and papers must be shut out if it was against public policy. At p. 919 the learned Chief Justice said: "It seems therefore that the reception of the minutes would tend directly to disclose that which is not permitted to be disclosed; and therefore, independently of the character of the court, I should say, on the broad rule of public policy and convenience that these matters, secret in their nature, and involving delicate enquiry and the names of persons, stand protected". The injury to public service was recognized in Beatson vs Skene (2) where Pollock, Q. B., said: "It appears to us, therefore, that the question, whether the production of the documents would be injurious to the public service, must be determined, not by the Judge but by the head of the department having the custody of the papers; and if he is in attendance and states that in his opinion the production of the document would be injurious to the public service, we think the Judge ought not to compel the production of it. The administration of justice is only a part of the general conduct of the affairs of any State or Nation, and we think is (with respect to the production or non production of a State paper in a Court of Justice) subordinate to the general welfare of the community. If indeed, the head of the (1) ; (2) ; 422 department does not attend personally to say that the production will be injurious but sends the documents to be produced or not as the Judge may think proper, or as was the case in Dickson vs The Earl of Wilton beford Lord Campbell (reported in Foster and Finla son 's N. P. Rep., p. 425), where a subordinate was sent with the document with instructions to object but nothing more, the case may be different." Martin B. did not entirely agree with the view of the other three learned Barons and he was of the opinion that if the document could be produced without prejudice to public service he ought to compel its production notwithstanding the reluctance of the head of the department to produce it. It was pointed out by Pollock, C. B., that this might apply to extreme cases and "extreme cases throw little light on the practical rules of life". In Smith vs East India Company (1) which related to a commercial transaction as to the liability to pay freight a similar privilege was upheld. It was argued that communications between officials and communications between Directors and Board of Control were official correspondence and were privileged. On appeal the Lord Chancellor held that in order that superintendence and control should be exercised effectively and for the benefit of the public it was necessary that unreserved communication should take place between the East India Company and the Board of Control. In Homer vs Ashford (2) which was of the year 1825,Best, C. J., said: "The first object of the law is to promote public interest; the second to preserve the rights of individuals". In this connection it may not be out of place to recall the striking language of Knight Bruce, V. C., quoted at p. 401 of Macintosh vs Dun (3) in the judgment of Lord Macnaughten: "Truth like other good things, may be loved unwisely may be pursued too keenly may cost too (1) (1841) 1 Ph. 50: (2) ; ; , 539. (3) 423 much". And then he points out that the meanness and the mischief of prying into things which are regarded as confidential, with all the attending consequences, are "too great to pay for truth itself." Thus the law as stated in these old English cases shows that what was injurious to the public interest or prejudicial to the proper functioning of the public services was not to be disclosed and if the objection was based on these grounds it must prevail. As to who was to determine this, the judge or the official, Pollock C. B. decided in favour of the official because the enquiry could not be held in private and if it was held in public the mischief would have been done. Beatson vs Skene (1). It was with this background of the state of the English law that Sir James Fitzjames Stephen drafted the law of evidence which was enacted into the (Act 1 of 1872). Scrutton, T., in Asiatic Petroleum Company Ltd. vs Anglo Persian Oil Company Ltd. (2) which was a case between private parties inspected the document to the production of which objection was taken, and having seen it he said that he would not take the responsibility of ordering it to be produced against the wishes of the Government. When the matter was taken in appeal, Swinfen Eady, L. J., was of the opinion that the rule was not confined to documents of political or administrative character. The foundation of the rule was that the information cannot be disclosed without injury to the public interest and not that the document was confidential or official, and that if the production would be injurious to the public service, the general public interest must be considered paramount to the individual interest of the suitor. This was a document which was written by the defendants, who owned a pipeline from Persia to their refinery in the Persian Gulf, to their agents in Persia which contained confidential information from the Board of Admiralty. The Scottish cases have also upheld the privilege of. the Crown in regard to production although it has (1) ; ; (2) 424 been stated that the inherent power of the court to itself see the document and to override but not to review the certificate of the official of the department concerned has always existed in Scottish courts. In Duncan 's case (1) Viscount Simon, L. C., quoted with approval the observation of Lord Dunedin, the Lord President in the Lord Commissioners of the Admiralty vs The Aberdeen Steam Trawling & Fishing Co., Ltd. (2). That was a case where a Government department objected to the production of the document on the ground that the production would be prejudicial to public services and it was held that the view of the government department was final and the court will refuse production even in action in which the Government department was a party. The objection there was taken on an affidavit. At p. 340, the Lord President (Dunedin) said: "It seems to me that if a public department comes forward and says that the production of a document is detrimental to the public service,, it is a very strong step indeed for the Court to overrule that statement by the department. The Lord Ordinary has thought that it is better that he should determine the question. I do not there agree with him, because the question of whether the publication of a document is or is not detrimental to the public service depends so much upon the various points of view from which it may be regarded, and I do not think that the Court is in possession of these various points of view. In other words, I think that, sitting as Judges without other assistance, we might think that something was innocuous, which the better informed officials of the public department might think was noxious. Hence, I think the question is really one for the department, and not for your Lordships". And Lord Kinnear agreed with Lord Dunedin and at p. 343 said: "I agree that we cannot take out of the hands of the Department the decision of what is or what is not detrimental to the public service. There are only two possible courses. We must either say that it is a good (1) ; , (2) , 343. 425 ground of objection or we must overrule it altogether. I do not think that we should decide whether it would be detrimental to the public service or not; and I agree with what both your Lordships have said as to the position of the Court in reference to that question. We do not know the conditions under which the production of the document would or would not be injurious to the public service. I think it is not improbable that even if an officer of the Department were examined as a witness we should not get further for ward, because the same reasons which induced the Department to say that the report itself ought not to be produced might be thought to preclude the Department from giving the explanations required. A department of Government, to which the exigencies of the public service are known as they cannot be known to the Court, must, in my judgment, determine a question of this kind for itself, and therefore I agree we ought not to grant the diligence. " In a later Scottish case Henderson v.M 'Gown (1) where in a suit between private parties income tax returns were sought to be produced, the court held that it had the power, in the exercise of its discretion, to order production of documents in the custody of a public department in spite of its objection but in the circumstances it did not order production as it was unnecessary. Lord Johnston said at p. 826: "That is not to say that the court never can and never will overrule such a statement but merely that it would be a very strong step, and therefore a step for which the Court would require very grave justification. The Admiralty and the War Office are charged with the duty of providing for the safety of the realm, and, if either say that the production of a document in their hands would be prejudicial to the public interest, I think that we should naturally implicitly accept the statement. But there are distinctions between public departments. The interest of such a department as the Inland Revenue is that the public should be able to rely on all returns to them and (1) 54 426 communications made to them being treated as confidential. This also is the public interest. " The latest Scottish case relied upon is a decision of the House of Lords in Glasgow Corporation vs Central Land Board (1). In that case privilege was claimed by the Central Land Board on the ground that its production would adversely affect the public interests. The question for decision was whether Scottish courts were bound to give effect to the certificate of the Secretary of State or whether the court had an inherent jurisdiction not to review the certificate but to override it. The House of Lords was of the opinion that Duncan 's case (2) did not affect the Law of Scotland and the Scottish courts possessed the inherent power to override the objections of the Minister and it did not exclude the court from making an order of production but in that case the power was not exercised. Viscount Simonds, L. C., said at p. 10 that Duncan 's case (2) had settled that according to the Law of England an objection validly taken to production of documents on the ground that this would be injurious to the public interest is conclusive but to cite the case of Lords Commissioners of the Admiralty (3 ) as authoritative without regard to the earlier cases and the later case of Henderson vs M 'Gown (4) must give an imperfect view of the law of Scotland. But even in Scotland the power had been rarely, very rarely, exercised by the courts; its exercise had been refused even where the result had been the prejudice of the private individual and the paramountcy of the public interest had been recognised and preserved. (p. II). Lord Normand observed that for a 100 years the uniform track of authority asserted the inherent power of the court to disregard the crown 's objection but the power had been seldom exercised; only the courts had emphatically said that it must be used with the greatest caution and only in special circumstances. In this connection Lord Normand said at p. 16: "It was also a firmly established rule that the courts could not dispute the certificate and that the (1) ; (2) ; (3) , 343. (4) 427 question whether production would be contrary to public interest was for minister or the department concerned. " Lord Radcliffe in his speech said that Duncan 's case ought not to be treated as a decision which affected the law of Scotland. Dealing with the case before the court and the power reserved to the court to overrule the crown objection he said at p. 18: "I do not understand that the existence of the power involves that in Scotland, any more than in England, it is open to the court to dispute with the minister his view that production would be contrary to the public interest is well founded or to arrive at a view, contradictory of his that production would not in fact be at all injurious to that interest. If weight is given to the argument that the Minister in forming his view may have before him a range of considerations that is not open to the Court and that he is not under any obligation to set out these considerations in public, I think that it must follow that the Minister 's view must be accepted by the Court as incapable of being displaced in by its own opinion". The view expressed in Admiralty Commissioners vs Aberdeen(1) was dissented from. After referring to another aspect of public interest that impartial justice should be done in the courts of law, not least between citizen and Crown, the Lord Normand observed: "If in the past the power to disregard the objection has hardly ever been exercised, that has been due, I think, to a very proper respect for the Crown 's position and to a confidence that objections of this nature would not be advanced, or at any rate persisted in, unless the case was one in which production would involve material injury to the public welfare". Thus, as was said by Lord Normand, there is a difference between the law of England and the law of Scotland on an important constitutional question. But in practice the difference was little as the exercise of the inherent power by the Scottish Courts had been rare. (1) ; (2) 343. 428 As the Privy Council judgment in Robinson 's case (1) was from Australia it will be useful to refer to two Australian cases: In Marconi 's Wireless Telegraph Company Limited vs The Commonwealth(2) where inspection was claimed of wireless telegraphic apparatus, Isaacs, J., in his minority judgment at p. 205 enunciated the following propositions which are relevant for the purpose of the present case: "(1) The rule of exclusion of State secrets applies, necessarily without distinction to the facts, documents and other objects. This was admitted by Mr. Irvine, and is established by such cases as B. vs Watson ; at p. 148; B. vs Hardy , at col. 753; R. vs Watson , at cols. 100 101. (2)The rule proceeds on the same grounds whether the parties called on to produce the documents, &c., are or are not parties to the suit, that is, on the grounds of the prejudice to the public interests, which production would occasion (per Turner, L. J. in Wadeer 's case section D. M. & G., 1882; Admiralty Commissioners vs Aberdeen Trawling Co. (1909) Sess. Ca., 335. (3) The right to protection depends upon the "character" of the documents, &c. (ib.). (4) If the documents, &c., are prima facie private, as where they are in private hands then in the absence of Ministerial claim for protection, the Court, in case of objection by the private defendant on the ground of public policy, will ascertain their character that is, whether they are really governmental and, if they are, the next succeeding paragraph applies: Smith vs East India Company I Ph. 50. (5) If the documents, & are of a political that is, a governmental "character", then even in the absence of any Ministerial claim for protection, it is the duty of the Court, on objection by private person holding them, to ascertain whether public prejudice will or may ensue from production, and, if it appears that public policy requires confidence between the objector and the Government, they are presumed (1) (2) (1913) 16 C.L.R. 178, 201. 429 prima facie to be confidential: Smith vs East India Company I Ph. 50 and per Wills, J. in Hennessy vs Wright 21 Q.B.D. 509, 518 519. (6) If either by proof or undisplaced presumption confidence is required, then it is a rule of law, not of discretion, that the documents shall be excluded: Marks vs Beyfus at pp. 498 500; Stace v Griffith ; at p. 428. (7) If the documents, &c., are in fact "State documents", that is, "in possession of a government department", and the Minister having custody of them assures the Court that public prejudice will or may ensue from production, that, in the absence of what are called extreme cases and are practically negligible, is conclusive evidence of their, character, that is, that they are confidential public documents, and that such prejudice will or may ensue, and the Court must act upon it: Stace vs Griffith L.R. 2 P.C. 420 at p. 428; Beatson vs Skene ; ; The Bellerophon ; Hughes vs Vargas 9 R. 661; Halsbury 's Laws of England, Vol. XI, p. 85; Taylor on Evidence, 10th ed., pp. 673, 674; Powell on Evidence, 9th ed., p. 273. Conclusiveness in such a case is not unique. Even a private claim for privilege in an ordinary affidavit of documents is (with certain exceptions immaterial here), taken as conclusive with respect even to the grounds stated for claiming privilege; See Halsbury 's Laws of England, Vol. XI, p. 61 and Morris vs Edwards 15 App. " The learned Judge dealing with the matter of privilege in public interest and the principles based on prevention of injury to the community observed at p. 203: "Such a doctrine is inherent in all systems of law; for the first requirement of every organised society is to live, and so far as possible to live securely, and the next is to live with the greatest advantage to the community at large ; and to these essentials the strict administration of justice in particular cases amongst members must yield. " Thus the principle is that private inconvenience must yield to public ;interest; in other words Fiat justitia 430 ruat coelum is not always the right of a suitor because the proper maxim applicable is salus populi suprema est lex which transcends all other considerations. The majority of the Court in that case had held that there was nothing to warrant the conjecture that the inspection could disclose anything that could reasonably be called secret in any sense of the word. The matter was taken to the Privy Council but special leave to appeal was refused. The Lord Chancellor there said: (See Griffins case; , , 386) "Of course the Minister 's statement or certificate must be conclusive on a particular document. How can it be otherwise?. . . . If the Minister certifies quite specifically, his certificate is to be taken as conclusive. The ground on which special leave to appeal was refused in that case appears to have been that, having regard to the form of the order, which carefully limited the right of inspection and reserved liberty to apply, it was not a convenient case in which to raise a great question of principle. " In Griffin vs The State of South Australia (1) objection to the production for inspection of documents was upheld on the ground that the statement of the Attorney General for the State that their production for inspection would be prejudicial to the public interest is conclusive. That was a case in which inspection of documents was sought in an action brought in the High Court of Australia by the plaintiff against the State of South Australia to recover damages for negligent storage of wheat. Knox, C. J., in the course of his judgment referred to the observations of the Lord Chancellor in Marconi 's case, (2) which have been quoted above. Isaacs, J., reiterated his previous opinion. Starke, J., was doubtful and he was of the opinion that there was no reason why the courts should not use the power confided in them for discovery. If some real doubt was established as to the accuracy of the Minister 's statement there was no reason for refusing the power in a proper case particularly when the commercial activities of the Government were becoming more and more extensive and (1) ; , (2) (1913) 16 C.L.R. 178,201. 431 the sphere of political and administrative action correspondingly wider. He was also of the opinion that the courts should be able to fully protect the public interests and do nothing to imperil them. The learned Judge in that particular case was not fully satisfied with the affidavit of the Minister. The matter of privilege in Australia was taken to the Privy Council in Robinson vs State of South Australia (1). This case arose out of an action similar to Griffin 's case (2) and a similar privilege was claimed. The Privy Council was of the opinion that the Minister 's minute was inadequate to support the claim of privilege but it had not been lost by the inefficiency of the form in which it was claimed and the matter was a proper one for the court to exercise its power of inspection for which privilege was sought in order to determine whether their production will be prejudicial to public interest or to the efficient working of the public services. Lord Blanesburgh said at p. 714: " As the protection is claimed on the broad principle of State policy and public convenience, the papers protected, as might have been expected, have usually been public official documents of a political or administrative character. Yet the rule is not limited to these documents. Its foundation is that the information cannot be disclosed without injury to the public interests and not that the documents are confidential or official, which alone is no reason for their nonproduction: See Asiatic Petroleum Co. vs Anglo Persian Oil , 829 830 and Smith vs East India Co. 1 Ph. 50." and at p. 715 it was observed: "It must not be assumed from these observations of the Lord Justice that documents relating to the trading, commercial or contractual activities of a State can never be claimed to be protected under this head of privilege. It is conceivable that even in connection with the production of such documents there may be "some plain overruling principles of public interest concerned which cannot be disregarded"." (1) (2) ; 432 After referring to various cases that have been set out above the Privy Council was of the opinion that the court was entitled to prescribe in any particular case the manner in which the claim of privilege should be made. It may accept unsworn testimony of the Minister in one case but in another where the circumstances seems to be to so require call for an affidavit from him. It may be that objection merely on ground of public policy may not be sufficient but it ought to appear that the mind of a responsible Minister had been brought to bear on the question of expediency in the public interest of giving or refusing the information asked for. This would be a guarantee that the opinion of the Minister which the court is asked to accept is one which has not been expressed inadvisedly or as a matter of mere departmental routine but is one put forward with the solemnity necessarily attaching to the sworn statements and that the privilege could not be asserted in relation to documents the contents of which had already been published. In that particular case the Minister had merely stated that he had considered this mass of documents and not that he had read them and considered each one of them. Lord Blanesburgh said at p. 722: "In view specially of the fact that the documents are primarily commercial documents he should have condescended upon some explanation of the particular and far from obvious danger or detriment to which the State would be exposed by their production. Above all, and especially in view of the last paragraph of the minute, the claim was one which should have been put forward under the sanction of an oath by some responsible Minister or State official. " Continuing it was observed that there may be some among the scheduled documents to which privilege may be genuinely attached and to give inspection of which without more would destroy the protection of the privilege and therefore it would or might be contrary to public interest to deprive the State of opportunity of regularising its claim to protection. The Board would have given this advice had it not been for the fact that it would have involved serious delay 433 without advancing further the final solution of the question. The case was therefore remitted to the Supreme Court with a direction that it was a proper one for the exercise by that court of the power of inspecting documents. The Privy Council was careful to add that the Judge in giving his decision as to, any document would safeguard the interests of the State and would not resolve the doubt against the State without further enquiring from the Minister. In that case also the paramountcy of the consideration of public interest was recognized but as the privilege was not properly claimed and the document related to commercial activities of the State and it would have involved unnecessary prolongation of the action the Privy Council remitted the case for the court to exercise its power of inspection under the Rules and Orders of the court but with the further direction of safeguarding the interest of the State. In Duncan vs Cammell Laird & Co. (1), the Court of Appeal held that the affidavit of the First Lord of Admiralty was conclusive if it stated that such production would be contrary to public interest, and the order for production was therefore refused. Du Parcq, L. J., pointed out that the Privy Council case (Robinson 's case (2)) was not the final word on the subject in regard to production. The House of Lords in appeal did not agree with the judgment of the Privy Council and it is significant that two of the seven Law Lords in the House of Lords were parties to the Privy Council judgment. The House of Lords held that the affidavit of the Minister was conclusive and that inspection of a document by a court in private would be communicating with one party to the exclusion of the other and it accepted the principle that if it was prejudicial to the public interests or the document belonged to that class of documents which are kept secret for the proper functioning of the public services the production of the document would be refused. It was recognized in that case that it is the Judge who is in control of the trial and not the executive but the proper ruling for the judge to give (1) ; (2) 55 434 would be that an objection validly taken to the production on the ground of its being injurious to public interest is conclusive. The English cases which were decided after the pronouncement of the House of Lords in Duncan 's case (1) naturally followed the decision of the House of Lords. In Ellis vs Home Office (2) where a prisoner who had been attacked in jail by another prisoner who was a mental case asked for certain reports and privilege was claimed, the privilege was upheld but it was said that although it was essential that Government department should be entitled to claim privilege against disclosure of documents on the ground of public interest the ambit of privileges should be carefully scrutinized and each document should be examined. It may be mentioned that in that case Devlin, J., felt grave concern about the claim of this privilege because the result was that documents were to be treated as destroyed and no secondary evidence could be led and this concern of the trial judge was shared by the Court of Appeal. In Broome vs Broome (3) which was a defended suit for divorce, the wife wanted certain documents of the Soldiers ', Sailors ' and Airmen 's Families Association but the Secretary of State issued a certificate in which he stated that the production would not be in public interest. It was held that Crown privilege from disclosure attached to all documents irrespective of where they originated or in whose custody they reposed provided that they had emanated from or came into the possession of some servant of the Crown. In Auton vs Rayner & Ors. (4) it was pointed out at page 572 that the sole concern of the Minister was whether the interests of the State in the sphere for which he was responsible would be affected and therefore the documents or evidence should be withheld from the court. It was added that the Minister should accept and recognize that the proper administration of justice would be impeded or may be unattainable if any document or any evidence was withheld. In that case an action was brought against the (1) ; (2) (3) (4) 435 defendants, one of whom was a Police Officer, charging them with conspiracy to injure and defraud him, false imprisonment and malicious prosecution. The documents required by the plaintiff were reports made by the Police Officer to his superior officers and the communication which passed between the Metropolitan Police Force and other police force and the Secretary of State swore an affidavit indicating that the document should be withheld from production and that he had formed an impartial judgment that in the public interest and for the proper functioning of the public services the document should be withheld. 'The Court of Appeal held that the determination of the Secretary of State ought reasonably to be accepted and that the affidavit was, in the circumstances, conclusive. The law in England may thus be summed up: (1) That a document need not be produced for inspection either on discovery or at the trial when objection is taken by the Minister that disclosure of the document would be contrary to public policy or detrimental to public interest or services. This privilege attaches irrespective of where the document originates or in whose custody it is provided it emanated from or came into possession of some servant of the crown; (2) the privilege can be claimed or waived by the authority of the Minister or the head of the department; (3) secondary evidence may not be given of a document for which privilege is established; (4) official correspondence per se is not privileged on the ground of its being confidential or official nor is it a valid ground that production would involve the Government in criticism or expose 'want of efficiency in the administration or open up claims to compensation but the ground for privilege is that the production would be detrimental to the interest of the public or interfere with the efficient working of the public service or it belongs to class of documents which it is the practice of the department to keep secret; (5) the minister 's objection may be conveyed by a letter or by the official who attends at a trial but 436 the court may require an affidavit by or the attendance of the Minister; (6) before a privilege is claimed it is desirable that each document should be examined by the department concerned and inspection permitted of all documents which cannot harm the public interest; (7) if a minister claims privilege the court will accept his statement and ought not to examine the document to see if the objection is well founded; (8) public interest must not be put in jeopardy by the production of a document which could injure it and the court should, if necessary, prohibit the production even though no objection has been taken by the Government department. It may be pointed out that the privilege was expressly reserved when by the Civil Proceedings Act, 1947, the Crown was made liable to. give discovery in civil proceedings. It is no doubt true and it must be recognized that the administration of public justice is also a part of public interest but as was pointed out by Viscount Simon L. C. in Duncan 's case (1) the interest of the State is the interest of the citizen and if the former suffers the interest of the litigant also suffers and therefore public interest transcends the individual interest of a citizen. In Duncan 's case (1) it was emphasised that the Minister in deciding whether it was his duty to object should bear in mind the considerations which justify withholding production, i.e., the public interest would otherwise be damnified, i.e., the disclosure would be injurious to national defence, or to good diplomatic relations or where the practice of keeping a class of documents secret is necessary for the pro per functioning of the public service. And that is the safeguard which both in England and India the law seems to have found sufficient for the protection of an individual 's rights. Even in Scotland where the inherent right of the courts to override official discretion has been recognized the occasions for the exercise of that power have indeed been rare and even in the (1) [1942) A.C. 624. 437 latest case Glasgow Corporation vs Land Board (1) that position was reiterated. Although the consensus of opinion in India is that under the second part of section 162 the court will not inspect the document if it relates to matters of State yet there is a track of decision which has taken the view that it is not for the head of the department claiming the privilege but for the court to decide whether the document falls within the category mentioned in section 123. But in some other cases a different view has been taken. A reference to cases which fall on both sides of the line will be helpful. In Irwin vs Reid (2) Mukherjea, A. C. J., held that the language of section 123 showed that the court cannot be invited to discuss the nature of the document and the public official concerned and not the court is to decide whether the evidence referred to shall be given or withheld. "If any other view were taken, the mischief intended to be averted would take place, as the judge could not determine the question without ascertaining the contents of the document, and such inquiry, if it did take place must, for obvious reasons, take place in public: Beatson vs Skene (3), Hennessy vs Wright (4), Jehangir vs Secretary of State (5). The result practically is, that if the objection is raised by a proper authority the court cannot compel disclosure by primary or by secondary evidence." The Lahore High Court in Khawja Nazir Ahmad vs Emperor (6) held that the head of the department who is in possession of the documents is the sole judge of the fact whether the documents should be protected from production on the ground of their being related to affairs of State and therefore though the decision would be that of the court, it would have to rule in favour of the privilege claimed by the head of the department. It was also held that the interests of the State must not be put in jeopardy by production of documents which would injure them and that was a principle to be observed in administering justice and (1) ; L.) (2) Cal. (3) ; ; (4) (5) , 160. (6) I.L.R. 438 indeed a rule on which the judge should insist even though no objection is taken at all. In that case there were certain confidential files of the Special Enquiry Agency containing notes, correspondence etc., relating to the case and containing a record of statements of various persons and a proper affidavit had been filed by the head of the department stating that the production would be injurious to public interests. Abdul Rahman, J., said "I feel convinced in my mind that the objection as to its production apart from its admissibility (e.g., for want of registration or contravening the rule as to when secondary evidence of a document can be admitted if the document is merely a copy and not original) can only be decided by its inspection by the Court followed as it must necessarily have been by an order for its production, although not in the sense of its contents having been disclosed to the party summoning the document at any rate at that stage. If the Court is debarred under the statute from inspecting it, I cannot see how the objection as to its production can otherwise be decided". In I. M. Lal vs Secretary of State (1) this privilege was upheld. In that case it was held that section 162 divided the privilege of documents into two categories. At p. 212 Abdul Rashid, J. (as he then was) observed: "The Court can inspect documents for the purpose of deciding the question of privilege only if those documents do not refer to matters of State. In other words an exception is made in respect of documents that refer to matters of State. Such documents cannot be inspected by the Court while all other documents for which privilege is claimed are open to inspection by the Court for the purpose of deciding the validity of the objection regarding privilege. " The Bombay High Court in re Mantubhai Mehta in construing sections 123, 124 and 162 has held that the officer summoned to produce the document is bound 'to bring it and if he takes objection to its production it is for the court to decide whether the objection is well founded or not but the court is not entitled to inspect it. This track of reasoning suffers from the (1) A.I.R. 1944 Lah. (2) I.L.R. 439 same difficulty that has been pointed out that without looking at the document and taking into consideration the wide words of section 123 it becomes difficult to hold that the court can decide as to whether the document relates to "affairs of State" and whether it should or should not be produced. In that Bombay judgment the learned Judge referred to the observations of Viscount Simon, L.C., in Duncan 's case (1). Besides the learned Judge also referred to section 124 the effect of which is not the same as of section 123 of the Evidence Act. Bhagwati J. (as a Judge of the Bombay High Court) in R.M.D. Chamarbaghwala vs Y. R. Parpia (2) held that the court cannot inspect the document in order to determine whether they are unpublished official records relating to any affairs of State, but its jurisdiction to determine is not taken away by section 162 and it is for the court to decide the question of production by taking all the circumstances into consideration barring inspection of the document. The learned Judge mainly referred to Robinson 's case (3) and it appears that the learned Judge was not satisfied as to the documents being unpublished but the criterion he laid down was that only such documents are privileged which relate to affairs of State and the disclosure of which would be detrimental to public interest. The question really is the same as to who is to decide whe ther it is "matters" of "affairs of State". The Calcutta High Court in a later judgment in Ijjat Ali Talukdar vs Emperor (4) took a contrary view different from its older view and held that the court is to decide whether conditions precedent to sections 123 & 124 have been established. That was a case under the Excise Act and the Excise Commissioner was called upon to produce certain documents. The Commissioner claimed privilege under section 123 on the ground that the files contained unpublished official records relating to affairs of State and Das J., as he then was, was of the opinion that the occasion for claiming privilege under section 123 arose when it was sought to give evidence derived from unpublished official records (1) ; (2) A.I.R. 1950 Bom. (3) (4) I.L.R. 440 relating to any public affairs which was a condition precedent. He then referred to section 124 of the Evidence Act. The second part of section 162 provided the method or means to enable the court to decide the question, namely, by inspecting the document or by taking other evidence. Although the court was disentitled from inspecting the document, the duty of deciding the question was still on the court. At p. 419 the learned Judge observed: "In case of documents relating to affairs of State it may be difficult for the Court to decide the question, yet it need not be necessarily impossible for the Court to do it. Ordinarily no difficulty will arise, because heads of departments or public officers are not expected to act capriciously and ordinarily the Court will accept their statement. If necessary, the Court will require the officer to claim the privilege in the manner indicated in the Judgment of Lord Blanesburgh in the Australian case. If, however, the Court finds that an over zealous officer is capriciously putting forward a claim of privilege, the Court will decide, as best as it can, by the means available to it, whether the claim is well founded." As has already been said above the second part does not afford the means or methods to the Court to decide the question of privilege. The only method is inspection and that is denied to the court in cases falling under section 123. The second case which is on the other side of the line is the judgment of Bose J., as he then was, in Bhaiya Saheb vs Ramnath Rampratap Bhadupote (1). In that case the learned Judge was of the opinion that the insertion of the words "unless it refers to matters of State" in the middle of the paragraph seemed to indicate that the court might not inspect the document in respect of which the privilege was claimed until it had opportunity of determining upon its admissibility and for that purpose it could take other evidence which meant evidence other than the document produced. This line of reasoning is similar to that adopted in Ijjat Ali 's (2) case. (1) I.L.R. , 247. (2) I.L.R. 441 The Andhra Pradesh High Court in Public Prosecutor, Andhra vs Damera Venkata Narsayya (1) was of the opinion that when an objection under section 123 is taken the court has no power to inspect the document but may take other evidence for the purpose of deciding the objection and if it comes to the conclusion that the evidence will be derived from the unpublished records relating to the affairs of the State the objection will have to be upheld and it will be left to the head of the department to give or withhold the permission and the criterion for the head of the department was whether or not the disclosure would cause injury to public interest and he was the sole judge of the matter with which the court cannot interfere. This case does not support the contention of the respondent. The Patna High Court in Lakhuram Hariram vs The Union of India (2) held that the head of the department must first examine the document and he may then raise an objection but he is not absolved from the obligation of appearing in court and satisfying the court that the objection taken is valid and the court may require him to give an affidavit or further questions may be put in regard to the validity of the claim but the court is not entitled to inspect the docu ment. A. P. Srivastava, J., in Tilka & Ors. vs State, (3) held that under section 162 of the Evidence Act the court may inspect a document unless it relates to affairs of State and in such a case it will have to take other evidence relating to the nature of the document. The words of section 123 are very wide; and the discretion to produce or not to produce a document is given to the head of the department and the court is prohibited from permitting any evidence to be given which is derived from any unpublished documents relating to affairs of State. Section 162 does not give the power to the court to call for other evidence which will indicate the nature of the document or which will (1) I.L.R. [1957] And. Prad. 174. (2) A.I.R. 1960 Pat. (3) A.I.R. 1960 All. 56 442 have any reference to the reasons impelling the head of the department to withhold the document or documents. In the very nature of things when the original cannot be looked at and no secondary evidence is allowable the court will only be groping in the dark in regard to the nature of the document or the evidence. The correct way of looking at the Indian statute, therefore, is to interpret in the manner which is in accord with the English law, i.e., the court has not the power to override ministerial certificate against production. It is permissible for the court to determine the collateral facts whether the official claiming the privilege is the person mentioned in section 123, or to require him to file proper affidavit or even to cross examine him on such matters which do not fall within the enquiry as to the nature of the document or nature of the injury but he may be cross examined as to the existence of the practice of the department to keep documents of the class secret but beyond that ministerial discretion should be accepted and it should neither be reviewed nor overruled. For these reasons I concur in the decision that this appeal must be allowed. SUBBA RAO, J. I have perused the judgments prepared by my learned brethren, Kapur and Gajendragadkar, JJ. I agree with them in maintaining the claim of privilege in regard to the three items described as "original orders" passed by the PEPSU Government, but regret my inability to agree with them in regard to the report of the Service Commission. This appeal raises the question of the scope and content of the law of privilege attached to affairs of State and the procedure to be followed for ascertaining it. The facts are fully stated in the said judgments and I need not restate them; but I would prefer to give my own reasons for my conclusion. It would be convenient at the outset to clear the ground. The arguments at the Bar have covered a wide field, but we are not concerned here with the law of privilege pertaining to the field of discovery and inspection of documents. We are called upon only to decide its 443 scope during the trial of a suit when a witness, who is summoned to produce a document, claims privilege on the ground that the document relates to affairs of State. I should not be understood to have expressed any opinion on the difficult question whether when the defendant is a State, the Court is not entitled to inspect the documents under 0. XI, rule 19(2), Code of Civil Procedure. The question falls to be considered on a true construction of two of the provisions of the (hereinafter called the Act), namely, sections 123 and 162. They read: Section 123: "No one shall be permitted to give any evidence derived from unpublished official records relating to any affairs of State, except with the permission of the officer at the head of the department concerned, who shall give or withhold such permission as he thinks fit. " Section 162: "A witness summoned to produce a document shall, if it is in his possession or power, bring it to Court, notwithstanding any objection which there may be to its production or to its admissibility. The validity of any such objection shall be decided on by the Court. The Court, if it sees fit, may inspect the document, unless it refers to matters of State, or take other evidence to enable it to determine on its admissibility. If for such a purpose it is necessary to cause any document to be translated, the Court may, if it thinks fit, direct the translator to keep the contents secret, unless the document is to be given in evidence; and if the interpreter disobeys such direction, he shall be held to have committed an offence under section 166 of the Indian Penal Code (45 of 1869). " The relevant parts of the foregoing sections may be summarized thus . Section 123 prohibits the giving of any evidence derived from unpublished official records relating to affairs of State except with the permission of the officer at the head of the department; while section 162 enjoins on a witness summoned to produce a document to bring it to Court and empowers 444 the Court to decide on the validity of any objection raised in respect of its production or admissibility. The argument of the Advocate General is that the words "affairs of State" mean "the business of State", and, therefore, evidence derived from any unpublished official document relating to that business cannot be given as evidence except with the permission of the head of the department concerned, and that the Court under section 162 of the Act must automatically accept the affidavit filed by the head of the department claiming such a privilege. Learned counsel for the respondent, on the other hand, defines the words "affairs of State" only to take in documents whose production would be against public interest, confines the power of the head of a department to permit or withhold the user of such a document in evidence, and sustains the Court 's power to decide the question of privilege in respect of such a document on relevant materials without inspecting the document. The crucial words in section 123 are, "unpublished official records relating to any affairs of State". Under that section no one shall be permitted to give any evidence derived from such records except with the permission of the officer at the head of the department concerned. The words "affairs of State" have not been defined. Though in section 123 the words used are & 'affairs of State", in section 162 the words used are "matters of State". There does not appear to be any practical difference between the two sets of words. In Shorter Oxford Dictionary, III edition (1956), "matter" has been defined as "a thing, affair, concern" and "affairs of State" as "public business". These Dictionary meanings do not help to decide the content of the said words. The content of the said words, therefore, can be gathered only from the history of the provision. It has been acknowledged generally, with some exceptions, that the was intended to and did in fact consolidate the English Law of Evidence. It has also often been stated with justification that Sir James Stephen has attempted to crystallize the principles contained in Taylor 's work into substantive propositions. In case of doubt or 445 ambiguity over the interpretation of any of the sections of the Evidence Act we can with profit look to the relevant English common law for ascertaining their true meaning. In English common law the words "affairs of. State" do not appear. The basis of the doctrine of Crown privilege is the injury to the public interests. The Judicial Committee in Robinson vs State of South Australia (1) says at p. 714, "The principle of the rule is concern for public interest, and the rule will accordingly be applied no further than the attainment of that object requires. " The House of Lords in Duncan vs Cammell Laird & Co. (2) restated the same idea when it observed that the State should not withhold the production of documents except in cases where the public interest would otherwise be damnified. The earlier decisions of the English courts indicate that the Crown privilege was sustained only in regard to documents pertaining to matters of administration, defence, and foreign relations whose disclosure would be against the public interest: see Home vs Lord F. C. Bentinck (3), Smith vs The East India Company (4) and Beatson vs Skene, (5). The decisions of the High Courts in India over a long period of time consistently gave the same meaning to the said words. It may also be stated that in and about the time when the Evidence Act was passed, the concept of a welfare State had not evolved in India and as such the words "affairs of State" could not have been, at that time, intended to take in the commercial or the welfare activities of the State. But when the words are elastic there is no reason why they should not :be so construed as to include such activities also, provided the condition of public injury is also satisfied. It is, therefore, clear that the words "affairs of State" have acquired a secondary meaning, namely, those matters of State whose disclosure would cause injury to the public interest. (1) (2) ; (3) ; (4) (1841) 1 Ph. 50; 41 E.R. (Chancery) 550. (5) ; 446 The learned Advocate General contends that this construction, if accepted, would give a meaning to the provisions of section 123 of the Act which would be contrary to its tenor. He classifies documents relating to "affairs of State" into noxious and innocuous documents, and contends that documents, whose disclosure would affect the public interest, are noxious documents and that if the records which relate to the affairs of State mean only noxious documents, the said construction would bring out a result directly opposite to that contemplated by the section. When the section intends to prohibit the disclosure of noxious documents, the argument proceeds, the construction enables their disclosure if the head of the department permits it. Shortly stated, his contention is that the expression "affairs of State", that is, business of State, is the genus and the document, the disclosure of which is against the public interest, is the species, and that the head of the department is only empowered to permit the disclosure of documents falling outside the said species. This argument is apparently logical and rather attractive, but it is an oversimplification of the problem and is based upon a disregard of the legislative history and the long track of decisions of this country. If accepted, it enlarges the scope of the said privilege to such an extent that in effect and substance the control of the admissibility of documents shifts from the Court to the State or its subordinate officers, for every document relating to the business of State would be a privileged document unless the head of the department in his discretion permits the giving of evidence derived therefrom. Nor can I accept the construction that an absolute privilege is attached to every noxious document, i.e., to every State document the disclosure of which may cause injury to the public interest. This is giving too narrow a meaning to the words "public interest". If the non disclosure of a particular State document is in public interest, the impartial and uneven dispensation of justice by Courts is also in public interest. They are indeed two aspects of public interest. There is no conflict or dichotomy between the two. In particular 447 circumstances one aspect may be paramount and in a different set of circumstances the other may be given precedence. In the last analysis, it is the question of balancing of the two aspects having regard to the circumstances of a particular case. The head of a department may as well permit the disclosure of a document even if ordinarily its disclosure affects public interest, if in his opinion the counter balancing circumstances are in favour of disclosure rather than non disclosure. I cannot, therefore, give a wide meaning to the words "records relating to affairs of State" so as to take in every unpublished document pertain ing to the entire business of State, but confine them only to such of the documents whose disclosure would be injurious to public interest. The next question is, who is empowered to decide the said question whether a particular document relates to affairs of State ? whether it is the Court or the State. That is found in section 162 of the Act. The learned Advocate General contends that the first part of section 162 makes a distinction between the production of a document and the admissibility of a document and that the first limb of the second part of the section provides for the production of a document and the second limb for its admissibility. He illustrates his argument thus: privilege may be raised in respect of production of a document on the ground that it pertains to matters of State, or on the ground that it is inadmissible for want of registration deficiency of stamp, or similar other defects. The first clause of the second part of section 162, the argument proceeds, enables the Court to inspect a document when the objection is to its production unless the document refers to a matter of State, and the second clause thereof empowers the Court to take evidence only when the objection is not to its production but to its admissibility. If this contention be accepted, it will lead to an anomaly, for grammatically construed the two limbs of the second part can be applied only to the question of admissibility and in that event, on the hypothesis suggested by the learned counsel, the Court will be entitled to look into a document even if it relates to a 448 matter of State if the objection is only to its production and not to its admissibility. The more reasonable construction of the section is to give a wider meaning to the word "admissibility" so as to comprehend both production as well as admissibility, for the question of admissibility arises only after the document is produced and a party seeks to get it admitted in evidence. In this view, the second part of section 162 can only mean that when an objection is raised either to the production or to the admissibility of a document, a Court can inspect the document and if it thinks necessary other evidence may be taken to decide on the objection raised. By the express terms of the section the Court is precluded from inspecting a document if it refers to matters of State. But in other respects the jurisdiction of the Court to decide on the objection raised is not different from that it possesses in respect of other privileged documents. If so understood there cannot be any ambiguity in the scope of section 162 of the Act. It says in express terms that when an objection is raised to the production of a document or to its admissibility, the validity of any such objection shall be decided by the court. The second part of the section states the material on the basis of which such an objection can be decided. It can either inspect the document or take other evidence to enable it to decide the validity of any objection raised. The only limitation in the case of a document referring to matters of State is that the court cannot inspect it. It is implicit in the limitation that in the case of documents pertaining to matters of State the court is precluded not only from inspecting the documents but also from permitting parties to adduce secondary evidence of their contents. "The other evidence" must necessarily be de hors the contents of the documents. Even in England there is no divergence of view on the question who has to decide, when an objection to the production of a document is raised on the ground of privilege, the validity of the objection. In Robinson 's case (1), the Judicial Committee observed at p. 716 thus: (1) 449 "The result of the discussion has been. . . wherein effect he concludes that the Court has in those cases always had in reserve the power to inquire into the nature of the documents for which protection is sought, and to require some indication of the nature of the injury to the State which would follow its production. The existence of such a power is in no way out of harmony with the reason for the privilege provided that its exercise be carefully guarded so as not to occasion to the State the mischief which the privilege, where it exists, is designed to guard against." The House of Lords in Duncan 's case (1), also recognized this power though it whittled down its scope by holding that the judge had to accept automatically the affidavit filed by a minister. Viscount Simon, L. C., states at p. 642 as follows: "Although an objection validly taken to production, on the ground that this would be injurious to the public interest, is conclusive, it is important to remember that the decision ruling out such documents is the decision of the judge. . . It is the judge who is in control of the trial, not the executive, but the proper ruling for the judge to give is as above expressed. " On the other hand, in Scotland the inherent right of courts to override official discretion is recognized. The House of Lords in Glasgow Corporation vs Land Board (2) gave a clear exposition of the law of that country. Viscount Simonds derives the principle of the court 's power from the fact that the fair administration of justice between subject and subject and the Crown is a public interest of higher order and the protection is the care of the courts. Lord Radcliffe finds it on the doctrine that the interest of the Government for which the minister should speak with authority does not exhaust the public interest, for another aspect of that interest is seen in the need that impartial justice should be done in courts of law. These judgments of the high authority also recognized the fact that it is the court that has to decide an objection (1) ; (2) ; 57 450 raised by the State on the ground of privilege. There is a strong current of Indian decisions taking the same view: see Khawja Nazir Ahmad vs Emperor (1), re Mantubhai Mehta (2), B. M. D. Chamarbaugwala vs Y. R. Parpia (3 ), Lijat Ali Talukdar vs Emperor Bhaiya Saheb vs Ramnath Rampratap Bhadupote Public Prosecutor, Andhra vs Damera Venkata Narasayya Lakhuram Hariram vs The Union of India Tilka vs State (8). In a few cases a different view is expressed. It may, therefore, be stated without contradiction that the preponderance of authority is in favour of a court deciding the question of State privilege. Some objections are raised in decided cases in England and restated in Duncan 's case (9) against conferring such a power on courts. Apart from the fact that the statute expressly confers such a power, there are no merits in the objections raised. The objections are: (i) the judges are not well qualified to appreciate the highly technical matters which may arise with regard to some kinds of State secrets; (ii) if a judge is allowed to decide on evidence the question of privilege, it may prejudice a fair trial; and (iii) it is a first principle of justice that the judge should have no dealings on the matter in hand with one litigant save in the presence of and to the equal knowledge of the other. The objections raised have no substance. The first objection, if accepted, disqualifies a judge from deciding complicated technical questions that arise before him. A judge is trained to look at things objectively and can certainly decide, without inspecting the documents on the material supplied whether the production of a document will affect the public interest having regard to the circumstances of each case. Nor are there any merits in the second objection. In the words of Sir C. K. Allen, a judge worthy of his office can put out of his mind all issues except those which are raised and decided by the forensic process. It is common place that a judge is trained to decide a case only on (1) I.L.R. (2) I.L. R. (3) A.I.R. 1950 Bom. (4) I.L.R. (5) I.L.R. (1940] Nag. 240. (6) I.L.R. (7) A.L.R. 1960 Pat. (8) A.I.,R. 1960 All, 543, (9) [1942) A.C. 624. 451 the admissible evidence actually adduced before him and not on any extraneous considerations. The third objection also has no basis in fact. So long as a judge takes care to rule out any question on the contents of a document in respect whereof privilege is claimed, he can certainly decide the question in the presence of both the parties. The objections have, therefore, no substance. On the other hand, there is every reason why the duty to decide on the question of State privilege must be left to a judge and not to the State. That is the reason why the legislature rightly conferred that power on the court. A judge is as much a part of a department of the State as an executive officer. But unlike the executive officer, a judge is trained to decide cases objectively not only between indi viduals inter se but also between the State and individuals. He can, therefore, be trusted to decide impartially on the question whether the production of a document in a case will affect the public interest. State documents in a secretariat, I presume, will be ' looked into by many officers dealing with the said documents, sometimes from the lowest to the highest in the department. It would be unrealistic to suggest that the disclosure of a State document to any one of those officers would not affect the public interest whereas the decision of its character by a judge would do so. It is, therefore, the duty of the court, whenever an objection is raised on the ground of State privilege to decide on relevant evidence whether the document relates to affairs of State. Even if the wide construction of the words "affairs of State", namely, business of State, be accepted, the result will not be different. The section says that no one shall be permitted to give any evidence derived from unpublished official records relating to affairs of State, except with the permission of the officer at the head of the department concerned. The expression "affairs of State" in its ordinary significance is of the widest amplitude and will mean the entire business of State. It takes in the routine day to day administration and also highly confidential acts involving defence and foreign relations, and also in modern times 452 the multifarious activities of a welfare State. The object of the section is simply to prohibit the use of undisclosed documents of State in evidence by persons who in the course of their duties deal with or look into those documents, without the permission of the officer at the head of the department concerned. The words used in the section "as he thinks fit" confer an absolute discretion on the head of the department to give or withhold such permission. The section does not lay down that the head of the department concerned should refuse permission only if the disclosure injures public interests, though ordinarily he may refuse permission on such matters affecting the State. One can visualize a situation when the officer in exercise of his absolute discretion refuses to give permission for the use of not only noxious documents but even of innocuous ones. The only limitation on his power is his reason and experience. The absolute discretion is capable of giving rise to mistake or even conscious abuse. The section does not really involve any doctrine of State privilege but is only a rule of commonsense and propriety. If the officer gives permission, there is an end of the matter; but, if he refuses, the party affected may take out necessary summons to the State Government to produce the document. The State Government may depute one of its officers to produce the document in court. Then only the occasion for raising the question of privilege arises and section 162 governs that situation. An overriding power in express terms is conferred on a court under section 162 of the Act to decide finally on the validity of the objection raised on the ground of privilege. The court will disallow the objection if it comes to the conclusion that the document does not relate to affairs of State or that the public interest does not compel its non disclosure, or that the public interest served by the administration of Justice in a particular case overrides all other aspects of public interest. This conclusion flows from the fact that in the first part of section 162 of the Act there is no limitation on the scope of the court 's decision, though in the second part the 453 mode of enquiry is hedged in by conditions. In England, in the absence of a provision or a rule of common law similar to that of section 162, there was room for conflict of views on the scope of the court 's power. On the other hand, in Scotland the common law corresponding to section 162 was invoked and the House of Lords recognized the inherent power of the Court to reject a claim of Privilege if the Court comes to a conclusion that the paramount interest of the administration of justice demands or compels such a disclosure. Section 162 of the Act in terms confers a similar power on courts and though it may have to be used with circumspection, it is a real and effective power. There is no conflict between section 123 and section 162 of the Act: the former confers a power on a head of a department to withhold permission from the stand point of State administration, whereas section 162 recognizes the overriding power of a court in the interest of higher public interest to overrule the objection of privilege. The next point is, what is the procedure to be followed by a judge for deciding on the said objection? When an officer of the State is summoned as a witness to produce a document, if the State seeks to take a plea of privilege then it is the duty of the minister in charge of the department concerned to file an affidavit at the first instance. The affidavit so filed shall ex facie show that the minister concerned has read and considered each of the documents in respect of which the privilege is claimed. It shall also contain the general nature of the document and the particular danger to which the State would be exposed by its production. If the court is not satisfied with the contents of the affidavit, to enable it to decide whether the document in question refers to the affairs of State, it can summon the minister to appear as a witness. In effect and substance the said procedure has been suggested in Robinson 's case (1) at p. 722. The same procedure is also indicated in Duncan 's case (2) at p. 638. In the second case above referred, Viscount Simon L.C. says at p. 638 thus: (1) (1931] A.C. 704. (2) ; 454 "If the question arises on subpoena at the hearing it is not uncommon in modern practice for the minister 's objection to be conveyed to the court, at any rate in the first instance, by an official of the department who produces a certificate which the minister has signed, stating what is necessary. I see no harm in that procedure, provided it is understood that this is only for convenience and that if the court is not satisfied by this method, it can request the minister 's personal attendance. " It may be suggested that this procedure may cause some inconvenience to the minister concerned. But if one realizes that every act of the exercise of the right of privilege detracts from the fair disposal of a case before the court and that the administration of justice is also part of the general conduct of the affairs of any State and that its impartiality and purity are as important as any other public interests, one will also appreciate that the requirement of the personal attendance of a minister, if necessary, to support his affidavit would be to a large extent a guarantee against unjust objections that may other wise be raised. It is suggested that an affidavit of the head of a department, such as the Secretary, would do as well as that of a minister, but there is an essential distinction between a Secretary and a minister: the former may be frequently tempted to take the opposite view, particularly in cases where a claim against the State seems to him to be harsh or unfair, while the latter, being the political head subject to parliamentary control, may be expected, if he carefully scrutinizes a particular document, not to take such objection which obstructs the cause of justice unless absolutely necessary. I would, therefore, hold that the affidavit which states that a particular document relates to affairs of State must be sworn to only by a minister in charge of the department wherefrom the document or documents are summoned. The next point is, what are the well established rules which help the court to decide whether a particular document pertains to affairs of State or not? The following relevant rules may be extracted from 455 the decision of the Judicial Committee in Robinson 's case (1): (1) the privilege is a narrow one most sparingly to be exercised; (2) the principle of the rule is concern for public interest and the rule will accordingly be applied no further than the attainment of that object requires; (3) as the protection is claimed on the broad principle of State policy and public convenience, the papers protected, as might have been expected, have usually been public official documents of a political or administrative character; (4) its foundation is that the information cannot be disclosed without injury to the public interests and not that the documents are confidential or official, which alone is no reason for their non production; (5) even in the case of documents relating to the trading, commercial or contractual activities of a State, it is conceivable that there may be some plain overruling principle of public interest. concerned which cannot be disregarded; though in times of peace such cases must be very rare. The House of Lords in Duncan 's case (2) has laid down the following negative and positive tests for deciding the question of privilege of the State. The negative tests are: (1) it is not a sufficient ground that the documents are State documents or official or marked confidential ; (2) it would not be a good ground that, if they were produced, the consequences might involve the department or the government in parliamentary discussion or in public criticism, or might necessitate the attendance as witnesses or otherwise of officials who have pressing duties elsewhere; (3) neither would it be good ground that production might tend to expose a want of efficiency in the administration or tend to lay the department open to claims of compensation. The positive test is, where the public interest would otherwise be damnified, for example, where disclosure would be injurious to national defence, or to good diplomatic relations, or where the practice of keeping a class of documents secret is necessary for the proper functioning of the public service. The last test has given rise to mild but definite protests within the limits of judicial propriety by the learned judges who (1) (2) ; 456 had the occasion to deal with the question of privilege and to vehement protests from jurists. Sir C. K. Allen, in his book "Law and Orders" (2nd edition), has observed at p. 384 thus: "Everybody is agreed that public security and foreign relations are necessary heads of privilege. Both are wide in scope, and it is doubtful whether any other 'head ' needs to be specified. . . It would be of great advantage if statute could put an end to the pernicious doctrine that privilege can be claimed for classes of documents. " The argument of the learned Advocate General is based upon an apprehension, which in my view is unfounded, that the court may always refuse the affidavit of a minister and insist on his personal attendance. The unpublished documents relating to defence, foreign relations and other documents of great public importance rarely come before municipal courts. Occasionally documents of day to day administration of the State may be relevant evidence, but very often documents pertaining to mercantile or welfare activities of the State would be summoned to establish a particular claim. In the case of documents of undoubted public importance, when the minister swears to an affidavit that in his discretion their production is against public interest, it may reasonably be expected that the judge would accept the statement. But the real difficulty is in the case of other documents, where the interests of private individuals and the State come into conflict, the judge should be in a position to examine the minister and others to ascertain by evidence collateral to the contents of the documents whether the assertion of the minister is justi fied. The aforesaid discussion yields the following propositions: (1) under section 162 of the Evidence Act the court has the overriding power to disallow a claim of privilege raised by the State in respect of an unpublished document pertaining to matters of State; but in its discretion, the court will exercise its power only in exceptional circumstances when public interest demands, that is, when the public interest served by the 457 disclosure clearly outweighs that served by the non disclosure. One of such instances is where the public interest served by the administration of justice in a particular case overrides all other aspects of public interest. (2) The said claim shall be made by an affidavit filed by the minister in charge of the department concerned describing the nature of the document in general and broadly the category of public interest its non disclosure purports to serve. (3) Ordinarily the court shall accept the affidavit of a minister, but in exceptional circumstances, when it has reason to believe that there is more than what meets the eye, it can examine the minister and take other evidence to decide the question of privilege. (4) Under no circumstances can a court inspect such a document or permit giving of secondary evidence of its contents. (5) Subject to the overriding power of the court to disallow the claim of privilege in exceptional cases, the following provide working rules of guidance for the courts in the matter of deciding the question of privilege in regard to unpublished documents pertaining to matters of State: (a) "records relating to affairs of State" mean documents of State whose production would endanger the public interest; (b) documents pertaining to public security, defence and foreign relations are documents relating to affairs of State; (e) unpublished documents relating to trading, commercial or contractual activities of the State are not, ordinarily, to be considered as documents relating to affairs of State; but in special circumstances they may partake of that character; (d) in cases of documents mentioned in (c) supra, it is a question of fact in each case whether they relate to affairs of State or not in the sense that if they are disclosed public interest would suffer. Bearing the aforesaid principles in mind, I shall construe the nature of the documents in respect of which privilege is claimed in the present appeal. The so called order of the PEPSU Government is really the minutes recorded in the course of cabinet discussions. Under article 163(3) of the Constitution, the question 58 458 whether any, and if so what, advice was tendered by ministers to the Governor shall not be inquired into in any court. In view of the constitutional protection, and the reason underlying such protection, I hold that in the present case the district court was right in sustaining the claim of privilege in regard to the said document. In regard to the report of the Service Commission, on the assumption that it is a relevant document, I cannot see how public interest suffers by its disclosure. Service Commission is a statutory body constituted with definite powers conferred on it under the Constitution. Under article 320(3)(c) of the Constitution the State Public Service Commission shall be consulted on all disciplinary matters affecting a person serving under the Government of a State. This is one of the constitutional protections conferred on public servants. I cannot visualize how public interest would suffer if the report submitted by the Service Commission to the Government is disclosed, and how the disclosure of such a report prevents the Service Commission from expressing its views on any other case in future passes my comprehension. It may expose the Government if it ignores a good advice; but such ' an exposure is certainly in public interest. The Constitution does not put a seal of secrecy on the document; nor, in my view, public interest demands such secrecy. In a conflict between the administration of justice and the claim of privilege by the State, I have no hesitation to overrule the claim of privilege. Before closing, I must notice one fact. In this case, the Chief Secretary filed an affidavit. But, in my view, the minister should have done it. The respondent did not object to this either in the district court or in the High Court. In the circumstances, I would not reject the claim of privilege on the basis of this procedural defect. In the result, I would allow the appeal in respect of the minutes of the cabinet and dismiss it in other respects. As the parties have succeeded and failed in part, I direct them to bear their own costs throughout. 459 BY COURT: In accordance with the opinion of the majority, this appeal is allowed, the order passed by the High Court is set aside and that of the trial court restored with costs throughout. Appeal allowed.

The respondent who was a District and Sessions Judge in the erstwhile State of Pepsu was removed from service on April 7, 1953 by an order passed by the President of India who was then in charge of the administration of the State. A representation made by the respondent on May 18, 1955, was considered by the Council of Ministers of the State as in the meantime the President 's rule had come to an end, and its views were expressed in the form of a Resolution dated September 28, 1955; but before taking any action it invited the advice of the Public Service Commission. On receipt of the report of the Public Service Commission, the Council of Ministers considered the matter again on March 8, 1956, and its views were recorded in the minutes of the proceedings. On August 11, 1956, the representation made by the respondent was considered over again by the Council and a final conclusion was reached in respect of it. In accordance with the said conclusion an order was passed which was communicated to the respondent to the effect that he might be re employed on some suitable post. On May 5, 1958, the respondent instituted a suit against the State of Punjab for a declaration that the removal of his service on April 7, 1953, was illegal, and filed an application under O. 14, r. 4, and O. 11, r. 14, of the Code of Civil Procedure for the production of certain documents, which included the proceedings of the Council of Ministers dated September 28, 1955, March 8, 1956, and August 11, 1956, and the report of the Public Service Commission. The State objected to the production of the said documents claiming privilege under section 123 of the , and the Chief Secretary of the State filed an affidavit giving reasons in support of the claim. The question was whether having regard to the true scope and effect of the provisions of sections 123 and 167 of the Act the claim of privilege raised by the State was sustainable. Held, that the documents dated September 28, 1955, March 8, 1956, and August II, 1956, which embodied the minutes of 372 the meetings of the Council of Ministers indicating the advice which the Council ultimately gave to the Rajpramukh, were expressly saved by article 163(3) of the Constitution of India and fell within the category of documents relating to " affairs of State " within the meaning of section 123 of the . Accordingly, they were protected under section 123, and as the head of the department, the Chief Secretary, did not give permission for their production, the Court cannot compel the State to produce them. Held, further (Subba Rao, J., dissenting), that the report of the Public Service Commission being the advice tendered by it, was also protected under section 123 of the Act. Held, also (Kapur, J., dissenting), that the words "records relating to affairs of State " in section 123 cannot be given a wide meaning so as to take in every document pertaining to the entire business of State, but should be confined only to such documents whose disclosure may cause injury to the public interest. The second clause of section 162 refers to the objections both as to the production and admissibility of the document and entitles the court to take other evidence in lieu of inspection of the document in dealing with a privilege claimed or an objection raised under section 123, to determine the validity of the objections. Case law reviewed. Per Sinha, C. J., Gajendragadkar and Wanchoo, jj. Though under sections 123 and 162 the Court cannot hold an enquiry into the possible injury to public interest which may result from the disclosure of the document in question, the matter being left for the authority concerned to decide, the Court is competent to hold a preliminary enquiry and determine the validity of the objection to its production and that necessarily involves an enquiry into the question as to whether the document relates to affairs of State under section 123. Where section 123 confers mide powers on the head of the department to claim privilege on the ground that the disclosure may cause injury to public interest, scrupulous care must be taken to avoid making a claim for such a privilege on the ground that the disclosure of the document may defeat the defence raised by the State. The apprehension that the disclosure may adversely affect the head of the department or the Minister in charge of the department or even the Government in power, or that it may provoke public criticism or censure in the Legislature, should not weigh in the mind of the head of the department and the sole test which should determine his decision is injury to public interest and nothing else. The privilege under section 123 should be claimed generally by the Minister in charge who is the political head of the department concerned ; if not, the Secretary of the department should 373 make the claim, and the claim should always be made in the form of an affidavit. When the affidavit is made by the Secretary, the Court may in a proper case, require an affidavit of the Minister himself. The affidavit should show that each document in question has been carefully read and considered, and the person making the affidavit is satisfied that its disclosure would lead to public injury. If there are series of documents included in a file it should appear from the affidavit that each one of the documents, whose disclosure is objected to, has been duly considered by the authority concerned. The affidavit should also indicate briefly within permissible limits the reason why it is apprehended that their disclosure would lead to injury to public interest. If the affidavit produced in support of the claim ' for privilege is found to be unsatisfactory a further affidavit may be called, and in a proper case the person making the affidavit whether he is a Minister or the Secretary should be summoned to face cross examination on the relevant points. The provisions of O. 11, r. 19(2), of the Code of Civil Procedure must be read subject to section 162 of the and where a privilege is claimed at the stage of inspection under O. 11, r. 19(2), of the Code, the Court is precluded from inspecting the privileged document in view of section 162 of the Act. Per Kapur, J. The words of section 123 of the Act are very wide and cover all classes of documents which may fall within the phrase " affairs of State ", some noxious and others inno cuous, and may even appear to be unduly restrictive of the rights of the litigant but if that is the law the sense of responsibility of the official concerned and his sense of fair play has to be trusted. Under that section discretion to produce or not to produce a document is given to the head of the department and the court has not the power to override the ministerial certificate against production. The words " or take other evidence to enable it to determine on its admissibility" in section 162 on their plain language do not apply to production and the taking of evidence must have reference to admissibility. The section does not entitle the court to take other evidence i.e., other than the document, to determine the nature of the document or the reasons impelling the head of the department to withhold the production of the document. It is permissible for the Court to determine the collateral facts whether the official claiming the privilege is the person mentioned in section 123, or to require him to file a proper affidavit or even to cross examine him on such matters which do not fall within the enquiry as to the nature of the document or nature of the injury. He may also be cross examined as to the existence of the practice of the department to keep documents of the class 374 secret but beyond that the ministerial discretion should be accepted and it should neither be reviewed nor overruled. Per Subba Rao, J. (1) " Records relating to affairs of State" in section 123 of the Act mean documents of State whose production would endanger the public interest; documents pertaining to public security, defence and foreign relations are documents relating to affairs of State; unpublished documents relating to trading, commercial or contractual activities of the State are not, ordinarily, to be considered as documents relating to affairs of State, but in special circumstances they may partake of that character and it is a question of fact in each case whether they relate to affairs of State or not in the sense that if they are disclosed public interest would suffer. (2) Under no circumstances can a court inspect such a docu ment or permit giving of secondary evidence of its contents. (3) Under section 162 the Court has overriding power to disallow a claim of privilege raised by the State, but in its discre tion, the court will exercise its power only in exceptional circumstances when public interest demands. The said claim shall be made by an affidavit filed by the Minister in charge of the department concerned describing the nature of the document in general and broadly the category of public interest its non disclosure purports to serve. Ordinarily, the court shall accept the affidavit of a Minister, but in exceptional circumstances, when it has reason to believe that there is more than what meets the eye, it can examine the Minister and take other evidence to decide the question of privilege. (4) The disclosure of the report of the Public Service Com mission may expose the Government if the latter ignores a good advice, but such an exposure is certainly in public interest and in a conflict between the administration of justice and the claim of privilege by the State, the claim must be overruled.

minal Appeal No. 170 of 1961. Appeal by special leave from the judgment and order dated August 28, 1961, of the Allahabad High Court (Lucknow Bench) at Lucknow in Cr. Case No. 125 of 1961. A.S. R. Chari, B. Parthasarathy, R. K. Garg, section C.Aggarwal, J. B. Dadachanji, O. C. Mathur and Ravinder Narain, for the appellant. G. C. Mathur and C. P. Lal, for respondent No. 2. 1962. September 13. The judgment of the Court was de livered by DAS GUPTA, J. This appeal by special leave is against an order of the High Court at Allahabad rejecting on August 28, 1961 an application made by the present appellant. For a proper appreciation of the contention raised in the appeal it is necessary to set out in some detail the complicated. facts which gave rise to her application. It appears that on January 23, 1938 the appellant 's mother Mrs. A. E. Forbes executed a will leaving all her property to her three children, viz., the appellant, Mrs. V. G. Paterson, Mrs. E. D. Earle and Mr. 0. V. Forbes. The testatrix died on June 6, 1939 and this appellant applied for a probate. The probate was granted on November 30, 1939. On May, 4, 1943 when Criminal Appeal No. 9 of 1943 was being argued before a, Single Judge of the Oudh Chief Court the Counsel for the State brought it to the notice of the judge that Mr. 0. V. Forbes brother of the present appellant had made in his application before the Trial Court and in other ways certain aspersions against the conduct of the Trial Court which amounted to contempt of Court. The 43 learned judge ordered the issue of notice against Mr. O. V. Forbes in this matter. On May 6 1943 the present appellant also filed an application for similar action under the Contempt of Courts Act against her brother Mr. Forbes. On this also notice was issued to Mr. Forbes. As the notices are not on record we do not know the actual terms of the notice; but it does not appear to be disputed that by these notices Mr. Forbes was asked to appear be ore the Oudh Chief Court to show cause why he should not be proceeded against for contempt of court. Mr. Forbes however did not appear. Some time after this a bailable warrant appears to have been issued for the arrest of Mr. Forbes. The warrant was returned unexecuted. A registered notice was thereafter issued under the orders of the Court asking Mr. Forbes to attend the Oudh Chief Court on September 23, 1943. On that date also he did not appear. The learned judges of the Chief Court being of opinion that Mr. Forbes was concealing himself only to avoid the execution of the warrant, made the following order : "Accordingly we order that action be taken under section 87 of the Code of Criminal Procedure against Mr. Forbes and direct the issue of a written proclamation requiring him to appear in this Court on the 25th November, 1943 at 10 a.m. This proclamation will be issued in strict accordance with the requirements of section 87 Cr. P.C. The proclamation will also be published once in the Pioneer of Lucknow and the Daily Statesman of Calcutta. Under section 88 of the Code of Criminal Procedure We further order attachment of the moveable and immoveable property belonging to Mr. Forbes within the jurisdiction of this Court including : 1. G.P. Notes and bonds for Rs.1,070,000/ in the hands of the Registrar of this Court. Rs. 12,250/ deposited in this Court in the Personal Ledger, Trustees and Stake Hol ders Fund; 3. G.P. Notes belonging to Mr. Forbes of the face value of Rs. 55,000/ attached in Execution Case No. 16 of 1942 in the Court of the Civil judge, Lucknow : Dr. Hari Shanker Dube vs O. V. Forbes. " The proclamation was duly published and certain property was attached on the basis that it was the property of Mr. 0. V. Forbes. On March 30, 1 '944, the Oudh Chief Court recorded an order stating that as Mr. Forbes did not appear within the time specified in the proclamation and under sub section (7) of section 88 of the Code of Criminal Procedure the property under attachment was at the disposal of the Provincial Government. As regards the two applications for contempt the Court made the following order: ""These applications will therefore be adjourned sine ded until Mr. Forbes appears or is arrested. " On September 21, 1944, the Court made an order withdrawing the prohibitory order it had earlier issued against the Registrar and the Civil judge, Lucknow. It appears that after the Oudh Chief Court made the order on March 30, 1944 stating that the attached property was at the disposal of the Provincial Government under sub section 7 of section 88 of the Code of Criminal Procedure the Provincial Government directed the City Magistrate to take suitable action for the disposal of the attached property. It was to facilitate such action by the City 'Magistrate that the prohibitory orders were withdrawn. The Chief Court also made an order directing the Registrar and the Civil judge to send the attached property to the City Magistrate for disposal according to law. On the same date Mrs. Paterson was also directed to hand over all the property in her possession which she may be 45 holding a custodian for 'Mr. O.V. Forbes to the City Magistrate. It, appears that in August 1943 the City Magistrate forwarded to the U.P. Government at Lucknow promissory notes of the total value of Rs. 2,28,800/ said to be the attached property adding"these G. P. Notes to the total value of Rs. 2,28,800/ have been ordered to be forfeited to the U. P. Government by the Chief Court of Oudh under order dated 21st September 1944 in Criminal Miscellaneous Application No. 47 of 1943". It was further stated that : "It is requested that necessary action may be taken ' by you to credit the sum under the head Fines and Forfeitures Apparently this has been done. Mr. Forbes died in 1953. On April 4. 1960 the present appellant made an application to the U.P. Government in which she stated that Mr. Forbes had died intestate and that his only heirs were his two sifters, the appellant herself and her sister Mrs. E. D. Earle for whom she was the trustee and prayed that as the Government was " 'only in the position of a receiver or a trustee of the property of Mr. Forbes this trusteeship having ceased with Mr. Forbes death .the government should return the property to the appellant and her sister". On September 3, 1960 the Government rejected this prayer stating ""that this was a confiscated property of Mr. Forbes and that on legal grounds her claim was Wholey untenable" but added these, words : " 'If however she has any special reasons for invoking the compassion of Government `she may indicate the same to Government and also furnish convincing evidence that Mr. Forbes actually has died and that she is his sole heir or one of the heirs entitled to his assets. " The appellant pointed out to the Government in her letter dated September 12, 1960 that the property of Mr. Forbes has not been confiscated bet merely attached and emphasised that the Government had no proprietary right to the attached property but 46 could retain it only as a custodian or trustee for the time being. She asked the Government to re consider the whole situation. The reply of Government, if any was apparently unsatisfactory and so on November 29, 1960 the appellant filed an application under article 226 of the Constitution in the High Court at Allahabad in which after stating the several facts as regards the attachment of the property and the action taken by the Government, she prayed for a writ of certiorari to quash the Government 's order of September 3,1960 and also for a writ of Mandamus ordering the Government to hand over the Government promissory notes and cash money which had been attached. On March 29, 1961 the ' High Court rejected this application. The High Court pointed out that the applicant had not shown that the State Government had failed to carry out any duty imposed by law and further that the order dated September 5, 1960 could not be said to be either judicial or a quasi judicial order or even an administrative order passed without jurisdiction. It was then that ' on May 1, 1961 the appellant made to the High Court at Allahabad the application out of which the present appeal has arisen. By this application the appellant asked for four relilfs : (a) for an order terminating the contempt of court proceedings; (b) for an order vacating the orders of attachment made by the Chief Court; (c) for a direction on the Finance Secretary, U. P. Government, to restore the attached property to the applicant as executrix of the estate of late Mrs. A. E. Forbes. A copy of the writ petition dated the 29th November, 1960 in which it had been mentioned that the proceedings under section 87 and section 88 of the Code of Criminal Procedure were illegal because the code was applicable to proceedings for contempt, was attached to the application. It was further stated in the present application that in any case the attachment was void inasmuch as the property that was attached 47 was at the time of attachment an undistributed part of the estate of late Mrs. A. E. Forbes and so vested in this appellant as executrix. By separate but concuring judgments Mr. Justice Mulla and Mr. justice Nigam, who heard this application rejected the applicant 's prayer for vacating the order of attachment or for any direction to the Finance Secretary, U.P. Government for restoration of the attached property. Mr. Justice Mulla based his decision mainly on the point that the appellant had herself acted in an unclean way, and she having been responsible for getting warrants under sections 87 and 88 of the Code of Criminal Procedure issued against Mr. Forbes it did not lie in her mouth to say now that the issue of these processes was without jurisdiction and held that as she was instrumental in getting the order now complained of passed, the discretionary powers of the Court should not be exercised in her favour, especially, as she had made the application after a long delay. The learned judge also expressed the opinion that the judges of the Chief Court acted within their jurisdiction in issuing processes under sections 87 and 88 of the Code of Criminal Procedure that this order was just and legal and the State had come into the custody of the property under the due process of law. In the opinion Of the learned judge "Mr. Forbes was willing to give away this property rather than, face a prosecution for contempt of Court" and added "if he took up that attitude it cannot be said by the heirs of Mr. Forbes that now the property should be released in their favour". Mr. Justice Nigam stressed the point that the Court had attached the property belonging to ',Mr. Forbes and the present appellant had handed over the property " treating it to be the property of Mr. O.V. Forbes. " According to this learned Judge if the property that was attached did not belong to Mr. 0. V. Forbes this appellant should have " 'never handed over the property voluntarily". He was further 48 of opinion that "the fact that she voluntarily handed a property over as belonging to Mr. Forbes and actually suggested that this particular property be attached clearly amounted to. . . an admission of 'the ownership of the property vesting in Mr. 0. V. Forbes and the property not being part of the undistributed assets in the possession of '. Mrs. Peterson as executrix to Mrs. A. E. Forbes. " After holding that the Code of Criminal Procedure was not directly learned Judge expressed the opinion that "the Bench could adopt its own procedure for enforcing the attendance of the delinqent" and added 'if it adopted the procedure prescribed in the Code of Criminal Procedure, I can see no warrant for the contention that the procedure adopted was wrong, improper and beyond the jurisdiction of the Court. " Finally, he held that it would be contrary to the interests of justice to review the order " 'after a lapse of about 18 years. " The learned Judge also held that the Court was no longer in possession of the attached property, the same having been handed over to the City Magistrate for being passed on to the State Government and could not therefore pass any orders in respect of the property. He also expressed the view that prima facie it appeared to him that the appellant 's remedy, if any, was by a civil suit. The contempt proceedings were however directed to be consigned to the record as abated. The present appeal is directed against the High Court 's decision refusing to give the plaintiff the substantial relief asked for in the application, viz., a direction on the Finance Secretary, U. P. Government to restore the attached property to her. The first question for consideration is whether at the time of attachment the property formed . part of the unadministered estate of Mrs. A. E. Forbes. If that was the correct legal position there could not be in law attachment of that property as the property 49 of Mr. Forbes, even if section 87 and s.88 could be applied to secure the arrest of a person alleged to have committed contempt. Mr. justice Mulla has not dealt with this question. Justice Nigam has however formed the definite conclusion that the property had vested in Mr. O.V. Forbes on the date of attachment and was not part of the undistributed assets of Mrs. A. E. Forbes in the hand of the executrix. In coming to this conclusion the learned Judge appears to have relied on what he described as " 'the fact that she (Mrs. Paterson) voluntarily handed the property over as belonging to Mr. Forbes and actually suggested that this particular property be attached". It is not clear from the record of this case on what materials the learned judge thought that Mrs. Paterson actually suggested that this particular property be attached. That she really handed the property over appears to be correct. It appears reasonable to think that she did so in obedience to the order of the Court. The matter was stated thus by her in Para. 8 of the Writ Petition: "8. That under the orders of the Hon 'ble Chief Court of Avadh the petitioner deposited with the Registrar of that Court and finally with the City Magistrate, Lucknow, unadministered assets consisting of Government Promissory Notes and each totalling Rupees 2,41,300/ detailed in the list attached to this petition which the then City Magistrate, Sri section G. Bose Mullick was pleased to transfer the same to the Finance Secretary to the U. P. Government, Lucknow, in August, 1948. " In the counter affidavit filed on behalf of the State of O. P. in the writ petition the statements made in this paragraph was admitted to be true. It appears clear therefore that the petitioner made over the securities and cash the property which was attached tinder the orders of the Chief Court of Oudh. It is further to be borne in mind that the petitioner made the 50 definite statement in this Para. 8 of the writ Petition that the property that was made over by her formed part of the unadministered assets in her hand and the truth of this statement was admitted by the State of U.P It is difficult to see how it can be reasonably here that merely because the executrix banded over certain assets in her hand to the Registrar and the City Magistrate in obedience to the orders of the Chief Court thereby become vested in Mr. 0. V. Forbes. The property in the hands of the executrix could become vested in Mr. O. V. Forbes only on her handing over the same to him or to somebody on his behalf. Delivering the property to the Registrar of the Court or to the City Magistrate could not amount to handing over to the legatee. For, obviously the Registrar of the Chief Court or the City Magistrate, Lucknow, were not acting on behalf of the legatee Mr. 0. V. Forbes but indeed acting against his inte rests. In our opinion, the property did not cease to be unadministered assets of the estates of Mrs. A. E. Forbes merely because under the orders of the Court this appellant, who was the executrix, had the assets in her hand deposited with the Registrar or the City Magistrate. It must therefore be held that the property which was attached was at the time of attachment not the property of Mr. O. V. Forbes but formed part of the unadministered assets of Mrs. A. E. Forbes. This property could not be legally attached in any proceedings for securing the arrest of Mr. O. V. Forbes. If what was attached did not form part of the property of Mr. 0. V. Forbes, the order of attachment was invalid; and there would be no scope for the operation of section 88 (7) of the Code of Criminal Procedure. Assuming that the property was of Mr. 0. V. Forbes, the question arises whether it would, as a result of the attachment, be at the disposal of 51 Government under s.88 (7) of the Code of Criminal Procedure. In Sukhdev Singh Sodhi vs The Chief Justice and Judges of the Pepsu High Court(1) it was held that the Code of Criminal Procedure does not apply to proceedings for contempt. On this authority it must be held that the provisions of sections 87 and 88 would also not be available to securing 'the presence of a person who is alleged to have committed contempt. It may be mentioned that on behelf of the appellant, 'Mr. Chari had urged that even if the property was of Mr. 0. V. Forbes, the a leged contemner, the Chief Court of Oudh had no power to attach it. The High Court seems to think that the Chief Court could choose any procedure it liked in the matter of punishing people for contempt and so if it thought that it would not finally dispose of contempt proceedings without the alleged contemner being present before it, it had the inherent right of first issuing a warrant of arrest and next, if that was not successful, by proclamation for his appearance and also by attachment of his property. It seems to us that the Chief Court as a Court of record had the right to punish persons for contempt and for the proper exercise of that power it will have all other powers necessary and incidental to it. It is however unnecessary to decide whether such necessary and incidental powers include the power of arrest and of attaching the alleged contemner 's property in an attempt to secure his presence. But assuming they do, we are of opinion that the Chief Court had still no right to make over the attached property to Government. The right of the Government to have any control over the attached property flows from the provisions of section 88 of the Criminal Procedure Code ' As no attachment could legally be made under section 88, Criminal Procedure Code, in any proceeding for contempt, the provisions of section 88 (7) of the Code of Criminal Procedure, under which (1) ; 52 the property under attachment shall be at the disposal of the State Government, if the proclaimed person does not appear within the time prescribed in the proclamation cannot come into operation. The position therefore is that Government is in possession of the property that was attached under the orders of the Chief Court; but the possession is, without any authority of law. The question then arises : whether the Court can or should direct restoration of the property to the rightful owner. On behalf of the State of V., P. it is argued that if the Government is in unlawful possession of the property the proper remedy for the rightful owner is to seek his remedy in a civil suit. In such a suit he will have to pay the necessary court fee, and it will be open to Government to take the plea of limitation or such other defences as may be available to it. This would ordinarily be a correct statement of the position in law. In the present case, we have however the special circumstance that it is by reason of an error on the part of the Chief Court that the property has found its way to the State Government. Proceedings taken by the Chief Court against Mr. 0. V. Forbes for alleged contempt of the Court must be taken to be fully justified , as such action is necessary not only to uphold the dignity of the Court but also to keep the administration of justice free from calumny. When however we find that Court acted without jurisdiction in attaching the property, and in any case, in ordering such property to be handed over to Government we have to remember the other great principle which was stated many years ago in these words by Cairns, L. C. in Rodger vs Comptoir D ' Escompte Da Paris(1): "One of the first and highest duties of all courts is to take care that the act of the Court does no injury to any of the suitors. . . To say that we arc aware, is not to say that whenever a court after wrongly deciding a case between two parties discovers that the decision was wrong it has the (1) [1871] L. R. 3 P. C. 465,475. 53 inherent jurisdiction to re open the matter and to set matters right by altering the decision. In many cases when the Court has made a mistake the party who has suffered for that mistake is without any remedy except what he can get in accordance with the provisions Of appeal, revision or review. As the courts are careful to point out again and again, courts of law have the jurisdiction to decide wrongly as well as rightly and the mere fact that the decision is wrong does not give a party a remedy. Those considerations against the use of inherent jurisdiction to: correct errors made by the courts in the exercise of its jurisdiction have, however, no application to cases like the present. Here, the Court for the purpose of exercising its jurisdiction in a matter of contempt took steps to attach certain properties. This is not a case where there are conflicting claims between two parties which have been decided by a judgment or order of the Court as between the parties. The question really is whether the rightful owner of the property would have it or the Government which has come into possession of the property without being a claimant to it because of an erroneous order of the court should retain it, if it is found that the order was wrong. In our opinion, this question must be answered in favour of the rightful owner of the property. We have assumed that the Court had the power to attach the properties of the alleged contemner; but have held that it had no power in law to make these over to the Government. The attachment however could only subsist so long as the contemner was alive. On the contemner 's death the attachment could not in law or equity continue. For, the purpose for which the attachment was made, viz., to secure the presence of the allegead contemner could no longer be achieved. Obviously, in such a case, the rightful owner of the property would be entitled to restoration of the property on the contemner 's death. It would not be proper for the Court to say then that it 54 cannot do anything in the matter because the property has passed into the hands of the Government by the Court 's own mistakes. In our opinion, the court will be failing to perform its primary function of doing justice if in such circumstances the court, on discovering its mistake refuses to correct that mistake. As it is plain here that it is the mistaken act of the Court which has put Government in possession of the property even though without being a claimant to it, it is only right and proper that the Court should correct that error and restore the property to the person from whom it was wrongly taken. We cannot see what legitimate grievance the State of U. P. can have against this. It had no title to the attached property and it would have had no control over it., except for the mistaken application of the provisions of section 88 (7) of the Code of Criminal Procedure. If now it is found that the Court had made a mistake, first, in attaching the property in question, and secondly, even apart from that, in directing the property to be made over to Government, the Government cannot legitimately object to the Court correcting this mistake. It would be deplorable if in circumstances like these the Court would find itself helpless to correct its mistake and to order restoration on an application being made to it in that behalf. In our opinion, the applicant is entitled to an order for restoration of the attached property. We accordingly allow the appeal, and order that tile Finance Secretary, U. P. Government be directed to restore to this appellant, the attached property which is in the possession of the Government. In the peculiar circumstances of the case, we make no order as to costs. Appeal allowed.

The appellant 's mother died leaving a will executed in favour of the appellant her sister and her brother. The appellant applied for a probate and it was granted to her. Subsequently in connection with a criminal appeal before the Oudh Chief Court applications were filed by the counsel for the State as well as the appellant for proceeding against her brother one Mr. Forbes under the Contempt of Courts Act. On the failure of Mr. Forbes to appear in pursuance of notices issued by the Court, a proclamation under s.87 of Code of Criminal Procedure was published and certain properties were attached under s.88 of the Code of Criminal Procedure. These properties were assumed to belong to Mr. Forbes and they were under the custody of the appellant. Finding that Mr. Forbes did not even then appear the Court recorded an order that the attached properties were at the disposal of the Government and the contempt proceedings would be adjourned sine die until Mr. Forbes appears or is arrested. On directions from the Court the appellant handed over the properties to the City Magistrate who in turn forwarded them to the Government. Thereafter Mr. Forbes died. After his death the appellant made an application to the 41 Government for the return of the properties. The Government refused to comply with this request and following an abortive writ petition filed by the appellant before the High Court for the issue of a writ of Mandamus against the Government, she filed before the High Court an application for a direction on the Secretary to the U. P. Government to restore the attached property. The High Court dismissed the application and the appellant appealed to the Supreme Court by way of special leave. The main questions which were raised in the appeal were whether at the time of the attachment the properties formed part of the administered estate of the appellant 's mother, whether the properties could be legally attached for securing the arrest of Mr. Forbes and whether the provisions of the Code of Criminal Procedure applied to contempt proceedings. A .further question raised was whether the property attached under section 88(7) of the Code of Criminal Procedure would be at the disposal of the Government. Held, that the properties in the hands of the executrix could become vested in Mr. Forbes only on her handing over the same to him or to somebody on his behalf. The properties did not cease to be unadministered assets of the estate of the appellant 's mother merely because under the orders of the Court the appellant who was the executrix handed over the properties to the Magistrate. The properties therefore could not be legally attached in any proceeding for securing the arrest of Mr. Forbes. The order of attachment being invalid there is no question of the application of section 88(7) of the Code of Criminal Procedure and the properties being at the disposal of the Government. Even if the properties belonged to Mr. Forbes the provisions of sections 87 and 88 of the Criminal Procedure would not be available for securing the presence of a person who is alleged to have committed contempt. Assuming that apart from the Criminal Procedure Code, the Court had the power to attach the contemner 's property it had no right to make over the attached property to the Government. The possession of the properties by the Government is therefore without the authority of law. It was further held that even if the attachment order was valid and the Government came into possession of the properties under the authority of law the courts attachment order can only subsist so long as the contemner was alive and the rightful owner of the property would be entitled to restoration of the property on the contemmner 's death. The Court will be failing in its duty if on discovering its mistake of ordering an illegal attachment and wrongful delivery to the Government refused to correct the mistake. Sukhdev Singh Sodhi vs The Chief Justice and Judges of the, Pepsu High Court; , , followed. 42 Bodgar vs Comptoir d ' Escomute di Paris, 3 P. C. 465, referred to.

ition Nos. 9078 to 9106, 9025 43 of 1982, 24 & 35. 43 46 and 2839 of 1983. (Under article 32 of the Constitution of India). WITH Civil Appeal Nos. 3812 & 3813 of 1983. Appeals by Special leave from the Judgement and Order dated the 31st December, 1982 of the Andhra Pradesh High Court in W.P. Nos. 6844 of 1982 & 6937 of 1982. AND (CMP. 13616, 16617, 22151, 22125 & 23486 of 1983). For the Appearing Petitioners in Writ Petitions: M.K. Ramamurthi, Anil Dev Singh, Subhash Sharma, Satish Vig, Shri Narain, V.K. Pandita, R.D. Upadhyay and E.C. Agarwala. 987 For the Appearing Respondents in Writ Petitions: G.L. Sanghi and Mr. S.N. Kacker Altaf Ahmad and Irfan Ahmad. A. Subba Rao for the Appellants in Civil Appeals. S.S. Ray, Vineet Kumar, T.V.S. Narasimhachari, G.V.L. Narasimha Rao and Mrs. Urmila Sirur for the Respondents in Civil Appeals. The Judgment of the Court was delivered by PATHAK, J. This Court has had occasion in the past to entertain the complaints of several young men and women who aspired to admission to the Medical Colleges of their States and had been wrongly denied admission thereto. In the writ petitions and civil appeals now before us, the grievance voiced by the petitioners and the appellants takes us to a new category of cases and to a new dimension. They question the validity of nominations by the State Government of Jammu and Kashmir and the State Government of Andhra Pradesh of candidates to seats reserved in the Medical Colleges of other States. The civil appeals are directed against the judgment dated December 31, 1982 of the Andhra Pradesh High Court dismissing writ petitions filed by the appellants. The Medical Council of India, in its report on under graduate medical education, recommended that with a view to encouraging national integration, ten per cent of the seats in veery Medical College, other than those where admissions were planned on an all India basis, should be reserved, on a reciprocal basis for students from other States. At the Joint Conference of the Central Council of Health and the Central Family Welfare Council, held from December 28, 1977 to January 31, 1978, the matter was considered and a resolution was passed recommending that five per cent of the seats in Medical Colleges should be reserved for candidates from other States on a reciprocal basis. After protracted correspondence between a number of State Governments, the States of Andhra Pradesh, Jammu and Kashmir, Karnataka, Kerala and Tamil Nadu agreed upon such an arrangement. It was decided that each of them would have the right to nominate candidates to seats reserved 988 in the Medical Colleges of the other participating States. We are concerned herewith nominations made by the State Government of Jammu and Kashmir and the State Government of Andhra Pradesh. Twenty two of the thirty nominations made by the State Government of Jammu and Kashmir for the year 1982 83 have been challenged in these writ petitions and all the nominations made by the State Government of Andhra Pradesh have been assailed in the associated Civil Appeals. The petitioners in the writ petitions and the appellants in the appeals were candidates for admission to the M.B.B.S. course of studies in the Medical Colleges of their respective States, and not having succeeded in that object, they claim that they should have been properly considered for nomination by their State Governments to the seats reserved in the Medical Colleges outside their home States because they have secured higher marks in the qualifying examination than the nominated candidates. They urge that the nominations actually made by the State Governments have been made in their absolute and arbitrary discretion, without reference to any objective criterion, or any controlling norms or guidelines. They also allege that the nominations have been influenced by the personal relationship of the candidates to persons in the ruling political party or to Government officers in positions of high authority. The position taken by the Jammu and Kashmir Government and by the Andhra Pradesh Government is that to serve the objective of national integration the selection of a candidate has to be determined not merely by the marks obtained by him in the qualifying examination but also by his ability to project an appropriate image of the culture of his home State in the State to which he is nominated. It is submitted that no objective criterion is possible in that context, and the selection must perforce be left to the absolute and unfettered choice of the State Government. The Andhra Pradesh Government relies on G.O.M. No. 508, M & H dated July 27, 1979, which brings the scheme into effect from the academic year 1979 80. It expressly provides that the selection of candidates for such nominations is excluded from the purview of the Selection Committees constituted for admission to the M.B.B.S. Course in the States. At the outset, we may dispose of an objection taken on behalf of the respondents. It is pointed out that the petitioners in the writ petitions and the appellants in the civil appeals applied merely for 989 admission to the Medical Colleges of the home State and have not alleged anywhere that they applied for nomination to a seat in a Medical College outside the State. It is urged that inasmuch as the scheme of nominations to Medical Colleges outside the State is distinct altogether from the scheme of admissions to Medical Colleges within the State the petitioners and the appellants are not entitled to question the validity of those nominations. We are referred to Chitra Ghosh and Another vs Union of India and Others.(1) In the civil appeals before us, however, we find that some of the appellants did apply for nomination to a seat in a Medical College outside the State. Besides, the Andhra Pradesh High Court has elaborately considered the question on its merits, and it seems desirable in the circumstances to pronounce our opinion on the controversy. The objection is overruled. For the purpose of these cases, we shall proceed on the assumption that national integration, which is undeniably in itself a highly commendable and laudable objective, will be effectively served by a policy encouraging the admission of candidates of one State to seats in the Medical Colleges of another State. After considering the matter carefully, we confess, we are unable to subscribe to the view that the selection of candidates for that purpose must remain in the unlimited discretion and the uncontrolled choice of the State Government. We think it beyond dispute that the exercise of all administrative power vested in public authority must be structured within a system of controls informed by both relevance and reason relevance in relation to the object which it seeks to serve, and reason in regard to the manner in which it attempts to do so. Wherever the exercise of such power affects individual rights, there can be no greater assurance protecting its valid exercise than its governance by these twin tests. A stream of case law radiating from the now well known decision of this Court in Maneka Gandhi vs Union of India(2) has laid down in clear terms that. Article 14 of the Constitution is violated by powers and procedures which in themselves result in unfairness and arbitrariness. It must be remembered that our entire constitutional system is founded in the Rule of Law, and in any system so designed it is impossible to conceive of legitimate power which is arbitrary in character and travels beyond the bounds of reason. To contend that 990 the choice of a candidate selected on the basis of his ability to project the culture and ethos of his home State must necessarily be left to unfettered discretion of executive authority is to deny a fundamental principle of our constitutional life. We do not doubt that in the realm of administrative power the element of discretion may properly find place, where the statute or the nature of the power intends so. But there is a well recognised distinction between an administrative power to be exercised within defined limits in the reasonable discretion of designated authority and the vesting of an absolute and uncontrolled power in such authority. One is power controlled by law countenanced by the Constitution, the other falls outside the Constitution altogether. Proceeding from there, it is evident that if the State Government desires to advance the objective of national integration it must adopt procedures which are reasonable and are related to the objective. In this Age of Reason, all law must measure upto that standard, and necessarily so also must all executive acts. Viewed in this context, the claim of the State Government in these cases that the nature of the objective and the means adopted to serve it entitle it legitimately to vest in itself an absolute power in choosing candidates for nomination cannot be allowed to prevail. It is incumbent on the State Government to adopt a criterion or restrict its power by reference to norms which, while designed to achieve its object, nevertheless confine the flow of that power within constitutional limits. We are not convinced that an adequate system of standards cannot be devised for that purpose. Tested on the touchstone of our constitutional values, the claim of the State Government to the content of the power assumed by it must, in our opinion, be declared invalid. Now, the selection of an appropriate procedure lies ordinarily within the domain of administrative policy, and when the objective can be fulfilled by more than one constitutionally valid method, the selection must be left to administrative choice. The Courts are generally concerned merely with the legal validity of the choice made. We think it desirable, therefore, to leave it to the Medical Council of India to formulate a proper constitutional basis for determining the selection of candidates for nomination to seats in Medical Colleges outside the State. The problem is one which needs to be tackled at the national level, having regard to the objective which is sought to be achieved and to the circumstance that it calls for reciprocal arrangements between Medical Colleges throughout the 991 country. Until a policy is so formulated and adopted and concrete criteria are embodied in the procedure to be selected, we direct that nominations be made by following the procedure of selecting candidates strictly on the basis of merit, the candidates nominated being those, in order of merit, immediately next below the candidates selected for admission to the Medical Colleges of the home State. Before concluding it is desirable to advert to the contention raised on behalf of the respondents that as the State Government finances medical education within the State it is entitled to exercise an absolute discretion in the nomination of candidates to seats in Medical Colleges outside the State, specially when the nomination is part of a reciprocal arrangement between the different States. In our opinion, the contention cannot be regarded as valid in view of what has been laid down now by this Court in Ramana Dayaram Shetty vs The International Airport Authority of India and Ors.(1) Considerable and vehement argument has been addressed on behalf of the petitioners and the appellants that we should make an order revoking the nominations already made by the Jammu and Kashmir Government and the Andhra Pradesh Government. We do not propose to do so. The State Government proceeded in the bona fide belief that the procedure adopted by it was just and proper, the basis being one which appears to have been uniformly adopted by all the participating States. Besides, the candidates nominated have already covered a substantial part of their course of studies. These considerations considered cumulatively dissuade us from interfering with the nominations already made. In the result, we allow the writ petitions and the civil appeals insofar that the principle adopted by the State Governments of nominating candidates in their absolute and unfettered choice to seats in Medical Colleges outside the State is declared invalid. The Medical Council of India is directed to formulate a proper constitutional basis for determining the selection of candidates for nomination to seats in Medical Colleges outside the State in the light of the observations contained in this judgment. Until a policy is so formulated and concrete criteria are embodied in the procedure selected, the nominations shall be made by selecting candidates strictly on the basis of merit, the candidates nominated being those, 992 in order of merit, immediately below the candidates selected for admission to the Medical Colleges of the home State. The judgment dated December 31, 1982 of the Andhra Pradesh High Court is modified accordingly. In the circumstances of these cases, we make no order as to costs. A copy of this judgment and order shall be sent to the Medical Council of India. H.S.K. Appeals & Petition partly allowed.

With a view to encourage national integration, a few States including respondent states agreed upon an arrangement by which a certain percentage of the seats in medical colleges was reserved for candidates from other States on a reciprocal basis. In the year 1982 83 the respondent States made some nominations under the above arrangement. The validity of these nominations was challenged in these writ petitions and civil appeals on the ground, inter alia, that these nominations had been made by the State Governments in their absolute and arbitrary discretion, without reference to any objective criterion, or any controlling norms or guidelines. Partly allowing the writ petitions and the appeals, ^ HELD: The principle adopted by the State Governments of nominating candidates in their absolute and unfettered choice to seats in Medical Colleges outside the State is invalid. But the nominations already made will not be affected. [991 F G; E] The exercise of all administrative power vested in public authority must be structured within a system of controls informed by both relevance and reason relevance in relation to the object which it seeks to serve, and reason in regard to the manner in which attempts to do so. article 14 of the Constitution is violated by powers and procedures which in themselves result in unfairness and asbitrariness. There is no doubt that in the realm of administrative power the element of discretion may properly, find place, where the statute or the nature of the power intends so. But there is a well recognised distinction between an administrative power to be exercised within defined limits in the reasonable discretion of designated authority and the vesting of an absolute and uncontrolled power in such authority. One is power controlled by law countenanced by the Constitution, the other falls outside the Constitution altogether. Proceeding from there, it is evident that if the State 986 Government desires to advance the objective of national integration it must adopt procedures which are reasonable and are related to the objective. In this Age of Reason, all law must measure upto that standard, and necessarily so also must all executive acts. [989 E F; 989 G; 990 A D] In the present cases, viewed in this context and tested on the touchstone of our constitutional values, the claim of the State Government that the nature of the objective and the means adopted to serve it entitle it legitimately to vest in itself an absolute power in choosing candidates for nomination is to deny a fundamental principle of our constitutional life and cannot be allowed to prevail. [990 D E] Chitra Ghosh and Anr. vs Union of India and Ors. , ; , 420; Maneka Gandhi vs Union of India, [1978] 2 S.C.R. 621; and Ramana Dayaram Shetty vs The International Airport Authority of India & Ors., , referred to. The Medical Council of India is directed to formulate a proper constitutional basis for determining the selection of candidates for nomination to seats in Medical Colleges outside the State in the light of the observations contained in this judgment. Until a policy is so formulated and concrete criteria are embodied in the procedure selected, the nominations shall be made by selecting candidates strictly on the basis of merit, the candidates nominated being those, in order of merit, immediately below the candidates selected for admission to the Medical Colleges of the home State. [991 G H; 992 A]

Appeal No. 2476 of 1993. From the Judgment and Order dated 21.2.1992 of the Orissa High Court in O.J.S. No. 4866 of 1991. 476 R. K. Mehta for the Appellants. H.L. Aggarwal, S.K. Patri, Abhijat P. Medh, Ms. Kirti Mishra and A.K. Panda for the Respondents. The following Order of the Court was delivered Service of the appellants employed in the school established in the year 1981 recognised in 1983 brought on grants in aid in 1988, were terminated in 1986. Their termination was not approved by the Inspector of Schools. Since the order not approving termination was not given effect to by the Institution the appellants approached the High Court by way of a writ petition for a mandamus to reinstate them and grant them their salaries from the date the school became an aided institution. The High Court did not find any merit in the claim for various reasons. Section 10 A of the Orissa Education Act provides that the termination of a teacher of an aided institution shall be subject to the approval of the Inspector. Use of the word 'aided institution ' is clear indication that the provisions of approval apply only to the aided schools. Since on the date the services of the appellants were terminated the institution was recognised only and not aided the Inspector could not have exercised the power of disapproval. Consequently no right vested in the appellant which he could get enforced in a court of law. The submission that the principle of Section 10 A being benevolent in nature should be extended to teachers of the institution once it has been granted recognition to avoid exploitation and undue harassment of those who are unequal in the bargain cannot be accepted. Recognition of an institution for purpose of imparting education is different than bringing it on grants in aid. To the former the regulatory provisions of the Education Act or the rules do not apply. The Education Departments has no control either on admission of students or members of staff. The High Court, therefore. did not commit any error of law in dismissing the writ petition. The appeal accordingly fails and is dismissed. But there shall be no order as Appeal dismissed.

The services of the appellants were terminated by the Management of a recognised school. The termination was not approved by the Inspector of Schools. The appellants filed a writ petition before the High Court for reinstatement and salaries from the date the school became an aided institution. The High Court having dismissed the writ petition, appellants preferred the present appeal. Dismissing the appeal, this Court, HELD: Section 10 A of the Orissa Education Act provides that the termination of a teacher of an aided institution shall be subject to the approval of the Inspector of Schools. Use of the word 'aided institution ' is dear indication that the provisions of approval apply only to the aided schools. Since on the date the services of the appellants were terminated the institution was recognised only and not aided, the Inspector could not have exercised the power of disapproval. Recognition of a institution for purposes of imparting education is different than bringing It on grants in aid. To the former the regulatory provisions of the Education Act or the rules do, not apply. The Education Department has no control either on admission of students or members of staff. (476 D F)

minal Appeal No. 119 of 57. Appeal by special leave from the judgment and order dated the 24th August, 1955, of the Calcutta High Court in Criminal Revision No. 596 of 1955. C. B. Agarwala and Sukumar Ghose, for the appellant. B. Sen and S.N. Mukherjee, for the respondents. March 23. The Judgment of the Court WAS delivered by SHAH, J. M/s. Lalji Raja & Sons who will hereinafter be referred to as the respondents are the owners of an oil seed pressing factory known as the Gouranga Oil Mill situated within the limits of the Bankura Municipality in the State of West Bengal. For extracting oil, the respondents import mustard seed from different areas. The respondents also hold a license for the @ale of mustard Seed. On the application of the Sanitary Inspector of the Bankura Municipality, the Sub Divisional Officer, Bankura, issued a search warrant directing seizure of 900 bags of "rotten and decomposed mustard seed", 600 bags stored in the mill godown and 300 bags stored 360 in the court yard of the rice mill at Hanseswar Maji. Pursuant to the search, a large quantity of mustard seed spread out for drying in the Gouranga Oil Mill was seized, and certain bags lying in the rice mill were also seized. On the report made by the Sanitary Inspector, the Chairman of the Municipality applied to the District Magistrate of Bankura on March 10, 1950, for action under sections 431 and 432 of the Bengal Municipal Act, No. XV of 1932, alleging that the mustard seed seized was " in a highly decomposed state and gave out an offensive stench" and that the same was unwholesome and unfit for human consumption. The proceedings started on the petition of the Chairman of the Municipality had a chequered career. it is unnecessary to sit out for the purposes of this appeal the diverse orders which were made from time to time by the District Magistrate and which were set aside by the High Court of Judicature at Calcutta. It may be sufficient to state that on May 26, 1950, the District Magistrate ordered restoration of the mustard seed bags to the respondents and that order was set aside bags Division Bench of the Calcutta High Court in revision. Another order passed by the District Magi strate in April 1951 directing that the contents of the bags be disposed of as " manure or fodder " was set aside by the Calcutta High Court and the proceedings were directed to be retried. The District Magistrate again held an enquiry and by his order dated November 10, 1954, held that the mustard seed was lawfully seized in accordance with the provisions of the Bengal Municipal Act, 1932, that it was unwholesome and unfit for human consumption on the date of seizure and directed in exercise of the powers under section 431(2) of the Act that the same be made over to the Commissioners of the Bankura Municipality for disposal either as manure. or as cattle feed. The High Court at Calcutta by order dated August 24, 1955, in exercise of its revisional jurisdiction, set aside the order of the District Magistrate holding that section 431 of the Bengal Municipal Act under which the order was made, had no application to a case of seizure of unwholesome food seized under a warrant issued under section 430. 361 Against the order of the High Court, this appeal is filed with special leave. The only question which falls to be determined in this appeal is whether articles of food seized under a warrant issued by a Magistrate in exercise of the powers under section 430 of the Bengal Municipal Act may be ordered to be destroyed under section 431(2) of the Act. In order to determine this question, it is necessary to refer to certain provisions of the Bengal Municipal Act, 1932. Section 421 prohibits, amongst other acts, selling or storing for sale of unwholesome articles to be used for human consumption. Section 427 (in so far as it is material) authorizes the Commissioners and certain other officers of a Municipality to enter upon and inspect any place in which any article of food is deposited for the purpose of sale or preparation for sale or to which any article of food intended for human consumption is brought for such purpose, and also to inspect the articles of food which may be found in the place inspected. Clause (1) of section 428 confers upon the Commissioners and the officers designated in section 427 power to seize articles of food intended for human consumption if, in the course of inspection, it appears that the same are unwholesome or unfit for human consumption. Section 429 provides that the articles of food referred to in section 428 which have been seized under that section may, with the written consent of the owner or the person in whose possession they are found, be ordered to be destroyed. If the consent of the owner or the person in possession is not obtained and the articles are of a perishable nature, the officer seizing the same may take them before a Magistrate who may, if it appears to him that the articles are unsound or unwholesome or unfit as human food, condemn the same or order them to be destroyed. Section 430 (in so far as it is material) provides that if any Magistrate is satisfied on the application of the Commissioners, Health Officer, Sanitary Inspector or any other officer authorized by the Commissioner in this behalf that there is just cause to believe that any food which is unsound, unwholesome or unfit for human food is in the possession of any person for the 362 purpose of being sold or offered or exposed for sale within the limits of the Municipality for such consumption, he may grant a warrant authorizing entry upon the premises of such person and search for and seizure of such articles of food. Section 431 by the 1st subsection (in so far as it is material) provides that where any article of food, seized under section 428 is not destroyed by consent under sub section 1 of section 429 or when an article of food so seized which is perishable is not dealt with under sub section 2 of that section, it shall be taken before a Magistrate as soon as may be after such seizure. Sub section 2 provides that if it appears to the Magistrate that any such food is unsound, unwholesome or unfit, for human food, he shall cause the same to be destroyed or to be otherwise disposed of by the Commissioners so as not to be capable of being used as human food. It is evident from this resume of the relevant legislative provisions that the municipal authorities are entitled to enter upon and inspect places where articles of food are stored or prepared for sale. If the municipal authorities find that any article of food stored or prepared for sale is unwholesome or unfit for human food, they may seize them and destroy the same with the written consent of the owner or person in possession, and if such consent is not forthcoming and the articles are perishable, destroy them under the orders of a Magistrate. But section 428 is not the only procedure under the Act authorizing seizure of articles. of food which are unwholesome or unfit for human food. The municipal authorities may move a Magistrate for the issue of a warrant for seizure of articles of food which are unsound, unwholesome or unfit for human food, and under the authority of the warrant, such articles may be seized. Articles of food seized under section 428(1) which are not disposed of under section 429 are required to be taken before a Magistrate as soon as may be after seizure and under sub section 2 of section 431, the Magistrate is authorized, if it appears to him that the articles of food are unsound or unwholesome or unfit for human food to order destruction or disposal thereof Evidently, the expression "such" used in sub s.2 of section 431 refers. to the articles of food described in sub.s. 1 of 363 that section and section 431(1) only deals with articles seized under section 428. There is no express provision made by the legislature either in section 431 or elsewhere in the Act authorizing destruction ' or disposal of articles of food which are seized under a warrant issued under section 430. Counsel for the Municipality contends that the legislature intended that all articles seized, whether on inspection under section 428 or under a warrant issued under section 430 must be dealt with under section 431 and the High Court was in error in holding that the authority of the Magistrate to order destruction or disposal of articles of food could be exercised only in respect of articles seized under section 428. But the words used in section 431(2) clearly authorize the Magistrate to order destruction or disposal of articles seized under section 428 and not dealt with under section 429, and it is difficult to uphold the plea that the legislature intended, even though it did not so expressly provide, that the articles seized under a warrant issued under section 430 may also be dealt with under sub section 2 of section 431. Counsel for the Municipality submits that it could not even have been the intention of the legislature that the Magistrate can order seizure of unwholesome food but cannot order its destruction, though he may order destruction of unwholesome articles of food seized by the officers of the Municipality. It appears, however, that a person storing unwholesome articles of food may be prosecuted for infraction of the provisions of section 421 and in the course of or on the conclusion of those proceedings, it would certainly be open to the Magistrate, having seizin of the complaint, to pass an appropriate order under the Code of Criminal Procedure for destruction of the articles seized. In view of this, we are not prepared to say that the absence of an express provision relating to the disposal of articles seized under section 430 is not deliberate; but even if we are constrained to hold that there is a lacuna in section 431, we do not think that we would be justified contrary to the plain words used by the legislature, in attempting to remedy the same by holding that a Magistrate exercising power under sub section 2 of section 431 has authority to 364 order destruction of articles seized in pursuance of a warrant issued under section 430. The argument advanced by counsel for the Municipality that the seizure was in exercise of the powers under section 428 and not under section 430 has, in our judgment, no force. The report of the Chairman of the Municipality dated March 10, 1950, makes it abundantly clear that the search warrant was issued by the Sub Divisional Officer in exercise of his authority under section 430 of the Bengal Municipal Act. 'Any admission by the respondents that the seizure was under section 428 of the Act in proceedings for resisting the order which the Municipality claimed to obtain against them can have no value. Section 428 does not contemplate a seizure of articles of food which are unwholesome, under the authority of a Magistrate, and section 430 is expressly the provision which authorises a Magistrate to issue a warrant, for such seizure. The powers under section 431(2) are expressly directed to be exercised by the Magistrate in respect of articles seized under section 428, and there is nothing in the former provision which may justify the view that those powers can also be exercised in respect of articles seized under a warrant issued under section 430. In our opinion, the High Court was right in its conclusion. The appeal therefore fails and is dismissed. Appeal dismissed.

The respondents were the owners of an oil seed pressing factory situated within the limit of a municipality. They used to import mustard seeds from different areas and they also held a (1) (1952) L.A.C.103. (2)(1958)1 L.L.J. 63. (3) A.I.R. 1959 Bom. 359 licence for selling Mustard seed. On a report of the Sanitary Inspector of the Municipality, the Sub Divisional Officer issued a search warrant directing seizure of a large quantity of " rotten and decomposed mustard seed " from the possession of the respondents. The Chairman of the Municipality applied to the District Magistrate for action under section 431 and section 432 of the Bengal Municipal Act. The proceedings started on the petition of the Chairman of the Municipality had a chequered career. Ultimately the District Magistrate found that the mustard seed was unwholesome and unfit for human consumption on the date of seizure and directed, in exercise of the powers under section 431(2) of the Act, that the same be made over to the Commissioners of the Municipality for disposal either as manure or as cattle feed. The High Court in revision set aside the order of the District Magistrate holding that section 431 of the Act under which the order was made did not apply to a case of seizure of unwholesome food under a warrant issued under section 430. On appeal by the Municipality by special leave: Held, that the powers under section 431(2) of the Bengal Munici pal Act (XV of 1932), were expressly directed to be exercised by the Magistrate in respect of articles seized under section 428, and there was nothing in section 431(2) which might justify tile view that those powers could also be exercised in respect of articles seized under a warrant issued under section 430.

Appeal No. 239 of 1953. Appeal by special leave from the Order and Judgment dated the 5th September, 1953, of the Election Tribunal, Cuttack, in Election Case No. 5 of 1952. section B. Jathar for the appellant. section P. Sinha (R. Patnaik, with him) for the respondent. February 4. The Judgment of Mahajan C.J. Mukherjea, Das and Ghulam Hasan JJ. was delivered ' by Das J. Vivian Bose J. delivered a separate judgment. DAS J. The question here is whether an election to a State Legislative Assembly is invalidated when the 118 914 member 's nomination was either proposed or seconded, or both, by a Government servant or servants. The appellant was a minister in the State of Orissa. He was nominated as a candidate for the Orissa Legislative Assembly and was later declared to have been elected. One of his rivals was the 1st respondent who filed an election petition challenging the election on a number of grounds, among them, the following. The appellant had filed about two dozen nomination papers. In five of them the proposer was a Government servant and in four the seconder. The 1st respondent stated that this was the first step in a scheme to get the assistance of Government officers in furtherance of the appellant 's election and to "use and utilse" them "for the purposes of the election. " There were also other allegations Which we need not consider here. The appellant made counter allegations against the 1st respondent, whom he had defeated, but they do not concern us either. The Election Tribunal framed twelve issues and examined 101 witnesses, but when it came to make its order it proceeded to decide only two issues instead of deciding the whole case. It held that as the proposers and seconders referred to above were admittedly Government servants that constituted a major corrupt practice and so invalidated the election under section 123 (8) of the Representation of the People Act, 1951 (No. XLIII of 1951). The other of the two decided issues does not concern this appeal. The appellant thereupon petitioned the High Court for a writ of certiorari Under article 226 of the Constitution. The High Court refused to interfere. The learned Judges held that there was no want of jurisdiction in the tribunal and that the tribunal 's view of the law was a possible and reasonable one , accordingly, as the High Court was not a court of appeal from the tribunal, they were not called upon to decide the question as a court of appeal. The appellant was granted special leave to appeal by this court against the order Of the Election Tribunal. 915 A question of 'great public importance affecting Government servants is involved and we deem it right to examine the question under our special jurisdiction under article 136. The only sections we are called upon to consider are sections 33 (2) and 123 (8). The former provides that "Any person whose name is registered in the electoral roll of the constituency and who is not subject to any disqualification mentioned in section 16 of the Representation of the People Act, 1950 (XLIII of 1950) may subscribe as proposer or seconder as man nomination papers. as there are vacancies to be filled. According to the latter "The obtaining or procuring or abetting. by a candidate or his agent or, by any other person with the 'connivance of a candidate or his agent, any assistance for the furtherance of the prospects of the candidate 's election from any person serving under the Government of India or the Government of any State other than the giving of vote by such person" shall be deemed to be a major corrupt practice for the purposes of the Act. A corrupt practice of this kind entails disqualification for membership (section 140). Section 33 (2) is general and confers the privilege of proposing or seconding a candidate for election on every person who is registered in the electoral roll provided be is not disqualified under section 16 of the Act of 1950. That section excludes three classes of persons but not Government servants, unless of course they happen to fall within those classes. Therefore, so far as section 33 (2) is concerned, a Government servant is entitled to nominate or second a candidate for election unless he happens to fall in one of the three excluded categories. The question is whether section 123 (8) takes away from Government servants that which section 33 (2) gives to them. We do not think it does. Viewing the question as a plain matter of construetion, we find that when section 33(2) was framed those 916 who passed it had in mind the desirability of excluding certain classes of persons from its scope and they chose to limit those classes to three. Therefore, in the absence of express provision to the contrary elsewhere, or unless it follows by necessary implication, the section must be construed to mean that those not. expressly excluded are intended to be included. As Government servants are not in the excluded categories it follows that so far as this section is concerned they are not disqualified from proposing and seconding a candidate 's nomination. Now, does section 123 (8) contain express provision to the contrary or can such provision be inferred by necessary implication? It is usual, when one section of an Act takes away what another confers, to use a non obstante clause and say that "notwithstanding anything contained in section so and so, this or that will happen", otherwise, if both sections are clear, there is a head on clash. It is the duty of courts to avoid that and, whenever it is possible to do so, to construe provisions which appear to conflict so that they harmonise. What exactly does section 123 (8) forbid? It is the obtaining or procuring etc., of "any assistance. . other than the giving of vote by such person. " Therefore, it is permissible for a candidate to canvass Government servants for their votes and if a Government servant chooses to reveal his hand it would be permissible for the candidate to disclose the fact and use it in furtherance of his election, for the law imposes no secrecy on the intentions of those who, of their own free will, choose to say how they intend to vote. They cannot be compelled to disclose the fact and any improper attempt to obtain such information would be a corrupt practice, but equally, they are not completed to keep the fact secret if they do not wish to do so; nor is the candidate. If therefore the law permits this, we find it difficult to see how in the same breath it can be said to have taken away the right expressly conferred by section 33(2). The policy of the law is to keep Government servants aloof from politics and also to protect them from being imposed on, by those with 917 influence or in positions of authority and power, and to prevent the machinery of Government from being used in furtherance of a candidate 's return. But at the same time it is not the policy of the law to disenfranchise them or to denude them altogether of their rights as ordinary citizens of the land. The balance between the two has, in our opinion, been struck in the manner indicated above. But though it is permissible for a candidate to go that far, he cannot go further and if the procurement of Government servants to propose and second a nomination is part of a plan to procure their assistance for the furtherance of the candidate 's prospects in other ways than by vote, then section 123(8) is attracted, for in that case, the plan, and its fulfillment, must be viewed as a connected whole and the acts of proposing or seconding which are innocent in themselves cannot be separated from the rest. Our conclusion on the preliminary issue may also be supported on another ground. The major corrupt practice referred to in clause (8) of section 123 consists in obtaining or procuring or abetting or attempt to obtain or procure by a candidate or his agent etc. , any assistance for the furtherance of the prospects of the candidate 's election from any person serving under the Government of India or the Government of any State other than the giving of vote by such person. In order, therefore, to bring a case within the mischief of that clause the assistance must be for the furtherance of the prospects of the candidate 's election. Section 79(b) defines a candidate as meaning " a person who has been or claims to have been nominated as a candidate at any election, and any such person shall be deemed to have been a candidate as from the time when, with the election in prospect, he began to hold himself out as a prospective candidate. " Unless, therefore, a case falls within the latter half of the definition a person becomes a candidate under the first part of the definition only when he has been duly nominated as a candidate and the furtherance of 918 the prospects of a candidate 's election must, therefore, in such a case commence from after that stage. Although evidence was adduced on both sides, there has been no finding so far on questions of fact which may or may not bring the case within the second part of the definition. In the absence of such a finding the case must be regarded, for the purpose of the preliminary issue, as governed by the first part of the definition and as such the proposing and seconding by a Government servant cannot be regarded as "assistance for the furtherance of the prospects of the candidate 's election." In this view of the matter also, the judgment of the Election Tribunal cannot be sustained. We set aside the order of the tribunal and remit the case to the Election Commission with directions to it to reconstitute the tribunal which tried this case and to direct the tribunal to give its findings on all the issues raised and to make a fresh order. Our power to make such an order was not questioned but it was said that when the legislature states that the orders of a tribunal under an Act like the one here shall be conclusive and final (section 105), then we should not interfere. It is sufficient to say that the powers conferred on us by article 136 of the Constitution and on the High Courts under article 226 cannot be taken away or whittled down by the legislature. So long as these powers remain, our discretion and that of the High Courts is unfettered. We wish to record our disapproval of the way in which this tribunal shirked its work and tried to take a short cut. It is essential that these tribunals should do their work in full. They are ad hoc bodies to which remands cannot easily be made as in ordinary courts of law. Their duty under section 99 is, " where any charge is made in the petition of any corrupt or illegal practice having been committed at the election" to record " a finding whether any corrupt or illegal practice has or has not been proved to have been committed. and the,nature of that corrupt or illegal practice. " 919 Also, " to give the names of all persons, if any, who have been proved at the trial to have been guilty of any corrupt or illegal practice and the nature of that practice. " Their duty does not end by declaring an election to be void or not because section 99 provides that in addition to that " at the time of making an order under section 98the tribunal shall also make an order etc. . " A number of allegations were made in the petition about corruption and illegal practices, undue influence and bribery. It was the duty of the tribunal not only to enquire into those allegations, as it did, but also to complete the enquiry by recording findings about those allegations and either condemn or clear the candidate of the charges made. We make no order about costs. Bose J. I agree on all but one point. I have some doubt about the reason given by my learned brother which is based on the definition ' of "candidate" in the Act. I prefer not to express any opinion that one point. Case remanded. Agent for respondent No. 1 A. D. Mathur.

(1) The unfettered discretionary powers conferred on the Supreme Court and the High Courts by articles 136 and 226 of the Constitution respectively cannot be taken away or whittled down by the legislature and therefore section 105 of the Representation of the People Act, 1951, which provides that every order of the tribunal under the Act shall be final and conclusive did not affect such powers. (2) In view of the provisions of section 16 of the Representation of the People Act, 1950, and the provisions of sections 33 (2) and 123 (8) of the Representation of the People Act, 1951, an election to a State Legislative Assembly is not invalidated when the elected member is either nominated or seconded or both by a Government servant or servants. (3) The Supreme Court recorded its disapproval of the way in which the Election Tribunal shirked its duty and tried to take a short cut in deciding only two of the twelve issues framed and thus acted against the provisions of section 99 of the Act.

Appeals Nos. 660 and 811 of 1966. Appeals by special leave from the award dated January 14, 1965 of the Industrial Tribunal, West Bengal in Case No. VIII260 of 1963. H.R. Gokhale, B.P. Maheshwari and N.M. Shetye, for the appellant (in C.A. No. 660 of 1966) and respondent No. 1 (in C.A. No. 811 of 1966). D.L. Sen Gupta, Janardan Sharma and S.K. Nandy, for the appellants in (C.A. No. 811 of 1966) and respondent No. 1 (in C.A. No. 660 of 1966). A. S.R. Chari and D.N. Mukherjee, for respondent No. 2 (in both the appeals). The Judgment of the Court was delivered by Vaidialingam, J. In these two appeals, by special leave, the company and the workmen 's Union attack the award of the Industrial Tribunal, West Bengal, dated January 14, 1965, in so far as it is against each of them. The Government of West Bengal, by its order dated November 5, 1963, referred for adjudication six issues, viz.: "1. Revision of dearness allowance. Revision of the scheme of gratuity. Age of superannuation. Leave and holidays. Canteen facilities; and 6. Shift allowance for supervisors. In both these appeals we are concerned only with issues nos. 1 to 3. With regard to dearness allowance, the Tribunal had directed that it should stand revised from November 1963. It provided a sliding scale for an increase or decrease of Re. 1/ for rise or fall of five points in the cost of living index, with retrospective operation from November 1963. It further directed that the dearness allowance payable for each month from November 1963 shall be recalculated on that basis and additional amounts due to workmen should be paid in two monthly instalments after the date of publication of the award. There was a further direction to the effect that the dearness allowance for any particular month shall be calculated on the basis of average cost of living index for three immediately preceding months. Regarding gratuity, the Tribunal effected certain modifications to the then existing scheme of gratuity, under rules 1, 2 and 3. The Tribunal increased the maximum gratuity payable to 15 months 116 salary, but deleted the provision contained in the scheme that the maximum should not exceed Rs. 4,000/ . In rule 2, it further directed the deletion of the qualifying period of 10 years continuous and approved service. It also modified the provisions of r. 3 by providing for payment of gratuity less any financial loss that has been caused to the employer as a result of misconduct which necessitated the termination of service. It further provided that in case of a workman leaving service without notice or terminating his employment without the permission of the company, in order to enable him to get gratuity he should have put in service of ten completed years or more. The Tribunal increased the existing age of superannuation from 55 years to 58 years. The Union, in its appeal C.A. No. 811 of 1966, attacks the award in respect of all the above matters; but so, far as the company 's appeal C.A. No. 660 of 1966 is concerned, though it has challenged the award, again, in respect of all the above matters to the extent to which they are against it, this Court has granted special leave, by its order dated April 28, 1965, only on the question of dearness allowance. Before we proceed to deal with the contentions of the parties regarding the award in question, we can straight away dispose of two applications filed by the company. C.M.P. No. 329 of 1967 has been filed by the company for leave to. urge additional grounds in the appeal. By this application the appellant seeks permission to raise contentions regarding certain modifications effected by the Tribunal in the gratuity scheme. That is, substantially, the company attempts to reopen the limited leave given by this Court on April 28, 1965. The company has also filed C.M.P. 2860 of 1968 referring therein to certain subsequent proceedings and requesting this Court to take them into consideration in considering the question of dearness allowance. Both these applications are opposed by the Union and we see no reason to grant the requests contained in each of them. These two applications are accordingly dismissed. We shall first take up the question of dearness allowance. While, on the one hand, the appellant wants a substantial reduction in the dearness allowance granted by the Tribunal, the Union, in its appeal, seeks a substantial increase in the dearness allowance granted by the award. We have already indicated the decision of the Tribunal in this regard. Before we actually deal with the contentions of Mr. Gokhale, learned counsel for the company, and Mr. Chari and Mr. Sen Gupta, who followed him, for the Union, it is necessary to refer to certain previous awards, as well as agreements, with reference 117 to dearness allowance. Though there have been certain awards prior to 1954, it is enough if we state the history, beginning from the agreement between the company and the Union, entered into on September 15, 1954. Under clause 11 of this agreement it was provided that the then existing rate of dearness allowance would prevail, unless there was a substantial change in the working class cost of living index, in which case the rate would be suitably adjusted. There is no controversy that the rate of dearness allowance, which was continued under this agreement, was Rs. 30/ .per month. The issue relating to dearness allowance was referred, by the State of West Bengal, to Shri G. Palit, the Fifth Industrial Tribunal, West Bengal. It is necessary to refer in some detail to the award of Shri Palit, dated August 26, 1957, because the Industrial Tribunal, in the present case, has not chosen to go behind the said award. Shri Palit found that after the agreement of September 15, 1954, there had been a substantial increase in the cost of living index justifying the grant of an increased dearness allowance, as contemplated under cl. 11 of the agreement. According to him, in August 1954 the working class cost of living index stood at 344.1 and in August 1955 it came down to 338.4; it again went up to 391.4 in August 1956. Shri Palit has also stated that in May 1957 the cost of living index reached 400.6 points. Accordingly he has noted that there has been a rise of 56 points, from 344.1 in August 1954 to 400.6 in May 1957 and that the said increase justifies a revision of the original rate of dearness allowance. In considering the quantum of increase in dearness allowance that should be awarded, Shri Palit has again taken note of the fact that at 344 points in September 1954, at the time when the agreement was entered into, the dearness allowance was Rs. 30 per month, and that there is no dearness allowance up to 180 points of the cost of living index. According to him, the dearness allowance of Rs. 30 per month, in September 1954, represented the dearness allowance for the points in excess of 180 points, viz., for 164 points and that this roughly worked out at Re. 1/ dearness allowance for every 51/2 points. On this basis Shri Palit held that to cover 56 points ' rise (400 minus 344), the dearness allowance, which could be legitimately claimed by the Union, would be Rs. 10/ odd, as it in fact appears to have been claimed. But, as normally only 75% neutralisation is granted and in view of the fact that the company, which was a chemical industry, was also in a tight corner, he held that full neutralisation should not be granted. On this reasoning Shri Palit allowed Rs. 7/ as increase in dearness allowance on the pay scale up to Rs. 50/ and increased dearness allowance of Rs. 5/ , thereafter, for the next Rs. 50/in the pay scale. In view of the fact that the company had 118 already allowed an increase of dearness allowance of Rs. 2/ , Shri Palit directed that the increase of dearness allowance, as ordered by him, should be adjusted against the amount already paid by the company. Both the company and the Union appealed to this Court against this award of Shri Palit. The decision of this Court is reported as Bengal Chemical & Pharmaceutical Works Ltd., Calcutta vs Their Workmen(1). Referring to the agreement dated September 15, 1954, this Court. observed that the rate of dearness allowance., continued under that agreement, was accepted by the parties as reasonable on the date of the agreement till there was a substantial change in the working class cost of living index. This Court further stated that the findings given by Shri Palit were on facts and no permissible ground had been shown for interference with it in an appeal by special leave. The award of Shri Palit was confirmed by this Court and the company 's appeal was dismissed with costs. The Union did not press its appeal and that too. was dismissed with costs. On January 6, 1962 there was again a memorandum of settlement between the company and the Union, and under cl. 6 it was provided that the then existing slab of dearness allowance in relation to. the basic pay of the employees would be increased by Rs. 3/ and that the increase was to have effect from November 1, 1961. The Union made a demand, on May 21, 1962, for revision of the dearness allowance, scheme of gratuity and the age of superannuation. It also. presented its demands, on September 3, 1962, to the Assistant Labour Commissioner, West Bengal. With reference to the revision of dearness allowance, the. demand of the Union was that there should be hundred percent neutralisation. As conciliation failed, a reference was made, by the State Government, on November 5, 1963. We have already indicated the nature of the directions given in the award, in respect of dearness allowance. The Tribunal, in the award in question, has, after elaborately referring to the agreement of September 15, 1954 as well as the award of Shri Palit and the settlement dated January 6, 1962, rejected the contention of the company that no, case had been made out for a revision of the dearness allowance. In this connection the: Tribunal referred to. the chart, filed by the Union, regarding the cost of living index during the years 1961 to 1964 and has noted that the correctness of the chart had not been disputed by the company. It is of opinion that in January 1962, when the settlement was arrived at on January 6, 1962, the index number was 402 and, after referring to the index numbers in the various months between 1962 and 1964, it concluded that there (1) [1959] Supp. 2 S.C.R. 136. 119 had been a substantial increase in the cost of living index and hence a revision of the dearness allowance was necessary. The Tribunal no doubt took the view that the financial ability of the company to bear the additional burden, did not come in for consideration because by cl. 10 of the settlement dated January 6, 1962, the company had agreed to. a modification of the dearness allowance if there was a substantial change in the working class cost of living index. Regarding the rate of variation that had to. be fixed, the company appears to have pressed for the acceptance of the principle laid down by this. Court in The Hindustan Times Ltd., New Delhi vs Their Workmen(1) providing for the linking of the dearness allowance with the cost of living index. It also appears to have urged that the provision made in the said decision regarding dearness allowance that it should be increased or decreased by Re. 1/ for a rise or fall in the cost of living index by 10 points should be adopted; that is, the appellant pressed that the variation should be linked to a variation of 10 points. On the other hand, the Union appears to. have pressed for the acceptance of the method adopted by this Court in a case from West Bengal in Workmen of Hindusthan Motors vs Hindusthan Motors(") viz. o.f providing a sliding scale of an increase or decrease of Re. 1/ for a rise or fall of every five points in the cost of living index. The Tribunal has, after holding that it cannot go behind the award of Shri PaIit as the said award had been confirmed by this Court, accepted the Union 's contention that there should be an increase or decrease of dearness allowance by Re. 1/ for an increase or decrease of every 5 points in the cost of living index. It has also held that the cost of living index at the time when the agreement of January 6, 1962 was entered into was 402 and the dearness allowance of Rs. 3/ fixed under the said settlement could be referred only to the said figure of 402. The Tribunal then considered the question as to from what date the revision of dearness allowance should be given effect to. Though the company contended that the award should become operative only from the date when it was given and the Union, on the. other hand, contended that it should be given effect to from the date when the demand for revision was made by it, the Tribunal ultimately held that the increased dearness allowance granted by it should take effect from the month when the reference was made by Government, viz., November 1963. Mr. Gokhale, learned counsel for the company, has urged that the linking of dearness allowance at the rate provided in the [1964] 1 S.C.R. 234. (2) [1962] II L.L.J. 352. 120 award is not justified as it departs from the past practice evidenced by the various awards, as well as the agreements and settlements, entered into by the parties. The Tribunal, counsel urges, has given no special reason to depart from the method adopted on previous occasions According to the learned counsel, the dearness allowance, if any, should have been given on an adhoc or lump sum basis as had been done on prior occasions. Mr. Gokhale also urges that the financial position, or capacity to bear the additional burden, that will be cast on the company by the grant of increased dearness allowance, which has been held by decisions of this Court to be a relevant factor to. be taken into account, has not been considered at all by the Tribunal. In the alternative, counsel urges that even assuming that the method of linking, adopted by the Tribunal, was correct, a very serious mistake has been committed by the Tribunal when it has proceeded on the basis that the increase should be granted on the basis that there has been a rise over the cost of living index of 402. According to Mr. Gokhale, the evidence clearly shows that on the date of the settlement, viz. January 6, 1962, the cost of living index for January 1962 could not have been available and the parties had before them only the cost of living index for the month of November 1961, which was 421 points and it is on that basis that an increase of Rs. 3/ was fixed in the settlement of January 6, 1962. Therefore any dearness allowance that is granted must have reference to a rise of the cost of living index above 421 points. Counsel also attacks the direction regarding effect being given to the award from November 1963. While contesting the appeal of the company, Mr. Chaff, and Mr. Sen Gupta, learned counsel for the Unions concerned, have urged that at no stage has the dearness allowance been fixed, in this ,company, on any scientific basis. According to the learned counsel, the agreement, entered into between the parties, should not be taken as indicative of the fact that complete neutralisation has been effected in the matter of fixing dearness allowance. According to them, Shri Palit has committed a fundamental error in assuming that in the 1954 agreement full neutralisation has been given. Counsel also point out that the extent or degree of neutralisation to be granted is not rigid and that though hundred per cent neutralisation is not normally given, nevertheless in the case of the lowest paid employees such neutralisation is permissible. Counsel also urged that the Tribunal has committed a mistake in not accepting the claim of the Union that the question of dearness allowance will have to be considered entirely on the materials placed before it. without in any manner being influenced by the award of Shri Palit. It is also, pointed out that even the appellant wanted a sliding scale to be attached to the dearness allowance and provision made for the rate of dear 121 ness allowance being liable to be increased or decreased by Re. 1/ for a rise or fall in the cost of living index by every 10 points, as will be seen from the fact that it pressed for the acceptance of the 'principle laid down by this Court in the Hindustan Times Case(1). It is further urged that the Tribunal was justified in granting dearness allowance for an increase over the cost of living index of 402, as that was the price .index in the month of January 1962 when the settlement between the parties was effected. In the appeal, by the Union, regarding dearness allowance, Mr. Sen Gupta, learned counsel, urges that there should have been cent per cent neutralisation in the award of dearness allowance and that there should have been a complete de novo examination of the claim made by the Union for revision of dearness allowance, without being influenced by the award of Shri Palit. In this connection counsel refers to the decision of this Court in Remington Rand of India vs Its Workmen(2) where it has been held that when a rise. in the cost of living index has been established, the claim for a revision of dearness allowance cannot be rejected without examining its merits solely on the ground that because a provision has been made for adjustment from time to time, by agreement of parties in a scheme, that scheme ought to remain in force for all time and cannot be reopened or re examined. Counsel further urges that in any event, the Tribunal should have given effect to its award from May 1962, when the Union had made the. demand for revision of dearness allowance. Before we deal with the contentions of the learned counsel, it will be desirable to refer to a few decisions of this Court laying down the principles that have to be borne in mind when a claim for dearness allowance or revision of dearness allowance is considered. In Clerks of Calcutta Tramways vs Calcutta Tramways Co. Ltd.(3) it is observed: " 'We can now take it as settled that in matters of the grant of dearness allowance except to the very lowest class of manual labourers whose income is just sufficient to keep body and soul together, it is impolitic and unwise to neutralise the entire rise in the cost of living by dearness allowance. More so in the case of the middle classes. " (1) [1964] 1 S.C.R. 234. (2) [1962] 1 L.L.J. 287. (3) ; , 779. C.I./69 9 122 In the Hindustan Times Case(1) it is stated at p. 247: "As was pointed out in Workmen of Hindusthan Motors vs Hindusthan Motors (2), the whole purpose of dearness allowance being to neutralise a portion of the increase in the cost of living, it should ordinarily be on a sliding scale and provide for an increase on rise in the cost of living and a decrease on a fall in the cost of living." In Greaves Cotton & Co. vs Their Workmen(a), after referring to the Hindusthan Motors Case(2) and French Motor Car Co. 's Case(4), this Court laid down that the basis of fixation of wages and dearness allowance is industry cum region and observed, at p. 368: "The principle therefore which emerges from these two decisions is that in applying the industry cum region formula for fixing wage scales the Tribunal should lay stress on the industry part of the formula if there are a large number of concerns in the same region carrying on the same industry; in such a case in order that production cost may not be unequal and there may be equal competition, wages should generally be fixed on the basis of the comparable industries, namely, industries of the same kind. But where the number of industries of the same kind in a particular region iS small it is the region part of the industry cum region formula which assumes importance particularly in the case of clerical and subordinate staff, for, as pointed out in the French Motor Car Co 's Case(4), there is not much difference in the work of this class of employees in different industries. ' ' Again, at p. 374, it is stated: "Time has now come when employees getting same wages should get the same dearness allowance irrespective of whether they are working as clerks, or members of subordinate staff or factory workmen. " In Ahmedabad Mill owners Association vs The Textile Labour Association(5) it has been emphasised that in trying to recognize and give effect to the demand for a fair wage, including the payment of dearness allowance to provide for adequate neutralisation, industrial adjudication must always take into account the problem of the additional burden which such wage structure would impose upon the employer and ask itself whether the employer can reasonably be called upon to bear such burden. (1) [1964] 1 S.C.R. 234. (2) [1962] II L.L.J. 352. (3) ; (4) [1963] Supp. (5) [1966] I S.C.R. 382. 123 In Kamani Metals & Alloys Ltd. vs 'Their Workmen(1) it has been noted that one hundred per cent neutralisation is not advisable as it will lead to inflation and therefore dearness allowance is often a little less than one hundred per cent neutralisation. The following principles broadly emerge from the above decisions: 1. Full neutralisation .is not normally given, except to the very lowest class of employees. The purpose of dearness allowance being to neutralise a portion of the increase in the cost of living, it should ordinarily be on a sliding scale and provide for an increase on the rise in the cost of living and a decrease on a fall in the cost of living. The basis of fixation of wages and dearness allowance is industry cum region. ' 4. Employees getting the same wages should get the same dearness allowance, irrespective of whether they are working as clerks or members of subordinate staff or factory workman. The additional financial burden which a revision of the wage structure or dearness allowance would impose upon an employer, and his ability to bear such burden, are very material and relevant factors to be taken into account. Having due regard to the above principles, we are satisfied, in the instant case, that the Tribunal has made substantially a correct approach in considering the claim for revision of dearness allowance. We are not impressed with the contention of either the company or the Union that the Tribunal has committed an error in the matter of revising the dearness allowance. The company appears to have been more intent upon pressing that there has been no substantial increase in the cost of living since the settlement, dated January 6, 1962 and that, m any event, the Union, n view of cl. 10 of the settlement, was not entitled to ask for a division of dearness allowance before the expiry of three years. The Tribunal has referred to the rise in the cost of living index after the date of the settlement of January 6, 1962, and it has also, in our opinion, quite rightly held that cl. 10 of the settlement is no bar for entertaining the claim; therefore, its decision hat a revision of the dearness allowance should be made iS perfectly correct. (1) ; 124 The Tribunal is also. justified in rejecting the contention of the Union that the revision of the dearness allowance must be made de novo, ignoring the previous award of Shri Palit. Though, normally, when a claim for revision of dearness allowance is made and a rise in the cost of living index has been established, such a claim has to be considered on its merits, as held by this Court in the Remington Rand Case(1), it cannot be lost sight of, in this case, that the decision of Shri Palit was affirmed by this Court and the appeals, filed by the company and the Union, were dismissed on the ground that the agreement of 1954 was reasonable ,and the findings of Shri Palit were all on facts. In view of this, the Tribunal, in our view, was perfectly justified in proceeding on the basis that the award of Shri Palit should form the basis for considering the nature of the revision of dearness allowance that would be permissible. We have already referred to the various matters, adverted to by Shri Palit in his award. If really the case of the Union was, as is now sought to be put before us, that the dearness allowance on prior occasions had not been fixed on any scientific basis and that Shri Palit erred in proceeding on such an assumption with reference to previous agreements, the proper stage when these questions should have been canvassed was in the Union 's appeal, before this Court, against the award of Shri Palit. Having allowed that appeal to be dismissed as not pressed, it is no longer open to the Union to raise those contentions now. We are therefore satisfied that the Tribunal 's view that Shri Palit 's award should form the basis for further reconsideration of the claim for revision of dearness allowance is correct. The Tribunal has no doubt stated that the financial ability of the company does not come in for consideration, as the company agreed, by the settlement of January 6, 1962, to pay increased dearness allowance if there was a substantial change in the cost of living index. It is true that the additional financial burden that will be thrown on the company by reason of the revision of dearness allowance is a very material and relevant factor to be taken into account in such circumstances; but, in this case, we do. not find in the written statement, filed by the company, am plea taken that if the claim of the Union, as made in its charte of demands in respect of dearness allowance is accepted, it will cast a very. heavy financial burden on the resources. of the corn pany. In the absence of any such plea having been taken, w consider it unnecessary to pursue this contention of the appellan any further. There is the additional circumstance of the provision for modification, as contained in the settlement of January 1962 (1) [1962] II.L.J. 287. 125 The appellant, so far as we can see, has not placed any material before the Tribunal regarding the comparable industries in the region. As pointed out by the Union, the company seems to have pressed for the grant of dearness allowance being liable to be increased or decreased by Re. 1/ , as was done by this. Court in the Hindusthan Times Case ( 1 ). The Union appears to have pressed for an increase or decrease of Re. 1/ in dearness allowance with a rise or fall of every 5 points in the cost of living index. It is therefore obvious that the appellant also wanted linking of Re. 1/ for every 10 points. It must also be borne in mind that the alternative way, propounded by the Union, for grant of dearness 'allowance has been rejected by the Tribunal. Under these circumstances, it cannot be stated that the Tribunal has committed any error in accepting the claim of the Union, supported as it was by the decision of this Court in the Hindusthan Motors Case(2). Mr. Gokhale next urged that the view of the Tribunal that the increase of Rs. 3/ as. dearness allowance, given in the settlement dated January 6, 1962, must have been on the basis that the index number was 402, was erroneous. The settlement was made on January 6, 1962, on which date the index number for January 1962 could not have been available to the parties. The last month for which the index number was available was for the month of November 1961 and it was 421. The index number at the time when the award was given by Shri Palit was about 400 and it was really for an increase of 21 points that Rs. 3/ as increment was provided in the settlement. Though when the Tribunal gave the present award the index number for January 1962 was already available, that figure could not have formed the basis of the settlement, and it is inconceivable that for a rise of only 2 points, i.e., from 400 in 1957 to 402 in 1962, a rise of Rs. 3/ in the dearness allowance would have been provided for. Therefore the increase or decrease provided for by the Tribunal must really relate to the cost of living index of 421 points, and not to 402 points. Mr. Sen Gupta, learned counsel for the Union, found considerable difficulty in supporting that reasoning in the award on this matter. We are in agreement with the contentions of Mr. Gokhale in this regard. Chart, Exhibit 4, furnished by the Union, clearly shows that the index number in November 1961 was 421 points. It also shows that the index for January 1962 was 402 points, but the index for that month was not available till the end of January 1962 and it could not have been before the parties when the settlement was made on January 6, 1962. Therefore, the index number of 421 must have been taken into (1) [1964] I S.C.R. 234. (2) [1962] II I.L.J. 352. 126 account on the date of the settlement and it must have been really for the increase of 21 points, after the date of Shri Palit 'section award, that the additional sum of Rs. 3/ was fixed as dearness allowance. If on the other hand, the Tribunal 's view is correct, there would have been only an 'increase of 2 points, from 400 to 402, and for that increase of 2 points, the sum, of Rs. 3/ was fixed, as dearness allowance. In our opinion, that reasoning of the Tribunal cannot be accepted. Therefore the award of the Tribunal will have to be modified, in this regard, by directing that the sliding scale providing for an increase or decrease of Re. l/for a rise or fall of every 5 points, must be related to the cost of living index of the base of 421 (that being the cost of living index for November 1961 ) and not of the base of 402, as. directed by the Tribunal. The last contention of Mr. Gokhale, bearing upon dearness allowance, is that the direction that the award will have retrospective effect from November 1963 is erroneous. In this connection: Mr. Gokhale referred us to el. 10 of the settlement of January 6, 1962 stating that the settlement was to remain operative for three years. According to learned counsel, any rise in dearness allowance should have effect only after the expiry of three years from January 6, 1962, or, at any rate, from the expiry of three years from November 1, 1961, the date on which the increase in the settlement had been given effect to. Mr. Sen Gupta, in the Unions appeal, pressed for the award being given effect to from May 1962 when the Union had made a demand on the company for revision of dearness allowance, especially when the Tribunal had itself found that there had been a substantial rise in the price index after the date of the settlemeat. It will be seen that both the parties have a grievance regarding the date from which the revision of dearness allowance should be given effect to, We are not impressed with the contentions of both the parties, in this regard. The Tribunal has taken note of the rise in the cost of living index, as well as the demand having been made by the workmen, as early as May 21,. It has also adverted to the fact that the reference, by the State Government, was made on November 5, 1963. It has further adverted to. the fact that though ' the cost of living index had increased considerably, the company did not choose to adjust the dearness allowance suitably. It was, after having regard to all the circumstances that the Tribunal felt that the workmen should get dearness allowance commensurate with the cost of living index, at least from the month of reference, viz., November 1963. As laid down by this Court in the Hindusthan Times Case(1), no general formula can be laid down as to the date from which a (1) [1964] 1 S.C.R. 234. 127 Tribunal should make its award effective and that that question has to be decided by the Tribunal On a consideration of the circumstances of each case. In the said decision this Court declined to interfere with the Tribunal 's direction that reliefs given by it would become effective from the date of reference. In Kamani Metals Ltd. Case(1) the workmen had made demands on July 1, 1961. The Conciliation Board was moved on September 8, 1962 and, when conciliation failed, a reference was made on December 14, 1962. The Tribunal made an award, retrospective from October 1, 1962, a date between the reference to conciliation and the reference to the Tribunal. That decision of the Tribunal was accepted by this Court. Recently, in Hydro (Engineers) Pvt. Ltd. vs The Workmen(2) this Court declined to interfere with the direction given by a Tribunal that its award should take effect from the date of demand made by the workmen. It has also been pointed out, in the said decision, that it is a matter of discretion for the Tribunal to decide, from the circumstances of each case, from which date its award should come into operation, and no general rule can be laid down as to the date from ' which a Tribunal should bring its award into force. Therefore it will be seen that when a Tribunal gives a direction regarding the date from which it has to become effective, no question of principle, as such, is involved. From the above decisions of this Court, it will also be seen that this Court has declined to interfere with an award having effect from either the date of demand, or the date. of reference, or even a date earlier than the date of reference but after the date of demand. In fact, the direction given by the Tribunal, in the case before us, giving effect to its award from the date of reference, squarely comes within the decision of this Court in the Hindusthan Times Case(3) and, as such, that direction is correct. To conclude, on this aspect of dearness allowance, excepting for the direction that the rate of increase or decrease awarded by the Tribunal should be related to the cost of living index of 421 and not 402 (as directed by the Tribunal), in all other respects the decision of the Tribunal on this point will stand. This closes ' the discussion on the appeal of the company and the appeal of the Union, in so far as they relate to dearness allowance. There are two further points, taken by the Union, in its appeal, one relating to the modifications effected to the gratuity scheme, and the other relating to the age of superannuation. The provisions in the gratuity scheme, which came up for consideration before the Tribunal, were as follows: (1) ; (2) [1969] 1 S C.R. 156. (3) [1964] 1 S.C.R. 234. 128 "1. On the death of an employee while in the service of the company, one month 's salary for each completed year of service subject to a maximum of 12 months salary not exceeding Rs. 4,000 on the average of the last three years salary to be paid to his heirs or dependants as the Board may in their discretion decide. On voluntary retirement due to illness or termination of service by the company after 10 years continuous and approved service one month 's pay for each year of service subject to a maximum of 12 months pay not exceeding Rs. 4,000. No employee shall be entitled to claim any gratuity if he is dismissed for dishonesty or misconduct or if he will have left service without notice or terminated his employment without the permission of the Company. " The Tribunal has effected certain modifications. to r. 3 which, in our opinion, are quite consistent with the decision of this Court in Management of Wenger & Co. vs Workmen(1). Therefore the Union cannot have any grievance regarding the Tribunal 's directions, in this 'regard. So far as rr. 1 and 2 are concerned, the Tribunal modified them by increasing the ceiling from 12 months ' salary to 15 months ' salary and deleted the pecuniary limit of Rs. 4,000. In r. 2, the Tribunal further directed the deletion of 10 years ' continuous and approved service, to enable a workman to get gratuity in the circumstances mentioned therein. Mr. Sen Gupta, learned counsel for the Union, urged that the Tribunal committed an error in prescribing the ceiling of 15 months ' basic wages and that the Tribunal should have modified r. 1 by providing that the average last one year 's salary should be taken into account for the purpose of calculating gratuity, instead of the three years ' period provided in the rule. Mr. Gokhale, learned counsel for the company, pointed out that his client has been prejudiced by the modifications effected by the Tribunal, but the company had now been precluded from raising these objections because of the limited leave given by this Court. Nevertheless, the counsel pointed out, inasmuch as the Tribunal was increasing the ceiling from 12 months to. 15 months and deleting the further pecuniary limit of Rs. 4,000/ , as well as the qualifying period to enable a worker to earn gratuity, the Tribunal must have felt that no further modifications were necessary. In our opinion no case has been made out by the Union for interfering with the directions given by the Tribunal and we are also satisfied that there has been no improper exercise of discretion by the Tribunal in this regard. It has effected certain modifications in favour of the (1) [1953] supp. 2 S.C.R. 862. 129 workmen and obviously it did not think it necessary to make any further .modifications as pressed by the Union. Therefore, the objections to the: modifications, raised on behalf of the Union have to be rejected. The last point that has been agitated by the Union, in its appeal, is regarding the age of. superannuation. The provision regarding age of superannuation, as obtaining then in the company, was as follows : "The age of retirement as mentioned in the Company 's Standing Orders under r. 9 will henceforth be strictly followed in case of all employees. The employees. henceforth shall retire at the age of 55. Extension, if any, will depend on Company 's discretion. " The Tribunal increased the age of superannuation to 58 years from 55 years. It has relied upon two circumstances in coming to this conclusion: (a) that this Court has raised the age of retirement from 55 to 58 years in Jessop 's Case(1) which was a case from West Bengal, with regard to clerical and subordinate staff, other than those who. were workers under the Factories Act. The appellant 's industry, which is of a different nature, being a chemical and pharmaceutical industry, all the workmen of such a company factory workers or non factory workers should have the same age of superannuation. (b) The fixation of the age of retirement for its employees, by the Government of West Bengal, at 58 years. Mr. Sen Gupta urged that the age of superannuation should have been raised to 60 years. It is not necessary to refer to the earlier decisions of this Court, on this point. Recently, in The Management of Messrs. Burmah Shell Oil Storage and Distributing Co. Ltd. vs Its Workmen(2), this Court, after a review of the prior decisions, held that in fixing the age of superannuation the most important factor that has to be taken into consideration is the trend in a particular area. Applying this test, we are satisfied that the Tribunal 's fixing of the age of retirement at 58 years is justified. As already noted, it has relied upon Jessop 's Case(1) which related to West Bengal and the age of retirement fixed by the State Government. Therefore the Tribunal has taken note of the trend in the particular area, viz., West Bengal, when it increased the age of superannuation from 55 to 58 years. Therefore the Union 's claim that it should be further increased to 60 years cannot be sustained. (1) [1964] I L.L.J. 451. (2) Civil Appeal No. 44 of 1968, decided on May 1, 1968. 130 In the result, excepting for the modification indicated by us with regard to the cost of living index in respect of dearness allowance, in all other respects we confirm the award. The appeal, by the company, is therefore partly allowed to the extent of the modification noted above. The appeal of the Union is dismissed. Parties will bear their own costs. G.C. C.A. No. 660/66 partly allowed. No. 811 / 66 dismissed.

In 1954 the Bengal Chemical and Pharmaceutical Works Ltd. entered into an agreement with its workmen about dearness allowance. In 1957 dearness allowance was again fixed by an award of the Fifth Industrial Tribunal, Bengal on the basis of the cost of living index in May 1957 which stood at 400.6. The company as well as the workmen 'appealed against the said award to this Court. The company 's appeal was dismissed and the workmen did not press their appeal. On January 6, 1962 there was a fresh settlement between the company and the workmen whereby dearness allowance was raised by Rs. 3. On a fresh industrial dispute arising in May 1962 the State Government made a reference to the Industrial Tribunal which gave its award on January 14, 1965. In respect of dearness allowance the award provided a sliding sale for an increase or decrease of Re. 1/ for rise or fall of five points in the cost of living index, with retrospective operation from November 5, 1963 i.e. the date when the reference was made. It further made certain modifications in the company 's gratuity scheme and raised the age of superannuation from 55 years to 58. The company as well as the workmen appealed to. this Court against the Tribunal 's award. HELD: (1) (i) The following broad principles relating to fixation of dearness allowance emerge from the earlier decisions of this Court: 1. Full neutralisation is not normally given, except to the very lowest class of employees, 2. The purpose of dearness allowance being to neutralise a portion of the increase in the cost of living, it should ordinarily be on a sliding scale and provide for an increase in the rise in the cost of living and decrease on a fall in the cost of living. The basis of fixation of wages and dearness allowance is industry cum region. Employees getting the same wages should get the same dearness allowance, irrespective of whether they are working as clerks or members of subordinate staff or factory workmen. The additional financial burden which a revision of wage structure or dearness allowance would impose upon an employer, and his ability to bear such burden, are very material and relevant factors to be taken into account. [123 B E] Clerks of Calcutta Tramways vs Calcutta Tramways Co. Ltd. ; , 779, The Hindustan Times Ltd. New Delhi vs Their Workmen, [1964] 1 S.C.R. 234, Greaves Cotton & Co. vs Their Workmen ; , French Motor Car Co. Ltd. vs Workmen,. [1963] Supp. , Ahmedabad Mill Owners ' Association v, The Textile Labour Association; , and Kamani Metals & Alloys Ltd. vs Their Workmen, ; , referred to. Having regard to the above principles, in the present case, the Tribunal had made a substantially correct approach in considering the claim for revision of dearness allowance. [123 E F] 114 (ii) The Tribunal rightly held that cl. 10 of the settlement of January 6, 1962 providing that the union was not entitled to ask for a revision of dearness allowance before the expiry of three years, was not a bar for entertainment of the claim. Its decision that in view of the rise in the cost of living a revision of the dearness allowance should be made was perfectly correct. [123 G H] (iii) The Tribunal was also justified in rejecting the contention of the ' union that the revision of the dearness allowance must be made de novo, ignoring the previous award of the Fifth Industrial Tribunal. It could not be lost sight of that the said award had been challenged in this Court and the appeals filed by the company 'as well as the workmen were dismissed. [124 A B] Remington Rand of India vs Its Workmen, [1962] I L.L.J. 287 distinguished. (iv) The additional financial burden that would be thrown on the company by reason of the revision of dearness allowance was a very material and relevant factor to be taken into account but the contention of the company in this respect could not be considered in the absence of a plea in its written statement to the effect that it would not be able to bear the burden. [124 F G] (v) In view of the Hindustan Motors Case it could not be said that the Tribunal had committed 'any error in accepting the claim of the union for increase or decrease of Re. 1/ for every rise or fail of five points in the cost of living index. [125 B C] Workmen of Hindusthan Motors vs Hindusthan Motors , followed. (vi) The Tribunal was in error in holding that the cost of living index for January 1962 which was 402 was the basis of the settlement of January 6, 1962. On the facts of the case the settlement must be taken to have been based on the index for November 1961 which was 421. [126 A C] (vii) From the decisions of the Court it is seen that this Court has declined to interfere with an 'award having effect from either the date of demand, or the, date of reference or even a date earlier than the date of reference but after the date of demand. The direction given by the Tribunal in the present ease giving effect to its award from the date of reference, squarely came within the decision of this Court in the Hindustan Times Case. 1127 E F] The Hindustan Times Ltd. New Delhi vs Their Workmen [1964] 1 S.C.R. 234, Karoant Metals & Alloys Ltd. vs Their Workmen; , and Hydro (Engineers) Pvt. Ltd. vs The Workmen, ; referred to. (2) There was no improper exercise of discretion by the. Tribunal in making modifications in the company 's gratuity scheme, 'and there was no ground for interfering with its directions in this regard. [128 G] Management of Wenger & Co. vs Workmen, [1963] Supp. 2 S.C.R. 862, applied. (3) In fixing the age of superannuation the most important factor that has to be taken into consideration is the trend in a particular case. Applying this test the fixation of the age of superannuation of 58 years was justified. [129 G] Jessop 's case, and Management of M/S. Burmah Shell Oil Storage and Distributing Co. Ltd. vs Its Workmen, C.A. No. 44/68 dated 1 5 68, applied. 115

Appeal No. 1920 of 1968. Appeal from the judgment and decree dated April 15, 1968 of the Madhya Pradesh High Court in Letters Patent Appeal No. 21 of 1962. M. C. Chagla, A. K. Verma, B. Datta, J. B. Dadachanji, O. C. Mathur and Ravinder Narain, for the appellants. 562 Jagdish Swarup, Solicitor General of India, section N. Prasad and B. D. Sharma, for the respondent. The Judgment of the Court was delivered by Ray, J. This is an appeal by certificate from the judgment dated 15 April, 1968 of the High Court of Madhya Pradesh up holding the judgment and decree passed by Nevaskar, J. of that High Court. The Union filed a suit against the appellant in the Court of Small Causes Judge at Indore in the year 1953 and claimed a decree for Rs. 83 12 0. The claim in the suit represented coal production cess levied under Ordinance No. XXXIX of 1944 on coal and coke dispatched from collieries in the then British India to the appellant. The only question which falls for consideration in this appeal is whether the Union could make a valid claim for the amount. Counsel on behalf of the appellant contended that the appellant was at the material time a resident at Indore in the then Holkar State and the Ordinance passed in the then British India would have no territorial operation to reach him. The Ordinance was called the Coal Production Fund Ordinance of 1944. It extended to the whole of the then British India. Section 2 of the Ordinance provided inter alia as follows : ( 1 ) With effect from such date as the Central Government may, by notification in the Official Gazette, appoint in this behalf, there shall be levied and collected as a cess for the purposes of this Ordinance, on all coal and coke dispatched from collieries in British India a duty of excise at such rate not exceeding one rupee and four annas for ton, as may from time to time be fixed by the Central Government by notification in the official gazette; Provided that the Central Government may, by notification in the official Gazette, exempt from liability to the duty of excise any specified class or classes of coal or coke. (2) ** ** ** (3)A duty levied under this section shall be in addition to any other duty of excise or customs for the time being leviable under any other law. 563 (4)The., duties imposed by this section shall, subject to and in accordance with the rules made under this Ordinance in this behalf, be collected on behalf of the Central Government by such agencies and in such manner as may be prescribed by the rules. " Section 5 of the Ordinance conferred power on the Central Government to make rules and to provide for inter alia the manner in which the duties imposed by this Ordinance shall be collected, the persons who shall be liable to make the payments, the making of refunds, remissions and recoveries, the deduction of collections agencies, of a percentage of the realizations to cover the cost of collection, and the procedure to be followed in remitting the proceeds to the credit of the Central, Government. The Coal Production Fund Rules, 1944 were made by the Central Government, in exercise of powers conferred by section 5 of the Coal Production Fund Ordinance 1944. Rule 3 related to recovery of excise duty. Rule 3(1) was as follows "Recovery of excise duty : (1) The duty of excise imposed under sub section (1) of section 2 of the Ordinance on coal and coke shall, when such coal or coke is dispatched by rail from collieries or coke plants, be collected by the Railway Administrations by means of a surcharge on freight, and such duty of excise shall be recovered (a) from the consignee if the freight charges are being prepaid at the destination of the consignment; (b) from the consignee if the freight charges are collected at the destination of the consignment; (c) from the party paying freight if the consignment is booked on the "Weight Only" system". The Coal Production Fund Ordinance 1944 was repealed by the Coal Production Fund (Repealing) Ordinance, 1947. The Repealing Ordinance of 1947 for the avoidance of doubts declared that the provisions of section 6 'of the General Clauses Act, 1887 applied in respect of such repeal. Therefore the repeal of the 1944 Ordinance did not affect the right of the railway to recover the surcharge on freight or the liability of the appellant to pay and the remedy in respect of the right and liability. The claim of the Union related to coal production cess on three several consignments of coal dispatched in the months of 564 December, 1946, January 1947 and February, 1947 from three different collieries at Mohuda, Unwia and Burhar respectively in the then British India to the, appellant the consignee at Indore. Each consignment was under a railway invoice and a railway receipt. Freight was payable on each consignment. Coal production cess was under the 1944 Rules to be collected by means of a surcharge on freight. Freight and the coal production cess as a surcharge thereon were payable at the destination at Indore by the consignee. The appellant paid freight but did not pay the coal production cess by way of surcharge. The Union therefore sued the appellant for the sums of Rs. 27 8 0, Rs. 27 8 0 and Rs. 28 12 0 aggregating Rs. 83 12 0 in respect of the aforesaid surcharge on the three several consignments. The validity of the Ordinance came up for consideration by this Court in R. C. fall vs Union of India(1). In that case suit was filed in the year 1953 at Chhindwara for recovery of coal cess on 3 consignments, of coal despatched from collieries in the then British India in the months of January/February, 1947 to the consignee at Indore. This Court held that coal cess was levied and collected with the authority of law. This Court however did not decide two contentions sought to be raised in that case. These were first, that coal cess is a fee and not a tax or duty and secondly, that the consignee was a non resident and therefore the Ordinance not having extra territorial operation could not reach him. Counsel on behalf of the appellant contended that the, appellant was at the material time a resident of Indore and was therefore not bound by the revenue law of the then British India and no suit could be filed for enforcing recovery of revenue dues against the appellant. Reliance was placed in support of the contention on the decision of the House of Lords in Government of India, Ministry of Finance vs Taylor and Anr.(2). In Taylor 's(2) case the Government of India sought to prove in the voluntary liquidation of a company registered in the United Kingdom but trading in India for a sum due in respect of Indian income tax including capital gains tax, which arose on the sale of the company 's undertaking in India. It was held by the majority opinion that although under section 302 of the English Companies Act, 1948 a liquidator was required to provide in the liquidation of the company for liabilities of the company the tax claims would not be a liability within the meaning of section 302 of the English Companies Act. The unanimous opinion was that the revenue claims would not be enforceable in relation to assets in England. The ratio of the decision in Taylor 's(2) case is that India being a foreign Government could not sue tile liquidator (1) [1962] Supp. 3 S.C.R. 436. (2) ; 565 taylor in England for income tax levied and declared to be payable under the Indian law. A foreign State cannot enforce a claim for revenues against a foreigner in his home country. The ' reason is that a foreign court will not be an agency for tax gathering. The decision in Taylor 's(1) case is of no aid to the appellant in the present case. The Union in the present case did not either sue or enforce any revenue law in a foreign court. The Coal Production Cess was levied on coal despatched from collieries in the then British India. Under the Rules the excise duty was to be collected by the railway administration as a surcharge on freight and was to be recovered from the consignee if the freight charges were to be collected at the destination. The fact found in the present case was that the coal was despatched from the collieries within the then British India. The appellant was the consignee. Freight charges were to be collected at the station of destination, namely, Indore. The appellant also paid the freight charges on the consignments. The levy of cess which is the taxable event happened within the then British India. The duty of excise is determined by reference to goods despatched from collieries. The tax is on the production of coal. The liability to pay cess is on the goods. The cess is a tax on goods and not on the sale of goods. This Court examined the true character of the cess in Jall 's(2) case and Subba Rao, J. speaking for the Court said at page 451 of the Report : "Excise duty is primarily a duty on the production or manufacture of goods produced or manufactured within the country. It is an indirect duty which the manufacturer or producer passes on to the ultimate consumer, that is, its ultimate incidence will always be on the consumer. Therefore, subject always to the legislative competence of the taxing authority, the said tax can be levied at a convenient stage so long as the character of the impost, that is, it is a duty on the manufacture or production, is not lost. The method of collection does not affect the essence of the duty, but only relates to the machinery of collection for administrative convenience. . . A perusal of the provisions of the Ordinance clearly demonstrates that the duty imposed is in essence excise duty and there is a rational connection between the said tax and the person on whom it is imposed". The ruling in gall 's(2) case establishes two propositions. First, that the cess is a duty on the manufacture or production of coal and secondly, the method of collection does not affect the essence of the excise duty. (1) [1955] A C 491 (2) [1962] Supp. 3 S.C. P. 43 6. 566 The transaction of sale is a composite transaction consisting of agreement of sale, passing of title, delivery of goods and payment of price and costs charges of transportation. The cess formed surcharge on the freight. The appellant being the consignee was liable for the same. The cess became a part of the freight for purposes of collection but in essence the cess remained a tax on goods. The machinery for collection of the duty is not to be confused with the duty itself. Once the duty attaches to the goods these became impressed with the liability and the purchaser, namely, the consignee in the present case was affixed with the liability to pay. The liability arose at the colliery. The collection was to be at Indore. The appellant became liable to pay the cess along with the payment of the freight charges. The suit was filed in the year 1953 when Indore was within India and the right of the Union to claim as well as the liability of the appellant to pay the cess was valid and subsisting. The Union was therefore entitled to a decree against the appellant. Counsel on behalf of the appellant sought to raise an addi tional ground that there was no cause of action against appellant No. 2. 'Notice of the application for urging additional ground was given on 22 January, 1972. We did not allow this additional ground to be raised at this late stage. If the appellant had raised this question at the trial of the suit the respondent would have dealt with the same. We therefore thought that it would not be fair and proper to allow this ground to be raised. For these reasons the judgment of the High Court is affirmed. The appeal is dismissed with costs.

Coal was despatched from colleiries within British India in December 1946 and January and February 1947, to the appellant in Indore. The respondent filed a suit in 1953 for recovery of coal production cess levied under the Coal Production Fund Ordinance, 1944, and r. 3(1) of the Coal Production Fund Rules, 1944. On the question whether the Ordinance had no territorial operation to reach the appellant, because, he was a resident of a Princely State at the time of dispatch of the coal. HELD:In R. C. Jall vs Union of India, [1962] Supp. 3 S.C.R. 436,. it was held that the cess was an excise duty on the manufacture or production of coal and that the method of collection did not affect the essence of the duty. The coal production cess was on the production of coal and was levied on coal dispatched from collieries in the then British India, that is, the taxable event happened within the then British India. Under the Rules, the duty was to be collected by the railway administration as a surcharge on freight and was to be recovered from the consignee if the freight charges were to be collected at the destination. The appellant was the consignee and the freight charges were to be collected from him at the destination, namely, Indore. The cess thus became a part of the freight for purposes of collection but in essence remained a tax on goods. Once the duty attaches to the goods they became impressed with the liability and the consignee was liable to pay. The suit was filed in 1953 when Indore was within India and the right of the Union to claim, as well the liability of the appellant to pay, the cess, was valid and subsisting. It was not a case of the Union seeing or enforcing any revenure law in a foreign court. Therefore, the Union was entitled to a decree against the appellant. [565D H; 566B D] Govt. of India, Ministry of Finance vs Taylor, [1955] A.C. 491; , distinguished.

ivil Appeal No. 1372 of 1980. From the Judgment and Order dated the 19.5. 1980 of the Punjab and Haryana High Court in C.W.P. No. 1378 of 1973. G.L. Sanghi, Vivek Gambhir, Dhruv Mehta, S.K. Gambhir and Surender Karnail for the Appellants. C.M. Nayar for the Respondents. The Judgment of the Court was delivered by THOMMEN, J. This appeal by special leave arises from the Judgment of the Punjab & Haryana High Court in Civil Writ Petition No. 1378 of 1973. The appellants in the writ peti tion challenged the constitutionality of the East Punjab Molasses (Control) Amendment (hereinafter referred to as the "Amendment Act, 1973") on the ground that the said amendment had not re ceived the previous sanction of the President of India in terms of Article 304(b) of the Constitution. The High Court dismissed the writ petition holding that the appellants were not shown to have been aggrieved by the impugned amendment. The Amendment Act. 1973 amended the provisions of the East Punjab Molasses (Control) Act. 1948 (East Punjab Act No. 11 of 1948) (hereinafter referred to as the "Principal Act"). as it stood at the relevant time. The Principal Act had been earlier amended in 1950. 1964 and 1968. It was subsequently amended in 1976. The appellants have. however. challenged only the Amendment Act, 1973 and have significantly not challenged the earlier or subsequent amendments. Rejecting the appellants ' contentions. the High Court observed: . We have very carefully gone through the petition and we have asked the learned counsel for the petitioners to point out any averment from the petition. to show that the petitioners were dealing with molasses which were not covered under the definition of molasses given in the unamended Act. but arc covered within the definition of molasses under the Amending Act. No such averment has been made . . The grievance of the petitioners that they have been made subject to the provisions of the Act in view of the Amending Act. thus does not stand substantiated from the averments made in the petition . The appellants admitted before the High Court that, apart from the Principal Act, as enacted in 1948. being an 'existing law '. and therefore beyond challenge. none of its provisions could be regarded as an unreasonable restriction on the freedom of trade. commerce and intercourse. The appellants, however. contended that the impugned provisions inserted in 1973 were null and void for the reason that the restrictions so introduced had not received the previous sanction of the President. Section 2 of the Principal Act was amended in 1973 to define 'molasses ' as well as 'khandsari unit '. By this amendment, a new definition of 'molasses ' was substituted in the place of the original definition [See Clause (c)]. Clause (f) of Section 2 was added to define a 'khandsari unit '. 502 Section 3 of the Principal 'Act empowered the Controller to "direct the owner or occupier of a sugar factory or any other person" to furnish returns of the stock of molasses in his possession. This Section was amended in 1973 to bring a khandsari unit or distillery within the statutory ambit. Section 3(A) had been added in 1964. to empower the Control ler to direct the owner or occupier of a sugar factory or distillery, or any other person permitted to store and preserve molasses, to construct tanks for the storage of molasses. This Section was amended in 1973 to bring a khand sari unit within its ambit. Section 4 of the Principal Act says that no person shall, without a permit issued by the Controller, move molasses by road, rail, river or by any other means or sell or otherwise dispose of molasses to any person other than the Government or a person licensed by the Government in this regard. It also authorises the Controller to direct the owner or occupier of a sugar factory to supply molasses of specified quantity and quality to such persons as the Con troller may direct. This section was amended in 1964 to provide that no person shall store or preserve molasses without the Controller 's permit. It was further amended in 1973 to bring a khandsari unit within the ambit of the controller 's power to direct supply of molasses. Section 5 of the Principal Act empowers the Government to regulate prices from time to time and prescribes the manner in which molasses has to be graded, marketed, packed or stored for sale. It was amended in 1976 in certain re spects which are not material. Section 6 provides for the imposition of penalty in the event of contravention of any provision of the Act. The Section was substituted in 1964 for the original Section. It was amended in 1973 in certain respects. Section 7 of the Principal Act refers to liability for breaches by corporation or company. This Section has not undergone any change. Section 8 of the Principal Act provid ed that no court should take cognizance of any offence punishable under the Act except on a report made by the Controller. This section was substituted in 1964 to provide for the exercise of supervision and control by the Control ler over sugar factories through subordinates. It was amend ed in 1973 by including a khandsari unit within its ambit. Section 9 of the Principal Act provided for power of entry and seizure. It was substituted in 1973 by a new section with certain changes which are immaterial. Section 10 of the Principal Act provided for the procedure of seizure. It was substituted by a new section in 1973, but the changes are not material. Section 11 deals with the delegation of pow ers. It has not undergone any change. Section 12 of the Principal Act deals with the power of the Govern 503 ment to exempt any area or person from the provisions of the Act. This Section was amended in 1973 to empower the Govern ment to exempt any kind of molasses from the provisions of the Act. Section 13 of the Principal Act deals with the rule making power of the Government. It was amended in 1973 to include khandsari unit or distillery within the scope of that Section. These are the changes made in the Principal Act. The substantial change introduced by the Amendment Act, 1973 is in the substituted definition of 'molasses ' so as to include within its meaning mother liquor produced in the final stage of manufacture of sugar or khandsari sugar. The appellants being dealers in khandsari molasses are stated to be aggrieved by the expanded definition of 'mo lasses '. 'Molasses ' was defined under the unamended Section 2(c) of the Principal Act as follows: "2(c) 'Molasses ' means the heavy, dark coloured residual syrup drained away in the final stage of the manufacture of sugar by vacuum pans or in open pans in sugar factories either from sugarcane or by refining gur; when such syrup has a density of not less than 75 degrees brix and a for mentable sugar content (expresent as reducing sugars) 19 per cent. ' ' This definition was substituted by the Amendment Act, 1973 as follows: "2(c) 'molasses ' means the mother liquor produced in the final stage of manufacture of sugar or khandsari sugar, by vacuum pans or in open pans, from sugarcane or gur, with or without the aid of power. " The new definition of 'molasses ' under the amendment provi sion specifically refers to khandsari sugar, apart from sugar, while the unamended section 2(c) referred only to sugar. Section 2(f), as introduced by the Amendment Act, 1973 defines 'khandsari unit ' as follows: "2(f) 'khandsari unit ' means any premises, including the land, godowns or out houses appurtenant thereto, wherein, or in any part of which a manufacturing process con 504 nected with the production of khandsari sugar from sugar cane or gur in open pans is carried on with or without the aid of power. " The 'occupier of a khandsari unit ' is defined as "a person who has control over the affairs of a khandsari unit". The definition of sugar factory ' has not undergone any change, and it reads as follows: "2(d) 'sugar factory ' means any premises, including the land, godowns or outhouses appurtenant thereto, whereon twenty or more workers are working, or were working on any day of the preceding twelve months, and in any part of which a manufacturing process connected with the production of sugar by means of vacuum pans or in open pans is being carried on or is ordinarily so carried on, with the aid of power. " The main object of the Amendment Act, 1973 is to clarify that the Principal Act applies in equal measure to a khand sari unit as it does to any other sugar factory. The contention is that the provisions of the Amendment Act, 1973. though not in themselves unreasonable restric tions, nevertheless bring the appellants under greater statutory control, and are, therefore. invalid for want of previous sanction of the President in terms of the proviso to Article 304(b). This challenge. as seen above, has been rejected by the High Court for the reason that the appel lants ' business has been in equal measure controlled by the Principal Act itself. The appellants being dealers in mo lasses. the new definition of the term "molasses", which includes "khandsari sugar", does not subject their business to any greater control. The appellants ' counsel. Mr. G.L. Sanghi contends that the provisions of the Amendment Act. 1973 impose direct and immediate restrictions upon the appellants ' trade. They are a burden on trade and they deter the appellants from trad ing. They directly affect the freedom of trade and commerce. They are not merely regulatory for the purpose of facilitat ing the free flow of trade and commerce. They are restric tions hampering trade. They may be justifiable as reasonable restrictions, but being restrictions unsupported by previous sanction of the President, they are nevertheless invalid. Mr. C.M. Nayar, appearing for the respondents, on the other 505 hand. contends that the impugned provisions of the Amendment Act, 1973 are regulatory measures enacted to facilitate trade and they do not come within the ban of the proviso to clause (b) of Article 304. These provisions do not require the previous sanction of the President in terms of the proviso to Article 304(b). Counsel on both sides. in support of the respective contentions. refer to the principle stated by this Court in Ariabari Tea Co., Ltd. vs State of Assam & Ors., ; ; The Automobile Transport (Rajasthan) Ltd. vs The State of Rajasthan & Ors., [1963] 1 SCR 491 and State 0f Bihar & Ors. vs Harihar Prasad Debuka & Ors. ; and other cases. [1967] (21 SCR 361; [1971] (11 SCC 59; [1986](1) SCR 939;[1989] (31 SCC 211;[1990] (31 SCC 87; ; ; [1970] (11 SCR 400; [1955] (11 SCR 380; SCC 541. It is not and cannot be. disputed that if the impugned provisions are not merely regulatory with a view to facili tating trade. but are in quality and substance restrictive. though reasonable as restrictions can be. and if they in effect constitute a hinderance or impediment to the free flow or movement of trade, they are unconstitutional in the absence of previous sanction of the President. The question, however is the Principal Act. being an "existing law" and, therefore, beyond challenge. do the impugned provisions. introduced in 1973. being additional provisions. enlarge in substance and quality the scope and ambit of the Principal Act. thereby impeding in greater measure the free flow or movement of trade so as to fall within the ban of the provi so to clause (b) of Article 304? In other words. does the Amendment Act.1973. restrict the appellants ' business to a greater extent or is it merely clarificatory in so far as. at any rate. the appellants are concerned? The point then really is. has the amendment made the Act more stringent in so for as the appellants are concerned? If the answer is negative. as the High Court has held. the appellants are not aggrieved. and cannot therefore. success fully challenge the Amendment Act. Referring to the principle of contemporanea exposition. Mr. Sanghi says that the Act. as it stood before the amend ment. was not understood to apply to khandsari unit. and consequently to the business of the appellants. and it became applicable only as a result of the amendment. We do not agree that this submission is right. The High 506 Court has, on the basis of the pleadings and other evidence, and with reference to the relevant provisions, categorically held that the Act, as it originally stood, was applicable to the trade of the appellants, and the amendment in effect did not make any difference to them. The High Court has found that the appellants were not aggrieved solely by reason of the amendment, and the provisions, as they stood prior to the amendment, applied to them in equal measure. This apart, the amendment, in our view, was merely clarificatory, and it was always well understood in trade that khandsari sugar was also sugar, and that any reference to sugar, in the absence of specific exclusion or qualification, was capable of equal application to sugar of all kinds including khandsari. Even if it is true that persons who dealt with the statute under stood its provisions in a restricted sense, such mistaken construction of the statute did not bind the Court, so as to prevent it from giving it its true construction. (see the observation of Lord Blackburn in The Trustees of the Clyde Navigation vs Laird & Sons, 8 AC 658, 670), as quoted in National & Grindlays Bank Ltd. vs The Municipal Corporation of Greater Bombay, ; We are of the view that the reasoning of the High Court was correct. The Principal Act being an 'existing law ' within the meaning of Article 366(10) read with Article 305 of the Constitution, and the provisions of the Amendment Act, 1973 which are impugned in this appeal being clarifica tory, the previous sanction of the President was not re quired. See the principle stated in Syed Ahmad Aga vs State of Mysore, We do not, however, ex press any view as to whether the impugned Act is regulatory or restrictive, for that question, for the present purpose, is, in our opinion, academic. The appeal is dismissed with costs throughout. P.S.S. Appeal dismissed.

The East Punjab Molasses Control (Amendment) Act, 1973 substituted the definition of "molasses" in section 2(c) of the East Punjab Molasses (Control) Act, 1948 to mean "the mother liquor produced in the final stage of manufacture of sugar or khandsari sugar". The unamended section 2(c) had hitherto referred only to sugar. Consequent changes were also made in other provisions of the Principal Act to give effect to the amendment. The appellants dealers in khandsari molasses aggrieved by the expanded definition of molasses challenged the con stitutionality of the Amendment Act, 1973 on the ground that it had imposed direct and immediate restrictions upon their trade and commerce unsupported by the previous sanction of the President of India in terms of Article 304(b) of the Constitution. The High Court dismissed the writ petition holding that the appellants were not shown to have been aggrieved solely by reason of the amendment on the view that their business had been in equal measure controlled by the Principal Act itself. In this appeal by special leave, the appellants reiter ated their contentions advanced before the High Court. For the respondents it was contended that the provisions of the Amendment Act, 1973 were regulatory measures enacted to facilitate trade and therefore they did not come within the ban of the proviso to clause (b) of Article 304 to require the previous sanction of the President. 500 Dismissing the appeal, the Court, HELD: 1. The main object of the Amendment Act, 1973 was to clarify that the Principal Act applies in equal measure to a khandsari unit as it does to any other sugar factory. It was always well understood in trade that khandsari sugar was also sugar and that any reference to sugar, in the absence of specific exclusion or qualification, was capable of equal application to sugar of all kinds including khand sari. The Act did not become applicable to the appellants only as a result of the amendment. Even though persons who dealt with the statute may have understood its provisions in a restricted sense, such mistaken construction of the stat ute did not bind the Court so as to prevent it from giving it its true construction. [316A C] The Trustees of the Clyde Navigation vs Laird & Sons, 8 AC 658, 670 and National & Grindlays Bank Ltd. vs The Munic ipal Corporalion of Greater Bombay; , , re ferred to. 2. The Principal Act being an "existing law" within the meaning of Article 366(10) read with Article 305 of the Constitution, and the provisions of the Amendment Act being clarificatory, the previous sanction of the President was not required. [316D E] Syed Ahmad Aga vs Stale of Mysore, , referred to.

Civil Appeal No. 1166 of 1976. Appeal by Special Leave from the Judgment and Order dated the 16th September, 1976 of the Madhya Pradesh High Court in Misc. Petition No. 1004 of 1974. M.N. Phadke, S.Q. Hasan and A.C. Ratnaparkhi for the appellant. Ram Panjwani, H.S. Parihar and 1. N. Shroff for Respond ent. No. 1. Niren De, Attorney General, Rameshwar Nath and Y.B. Desai, for Respondent No. 6. The Judgnent of the Court was delivered by RAY, C.J. This appeal is by special leave from the judgment dated 16 September, 1976 of the High Court of Madhya Pradesh. 87 The appellant made an application under Articles 226 and 227 of the Constitution in the High Court and impeached the order dated 21 September 1974 whereby the Government dis missed the appellant 's objections against Scheme No. 9 M relating to Road Transport Nationalisation. The appellant also impeached the Scheme as published in the Gazette on 11 October, 1974. The High Court held that in view of the fact that Chap ter IV A of the (hereinafter re ferred to as the Act) is included as Entry 125 in the Ninth Schedule to the Constitution the appellant could not chal lenge the Scheme. The High Court erred in holding that it was not open to the appellant to challenge the Scheme. The Attorney General rightly and fairly said that the judgment of the High Court could not be supported on that ground. The High Court failed to appreciate that though Chapter IV A of the Act is not open to any constitutional challenge it is open to any aggrieved person to challenge any Scheme on the ground that it is not a valid Scheme as required by the provisions of Chapter IV A of the Act. Scheme No. 9 M relating principally to Jabalpur Sagar and Damoh Hatta routes was published by the State Transport Undertaking in the State Gazette on 15 November, 1963. The Scheme was approved and finally published in the State Gazette on 12 February 1965. Under the Scheme which came into force with effect from 2 April, 1965 Jabalpur Sagar and Damoh Hatta portions of the routes were reserved for exclusive operation by the State Transport Undertaking. The portions Sagar Bhopal, Rehli Garhakota, Hatta Panna, Ka tangi Majhouli and Damoh Chhatarpur via Hirapur were kept for joint operation with existing permit holders with the condition that the permit holders with existing permits were not to pick up passengers from and to any station lying between Nohta Abhana Garhakota or any other two stations on Jabalpur Sagar road and Damoh Hatta and vice versa. The Transport Authorities granted fresh permits cover ing Abhana Garhakota portion treating it to be a portion of joint operation with others. This action of the Transport Authorities was found to be destructive of the true inten tion of Scheme No. 9 M. It thus became necessary to modify Scheme No. 9 M. The proposal was then placed before the Board of the State Transport Undertaking referred to hereinafter as the Under taking by, the General Manager. The Board of the Undertak ing considered the matter at its meeting held on 20 August 1973 and passed Resolution No. 8354approving the proposal modifying Scheme No. 9 M. The Board 'Resolution directed inclusion of Sagar Rehli Garhakota Jabalpur and Patharia Damoh routes for exclusive operation by the State Corpora tion. The Board directed that the Scheme giving the de tails should be placed before the Board for its approval. In this background Scheme No. 9 M giving details was prepared and the proposal was placed before the Board of the Undertaking at the meeting held on 88 29 November, 1973. The Board of the Undertaking approved the proposal by Resolution No. 1395 and authorised conse quential action. Scheme No. 9 M was published in the Official Gazette on 7 December 1973. The Scheme was thereafter considered by the Special Secretary to the State Government in exer cise of powers under section 68D of the Act. Under section 68D of the Act persons contemplated in the Act might file objections and the State Government would hear objections and then approve or modify the Scheme. The State Government on 21 September 1974 approved the Scheme after having heard the objections. The approved Scheme was notified in the State Gazette dated 11 October 1974. The approved Scheme came into force with effect from 19 November, 1974. Scheme No. 9 M as approved, after hearing objections, provided in clause (2) that the State Road Transport Serv ices would be provided on the routes of Jabalpur, Sagar and Bhopal regions. In clause (2) of the Scheme 25 routes are set out. Route No. 2 is Jabalpur Bhopal via Patan, Tenduk heda, Damoh, Rehli, Sagar and Raisen. Route No. 3 is Jabalpur Sagar via Katangi and Damoh. Route No. 4 is Jabal pur Sagar via Patan, Tendukheda, Damoh and Rehli, Route No. 20 is Sagar Patharia. In clause (4) of Scheme No. 9 M it is said that no person other than the Undertaking will be permitted to provide Roard Transport Services on the routes or portions thereof specified in clause (2) except as provided in clause (5). In clause (5) it is stated that all Road transport Services will subject to the provisions made in the subsequent clauses, namely, No. (6) and (7) be provided by the Undertaking exclusively on JabalpurSagar via Katangi, Damoh and Damoh Hatta via Bangnon roads covering portions of the routes specified in clause (2). The routes which the Under taking will operate in conjunction with others are (1) Jabalpur patan Tendukheda Abhana, (2) Damoh Patera Hatta Panna, (3) Damoh Hirapur Tikamgarh and (4) Damoh Hirapur Chhatarpur portions of the routes specified in clause (2). In clause (7) of the Scheme is set out a list of permits granted by the Regional Transport Authorities and modified as indicated therein. In Item No. 20 of the list is set out the name of United. Transport and in Items 22 and 23 is set out the name of S.S.M. Trading Company, Society. The route of Damoh jabalpur via Abhana, Patan which was in the name of United Transport Company was modified to remain operative on the route of Abhana Jabalpur via Tendukheda, Patan. The route of Sagar Jabalpur via Reihli, Gerhakota, Abhana, Tejgarh, Patan which had been given to S.S.M. Trad ing Company was modified to Abhana Jabalpur via Tendukheda, Patna. It, therefore, appears from the Scheme that the routes (1) Jabalpur Patan Tendukheda Abhana, (2) Damoh Patera Hatta Panna, (3) Damoh Hirapur Tikamgarh, (4) Damoh Hirapur Chhattarpur were to be operated by the Undertaking in conjunction with existing permit holders. 89 The appellant under section 68D of the Act preferred objections to the Scheme. The objections were four in number. First the Scheme is mala fide as it is intended "to avert (sic) issuance of permits on these routes to private operators". Second the Scheme is published without the undertaking forming the requisite opinion under section 68C of the Act. Third the Scheme is discriminatory. Two permits of the appellant are proposed to be curtailed where as 14 permits on Sagar Rehli Garhakota route have been left over. Fourth the Scheme does not fulfil the four fold tests in section 68C of the Act. The Government heard the objections. The State Secre tary rejected the objections and approved the Scheme on 21 September 1974. The State Secretary held that no mala fide was proved. He also rightly held that nationalisation of Road Transport Service would result in the legal effect of stoppage of issue of permits on the routes mentioned in the Scheme. In short, nationalisation of routes cannot be said to be mala fide. The State Secertary found that the under taking considered the Scheme and formed the requisite opin ion under Section 68C of the Act. The State Secretary found that there was no discrimination. There was nothing to prove that similarly situated operators were treated dif ferently. There was no proof that the undertaking knew of the existence of the alleged permit of the appellant or of others. The State Secretary also found that the operators on Sagar Garhakota Patharia route were operating because it was not taken for exclusive operation. In other words, the Scheme does not concern the route on which the 14 operators are alleged t0 be plying. The State Secretary also found that the four purposes in section 68C of the Act were ful filled. The appellant repeated some of the objections to the Scheme raised before the State Secretary and added new ones. The appellant 's contentions here were these. First Scheme No. 9 M which was finalised was not the opinion formed by the undertaking. Second the appellant asked for resolution of the undertaking dated 20 August 1973 and this was not given. Therefore, no opportunity was given to the appellant to raise objections under section 68D of the Act. Third, Scheme No 9 M does not fulfil the four fold purposes, name ly, providing (a) efficient, (b) adequate, (c) economical and (d) properly coordinated road transport service as mentioned in section 68C of the Act. Fourth curtailment of route Sagar Rehli Garhakota is contrary to clause (5) of the Scheme. Chapter IV A of the Act contains sections 68 A to 68 I. These provisions in Chapter IV A are under the heading "Special provisions relating to State Transport Undertak ings". The Scheme recites that the Undertaking formed the opinion that for purposes of providing efficient, adequate, economical and properly coordinated road transport service provided in clause (2) of the Scheme, it is necessary in the public interest that the road transport service in relation to the said routes should be run and operated by the Undertaking in accordance with the Scheme. There is thus in 90 trinsic evidence inherent in the Scheme that the Undertaking formed the opinion for the Scheme. The State Secretary rightly rejected the contention of the appellant which was repeated here. It appears from the order of the State Secretary who heard the objections of the appellant against the Scheme that the Secretary never made an order directing the Under taking to produce the resolution dated 20 August, 1973. In the writ petition filed by the appellant in the High Court the appellant stated in paragraph 19 that the State Secretary instead of directing the Undertaking to produce these documents only observed that the Undertaking might think over the request adding that he might himself call for the said documents, if thought necessary. It also appears from the judgment of the High Court that the proceedings before the State Secretary indicated that the appellant 's case was argued without any insistence on the. production of the resolution. The High Court also noticed that the State Secretary made no such direction. The fact that he made no such direction shows that he found it possible to give the decision without production of it. The contention of the appellant is without any merit. The State Secretary rightly held that the four fold purposes indicated in section 68C of the Act are estab lished. This Court in Capital Multipurpose Cooperative Society Bhopal & Ors. vs The State of M.P. & Ors(1), said that the right of a person to object to the Scheme is to be confined only to the four grounds, namely, that the Scheme did not provide (a) efficient, (b) adequate, (c) economical and (d) properly coordinated transport services. The Scheme in the present case amply establishes that it fulfils the four purposes mentioned in the Act. It has to be ' remembered that the Scheme in clause (2) as well as in clause (5) mentions the exclusive operation of the Undertaking on these routes in the public interest. A mere allegation that the Scheme does not fulfil the purposes does not amount to any allegation and far less any proof. The appellant laid emphasis on the contention that the appellant 's permits in respect of the portion Garhakota to Sagar via Rehli ought not to have been curtailed because the route was not reserved for exclusive operation by the State Transport Undertaking under clause (5). It is a matter of policy as to what routes should be curtailed for the opera tion of the Scheme. Courts do not judge such policy deci sions. The appellant 's permits on the Garhakota Rehli Sagar routes expired on 26 and 30 September, 1976. The appellant has been granted fresh temporary permit on the route which is of conjoint operation. This temporary permit was granted to the appellant on 25 September, 1976. The appellant has taken advantage of it. It has to be shown that unless the appellant is allowed to operate on Sagar Rehli Garhakota route the Scheme will not be efficient, adequate, economical and properly coordi nated. The appellant did not allege and substantiate the case. This case cannot be entertained also for the reason that it is idle to suggest that the appellant will have not only Abhana Jabalpur via Tendukheda Patan route but also SagarRehli Garhakota route as of right. (1) ; 91 It is not only competent but also conscionable that a Scheme for nationalisation can be complete or partial. The efficiency as well as adequacy of the Scheme is advanced by such policy decisions of complete or partial nationalization of routes. See H.C. Narayanappa & Ors, vs The State of Mysore & Ors. C) Under section 68D of the Act the only scope for objection is whether the Scheme is efficient and adequate and not whether exclusion is complete or partial. Objections axe confined only to the four grounds of effi ciency, adequacy, economy and proper coordination of road transport service. Exclusion can be attacked only on these four grounds. There was never any objection to the Scheme on exclusion related to any of these grounds. The State Secretary in his order, on hearing the objections, rightly said that the Sagar Rehli Garhakota Patharia route is not to be taken for exclusive operation because there is no mention at all of the route. The Scheme in clause (5) has specifi cally mentioned which routes are for operation by the State Transport Undertaking in conjunction with others. The exclusion of the appellant from route on which the appellant had earlier operated cannot be said to challenge efficiency, adequacy, economy or proper coordination. For these reasons the appeal is dismissed. In view of the order of the High Court as to costs parties will pay and bear their own costs. M.R. Appeal dis missed.

The Government of Madhya Pradesh proposed to pass scheme No. 9 M; regarding the nationalisation of road transport. The scheme was approved and notified in the State Gazette, after the appellant 's objections made under section 68D of the , had been heard. The appellant flied a writ petition in the High Court challenging the Government 's rejection of his objections, and also impeach ing the scheme as published in the gazette. The High Court dismissed the petition holding that, as Chapter IV A of the Act has been included as Entry 125 in the Ninth Schedule to the Constitution, the scheme cannot be challenged. Dismissing the appeal the Court, HELD: 1. Though Chapter IV A of the Act is not open to any constitutional challenge, it is open to any aggrieved person to challenge any scheme on the ground that it is not a valid scheme as required by the provisions of Chapter IV A of the Act. [87 C D] 2. Under section 68D of the Act the only scope for objection is whether the scheme is efficient and adequate and not whether exclusion is complete or partial. [91 A B] Objections are confined only to the four grounds of efficiency, adequacy, economy and proper coordination of road transport service. There was never any objection to the Scheme on exclusion related to any of these grounds. [90 D E] Capital Multipurpose Co operative Society Bhopal and Ors. vs The State of M.P. & Ors. ; , ap plied. H.C. Narayanappa & Ors. vs The State of Mysore & Ors., ; , referred to:

Civil Appeal No.1779 of 1991. From the Judgment and Order dated 10 4 1990 of the Bombay High Court in W.P.No.1944 of 1987. M.C.Bhandare, CPU Nair, Ms. Kamini Lao and M.N.Shroff for the Appellants. V.N.Ganpule, S.K.Agnihotri, A.S.Bhasme and Ms. H.Wahi for the Respondents. The Judgment of the Court was delivered by Sawant,J. Leave granted. Appellant No.1 is a Trust which runs and manages an Ayurveda College in Bombay. Appellant No.2, is the Principal of the College. There was a vacancy in the post of a lecturer in Sanskrit for the academic year 1983 84 which was admittedly reserved for a candidate from the backward classes. The Ist respondent had applied for the said post on 19th September, 1983 even before the appellant Trust had invited applications by advertising the vacancy as it was required 286 to do. Subsequently, on October 13, 1983, the appellant Trust issued an advertisement inviting applications for the post without mentioning for which academic year the appointment was to be made. The parties before us agree that it was for the academic year 1983 84. In the advertisement, it was specifically mentioned that the post was reserved for a backward class candidate and if no suitable candidate from the backward classes was available, a candidate from the non backward classes may be appointed for an year. It appears that within a month thereafter on the 12th November, 1983, a second advertisement was issued repeating the earlier advertisement. No application was received from any candidate from the backward classes in response even to this advertisement, and hence, the Ist respondent who had already applied as stated earlier, was appointed to the said post for the period from March 19, 1984 till April 30, 1984. The total period of service put in by the Ist respondent for the said academic year was 41 days. On April 28, 1984, the appellant Trust issued an advertisement for the same post repeating the contents of the earlier advertisement, but for the academic year 1984 85. The applications were invited by 30th April, 1984. No candidate from the backward classes applied in response to the said advertisement. The interview was held on June 30, 1984 and the Ist respondent was appointed for the period from 21st August, 1984 to 19th April, 1985. In the third academic year 1985 86, admittedly no advertisement was issued and no applications from the candidates including candidates from the backward classes were invited. However, the Ist respondent was appointed to the post from July 10, 1985 to April 30, 1986. Thereafter the Ist respondent 's services were terminated w.e.f. 30th April, 1986 by a notice dated March 12, 1986. No appointment was made to the said post for the academic year 1986 87. On May 1,1987, the Trust issued advertisement inviting applications to the said post from candidates belonging to all classes since, according to the Trust, the post was dereserved during the said period. Three candidates belonging to the non backward classes including the Ist respondent and the 5th respondent applied for the post and the 5th respondent was selected and appointed to the same. It appears that the Ist respondent was not paid salary for the summer vacations following the academic years 1984 85 and 1985 86. She was also not paid salary from November 1985 to April 1986. She approached the College Tribunal praying for salary for (i) November 1985 to April 1986, and (ii) for the summer vacations following 287 academic years 1984 85 and 1985 86, i.e., for the months of May and part of June 1985, and May and part of June 1986, and (iii) for setting aside her termination of service and for reinstatement. The Tribunal allowed her claim for the salary for the relevant periods, but dismissed her claim for reinstatement holding that her appointment was purely temporary and her claim that she should be deemed to have been confirmed because she had served for two academic years was not established in the circumstances of the case. This decision was delivered by the Tribunal on December 9, 1986. As stated earlier, during the academic year 1986 87, no appointment was made to the said post and it was subsequent to this decision that an advertisement was issued calling for applications from candidates belonging to all classes and 5th respondent was appointment to the said post. Against the decision of the Tribunal the Ist respondent approached the High Court under Article 226 of the Constitution, and the High Court held that notwithstanding the break in her actual appointment, she was continuously in employment from March 19, 1984 to April 30, 1986. She was, therefore, entitled to the benefit of the resolutions of the State Government and the University of Bombay dated September 29, 1986 and February 27, 1987 respectively which, according to the High Court, laid down that an employee who was appointed for two consecutive academic years must be deemed to have been on probation right from the time of the first appointment and, therefore, confirmed in the post. The High Court, therefore, allowed her petition and directed the appellants to reinstate her forthwith in the post and also to treat her as if she had been in continuous employment from March 19, 1984 with the benefit of full back wages, seniority etc. The High Court also directed the University, the Director of Ayurveda, Maharashtra and the State of Maharashtra who were respondents 3,4 and 5 respectively to the petition, and who are respondents 2,3 and 4 to the present appeal respectively, to make appropriate sanctions including grant of money, if necessary. The High Court further granted cost and directed compliance with the orders by the appellants within six weeks from the date of its order, which is April 10, 1990. Although various contentions have been raised we find that it is not necessary to go into them. According to us the appellant Trust has violated the directions of the Government as well as of the University in the appointments in question in two major respects, as a result of which neither the appointment of the Ist respondent nor that of the 5th respondent can be said to have been validly made. Unfortunately, these aspects of the matter which are evident from the record 288 were lost sight of both by the Tribunal and the High Court. The result has been that the illegalities which are patent on the face of the record have been perpetuated. The Government of Maharashtra had issued a Govt. resolution No. 1177/129387/XXXII (CELL) on October 25, 1977 prescribing conditions of service as shown in Appendix III to the resolution. By a further resolution of April 3, 1978, Government made it clear that the revised scales of pay which were sanctioned by the resolution of October 25, 1977 could be implemented only after statutes had been duly made by the University. Since the making of the statutes was to take some time and the revised scales of pay recommended of the University Grants Commission were to be effective from January 1, 1973 as laid down in the GR of October 25, 1977, the Vice Chancellor exercised his powers conferred upon him under Section 11(6)(b) of the Bombay University Act 1974 (hereinafter referred to as the "Act") and issued his direction No.192 of 1978 on 7th June, 1978. This direction, among other things, laid down the mode of recruitment of the teachers and principals, as follows: "Futuer recruitment to posts of Teachers and Principals of colleges shall be made through a Selection Committee, the composition of which is specified in the terms and conditions (Appendix II)." Appendix II states as follows: " Terms and conditions attached to the revised scales of pay. (i) x x x x x x x x (ii) All appointments of teachers in colleges shall be made on merit and on the basis of all India advertisement. The qualifications prescribed for the posts should essentially be related to the academic attainment in the subject concerned and should not be linked with language or other regional consideration. Appointment should not be made on communal or caste consideration. The constitution of Selection Committee for recruitment to the posts of lectures in a college should be as follows: (a) Chairman, Governing Body of the College or his nominee; 289 (b) a nominee of the Vice Chancellor. (c) one expert to be nominated by the University. (d) one nominee of the Director of Education (Higher Education). (e) Principal of the college; and (f) Head of the Department concerned of the college. No selection shall be considered valid unless at least one expert is present. The recommendations of the Selections Committee shall be subject to the approval of the Vice Chancellor. * * * * * * * * (Emphasis Supplied) 8. The effect of the aforesaid government resolutions and the University directions is (a) that all appointment of teachers in colleges have to be made on merit and on the basis of all India advertisement;(b) that the appointments have to be made by a Selection Committee which consists, among others, of nominee of the Vice Chancellor, an expert to be nominated by the University and a nominee of the Director of Education (Higher Education). No selection will be considered valid unless at least one expert is present for the selection. Admittedly, the selection of the 5th respondent was made by a committee where neither the nominee of the Vice Chancellor nor the expert nominated by the University nor the nominee of the Director of Education (Higher Education), i.e., in the present case of the Director of Ayurveda was present. The selection so made was, therefore, not valid. Shri Bhandare, the learned counsel for the appellant Trust Pointed out to us the letter of June 6, 1989 sent by the University of Bombay according approval to the appointment of the 5th respondent as a lecturer in Sanskrit on probation from 2nd July, 1987 and contended that in view of the said approval the invalidity of the appointment, if any, on account of the absence of the expert in the Selection Committee, should be deemed to have been condoned. We are not impressed by this contention. In the first instance, there is nothing on record to show whether when the appellant Trust forwarded its report on appointment of the 5th respondent, the Trust had apprised the 290 University of the absence of the expert at the time of his selection. Secondly, the University has not reserved the power to relax the rule and permit selection without the presence of the expert. There is nothing in the University 's letter to show why the University had condoned the absence of the expert. It is, therefore, obvious that the approval given by the University being in ignorance of the true state of affairs and in breach of the rule is legally ineffective and cannot validate the appointment. There is further a common illegality in the appointment of both the 1st and the 5th respondent which arises on account of the failure to follow the Government Resolutions and University directions in the matter of reservation of the seats for the backward classes, which are binding on the College. On 30th March 1981, the Government of Maharashtra passed a resolution in exercise of the powers conferred on it under sub Section (2) of Section 77 C of the Act issuing instruction to all the non agricultural Universities in regard to the reservation of posts to be made in favour of Scheduled Castes and Scheduled Tribes while making appointments to teaching and non teaching posts in the University affiliated colleges and recognized institutions. The reservation prescribed was as follows: (1) Scheduled Castes 13 p.c. (2) Scheduled Tribes 7 p.c. (3) Nomadic Tribes & Vimukta Jatis 4 p.c. Total 24 p.c. That resolution further says that the various orders contained in the booklet "Reservation and other concessions in Government service for backward classes" will be applicable for recruitment to the teaching and non teaching posts reserved for backward classes in the University and the affiliated colleges and recognized institutions subject to the following modifications in regard to recruitment to the teaching posts. The modifications, among other things, were as follows: "Similarly, at any given time of recruitment to the teaching posts, only the total number of reserved vacancies and the sections from which they are to be filled in should be 291 determined. It would be enough if the require percentage is fulfilled as a whole and not with reference to any particular post. If the reserved vacancies cannot be filled, then so many posts as cannot be filled in may be kept vacant for six months and should be again advertised thrice. Even after readvertising the posts 3 times if suitable candidates belonging to backward classes do not become available, they may be filled in by candidate belonging to the open category." "For giving effect to the aforesaid instructions, it will be necessary for the Universities to make statutes under Section 77C(1) under their respective Universities Acts of 1974. For ensuring immediate implementation, the Vice Chancellors of the Universities, under clause (b) of Section 11(6) of the respective Universities Act of 1974. " (Emphasis supplied) 12. By its subsequent resolution of October 20, 1983, the Government of Maharashtra clarified its earlier resolution of March 30, 1981 and stated as follows: "1. x x x x x x x x 2. After reconsideration of the above decision, it is now directed that if suitable candidates cannot be found to fill posts reserved for backward classes in Universities, affiliated colleges and recognized institutions, those posts should be temporarily filled with candidates belonging to non backward classes for one academic year. But as mentioned in the resolution the appointment of a non backward class candidate to a reserved vacancy should be made only in the event of failure to find a backward class candidate even after the post has been advertised thrice. x x x x x x x x" (Emphasis supplied) 13. Thereafter a further resolution was issued by the Government on September 29,1986 on the subject stating therein that it had come to the notice of the Government that some institutions had not 292 implemented the instructions contained in the earlier resolutions of March 30, 1981 and of October 30, 1983. The Government therefore directed that the said directions should be implemented strictly. This resolution further directed that the non backward class candidates who were being repented for the second and third academic years when backward class candidates were not found for appointment for the first academic year, should not be called for interview every year and that the candidates belonging to the non backward classes should be appointed for the second and third academic year also, without calling them for interview. It is further stated in the said resolution that, similarly, as soon as the reserved post is dereserved, the appointed candidate should be confirmed in that post from the date of dereservation subject to all other terms and conditions. It was also directed that necessary statutes should be made by the University in accordance with the provisions of the Act and for ensuring immediate implementation, the vice Chancellor should issue directions under clause (b) of Section 11(6) of the Act. Pursuant to the said resolution of the Government, the Vice Chancellor of the University issued direction on March 11, 1987 as follows: "x x x x x x x (1) That the reserved teaching post which is filled in by appointment of a suitable non backward class candidate in the first year by following the prescribed procedure of selection shall be advertised again for the second and third years for inviting applications only from persons belonging to Scheduled Castes, Scheduled Tribes, Denotified Tribes and Nomadic Tribes. However, applications may also be invited from persons belonging to non backward class if the suitable non backward class candidate already appointed in the first year is not available for reappointment in the second or third year and or his services are required to be terminated on account of unsatisfactory performance of work in the first year; (2) That if in the second year, in response to the advertisement, a backward class candidate is not available, then the suitable non backward class candidate already appointed in the reserved post shall not be required to appear for interview before the Selection Committee again for the second 293 and: or third year (s) but that he shall be reappointed in the reserved post, if he is available for reappointment; (3) That if in response to the third advertisement in the third year, no application is received for the reserved post from candidates belonging to SC, ST, DT, or NT, the college authorities shall start the process of dereservation of the reserved post. After the process of dereservation of the post is completed, the appointment of non backward class teacher shall be deemed to be on probation with retrospective effect from the date of his initial appointment if he has held continuous appointment for two years in the college or in any other college under the same management, and that his appointment shall be confirmed from the dates of completion of two years of continuous appointment. The aforesaid direction shall come into force with retrospective effective from the date of the Maharashtras Government Resolution, that is, of 29 9 1986, which means that non backward class teacher who is eligible to get the benefit of the above direction shall be confirmed in his post with effect from 29 9 1986 or from any later date on which he may become eligible for confirmation in accordance with the aforesaid directions. x x x x x x x x x" (Emphasis supplied) 14. According to these Government resolutions and University directions (a) whenever a post is reserved to be filled in by the candidates from the backward classes, the post is to be advertise thrice within 6 months in each academic year. The post is to be kept vacant for the said months 6 months if no suitable candidate from the backward classes is available; (b) the post is to be filled in temporarily for one academic year by a non backward class candidate only after the three advertisements have been given as above; (c) the aforesaid process is to be repeated for two more academic years; (c) the candidate from the non backward classes appointed temporarily in the first academic, year for want of a backward class candidate, is to be continued as a temporary appointee for the next two academic years without being interviewed afresh for the next two years; (d) if in spite of the third advertisement in the third academic year, no application is received from a backward class candidate, the College authorities are free to 294 start the process of dereservation of the reserved post; (e) after the process of dereservation of the post is completed, the appointment of non backward class teacher will be deemed to be on probation with retrospective effect from the date of his initial appointment and he shall be confirmed in the post on his completing two years of his continuous service. Admittedly, as pointed out earlier, the post was reserved for the academic year 1983 84. The Trust had not given three advertisements within six months for any of the academic years 1983 84, 1984 85 and 1985 86. On the other hand for the academic year 1983 84, it issued only two advertisements, viz., on October 30, 1983 and November 12, 1983. It is not known as to why even two advertisements were not issued at the beginning of the said academic year. The academic year admittedly begins from June. May that be, as it is. As regards the second academic year 1984 85, it issued only one advertisement and that was on April 28, 1984. It did not issue any advertisement for the academic year 1985 86. The initial appointment of the 1st respondent for the academic year 1983 84 and her continuation for the subsequent academic years, viz., 1984 85 and 1985 86 was thus in breach of the Government resolutions and the University directions and, therefore, illegal. Similarly, since the appointment of the 5th respondent was made without fallowing the procedure prior to dereservation, viz., three advertisements repeated every year for all the three academic years for which the post was to be reserved, his appointment to the post, as if the post stood legally dereserved was also illegal since in the facts and circumstances of the case, it is obvious that the post could not have been dereserved to make it available for non backward class candidate. Shri Bhandare, however, contended that in the meanwhile the appellant Trust had taken steps to shift the reservation from the post of a lecturer in Sanskrit to the post of lecturer in Sanhita. The Trust had written a letter on July 2, 1986 for the purpose to the Directorate had by its letter of July 11, 1986 accorded the sanction. It may, however, be pointed out the representation made by the lecturer in Sanskrit to the post of lecturer in Sanhita had proceeded on the basis that the Trust had made efforts to fill in the said post from the candidates of the backward classes as required by the Government resolutions and the University directions. As pointed out above, the Trust had not made the efforts as required by the said resolutions and directions. It had not issued the advertisements 295 as it was required to do. The sanction was obtained and granted obviously on the basis of inadequate information. The sanction was, therefore, defective in law. The High Court unfortunately did not notice these infirmities in the appointment of either of the respondents. Shri Ganpule, the learned counsel appearing for the 1st respondent contended that since the 1st respondent was appointed in the first academic year, viz., 1983 84 and continued for the next two academic years, viz., 1984 85 and 1985 86 she was entitled to the benefit of the directions of the University contained in Circular No. 98 of 1987 dated March 11,1987 which had stated that if the non backward class teacher is on probation continuously for two years he would be deemed to be on probation with retrospective effect from the date of ;his initial appointment. Although the services of the 1st respondent were terminated w.e.f. April 30, 1986, since she was entitled to the benefit of the vacation salary following the academic year 1985 86 she would be deemed to be in service after the completion of the vacation and, therefore, she may be said to be in service on September 29, 1986 from which date the said University direction was to be effective. The contention proceeds on the footing that her initial appointment and the continuation of service for the next two academic years was valid. We have already pointed out above that they cannot be considered to be valid. However, assuming that her initial appointment and subsequent continuation of service was valid, she would not be entitled to the b benefit of the University Direction of March 11, 1987 because her entitlement to the vacation salary does not extend her period of employment up to the end of the vacation. That is a perquisite which is conferred on every teacher who has served during the academic year. It has no connection with the continuation of the employment since even those teachers whose services are validly terminated before the beginning of the vacation period are given the benefit of the salary of the vacation period. Statute 424 of the University which is reproduced as Annexure 'C ' to the petition makes this position clear. The argument, therefore, has no merit. In the view we have taken the appointments of both 1st and the 5th respondents were not valid. The post was reserved for the academic year 1983 84. We are now at the end of the academic year 1990 91 A fresh appointment, therefore, will have to be made for the academic year 1991 92. In the meanwhile, several events have occurred. The appointment of the 1st 296 respondent has already been terminated w.e.f. April 30, 1986. The 5th respondent has been in service from July 2, 1987. We are informed across the bar that today he has become overaged. The 1st respondent was overaged even at the time of her initial appointment. Although the advertisemently had stated that the candidate should not be above 32 years, at the time of her initial appointment itself, she was about 40 years old. The advertisement had also not l;mentioned anywhere that the age was relaxable. But that is a matter of history. In the meanwhile. as pointed out above, on incomplete information, the Directorate of Ayurveda has allowed the appellant Trust to shift the reservation from the post to the post of a lecturer in Sanhita. Taking into account all the facts and circumstances, we are of the view that an opportunity should be given to the appellant Trust to cure the illegalities. While, therefore, we maintain the order of Tribunal and set aside the order of the High Court, we direct the appellant Trust to advertise the post three times sufficient in advance and in any case within six months from the close of the present academic year, viz. ,1990 91 as a post reserved for the backward class candidate, and if no application is received from a suitable backward class candidate, the post will be deemed to have been dereserved. The Trust will then proceed to fill in the same by a candidate belonging to non backward classes. This fact may be made clear in all the three advertisements. The 5th respondent will be entitled to apply for the post notwithstanding the fact that he has by this time become overaged. If he is selected on the basis of his other qualifications, the Selection Committee shall relax in his favour the condition with regard to the maximum age. If he is appointed to the post, his appointment will be a fresh one and his past service will not count for the probation period. The Trust shall for the purpose constitute a proper Selection Committee according to the rules. The appeal is allowed accordingly. The parties will bear their own costs. Before parting with this appeal, we must observe that our decision has proceeded on the basis of the Government resolutions and University directions placed before us. The resolutions and directions as pointed out above require that the posts reserved for backward class candidates should be kept vacant for six months and it is only after the third advertisement during the said six months in each academic year that they should be filled in by candidates belonging to 297 the non backward classes if suitable candidate from backward classes are not available. Literally interpreted, it would mean that in each academic year, there will be no teacher for the first six months, if the process of advertisement is to begin at the commencement of the academic year. This is bound to cause hardship to the students. It is, therefore, incumbent upon the institutions concerned to advertise the posts thrice within six months well before each academic year begins. Since in the present case the academic year begins in June, the process of advertisement must begin in December of the preceding year. This should be the normal practice. An exception has to be made in the present case because the decision is being given today. To overcome the hardship to the decision is being given today. To overcome the hardship to the students, we would recommend that the 5th respondent may be permitted to teach as a purely temporary teacher during the period that the process is not completed for the academic year 1991 92. However, the appellant Trust will take steps within two weeks from the receipt of this order to start the process of advertisement as directed above. G.N. Appeal allowed.

For the academic year 1983 84, there was a vacancy for the post of Lecturer in Sanskrit, in the College managed by the appellant Trust. The said post was reserved for candidate from backward classes. The first Respondent, not belonging to any backward class, applied for the post, even before the appellant Trust issued an advertisement. An advertisement was issued later without mentioning the academic year for which the appointment was to be made, though admittedly it was for the academic year 1983 84. The advertisement specifically stated that the post was reserved for a backward class candidate and if no such candidate was available, a candidate from the non backward classes may be appointed for one year. Within a month, the advertisement was repeated and yet no application was received from any candidate from backward classes. Hence the appellant trust appointed the First Respondent, who had earlier applied, from 19.3.84 till 30.4.1984. Again, an advertisement was issued in 1984 for the academic year 1984 85. And there was no response from any candidate belonging to backward classes. The First Respondent was interviewed and appointed for one year, till 19.4.1985. For the academic year 1985 86, no advertisement was issued. The First Respondent was again appointment to the said post from July 10, 1985 to April 30, 1986. Thereafter her services were terminated after issue of notice. No appointment was made to the said post for the academic year 1986 87. However, on 1.5.1987, an advertisement was issued inviting applications for the said post from candidates belonging to all classes, 283 dereserving the post. Respondents 1 and 5 and another candidate, all belonging to non backward classes applied. The 5th Respondent was selected and appointed to the said post. Thereafter, in respect of non payment of salary for certain period and for setting aside her termination order, the First Respondent approached the College Tribunal. The Tribunal allowed her claim for salary for the relevant periods, but dismissed her claim for reinstatement, holding that her appointment was purely temporary and her claim that she should be deemed to have been confirmed because she had served for two academic years was not established in the circumstances of the case. Against the Tribunal 's decision, the First Respondent approached the High Court by way of a Writ Petition. The High Court allowed the Writ Petition holding that notwithstanding the break in her actual appointment, she was continuously in employment from March 19, 1984 to April 30, 1986, and hence entitled to the benefit of the resolutions of the State Government and the University directions which, according to the High Court, laid down that an employee who was appointed for two consecutive academic years must be deemed to have been on probation right from the time of the first appointment and, therefore, she should be confirmed in the post. The benefit of full back wages, seniority etc. was also ordered. Aggrieved by the Judgment of the High Court, the appellants preferred the present appeal, by special leave. Allowing the appeal, this Court, HELD: 1. The appellant Trust had violated the directions of the Government as well as of the University in the appointments in question as a result of which neither the appointment of the 1st respondent nor that of the 5th respondent can be said to have been validly made. Both the appointments were made without following the Government Resolutions and the University directions in the matter of reservation of seats for backward classes which are binding on the college. Unfortunately, these aspects of the matter which are evident from the record were lost sight of both by the Tribunal and the High Court. [287G H;288A] 2.1. Admittedly, the selection of the 5th respondent was made by a committee where neither the nominee of the Vice Chancellor nor the expert nominated by the University nor the nominee of the Director of 284 Education (Higher Education), i.e., the Director of Ayurveda, was present. The selection so made was, therefore, not valid. [289F] 2.2 There is nothing on record to show that when the appellant Trust forwarded its report on appointment of the 5th respondent, it apprised the University of the absence of the expert at the time of his selection. The University has not reserved the power to relax the rule and permit selection without the presence of the expert. There is nothing in the University 's letter to show why the University had condoned the absence of the expert. The approval given by the University being in ignorance of the true state of affairs and in breach of the rule, is legally ineffective and cannot validate the appointment. [289H,290A B] 3. Admittedly, the post was reserved for the academic year 1983 84. The Trust had not given three advertisements within six months for any of the academic years 1983 84, 1984 85 and 1985 86. On the other hand, for the academic year 1983 84, it issued only two advertisements. It is not known as to why even these two advertisements were not issued at the beginning of the said academic year. As regards the second academic year 1984 85, it issued only one advertisement, and no advertisement was issued for the academic year 1985 86. The initial appointment of the Ist respondent for the academic year 1983 84 and her continuation for the subsequent academic years, viz., 1984 85 and 1985 86 was thus in breach of the Government resolutions and the University direction and, therefore, illegal. Similarly, since the appointment of the 5th respondent was made without following the procedure prior to dereservation, viz., three advertisements repeated every year for all the three academic years for which the post was to be reserved, his appointment to the post, as if the post stood legally dereserved, was also illegal since the post could not have been dereserved to make it available for a non backward class candidate.[294B E] 4. Even assuming that her initial appointment and subsequent continuation of service was valid, the First Respondent would not be entitled to the benefit of the University direction of March 11, 1987 because her entitlement to the vacation salary does not extend her period of employment up to the end of the vacation. That is a perquisite which is conferred on every teacher who has served during the academic year. It has no connection with the continuation of the employment since even those teachers whose services are validly terminated before the beginning of the vacation period are given the benefit of the salary of the vacation period. [295E F] 285 5. The appellant Trust shall advertise the post three times sufficiently in advance and in any case within six months from the close of the present academic year, viz., 1990 1991 as a post reserved for the backward class candidate, and if no application is received from a suitable backward class candidate, the post will be deemed to have been dereserved. The Trust will then proceed to fill in the same by a candidate belonging to non backward classes. This fact may be made clear in all the three advertisements. The 5th respondent will be entitled to apply for the post notwithstanding the fact that he has become overaged. If he is selected on the basis of his other qualifications, the Selection Committee shall relax in his favour the condition with regard to the maximum age. If he is appointed to the post, his appointment will be a fresh one and his past service will not count for the probation period. The Trust shall constitute a proper Selection Committee according to the rules. [296D F] 6. To overcome the hardship to the students, the 5th respondent may be permitted to teach as a purely temporary teacher till the process is completed for the academic year 1991 92. [297C]

Civil Appeal No. 2546 2547 of 1983. 731 From the judgment and order dated the 13th February, 1981 of the Andhra Pradesh High Court in Writ Petitions Nos. 5458 and 5459 of 1980. WITH Writ Petition Nos. 6051 64, 8226 28, 8284 97, 8321 37, 3952, 7569, 7572, 7574 and 7577 of 1983. (Under Article 32 of the Constitution of India) T. V. section N. Chari for the Appellant. D. R. Gupta, B. R. Kapoor, section R. Srivastava and N. N. Sharma for the Petitioners. K G. Bhagat, Additional Solicitor General, Shanti Bhushan, P. R. Mridul, Dr. Y. section Chitale, K N. Bhatt, P. K Pillai, R. N. Poddar, R. B. Datar, A. Subba Rao, N. Nettar, V. G. Mehta and Mrs. H. Wahi, for the appearing Respondents. The Judgment of the Court was delivered by CHINNAPPA REDDY, J. The Andhra Pradesh High Court has declared sec. 129 A of the unconstitutional and void as offending article 19 (1) (g) of the Constitution of India. We may straight away say that the judgment of the High Court suffers from serious infirmities, not the least of which is the total failure to notice and consider the applicability of the provisions of the Code of Criminal Procedure to the situation. On an oral application by the Advocate General, the High Court granted leave to appeal to the Supreme Court. Presumably, by 'leave ' the High Court meant a certificate as provided under the Constitution. The order of the High Court regarding the grant of 'leave ' to appeal to this Court is in the following terms: "An oral application for leave to appeal to the Supreme Court has been made by the Learned Advocate General. The question whether 129 A of the is ultra vires the Constitution on the ground that it infringes article 19 (1) (g) of the Constitution relates to the interpretation of the Constitution and is also a substantial question of law of general importance, which requires to be decided by the Supreme Court. Therefore, we grant leave to appeal to the Supreme Court". 732 The order of the High Court states, (i) that the question relates to the interpretation of the Constitution; and (ii) the question is also a substantial question of law of general importance which requires to be decided by the Supreme Court. The order of the High Court while saying that the question relates to the interpretation of the Constitution refrained from certifying that the case involved a substantial question of law as to the interpretation of the Constitution. We cannot therefore, treat the certificate as one under article 132 of the Constitution. On the other hand the High Court has certified that the case involves a substantial question of law of general importance and it requires to be decided by the Supreme Court, employing the precise language used in clauses (a) and (b) respectively of article 133 (1) of the Constitution. The certificate, therefore, was clearly one under article 133 of the Constitution. We are mentioning these circumstances because at the very commencement, our attention was invited to article 145 (3) of the Constitution which provides that the minimum number of judges who are to sit for the purpose of deciding any case involving a substantial question of law as to the interpretation of the Constitution or for the purpose of hearing any reference under article 143 shall be five. The High Court had not certified that the cases involved a substantial question of law as to the interpretation of the Constitution and we are also satisfied that the cases do not involve a substantial question of law as to the interpretation of the Constitution. We proceeded to hear the appeals and writ petitions after the position was clarified when the cases were opened by the learned counsel. Section 129 A of the may be extracted here. It is as follows: "129 A Power to detain vehicles used without certificate of registration or permit. Any police officer authorized in this behalf or other person authorized in this behalf by the State Government may, if he has reason to believe that a motor vehicle has been or is being used in contravention of the provisions of Sec. 22 or without the permit required by sub section (1) of Sec. 42 or in contravention of any condition of such permit relating to the route on which or the area in which or the purpose for which the vehicle may be used, seize and detain the vehicle, and for this purpose take or cause to be taken any steps he may consider proper for the temporary safe 733 custody of the vehicle. Provided that where any such officer or person has reason to believe that a motor vehicle has been or is being used without the permit required by subsection (1) of Section. 42, he may, instead of seizing the vehicle, seize the certificate of registration of the vehicle and shall issue an acknowledgement in respect thereof. Provided further that where a motor vehicle has been seized and detained under this section for contravention of the provisions of Section 22, such vehicle shall not be released to the owner unless and until he produces a valid certificate of registration under this Act in respect of that vehicle. " It is seen that Section 129 A contemplates three situations where the police officer or authorized person may seize and detain the vehicle. The three situations are, (i) where he has reason to believe that the motor vehicle has been or is being used in contravention of the provisions of Sec. 22, (ii) where he has reason to believe that the motor vehicle has been or is being used without the permit required by sec. 42 (1), and (iii) where he has reason to believe that the motor vehicle has been or is being used in contravention of any condition of such permit relating to the route on which or the area in which or the purpose for which the vehicle may be used. These are precisely the three situations contemplated by Sec. 123 (1) of the and made punishable under that provision. Section 123 (1), which may also be extracted, is as follows: "S 123. Using vehicle without registration or permit. (1) Whoever drives a motor vehicle or causes or allows a motor vehicle to be used in contravention of the provisions of Section 22 or without the permit required by sub section (1) of Section 42 or in contravention of any condition of such permit relating to the route on which or the area in which or the purpose for which the vehicle may be used or to the maximum number of passengers and maximum weight of luggage that may be carried on the vehicle shall be punishable for a first offence with fine which may extent to two thousand rupees and for any second or subsequent offence with imprisonment. It is, therefore, clear that the power given to seize and detain the vehicle under sec. 129 (A) is to be exercised by the police officer or 734 the authorised person when he has reason to believe that an offence punishable under sec. 123 (1) has been or is being committed. Now, after detecting the commission of an offence punishable under sec. 123 (1) of the , the next appropriate step for the police officer or the authorised person would be to consider the question whether the offence should be compounded as provided by Section 127 (B) of the and any notification issued by the Government in that behalf. Section 127 B may also be extracted here and it is as follows . "127 B (1) Any offence (whether committed before or after the commencement of section 26 of the Motor vehicles (Amendment Act, 1982) punishable under section 112, section 113, section 113A, section 113B, section 114, sub section (1) and (2) or section 115, section 116, section 118, section 120 section 122, Section 123, section 124, section 125 or section 127 may, either before or after the institution of the prosecution, be compounded by such officers or authorities and for such amount as the State. Government may, by notification in the official Gazette, specify in this behalf. (2) Where an offence has been compounded under sub section (1), the offender, if in custody, shall be discharged and no further proceedings shall be taken against him in respect of such offence. " Thereafter the next logical and appropriate step for the police officer or the authorised person would be to lay a complaint before the Court competent to take congnizance of the offence, subject to the over riding provision of Section 132 of the which provides that no Court inferior to that of a Metropolitan Magistrate or a Magistrate of the second class shall try any offence punishable under the or any rule made thereunder. Section 4 (2) of the Code of Criminal Procedure provides that all offences under any law other than the Penal Code shall also be investigated, inquired into, tried, and otherwise dealt with according to the same provisions that is, the provisions of the Criminal Procedure Code, subject to any enactment for the time being in force regulating the manner or place of investigating, inquiring into, trying or otherwise dealing with such offences. Chapter XIII of the Code of Criminal Procedure deals with "Jurisdiction of the Criminal Courts in inquiries and trials". So, subject to section 132 of the , 735 the Court before which the complaint may be laid has to be determined in accordance with the provisions of chapter XIII of the Code of Criminal Procedure. After the complaint is laid the case has to be tried in accordance with the provisions of the Code of Criminal Procedure. This again is subject to one special provision of the , namely Section is in the following terms: "The court taking cognizance of an offence under this Act, (i) may, if the offence is an offence punishable with imprisonment under this Act and (ii) shall, in any other case, state upon the summons to be served on the accused person that he (a) may appear by pleader and not in person, or (b) may by a specified date prior to the hearing of the charge plead guilty to the charge by registered letter and remit to the court such sum (not exceeding the maximum fine that may be imposed for the offence) as the court may specify: Provided that nothing in this sub section shall apply to any offence specified in Part A of the Fifth Schedule. Where the offence dealt with in accordance with sub section (1) is an offence specified in Part of the Fifth Schedule, the accused person shall, if he pleads guilty to the charge, forward his licence to the Court with the letter containing his plea in order that the conviction may be endorsed on the licence. Where an accused person pleads guilty and remits 1 the sum specified and has complied with the provisions of sub section (2), no further proceedings in respect of the offence shall be taken against him, nor shall he be liable to be disqualified for holding or obtaining a licence by reason of his having pleaded guilty. " That is how the offender is dealt with. But, what happens to the vehicle seized under the provisions of section 129 A ? To begin with, we notice that a pre condition to the seizure and detention of the vehicle is that the police officer or authorised person must have reason to believe that one or the other of the offences specified, punishable as we have seen under section 123, 736 has been or is being committed. Whenever property involved in the commission of an offence is seized, the seizure is generally expected to serve a manifold purpose such as to prevent repetition of the offence, to use the thing seized as material evidence in the prosecution, to preserve the property so as to enable the court to pass appropriate orders for its disposal by way of destruction, confiscation, or delivery to any person claiming to be entitled to possession thereof or otherwise. There ii no reason to assume that the seizure under section 129 A is any different and is not to serve any of these purposes or any purpose at all. We then notice that the police officer or the authorised person may "Seize and detain the vehicle , and for this purpose take or cause to be taken any steps he may consider proper for the temporary safe custody of the vehicle". Clearly, therefore, the detention by the authorised officer or person is to be temporary. For how long then ? obviously until appropriate orders regarding its disposal are made. Quite obviously the vehicle may be released if the owner of the vehicle satisfies the authorised officer or person, that no offence such as that mentioned in section 129 A had been or was being committed. This is subject to tho second proviso to section 129 A which bars the release of a vehicle seized for a contravention of the provisions of section 22 unless the owner of the vehicle produces a valid certificate of registration under the Act in respect of the vehicle. Conversely, in the contest, it implies 15 that a vehicle seized for a contravention of section 22 is to be released if the certificate of registration is produced. Again, since the detention is for 'temporary safe custody, until appropriate orders are made, the police officer or authorised person seizing the vehicle may arrange for the 'temporary safe custody ' of the vehicle with the owner of the vehicle by releasing the vehicle to him subject to suitable security J and so undertaking to produce the vehicle when called upon to do so. We have indicated that the next step in the process of dealing with tho offender is to consider whether the offence may not be compounded. If the offence is compounded, the vehicle has naturally to be returned to the owner. If it is not compounded, a complaint has to be laid before the Court empowered to take cognizance of the case and the case proceeded with. As soon as the complaint is laid, the Court acquires jurisdiction to pass appropriate orders regarding 'the custody ' and the 'the disposal ' of the vehicle. We have already noticed how Section 4 (2) of the Code of the Criminal Procedure stipulates that offences under laws other than the Penal Code also are to be investigated, inquired into, tried and otherwise dealt with in accordance with the provisions of the Code of Criminal Procedure 737 The provisions of Chapter XXXIV of the Code relating to 'Disposal of Property ' are also therefore attracted in dealing with offences under the . Section 452 of the Code enables the Court, at the conclusion of an inquiry or trial to "make such order as it thinks fit for the disposal, by destruction, confiscation or delivery to any person claiming to be entitled to possession thereof or otherwise, of any property or document produced before it or in its custody, or regarding which any offence appears to have been committed, or which has been used for the commission of any offence". The Court thus has the power at the conclusion of the case to make appropriate orders regarding the disposal of the motor vehicle regarding which an offence appears to have been committed. So far as the custody of the vehicle pending the conclusion of the case is concerned, the Court may either treat the arrangement made by the officer or person acting under section 129 A as sufficient or may itself make further or other orders. Section 451 of the Code of Criminal Procedure empowers the Court, when any property is produced before it during any inquiry or trial, to make such order as it thinks fit for the proper custody of such property pending the conclusion of the inquiry or trial. We think that a motor vehicle regarding whose temporary custody arrangements have been made under sec. 129 A of the by the police officer or the authorised person seizing the vehicle must be considered to have been produced before the Criminal Court as soon as a complaint is filed before the Court alleging the commission of an offence under sec. 123 regarding the vehicle. In any case, the Court has ample power under Chapter VII of the Code, Section 91 in particular, to compel the production of the vehicle before the Court. Thus if the provisions of the are read in conjunction with the provisions of the Code of Criminal Procedure and there is no getting away from the provisions of both the laws it is seen that there is no lacuna whatsoever in regard to the proper custody and disposal of the motor vehicle seized under sec. 129 A of the . The custody of the vehicle in the hands the police officer or the authorised person is but temporary and he is therefore, obliged to act and take all further steps in the matter with all expedition. If he releases the vehicle on being satisfied that no offence has been committed or if he releases the vehicle on the offence being compounded, no further question arises. If, instead, he lays a complaint before the Court, the court acquires instant jurisdiction over the vehicle to pass suitable orders. In the remote event of the police officer or the authorised person not taking any further action after 738 seizing and detaining the vehicle, the owner of the vehicle is not without remedy. article 226 is always available but one does not have to presume that the police officer or the authorised person may not act according to law. The Andhra Pradesh High Court appeared to think that sec. 129 A of the was an unreasonable restriction on the fundamental right guaranteed by article 19 (1) (g) of the Constitution because (i) there was no provision in the Act providing for confiscation of the vehicle, (ii) there was no provision in the Act indicating what should be done after seizing and detaining the vehicle, (iii) the seizure by the police officer or the authorised person was based on his subjective satisfaction, (iv) there was no discernible purpose behind the seizure, (v) there was no obligation on the seizing authority to produce the vehicle in court, (vi) Nor was there any purpose to be served by producing the vehicle before the court as the court did not possess the power to confiscate the vehicle or to pass any orders regarding its temporary custody,(vii) no appeal was provided against the seizure, and (viii) no maximum period was prescribed for the detention of the vehicle. None of these reasons bears any scrutiny, if properly examined in the light of the provisions of both the and the Code of Criminal Procedure, as we are bound to. Indeed, whenever an offence under a law other than the Penal Code is committed and that law does not itself regulate the procedure to be followed, there is no option but to look to the provisions of the Criminal Procedure Code for further action and to weave into a single texture the provisions of the code and the special law. The High Court has totally ignored the provisions of the Criminal Procedure Code and the judgment stands vitiated on that account. It has therefore, to be set aside. We have explained the context of Sec. 129 A in the scheme emerging from the inter lacing of the provisions of the and the Criminal Procedure Code. We do not have the slightest hesitation in rejecting the contention that there is any infringement of the fundamental right guaranteed by article 19 (1) (g) of the Constitution and in upholding the vires of Sec. 129 A of the . One of the Learned Counsel submitted that when a tourist motor vehicle was seized under Sec. 129 A, there should be some safeguard in regard to the several removable items which are usually 739 found in tourist vehicles such as spare tyres, spare parts, radio, video etc. It was suggested that in the absence of a provision similar to that found in the Criminal Procedure Code, Sec. 129 A Should be held to be unreasonable. There is no substance in this contention. 100 of the Criminal Procedure Code to which reference was made by the Counsel deals with searches and not seizures. In the very nature of things when property is seized and not recovered during a search, it is not possible to comply with the provisions of Sub Sections (4) and (5) of Sec. 100 of the Criminal Procedure Code. In the case of a seizure under the , there is no provision for preparing a list of the things seized in the course of the seizure for the obvious reason that all those things are seized not separately but as part of the vehicle itself. But it is in the interests of the very officer or person seizing the vehicle, so that they may not be open to any charge being laid against them later, that such officer or person takes care to prepare a list of detachable things which are ordinarily not part of the vehicle and give a copy of the list to the person in charge of the vehicle at the time of the seizure. In view of the discussion, the appeals are allowed with cost and the writ petitions filed in High Court are dismissed. Some of the operators have directly approached this Court under article 32 of the Constitution. Their writ petitions have been heard along with the civil appeals and for the same reasons they are dismissed with costs. H.L.C. Appeals allowed.

Section 129 A of the authorises the seizure and detention of a motor vehicle by a police officer or any other person authorised by the State Government in that behalf if such officer or person has reason to believe that the vehicle has been or is being used without a certificate of registration as required under section 22 or without a permit as required under sub section (1) of section 42 or in contravention of any condition of such permit. The appeals in this group of matters were directed against a judgment of the Andhra Pradesh High Court striking down section 129 A as an unreasonable restriction on the fundamental right guaranteed by article 19(1) (g) of the Constitution for the reason that there was no discernible purpose behind the seizure authorised by the section, that the seizure was based on the subjective satisfaction of the police officer or the person authorised, that there was neither any obligation on him to produce the vehicle in the court nor was any power conferred on the court either to confiscate the vehicle or to pass any orders regarding its temporary custody, that there was no provision in the Act indicating as to what should be done after seizing and detaining the vehicle and that there was also no provision prescribing any maximum period for the detention of the vehicle or providing for an appeal against seizure. Upholding the validity of section 129 A and allowing the appeals, ^ HELD: There is no lacuna in regard to the proper custody and disposal of the motor vehicle seized under section 129 A of the . The provisions of the Act have to be read in conjunction with the provisions of the Code of Criminal Procedure. [739 A B] (i) Section 129 A contemplates three situations where the police officer or the person authorised may seize and detain the vehicle and these are precisely the three situations made punishable under section 123(1). The power given to seize and detain the vehicle under section 129 A has to be exercised by the police officer or the person authorised when he has reason to believe that an offence punishable under section 123(1) has been or is being committed. After detecting the commission of an offence punishable under section 123(1) the next step for him would be to consider whether the offence should be compounded as provided 730 under section 127 B and thereafter to lay a complaint before the Court competent to take cognizance of the offence. Section 4(2) of the Code of Criminal Procedure provides that all offences under any law other than the Penal Code shall also be investigated, inquired into, tried and otherwise dealt with in accordance with the provisions of the Code subject to any enactment for the time being in force regulating the manner or place of investigating, inquiring into, trying or otherwise dealing with such offences. Chapter XIII of the Code deals with "Jurisdiction of the Criminal Courts in inquiries and trials". So, subject to section 132 of the Act, the Court before which the complaint may be laid has to be determined in accordance with Chapter XIII of the Code and after the complaint is laid before the appropriate court it has to be tried in accordance with the provisions of the Code subject to section 130 of the Act. This is how the offender has to be dealt with. [733 D; H; 734 A B; G H; 735 A B] (ii) A pre condition to the seizure of a vehicle under section 129 A is that the police officer or the person authorised must have reason to believe that one or the other of the offences specified in section 123 has been or is being committed. The seizure is expected to serve a manifold purpose such as to prevent repetition of the offence, to use the thing seized as material evidence in the prosecution and so on. Section 129 A itself provides that the detention of the vehicle by the authorised officer or person is to be temporary, and obviously, until appropriate orders regarding its disposal are made. The vehicle may be released if the owner satisfies the authorised officer or person that no offence such as that mentioned in section 129 A had been or was being committed. Again, since the detention is for temporary safe custody, the vehicle may be released to the owner subject to suitable security and an undertaking to produce it when called upon to do so. If the offence is compounded under section 127 B, the vehicle has naturally to be returned to the owner. If a complaint is laid before the appropriate court, the court acquires jurisdiction to pass appropriate orders regarding the custody and the disposal of the vehicle under Chapter XXXIV and sections 451 and 452 of the Code of Criminal Procedure. [735 H; 736 C H; 737 A] 2. The contention that section 129 A should be held unreasonable as it does not provide any safeguard in regard to the several removable items which are usually found in tourist vehicles such as spare tyres, spare parts, radio, video, etc., has no substance. Section 100 of the Code of Criminal Procedure which was referred to in this context deals with searches and not seizures. In the very nature of things when property is seized and not recovered during a search, it is not possible to comply with the provisions of sub sections (4) and (5) of section 100, Cr. In the case of a seizure under the , there is no provision for preparing a list of the things seized in the course of seizure for the obvious reason that all those things are seized not separately but as part of the vehicle itself. But it is in the interests of the very officer or person seizing the vehicle to prepare a list of detachable things which are ordinarily not part of the vehicle and give a copy of the list to the person in charge of the vehicle at the time of the seizure. [739 A D]

ivil Appeal No. 2840 of 1982. From the Judgment and Order dated 5.12. 1979 of the Allahabad High Court in Second Appeal No. 82 of 1972. R.K. Garg and H.K.Puri for the Appellant. Satish Chandra, Pramod Swarup and A.K. Srivastava for the Respondents. The Judgment of the Court was delivered by R.M. SAHAI, J. In this appeal by grant of special leave, directed against judgment of the Allahabad High Court in second appeal arising out of a suit for arrears of rent and ejectment, the question is if the High Court committed any error of law in allowing the second appeal on the ground that the two courts below had erroneously held that finding recorded in an appeal, filed by one of the defendants who was sued as tenant in an earlier suit, could not operate as res judicata between plaintiff and respondents who were defendants nos. 2 and 3 in that suit. Unfortunately for appellant equity may or may not be in his favour as his father too acted shrewdly while purchasing house of daughter in law 's father but law is certainly not in his favour. How dispute arose between parties, who are closely related, is quite interesting. Shiv Charan Das and Har Charan Das (respondents nos. 1 99 and 3 in this appeal) are first cousins. Ravindra Kumar (respondent No. 2) is son of Shiv Charan. His sister was married to son of Ganga Prasad who purchased the only house of Shiv Charan and Ravindra Kumar with condition of repur chase by sellers after five years. He permitted them to remain in possession, but got a rent note executed by Har Charan. Purpose of this became apparent later as immediately after expiry of five years when the house was not repur chased Ganga Prasad (referred hereinafter as plaintiff) filed suit for ejectment and arrears of rent against Har Charan, Shiv Charan and Ravindra (hereinafter referred as defendants nos. 1, 2 and 3) claiming that defendant No. 1 was in arrears of rent and defendant No. 2 and 3 were his sub tenants. The suit was contested by defendants nos. 2 and 3 only. The Trial Court decreed the suit for arrears of rent against defendant No. 1. It was held that defendant No. 2 and 3 were not sub tenants. Therefore suit for ejectment was dismissed. The plaintiff submitted to this finding. Ag grieved by the decree for arrears of rent defendant No. 1 filed appeal which was dismissed. But the appellate court while observing that any evidence led by defendant nos. 2 and 3 could not be read against defendant No. 1 observed that it appeared that they being closely related to defend ant No. 1 were in possession on his behalf. This furnished occasion for plaintiff to file second suit against three defendants with this change that defendants nos. 2 and 3 were claimed to be licensees of defendant No. 1. The Trial Court relying on earlier judgment decreed suit for arrears of rent against defendant No. 1 and for ejectment against defendants nos.2 and 3 as they were licensees. Both defend ant No. 1 separately and defendants nos. 2 and 3 jointly filed two appeals but without any success. Both the sets approached the High Court also by way of separate appeals. The appeal of defendant No. 1 came up for hearing earlier but it was dismissed. The appeal of defendant nos. 2 and 3 came up for hearing before another Hon 'ble Judge who allowed it and held that the finding recorded in appeal arising out of earlier suit that they were licensees did not operate as res judicata and the suit for ejectment was dismissed. It is the correctness of this finding that has been assailed in this Court. Although long arguments were advanced but in our opinion the only question that arises for consideration is if the finding recorded in the appeal filed by defendant No. 1 in which it was held that defendants nos. 2 and 3 were in possession on his behalf was binding on them in the subse quent suit filed by the plaintiff. In that suit issue No. 2 was if 100 defendant No. 2 and defendant No. 3 were sub tenants. And issue No. 5 was if they were liable to be ejected. The Trial Court while discussing these two issues held that there was no question of sub tenancy of these persons as despite sale there was never a break in their possession. It was further held that they were not sub tenants nor they claimed to be in possession through defendant No. 1. Therefore they were not liable to ejectment. Against this finding plaintiff did not file any appeal. The finding therefore between the plaintiff and defendants nos. 2 and 3 became final and binding. The appeal was filed by defendant No. 1 as he was aggrieved by the decree of arrears of rent. In that appeal it was observed that the evidence led by defendant nos. 2 and 3 could not be read against him. But the Court while dismissing his appeal and upholding the decree of Trial Court observed that since they were close relations it appears that even though rent note was executed by defendant No. 1 the possession of defendants nos. 2 and 3 was on his behalf. This finding could not be taken advantage of by the plaintiff for more than one reason. This observation was unnecessary as the appeal was dismissed. One could under stand if the appeal would have been allowed and the liabili ty for payment of rent would have been fastened on defendant No. 2 and 3 as they were in possession. But since appeal was dismissed the order of Trial Court that liability to pay rent was of defendant No. 1 stood affirmed. Therefore it was an observation which was not only off the mark but unneces sary. It could not accordingly operate as res judicata between defendant No. 1 and defendants nos. 2 and 3 as much less between plaintiff and defendant nos. 2 and 3. One of the tests to ascertain if a finding operates as res judicata is if the party aggrieved could challenge it. Since the dismissal of appeal or the, appellate decree was not against defendants nos. 2 and 3 they could not challenge it by way of appeal. Even assuming that defendant No. 1 could chal lenge the finding that liability of rent was of defendants nos. 2 and 3 as they were in possession he did not file any written statement in the Trial Court raising any dispute between himself and defendants nos. 2 and 3. There was thus no occasion for the appellate court to make the observation when there was neither pleading nor evidence. Therefore, from either point of view the finding could not operate against defendants Nos. 2 and 3 as res judicata. Reliance by the appellant on Keshardeo Chamria vs Radha Kissen Chamria, ; , is of no assistance as it only lays down the binding effect of a decision in a subsequent suit. For the reasons stated above this appeal fails and is dismissed. There shall be no order as to costs. T.N.A. Appeal dis missed.

The Appellant 's father purchased the house of respondent Nos. 1 and 2 with condition of repurchase by the sellers after five years. He permitted the respondents to remain in possession but got a rent note executed by Respondent No.3, the first cousin of Respondent No.1. After the expiry of 5 years when the house was not repurchased by the respondents, the appellant 's father (plaintiff) instituted a suit for arrears of rent and ejectment against Respondent Nos. 1, 2 and 3 (Defendant Nos. 2, 3 and 1) claiming that defendant No. 1 was in arrears of rent and defendant Nos. 2 and 3 were his sub tenants. The Trial Court decreed the suit for ar rears of rent against defendant No. 1 but dismissed the suit for ejectment against defendant Nos. 2 and 3 holding that they were not sub tenants. Defendant No. 1 filed an appeal against the decree for arrears of rent. The Appellate Court dismissed the appeal with an observation that though the rent note was executed by Defendant No. 1, the possession of Defendant Nos. 2 and 3 was on behalf of Defendant No. 1 since they were closely related. Relying on these observa tions the plaintiff filed a second suit against the defend ants with a change that defendant Nos. 2 and 3 were licen sees of defendant No.1. The Trial Court decreed the suit for arrears of rent against defendant No. 1 and for ejectment against defendant Nos. 2 and 3. Both defendant No. 1 sepa rately and defendant Nos. 2 and 3 jointly filed two appeals which were dismissed. Separate appeals were filed in the High Court which dismissed the appeal of defendant No. 1 and allowed the appeal of defendant Nos. 2 and 3 holding that the findings recorded in appeal arising out of earlier suit that they were licensees did not operate as res judicata. Accordingly the High Court dismissed the suit for ejectment against defendant Nos. 2 and 3. Hence this appeal. Dismissing the appeal, this Court, 98 HELD: One of the tests to ascertain if a finding oper ates as res judicata is if the party aggrieved could chal lenge it. Since the dismissal of appeal or the appellate decree was not against defendants Nos. 2 and 3 they could not challenge it by way of appeal. Even assuming that de fendant No. 1 could challenge the finding that liability of rent was of defendant Nos. 2 and 3 as they were in posses sion he did not file any written statement in the Trial Court raising any dispute between him. self and defendants Nos. 2 and 3. There was thus no occasion for the appellate court to make the observation when there was neither plead ing nor evidence. Therefore, from either point of view the finding could not operate against defendants Nos. 2 and 3 as res judicata. [100E G] Keshardeo Chamria vs Radha Kissen Chamria, [1953] S.C.R. 154; held in applicable.

Appeal No. 494 of 1970. From the judgment and order dated the 24th January, 1969 of the Delhi High Court in Income Tax Ref. No. 51 of 1966. V. C. Desai, J. Ramamurthy and R. N. Sachthey, for the appellant. K. Sen and H. K. Puri, for the respondent. The Judgment of the Court was delivered by SARKARIA, J. This appeal is directed against the Judgment, dated 24 1 1969, of the High Court of Delhi answering in the affirmative the following question referred to it under section 66(1) of the Indian Income tax Act, 1922 (for short, the Act) by the Commissioner of Income tax . "Whether on the facts and in the circumstances of the case the capital loss of Rs. 28,662/ could be determined and carried forward in accordance with the provisions of Section 24 of the Indian Income tax Act, 1922, when the provisions of section 12B of the Income tax Act, 1922 itself were not applicable in the assessment year 1955 56. " The assessee (respondent) is a Private Limited Company. The assessment year under reference is 1955 56 and the relevant previous year is from 1 5 1953 to 30 4 1954. On 10 1 1952 the assessee pur 698 chased 1124 shares of M/s. Intercontinent Travancore Pvt. Ltd. at a cost of Rs. 1,12,400/ from M/s. Escorts (A&M) Ltd. In the relevant accounting year ending on 30 4 195 3 the assessee received 562 bonus shares from the same company. It thus acquired a total number of 1686 shares. On 3 9 53, i.e. during the relevant previous year the assessee sold all these 1686 shares to M/s. Escorts (Agents) Ltd. for Rs. 84,300 and claimed a loss of Rs. 84,862/ in the income tax return filed by it. The Income tax Officer disallowed the entire loss of Rs. 84,862 on the ground that it was a loss of a capital nature. The assessee carried an appeal to the Appellate Assistant Commissioner and contended that this loss of Rs. 84,862/ was a revenue loss arising out of dealing in shares. The Appellate Assistant Commissioner found that the assessee 's claim was exaggerated and that the actual lose was to the tune of Rs. 28,662/ only. He further held that this loss of Rs. 28,662/ was not a 'revenue loss, but a 'capital loss ' arising out of change of investments. Against the decision of the Appellate Assistant Commissioner the assessee preferred an appeal before the Tribunal, challenging the findings of the Commissioner both in regard to the amount of loss and its nature. At the stage of arguments before the Tribunal, the assessee 's Counsel did not press these grounds of appeal but took up the plea that the amount of Rs. 28,662/ which had been held to be a "capital loss" by the authorities below, should be allowed to be carried forward and set off against profits and gains, if any, under the head "capital gains" earned in future, as laid down in sub sections (2A) & (2B) of section 24 of the Act. Despite objection from the Departmental Representative, the Tribunal allowed this new ground to be raised with the observation that It was "a pure question of law and did not require investigation of any fresh fact '. It further accepted the contention of the assessee and directed that the "capital loss" of Rs. 28,662/ should be carried forward and set off against "capital gains" if any, in future. At the instance of the Commissioner of Income tax, the Tribunal referred the above question (set out at the commencement of this judgment) to the High Court under section 66(1) of the 1922 Act. It was contended before the High Court on behalf of the Revenue that the expression "capital gains" in sub section (2A) of section 24 has reference only to section 12B so that the loss suffered in the year in which the profits under the head "capital gains" were not taxable, could not fall within sub section (2A) of section 24, section K. Kapoor J., speaking for the Division Bench, rejected this contention in these terms : "This argument overlooks the fact that the head of income chargeable to income tax are set out in section 6. "Section 12 B deals only with the computation of capital gains and with their taxability if they arise during a particular period. As a matter of fact, section 12B itself refers to section 6 inasmuch as it says that "the tax shall be payable by an assessee under the bead "capital gains". This obviously has reference to the VIth head in section 6. The effect of 699 sub section (2A) and (2B) of section 24 read with section 6 and 12B, therefore, is that if a capital loss is incurred in a year in which a capital gain did not attract tax under section 12B such loss would still be loss under the head "capital gains" and if in subsequent year the assessee has any profit under that head it can still be carried forward and set off against the taxable capital gain. The Tribunal was in my opinion, right in coming to the conclusion that it did. " Hence this appeal by the Commissioner of Income tax (Central) Delhi. Capital Gains Tax for the first time was introduced by the Income tax and Excess Profit Tax (Amendment) Act, 1947 (No. 22 of 1947) which inserted section 12B in the Act. This section made taxable "capital gains" which arose after March 31, 1946 The same Act of 1947 added as the VIth head "capital gains" in section 6 of the Act. It also inserted sub sections (2A) and (2B) in section 24 of the Act. The Indian Finance Act, 1949 virtually abolished the levy and restricted the operation of section 12B to "capital gains" arising before the ' 1st April, 1948. But section 12B in its restricted form, and the VIth head, capital gains ' in section 6, and sub sections (2A) and (2B) of section 24 were not deleted and continued to form part of the Act. The Finance (No. reintroduced the "capital gains ', tax with effect from the 31st March, 1956. It substantially altered the old section 12B and brought it into its present form. As a result of Finance Act (3) of 1956 "capital gains" again became taxable in the assessment year 1957 58. The position that emerges is that "capital gains" arising, between 1 4 1948 and 31 3 1956, were not taxable. The capital loss in question relates to this period. Mr. V. section Desai, learned Counsel for the appellant contends that according to the scheme of the Act, a "capital loss" occurring in a previous year, could be allowed to be carried forward and set off against the capital gains of a subsequent year, only if the income under that head was taxable in the relevant previous and subsequent years. Since during the period from 1 4 1948 to 31 3 1956, capital gains (plus) or capital gains (minus) did not enter into computation of the, total income of the assessee chargeable to tax under section 3 read with section 12B of the Act, the question of carrying forward inch loss did not arise, much less could such a loss be set off against the profits of any subsequent year. As against this, Shri Ashok Sen, learned Counsel for the assessee maintains that a, right to carry forward a loss under any of the heads enumerated in section 6, is not dependent upon the taxability of income under that head it is sufficient if at the relevant time "capital gains" is one of the heads of income recognized by the charging section 6 and the loss is adjustable against "capital gains", if any, in future under section 24. The argument proceeds, that section 6(vi) was not lying inert on the, statute book but was operative, throughout, for the purpose of calculating the losses under that head. Shri Sen compared the non taxability of 700 capital gains during the period from 1 4 1948 to 31 3 1956, to a tax holiday for those years. Another illustration given by the learned Counsel is of a person whose total income falls entirely on the negative side on account of losses suffered by him under any of the heads of income given in section 6. Such a person notwithstanding the fact that he had no assessable income has a right to file a return and get his losses computed by the Income tax Officer merely for the purpose of carrying forward the loss. The Income tax Officer, it is added, cannot ignore the return filed by the assessee, voluntarily, showing losses even though such a return is filed beyond time. In this connection, Shri Sen has referred to Commissioner of Income tax, Punjab vs Kulu Valley Transport Co. Ltd. (1), Jaikishan Gopikishan and Sons vs Commissioner of Income tax, M.P. (2) and Commissioner of Income tax, Madhya Pradesh vs Khushat Chand Daga(3). Before dealing with the contentions canvassed, it will be appropriate to have a clear idea of the terms 'income ', 'total income ', 'computation of total income ', 'carrying forward ' of a loss and its purpose, in the context of the scheme of the Act. Section 2 Cl. (15) defines "total income" to mean total amount of income, profits and gains referred to in sub section (1) of section 4 computed in the manner laid down in this Act. Section 3, captioned as "Charge of Income tax", emphasises that the income tax shall be charged in respect of the total income of the previous year of every assessee. Section 4 defines the ambit of that total income. Section 6 enumerates six heads of income, profits and gains chargeable to income ax. They are : " (i) Salaries. (ii) Interest on securities. (iii) Income from property. (iv)Profits and gains of business, profession or vocation. (v) Income from other sources. (vi) Capital gains. " Sections7, 8, 9, 10, 12 and 12B relate to payability and computation of taxunder the various heads of income. The material part of section 12B at the relevant time was as follows: "12B (1) 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 before the, 1st day of April, 1948 and such profits and gains shall be deemed to be income of the previous year in which the sale, exchange or transfer took place. " (1) 7 (3) (2) 701 Section 22(1) requires a general notice to be published requiring every person whose total income during the previous year exceeds the maximum non taxable limit to Me a return. Sub section (2) of this section enables the Income tax Officer to issue notice to any such person requiring him to furnish a return. Sub section (2A) which was inserted by the Income tax Amendment Act 25 of 1953 with effect from 1 4 1952 provides "If any person who has not been served with a notice under sub section (2) has sustained a loss of profits or gains in any year under the head Profits and gains of business, profession or vocation, and such loss or any part thereof would ordinarily have been carried forward under sub section (2) of section 24, he shall, if he is to be entitled to the benefit of the carry forward of loss in any subsequent assssment, furnish within the time specified in the general notice given under sub section (1) all the particulars required under the prescribed form of return. " The material part of section 24 runs thus : "24.(1) Where any assessee sustains a loss of profits or gains in any year under any of the heads mentioned in section 6, he shall be entitled to have the amount of the loss set off against his income, profits or gains under any other head in that year * * * * * Provided that in computing the profits and gains chargeable under the head "Profits and Gains of business, profession or vocation", any loss sustained in speculative transaction which are in the nature of a business shall not be taken into account except to the extent of the amount of profits and gains, if any, in any other business consisting of speculative transactions * * * * * (2) Where any assessee sustains a loss of profits or gains in any year, being a previous year not earlier than the previous year for the assessment for the year ending on the 31st day of March 1940, in any business, profession or vocation, and the loss cannot be wholly set off under sub section (1), so much of the loss as is not so set off or the whole loss where the assessee bad no other head of income shall be carried forward to the following year, and (i) where the loss was sustained by him in a business consisting of speculative transactions, it shall be set off only against the profits and gains, if any, of any business in speculative transaction carried on by him in that year; (ii) where the loss was sustained by him in any other business, profession or vocation, it shall be set off against the profits and gains, if any, of any business, profession or vocation carried on by him in that year pro 702 vided that the business, profession or vocation in which the loss was originally sustained continued to be carried on by him in that year; and (iii) if the loss in either case cannot be wholly so set off, the amount of loss not so set off shall be carried forward to the following year and so on. * * * * * * 2A. Notwithstanding anything contained in sub section (1), where the loss sustained is a loss falling under the head "Capital gains". such loss shall not be set off except against any profits and gains failing under that head. Where an assessee sustains a loss such as is referred to in sub section (2A) and the loss cannot be wholly set off in accordance with the provisions of that sub section, the portion not so set off shall be carried forward to the following year and set off against capital gains for that year, and if it cannot be so set off, the amount thereof not so set off shall be carried forward to the following year and so on, so however, that no such loss shall be so carried forward for more than six years : Provided that where the loss sustained in any previous year does not exceed fifteen thousand rupees, it shall not be carried forward. (3) When, in the course of the assessment of the total income of any assessee, it is established that a loss of profits or gains has taken place which he is entitled to have set off under the provisions of this section, the Income tax, Officer shall notify to the assessee by order in writing the amount of the loss as computed by him for the purposes of this section,. " Section 2(6C) provides that 'income ' includes (among other things) "(vi) any capital gain chargeable under Section 128. " From the charging provisions of the Act, it is discernible that the words 'income ' or 'Profits and gains ' should be understood as including losses also, so that, in one, sense 'profits and gains ' represent 'plus income ' whereas losses represent 'minus income '(1). In other words, loss is negative profit. Both positive and negative profits are of a revenue character. Both must enter into computation, wherever it becomes material, in the game mode of the taxable income of the assessee. Although section 6 classifies income under six heads, the main charging provision is section 3 which levies income tax, as only one tax, on the 'total income ' of the assessee as defined in section 2(15). An income in order to come within the purview of that definition must satisfy two conditions. Firstly, it must comprise the "total amount of income, (1) CIT vs Karamchand Prem Chand ; CIT V. Elphinston Spinning & Weaving Mills; 703 profits and gains referred to in s: 4(1). " Secondly, it must be "computed in the manner laid down in die Act". If either of these conditions fails, the income will not be a part of the "total income" that can be brought to charge. Now, capital gains would be covered by the definition of 'income ' in sub section (6C) of section 2, only if they were chargeable under section 12B. As noticed already, s.12B as modified by the Finance Act, 1949, did not charge any 'capital gains ' arising between 1 4 1948 to 14 1957. Indeed, section 12B was not operative in these years (1948 57). During this period, "capital gains", whether on the positive or the negative side, could not be computed and charged under section 12B or any other provisions of the Act. In the instant case, the second condition, namely, "the manner of computation laid down in the Act" which to use the words of Stone C.J.(1) "f an integral part of the definition of 'total income" ' was not satisfied. Thus in the relevant previous year and the assessment year, or even in the subsequent year, capital gains or "capital losses" did not form part of the "total income" of the assessee which could be brought to charge, and were, therefore, not required to be computed under the Act. Before the insertion of sub section (2A) in section 22 by the amendment of 1 4 1952, an assessee was entitled to carry forward a loss even if he had submitted no return for the year in which the loss was sustained. After the enactment of sub section (2A), it is a condition precent to the carry forward and set off of, the loss, that the assessee must file a return either in response to a general notice under sub section (1) of section 22 or voluntarily, without any individual notice under sub section (2) of that section. If he does not Me the return for the year in which the loss was incurred and get the loss computed by the Income tax Officer, the right to carry forward the loss will also be lost. But if the loss is from a source or head of income not liable to tax or congenitally exempt from income tax, neither the assessee is required to show the same in the return, nor is the Income tax Officer under any obligation to compute or assess it, much less for the purpose of "carry forward". It is noteworthy that in the instant ease, the assessee in his return had not shown any "capital losses". He had claimed this loss as a revenue loss. The Income tax Officer could, therefore, reject the assessee 's claim to carry forward the loss, merely on the ground that it was not a "revenue loss". His further finding that it wag a "capital loss" was only incidental and, in fact, was not necessary. From what has been said above, it follows as a necessary corollary, that during the period section 12B did not make income under the he ad, ,capital gains ' chargeable, an assessee was neither required to show income under that head in his return, nor entitled to file a return showing "capital losses" merely for the purpose of getting the same computed and carried forward. Sub section (2A) of section 22 would not give him such a right because the operation of that sub section is, in terms, confined to (i) a loss which is sustained "under the head 'profits and gains, of business, profession or vocation" and would ordinarily (1) In re Kamdar , 21. 704 have been carried forward under sub section (2) of section 24, and (ii) to "income" which falls within the definition of 'total income '. Both these conditions necessary for the application of the sub section are lacking in the present case. Nor do we find any substance in the contention that under sub section (2) read with subsection (1) of section 24, the assessee had an independent right to carry forward his capital loss, even if it could not be set off, owing to the non taxibility of capital gains, against future profits, it any, in the immediate subsequent years. Sub section (2) of section 24 expressly refers to loss 'in any business, profession or vocation '. It does not cover a "Capital loss", or the minus income under the head 'capital gains ' which at the relevant time, were not chargeable and did not enter into computation of the 'total income ' of the assessee under the Act. It may be remembered that the concept of carry forward of loss does not stand in vacuo. It involves the notion of set off. Its sole purpose is to set off the loss against the profits of a subsequent year. It presupposes the permissibility and possibility of the carried forward loss being absorbed or set off against the profits and gains, if any, of the subsequent year. Set off implies that the tax is exigible and the assessee wants to adjust the loss against profit to reduce the tax demand. It follows that if such set off is not permissible or possible owing to the income or profits of the subsequent year being from a nontaxable source, there would be no point in allowing the loss to be "carried forward". Conversely, if the loss arising in the previous year was under a head not chargeable to tax, it could not be allowed to be carried forward and absorbed against income in a subsequent year, from a taxable source. Now let us test the claim of the assessee in the light of the above principles. The "capital loss" of Rs. 28,662/ in the present case, was, sustained in September 1953, that is, in the previous year 1953 54. Let us assume that in the subsequent years 1955 56 and 1956 57 when the capital gains were not taxable, he made huge capital gains far exceeding this loss, could he be obliged to show those capital gains ill his return? Could the loss of the year 1953 54 be absorbed or set off against such capital gains of the subsequent years? The answer is emphatically in the negative. The cases cited by Shri Sen are not relevant. In all those cases, the heads of income under which the, losses were sustained, were chargeable to tax. None of them was a case of 'capital loss ' pertaining to the period, 1948 to 1957. For the foregoing reasons, we are of the opinion that the High Court was in error in answering the question referred to it, in favour of the assessee. We would reverse that answer in favour of the Revenue. In the result, the appeal is accepted with costs. Appeal allowed.

By the Income tax and Excess Profit Tax (Amendment) Act, 1947 section 12B was inserted in the Indian Income tax Act, 1922, making capital gains which arise after March 31, 1946, taxable. The same Act inserted sub sections (2A) and (2B) in section 24 of the Income tax Act. As a result of the Indian Finance Act, 1949 which restricted the operation of section 12B to capital gains arising before April 1, 1948, and the Finance (No. 3) Act, of 1956 which restored tax on capital gains with effect from April 1, 1948 capital gains arising from 1 4 1949 to 31 3 1956 were not taxable. For the assessment year 1955 56 which relates to the period when capital gains were not taxable the assessee claimed a loss of Rs. 84,862/ arising from the sale of certain shares. The Income tax Officer disallowed the loss on the ground that it was a loss of capital nature. The Appellate Assistant Commissioner, in appeal, held that the assessee 's claim was exaggerated, that the actual loss was only Rs. 28,662/ and agreed with the Income tax Officer that the loss was not a revenue loss but a capital loss. Before the Tribunal the assessee contended that the amount of Rs. 28,662,/ which had been held to be a capital less by the authorities should be allowed to be carried forward and set off against profits and gains under the head "Capital gains" earned in future as laid down in section 24(2A) and (2B). The Tribunal held in favour of the assessee. The High Court. in reference, confirmed the order of the Tribunal holding that the effect of sub sections (2A) and (2B) of section 24 read with sections 6 and 12B was that if a capital loss was incurred in a year in which a capital gain did not attract tax under section 12B even then such loss would still be loss under the head 'capital gains ' and if in a subsequent year the assessee had any profit under that head it would still be carried forward and set off against the taxable capital gain. Allowing the appeal to this Court, HELD : (1) From the charging provision of the Indian Income tax Act it is discernible that the words 'income ' or 'profits and gains, should be understood as including losses, so that both must enter into computation, wherever it becomes material, of the taxable income of the assessee. Although section 6 classifies income under six heads the main charging provision is section 3 which levies income tax as only one tax on the 'total income ' of the assessee as defined in section 2(15). An income in order to come within the purview of that definition must satisfy two conditions. (a) it must comprise the 'total amount of income, profits and gains referred to in section 4(1), and (b) it must be computed in the manner laid down in the Act. If either of these conditions fails the income will not be a part of the total income that can be brought to charge. [702F 703B] (2)The concept of carry forward of loss does not stand in vacuo. Its sole purposeis to set off the loss against the profits of a subsequent year. Set off impliesthat the tax is exigible and the assessee wants to adjust the loss against profit to reduce the tax demand. It follows that if such set off is not Permissible or possible owing to the income or profits of the subsequent year being from a non taxable source, there would be no point in allowing the loss to be carried forward. Also, if the loss arising in the previous year was under a head not chargeable to tax it could not be allowed to be carried forward and absorbed against income in a subsequent year from a taxable source. [704C E] (3) Capital gains would be covered by the definition of income in section 2(6C) only if they were chargeable under s ' 12B. But section 12B was not operative in the years 1948 to 1956. Thus in the relevant previous year and the assessment year or even in he subsequent year capital gains ' or 'capital losses ' did not 697 form part of the total income of the assessee which could be brought to charge and were, therefore, not required to be computed under the Act. That is condition (b) which 'total income ' must satisfy is not satisfied in the present case. [703B D] (4) Under section 22(2A) it is a condition precedent to the carry forward and set off of the loss that the assessee must file a return either in response to a general notice, under section 22(1) or voluntarily, without any individual notice under subsection (2). If he does not file the return for the year in which the loss was incurred and get the loss computed by the Income tax Officer, the right to carry forward the loss will also be lost. But if the loss is from a source or head of income not liable to tax or exempt from tax neither the assessee is required to show the same in the. return nor is the Income tax Officer under any obligation to compute or assess it, much less for the purpose of carry farward. [703D F] (5) In the instant case. the, assessee in his return had not shown any ,capital loss ' but claimed the loss as a revenue loss. The Income tax Officer should have rejected the assessee 's claim to carry forward the loss merely on the ground that it was not a revenue loss and he need not have given a finding that it was a capital loss, because 'capital gains were not taxable during the year. [703F G] (6) Section 24(2) expressly refers to loss, 'in any business, profession or vocation '. It does not cover a capital loss under the head 'capital gains ' which at the relevant time were not chargeable and did not enter into computation of the total income of the assessee. Therefore, under a. 24(1) and (2) the assessee had no independent right to carry forward his capital loss even if it could not be set off owing to the non taxability of capital gains against future profits in the immediate subsequent years. [704B C] (7) Assuming, therefore, that the assessee in the subsequent years 1955 56 and 1956 57 when the capital gains were not taxable made huge capital gains he would not be obliged to show those capital gains in his return. Therefore, the loss suffered by him in the relevant assessment year in the instant case could not be absorbed or set off against such capital gains. [704F]

N: Criminal Appeal No. 2 of 1951. This Was an appeal under article 134 (1) (c) of the Constitution from the Judgment and Order of the High Court of Rajasthan (Nawal Kishore C.J., and Mehta J.) dated 16th October, 1950, in Criminal Appeal No. 63 of Samvat 2005, revising an order of acquittal of the Sessions Judge, Jai pur, in Criminal Appeal Case No. 200 of Sam vat 2004, and convicting the accused of an offence under sec. 376 of the Indian Penal Code. The material facts are stated in the judgment. K.N. Aggarwala, for the accused. G.S. Mathur, for the State of Rajasthan. December 20. BOSE J. delivered judgment as fol lows. FAZL ALI J. agreed. BOSE J. The appellant Rameshwar was charged with com mitting rape on a young girl Mst. Purni, eight years of age. He was committed to Sessions and was convicted by the As sistant Sessions Judge, Sawai Jaipur, and sentenced to one year 's rigorous imprisonment and a fine of Rs. 250. An appeal was made to the Sessions Judge at Jaipur, that being the appropriate appellate tribunal in that area. The learned Sessions Judge held that the evidence was sufficient for moral conviction but fell short of legal proof because, in his opinion, the law requires corroboration of the story of the prosecution in such cases as a matter of precaution and the corroborative evidence, in so far as it sought to connect the appellant with the crime, was legally insuffi cient though morally enough. He was satisfied however that the girl had been raped by somebody. Accordingly, he acquit ted the accused giving him the benefit of the doubt. The State of Sawal Jaipur and Gangapur appealed against the acquittal to the High Court at Jaipur. 380 The learned High Court Judges held that the law requires corroboration in such cases but held that the girl 's state ment made to her mother was legally admissible as corrobora tion and considering that sufficient they set aside the acquittal and restored the conviction and sentence. The High Court later granted leave to appeal under article 134 (1)(c) of the Constitution as the case involved questions of law of general importance. The first point taken before us related to the admissi bility of the evidence of the girl herself. Her age was stated to be seven or eight years at the time of the exami nation by the learned Assistant Sessions Judge who recorded her testimony. He certified that she did not understand the sanctity of an oath and accordingly did not administer one to her. He did not certify that the child understood the duty of speaking the truth. The proviso to section 5 of the , prescribes that "Provided that where the witness is a child under twelve years of age, and the Court or person having authority to examine such witness is of opinion that, though he understands the duty of speaking the truth, he does not understand the nature of an oath or affirmation, the forego ing provisions of this section and the provisions of section 6 shall not apply to such witness, but in any such case the absence of an oath or affirmation shall not render inadmis sible any evidence given by such witness nor affect the obligation of the witness to state the truth. " The question is whether the opinion referred to must be formally recorded or whether it can be inferred from the circumstances in which the deposition was taken. The proviso quoted above must be read along with section 118 of the Evidence Act and section 13 of the Oaths Act. In my opinion, an omission to administer an oath, even to an adult, goes only to the credibility of the witness and not his competency. The question of competency is dealt with in section 118. Every 381 witness is competent unless the Court considers he is pre vented from understanding the questions put to him, or from giving rational answers by reason of tender years, extreme old age, disease whether of body or mind, or any other cause of the same kind. It will be observed that there is always competency in fact unless the court considers otherwise. No other ground of incompetency is given, therefore, unless the Oaths Act adds additional grounds of incompetency it is evident that section 118 must prevail. Now the Oaths Act does not deal with competency. Its main object is to render persons who give false evidence liable to prosecution. It is true a subsidiary object is to bring home to the witness the solemnity of the occasion and to impress upon him the duty of speaking the truth, but in view of section 118 these matters only touch credibility and not admissibility. In my opinion, section 13 of the Oaths Act places this beyond doubt. It states "No omission to take any oath or make any affirmation. . and no irregularity whatever, in the form in which any one of them is administered, shall invali date any proceeding or render inadmissible any evidence whatever. . " Section 5 is the main provision regarding the adminis tration of oaths. The proviso only sets out the cases in which the oath is not to be administered. If, therefore, an omission to take the oath does not affect the admissibility of the evidence, it follows that irregularity of the kind we are considering which arises out of the proviso cannot affect the admissibility either. Section 118 remains and unless the judge considers otherwise the witness is compe tent. I do not think it will be useful to consider English authorities on the point because we are governed here by the terms of the various sections I have referred to. But a decision of the Judicial Committee of the Privyi Council is in point. Their Lordships stated in Mohamed Sugal Esa vs The King(1) : (1) A.I.R. 1946 P.C. 3 at 5 382 "Section 13, Oaths Act, is quite unqualified in its terms and there is nothing to suggest that it is to apply only where the omission to administer the oath occurs per incuriam. If that had been the intention of the Legislature, it would have been simple to insert words in the section to that effect. . It may be observed that this question can no longer arise in India because in 1939 the Legislature passed the Oaths (Amendment) Act (Act XXXIX of 1939) which settles the law in accordance with the Bengal and Oudh decisions referred to above. " The decisions to which their Lordships refer are and Ram Samujh vs Emperor(2). The decisions there were that the section being unqualified in terms did apply to a case where the Court accepted the evidence of a child to whom the oath was not administered on the ground that the witness did not understand its nature. The principle of the decisions ap plies here because, as their Lordships observe, the section is unqualified in its terms. I would add however that it is desirable that judges and magistrates should always record their opinion that the child understands the duty of speaking the truth and state why they think that, otherwise the credibility of the wit ness may be seriously affected, so much so, that in some cases it may be necessary to reject the evidence altogether. But whether the magistrate or judge really was of that opinion can, I think, be gathered from the circumstances when there is no formal certificate. In the present case, it is plain that the learned Judge had the proviso in mind because he certified that the witness does not understand the nature of an oath and so did not administer one but despite that went on to take her evidence. It is also an important fact that the accused, who was represented by counsel, did not object. Had he raised the point the Judge would doubtless have made good the omission. I am of opinion that Mst. Purni was a competent witness and that her evi dence is admissible. In (1) F.N. (2) (1907) 10 O.C. 337 383 the Privy Council case which I have just cited, their Lord ships said "It is not to be supposed that any judge would accept as a witness a person who he considered was incapable not only of understanding the nature of an oath but also the necessi ty of speaking the truth when examined as a witness. " That is the very point here. One can presume that the learned Judge had that in mind from the fact that he exam ined the child after referring to a fact which arises out of the proviso. As regards her credibility, the learned trial Judge, who recorded her evidence and saw her in the box, has believed her, so has the High Court; and it is important to note that the learned Sessions Judge who acquitted the accused has not disbelieved her. On the contrary he says he is morally convinced. All he says is that in the absence of corrobora tion it will be unsafe to convict because the Privy Council and other cases advise corroboration as a matter of pru dence. We were taken carefully through the evidence, as elabo rately as in a court of first appeal. I am of opinion that the learned High Court Judges were fully justified in ac cepting the evidence of Purni and in believing her mother Mst. Ghisi. I consider it unnecessary to recapitulate their reasons. After the careful analysis given by three Courts it is sufficient to say that I agree with the learned High Court Judges. We are left therefore with the questions of law. The first question is whether the law requires corrobo ration in these cases. Now the Evidence Act now here says so. On the other hand, when dealing with the testimony of an accomplice, though it says in section 114 (b) that the Court may presume that an accomplice is unworthy of credit unless he is corroborated in material particulars, it makes it clear in section 133 that "An accomplice shall be a competent witness against an accused person; and a conviction is not 50 384 illegal merely because it proceeds upon the uncorroborated testimony of an accomplice. " Now a woman who has been raped is not an accomplice. If she was ravished she is the victim of an outrage. If she consented there is no offence unless she is a married woman, in which case questions of adultery may arise. But adultery presupposes consent and so is not on the same footing as rape. In the case of a girl who is below the age of consent, her consent will not matter so far as the offence of rape is concerned, but if she consented her testimony will natural ly be as suspect as that of an accomplice. So also in the case of unnatural offences. But in all these cases a large volume of case law has grown up which treats the evidence of the complainant somewhat along the same lines as accomplice evidence though often for widely differing reasons and the position now reached is that the rule about corroboration has hardened into one of law. But it is important to under stand exactly what the rule is and what the expression "hardened into a rule of law" means. In my judgment, this branch of the law is the same as in England and I am of opinion that the lucid exposition of it given by Lord Reading, the Lord Chief Justice of England, in The King vs Baskerville(1) cannot be bettered. In that case, Baskerville had been convicted of having committed acts of gross indecency with the two boys. (There the boys were accomplices because they were freely consent ing parties and there was no use of force). The learned Chief Justice says at page 663 : "There is no doubt that the uncorroborated evidence of an accomplice is admissible in law. But it has long been a rule of practice at common law for the judge to warn the jury of the danger of convicting a prisoner on the uncorroborated testimony of an accomplice or accomplices, and, in the discretion of the judge, to advise them not to convict upon such evidence; but the judge should point out to the jury that it is (1) 385 within their legal province to convict upon such unconfirmed evidence. This rule of practice has become virtually equivalent to a rule of law, and since the Court of Criminal Appeal came into operation this Court has held that, in the absence of such a warning by the judge, the conviction must be quashed. If after the proper caution by the judge the jury nevertheless convict the prisoner, this Court will not quash the conviction merely upon the ground that the accom plice 's testimony was uncorroborated. " That, in my opinion, is exactly the law in India so far as accomplices are concerned and it is certainly not any higher in the case of sexual offences. The only clarifica tion necessary for purposes of this country is where this class of offence is sometimes tried by a judge without the aid of a jury. In these cases it is necessary that the judge should give some indication in his judgment that he has had this rule of caution in mind and should proceed to give reasons for considering it unnecessary to require corroboration on the facts of the particular case before him and show why he considers it safe to convict without corrob oration in that particular case. I am of opinion that the learned High Court Judges were wrong in thinking that they could not, as a matter of law, convict without corrobora tion. There is a class of cases which considers that though corroboration should ordinarily be required in the case of a grown up woman it is unnecessary in the case of a child of tender years. Bishram. vs Emperor(1) is typical of that point of view. On the other hand, the Privy Council has said in Mohamed Sugal Esa vs The King(2) that as a matter of prudence a conviction should not ordinarily be based on the uncorroborated evidence of a child witness. In my opinion, the true rule is that in every case of this type the rule about the advisability of corroboration should be present to the mind of the judge. In a jury case he must tell the (1) A.I.R. 1944 Nag. 363. (2) A.I.R. 1946 P.C. 3 at 5. 386 jury of it and in a non jury case he must show that it is present to his mind by indicating that in his judgment. But he should also point out that corroboration can be dispensed with if, in the particular circumstances of the case before him, either the jury, or, when there is no jury, he himself, is satisfied that it is safe to do so. The rule, which according to the cases has hardened into one of law, is not that corroboration is essential before there can be a con viction but that the necessity of corroboration, as a matter of prudence, except where the circumstances make it safe to dispense with it, must be present to the mind of the judge, and in jury cases, must find place in the charge, before a conviction without corroboration can be sustained. The tender years of the child, coupled with other circumstances appearing in the case, such, for example, as its demeanour, unlikelihood of tutoring and so forth, may render corrobora tion unnecessary but that is a question of fact in every case. The only rule of law is that this rule of prudence must be present to the mind of the judge or the jury as the case may be and be understood and appreciated by him or them. There is no rule of practice that there must, in every case, be corroboration before a conviction can be allowed to stand. I turn next to the nature and extent of the corrobora tion required when it is not considered safe to dispense with it. Here, again, the rules are lucidly expounded by Lord Reading in Baskerville 's case(1) at pages 664 to 669. It would be impossible. indeed it would be dangerous, to formulate the kind of evidence which should, or would, be regarded as corroboration. Its nature and extent must necessarily vary with circumstances of each case and also according to the particular circumstances of the offence charged. But to this extent the rules are clear. First, it is not necessary that there should be inde pendent confirmation of every material circumstance in the sense that the independent evidence in the case, apart from the testimony of the complainant or the (1) , 387 accomplice, should in itself be sufficient to sustain con viction. As Lord Reading says ``Indeed, if it were required that the accomplice should be confirmed in every detail of the crime, his evidence would not be essential to the case, it would be merely confirmatory of other and independent testimony. " All that is required is that there must be "some addi tional evidence rendering it probable that the story of the accomplice (or complainant) is true and that it is reasona bly safe to act upon it. " Secondly, the independent evidence must not only make it safe to believe that the crime was committed but must in some way reasonably connect or tend to connect the accused with it by confirming in some material particular the testi mony of the accomplice or complainant that the accused committed the crime. This does not mean that the corrobora tion as to identity must extend to all the circumstances necessary to identify the accused with the offence. Again, all that is necessary is that there should be independent evidence which will make it reasonably safe to believe the witness 's story that the accused was the one, or among those, who committed the offence. The reason for this part of the rule is that "a man who has been guilty of a crime himself will always be able to relate the facts of the case, and if the confirmation be only on the truth of that history, without identifying the persons, that is really no corroboration at all. It would not at all tend to show that the party ac cused participated in it. " Thirdly, the corroboration must come from independent sources and thus ordinarily the testimony of one accomplice would not be sufficient to corroborate that of another. But of course the circumstances may be such as to make it safe to dispense with the necessity of corroboration and in those special circumstances a conviction so based would not be illegal. I say this because it was contended that the mother in this case was not an independent source. 388 Fourthly, the corroboration need not be direct evidence that the accused committed the crime. It is sufficient if it is merely circumstantial evidence of his connection with the crime. Were it otherwise, "many crimes which are usually committed between accomplices in secret, such as incest, offences with females" (or unnatural offences) "could never be brought to justice." Next, I turn to another aspect of the case. The learned High Court Judges have used Mst. Purni 's statement to her mother as corroboration of her statement. The ques tion arises, can the previous statement of an accomplice, or a complainant, be accepted as corroboration ? That the evidence is legally admissible as evidence of conduct is indisputable because of Illustration (j) to section 8 of the Evidence Act which is in these terms: "The question is whether A was ravished. The facts that, shortly after the alleged rape, she made a complaint relating to the crime, the circumstances under which, and the terms in which, the complaint was made are relevant. " But that is not the whole problem. for we are concerned here not only with its legal admissibility and relevancy as to conduct but as to its admissibility for a particular purpose, namely corroboration. The answer to that is to be found in section 157 of the Evidence Act which lays down the law for India. Section 157 states that "In order to corroborate the testimony of a witness, any former statement made by such witness relating to the same fact at or about the time when the fact took place, or before any authority legally competent to investigate the fact, may be proved. " The section makes no exceptions, therefore, provided the condition prescribed, that is to say, "at or about the time etc. ," are fulfilled there can be no doubt that such a statement is legally admissible in India as corroboration. The weight to be attached to it is, of course, another matter and it may be that in some 389 cases the evidentiary value of two statements emanating from the same tainted source may not be high, but in view of section 118 its legal admissibility as corroboration cannot be questioned. To state this is, however, no more than to emphasise that there is no rule of thumb in these cases. When corroborative evidence is produced it also has to be weighed and in a given case, as with other evidence, even though it is legally admissible for the purpose on hand its weight may be nil. On the other hand, seeing that corrobo ration is not essential to a conviction, conduct of this kind may be more than enough in itself to justify acceptance of the complainant 's story. It all depends on the facts of the case. In the present case, Mst. Purni told 'her mother about the incident about four hours after it occurred. The reason for the delay was that her mother was not at home when she went there. She says that when she went home she lay down and went to sleep and that when her mother returned she asked her why she was sleeping and then she told her mother what had happened. Her mother tells much the same story. She says she had gone out to her field in the morning and did not return till about 4 p.m. When she reach home she found her daughter lying there weeping. She has been be lieved by the learned trial Judge as also by the High Court and has not been disbelieved by the learned Sessions Judge. All he says is that she is not an "independent" witness and is therefore not sufficient for corroboration. The first question is whether this delay fulfills the "at or about" condition. In my opinion, here also there can be no hard and fast rule. The main test is whether the statement was made as early as can reasonably be expected in the circumstances of the case and before there was opportu nity for tutoring or concoction. It was suggested that the child could have complained to some women who were working in the neighbourhood, but that would not be natural in a child. She would be frightened and her first instinct would be to run home to her mother. The High Court 390 was satisfied on these points and so am I. Consequently, the matter does fall within the ambit of section 157 read with section 8, Illustration (j). The next question is whether the mother can be regard ed as an "independent" witness. So far as this case is con cerned, I have no doubt on that score. It may be that all mothers may not be sufficiently independent to fulfill the requirements of the corroboration rule but there is no legal bar to exclude them from its operation merely on the ground of their relationship. Independent merely means independent of sources which are likely to be tainted. In the absence of enmity against the accused there is no reason why she should implicate him falsely. It is true the ac cused suggested that they were on bad terms but that has not been believed by anyone. The third question is whether there is independent corroboration connecting the accused with the crime. The only corroboration relied on for that is the previous state ment of the child to her mother. That might not always be enough but this rule can be waived in a given case just as much as the necessity for any corroboration at all. In the present case, the learned High Court Judges would have acted on the uncorroborrated testimony of the girl had they not felt pressed by the corroboration rule. Viewing all the circumstances I am satisfied that the High Court was right. I am satisfied that in this case, considering the conduct of the girl and her mother from start to finish, no corrobora tion beyond the statement of the child to her mother was necessary. I am satisfied that the High Court was right in holding that that was enough to make it safe to act on her testimony. I would dismiss the appeal and direct the appellant to surrender to his bail in accordance with the terms of his bond, serve out his sentence and pay the fine. FAZL ALI J. I agree. Appeal dismissed.

An omission to administer an oath, even to an adult, goes only to the credibility of the witness and not his competency; so also an omission of the Court or the authori ty examining a child witness formally to record that in its opinion the witness understands the duty of speaking the truth though he does not understand the nature of an oath or affirmation, does not affect the admissibility of the evi dence given by that witness. Though it is desirable that judges and magistrates should always record their opinion when a child is to be examined that the child understands the duty of speaking the truth, and state why they think so, whether a magistrate or judge was really of that opinion can be gathered from the circumstances when there is no formal certificate to that effect on the record. Mohamed Sugal Esa vs The King (A.I.R. , R, vs Sewa Bhogta F.N.), Samujh vs Emperor (1907) 10 O.C. 337) referred to. Though a woman who has been raped is not an accomplice, her evidence has been treated by the Courts on somewhat similar lines, and the rule which requires corroboration of such evidence save in exceptional circumstances has now hardened into law. The rule laid down in King vs Baskerville (L. R. with regard to the admissibility of the uneorrobo rated evidence of an accomplice is the law in India also so far as accomplices are concerned and it is not any higher in the case of sexual offences. The only clarification of the rule that is necessary for the purposes of India is where this class of offence is tried by a judge without the aid of a jury. In such cases it is necessary that the judge should give some indication in his judgment that he has had the rule of caution in his mind and should proceed to give reasons for considering it unnecessary to require corrobora tion on the facts of the particular case before him and show why he considers it safe to convict without corroboration in that particular case. There is, however, no rule of law or 378 practice that there must in every case be corroboration before a conviction can be allowed to stand. The view that though corroboration should ordinarily be required in the case of a grown up woman, it is unnecessary in the case of a child of tender years is not correct. The true position is that in every case of this type the rule about the advisability of corroboration should be present to the mind of the judge; whether corroboration is unnecessary is a question of fact in every case. Bishram vs Emperor (A.I.R. not approved; Mohamed Sugal Esa vs The King (A.I.R. followed. The nature and the extent of the corroboration that is required when it is not considered safe to dispense with it, must necessarily vary with the circumstances of each case and also according to the particular circumstances of the offence charged. It is however clear (i) that it is not necessary that there should be independent confirmation of every material circumstance in the sense that the independ ent evidence in the case, apart from the testimony of the complainant or accomplice, should itself be sufficient to sustain conviction; all that is required is that there must be "some additional evidence rendering it probable that the story of the accomplice (or the complainant) is true and that it is reasonably safe to act upon it," (ii) The inde pendent evidence must not only make it safe to believe that the crime was committed but must in some way reasonably connect the accused with it; (iii) the corroboration must come from independent sources and thus ordinarily the testi mony of one accomplice would not be sufficient to corrobo rate that of another accomplice;(iv) the corroboration need not be direct evidence that the accused committed the crime; it is sufficient if it is merely circumstantial evidence of his connection with the crime. A previous statement of an accomplice or a complainant is admissible as evidence of conduct; it is also admissible as corroborg live evidence provided it fulfills the condi tions laid down in see. 157 of the Evidence Act. The main test as to whether a previous statement was made "at or about the time when the fact took place", within the meaning of sec. 157, Evidence Act, is whether the state ment was made as early as can reasonably be expected in the circumstances of the case and before there was an opportuni ty for tutoring or concoction. Where a person was charged with having committed rape upon a girl eight years of age and the only evidence to corroborate the testimony of the girl connecting the accused with the crime was a statement made by her to her mother some four hours after the incident, that she had been raped by the accused: Held, that in the circumstances of the case the testimony of the mother was admissible as independent corroborative evidence and 379 the girl 's previous statement was sufficient corroboration of the girl 's testimony for convicting the accused.

mpt Petition No. 82 of 1992. WITH Writ Petition No. 232 of 1992. (Under Article 32 of the Constitution of India). Vijay Kumar and Shiv Kumar Suri for the Petitioner/Applicant. Milan K. Banerjee, Attorney General, D.P. Gupta, Solicitor General, V.C. Mahajan, Kapil Sibal, Mg. A. Subhashii Gaurab Banarjee, K. Swamy, Ms. section Janani, S.K. Battacharya and L.K. Poonam for the Respondents. The following Order of the Court was delivered: This matter came up for our consideration on December 8, 1992" pursuant to the order dated November 24, 1992, to decide the appropriate 774 order which needs to be made in the existing situation. A brief resume of the events leading to the present stage may first be given. This Court has held that the Speaker while deciding the question of disqualification of a Member of the Legislative Assembly under the Tenth Schedule to the Constitution acts as a statutory authority, in which capacity the Speaker 's decision is subject to judicial review by the High Court and this Court. Pursuant thereto, certain orders were made by this Court in proceedings arising out of the order of disqualification of certain members, made by the contemner, Dr. H. Borobabu Singh who holds the office of Speaker of the Manipur Legislative Assembly, in spite of the clear decision of this Court that an order made under the Tenth Schedule by the Speaker relating to the disqualification of a Member of the Legislative Assembly is subject to judicial review and the Speaker while making an order under the Tenth Schedule acts merely as a statutory authority amenable to the court 's jurisdiction in that capacity, the contemner continued to resist the implementation of such orders made by this Court. The petitioner, 1. Manipal Singh was then the Secretary of the Manipur Legislative Assembly. In his capacity as Secretary of the Assembly, the petitioner, 1. Manilal Singh took steps to implement this Court 's orders. The allegation made by 1. Manilal Singh is that the contemner, Dr. H. Borobabu Singh got annoyed with him for or his attempt to secure obedience and implementation of this Court 's orders and, therefore, as an act of reprisal, the contemner has made an order of his compulsory retirement. The petitioner, 1. Manilal Singh, therefore, challenged the order of his compulsory retirement made by the contemner inter alia on the ground that it was mala fide being an act of reprisal by the contemner for the petitioner 's obedience of this Court 's orders. This Court stayed the operation of the impugned order of compulsory retirement of the petitioner, I. Mandal Singh as well as the order of is sub is suspension passed by the contemner. The petitioner then complained that in spite of this Court 's orders, the contemner was not permitting him of function as, the secretary of the Manipur Legislative Assewbly and was also not paying him his salary and other dues; and that another person had been appomted by the contemner to function as the Secretary. On July 22, 1992, this Court made an order reiterating that the petitioner, 1. Manilal Singh shall be allowed to function as the Secretary of the Manipur Legislative Assembly without delay and that all concerned with enable him to so function, and some further directions were also given 775 On August 4, 1992 another order was made by this Court as a result of the grievance made by the petitioner, I. Manilal Singh that in spite of the orders of this Court, he was neither allowed to function as the Secretary of the Legislative Assembly nor had he been paid his salary etc. In that order, this Court further directed the Chief Secretary of the State of Manipur to ensure that the direction given for payment of dues to the petitioner was promptly obeyed. When the matter was again taken up on August 25, 1992, the petitioner, I. Manilal Singh stated that another order had been made on August 19, 1992 declaring that the petitioner is to retire from service on August 31, 1992 as Joint Secretary which was in disobedience of this Court 's orders, and was a further act of reprisal against him by the contemner. Accordingly, in the order dated August 25, 1992, this Court after recording that this action appears to be prima facie in violation of this Court 's order, stayed the operation of the order dated August 19, 1992. The order after mentioning the statement made by the learned counsel for the Chief Secretary, H.V. Goswami expressed this Court 's concern at the apathy exhibited towards obedience of the mandate under Article 144 of the Constitution and after hearing all the counsel including Shri S.K. Bhattacharya, learned counsel for the contemner, directed that the Chief Secretary, H.V. Goswami, Deputy Secretary, Manipur Legislative Assembly, R.K. Chinglensana Singh and Dr. H. Borobabu Singh should be personally present in court at the next hearing which was fixed for September 8, 1992. On September 8, 1992 the matter was adjourned to September 9, 1992. On September 9, 1992, the Chief Secretary, Manipur, H.V. Goswami and R.K Chinglensana Singh, Deputy Secretary, Manipur Legislative Assembly were personally present. On behalf of Dr. H. Borobabu Singh who did not appear, a request was made by his counsel, Shri Bhattacharya to adjourn the matter till after September 22, 1992 on the ground that the Manipur Legislative Assembly was in session. The matter was, therefore, adjourned to September 25, 1992. On September 25, 1992, in spite of earlier order in the contempt proceeding directing Dr. H. Borobabu Singh to appear in person, he did not appear. His counsel. Shri Bhattacharya filed an affidavit stating inter alia that Dr. H. Borobabu Singh is immune from such directions of the 776 court in view of his constitutional position as Speaker. Accordingly, Shri Bhattacharya was heard on his objection which was found to be without substance. On September 25, 1992, the Court while rejecting the contention of Shri Bhattacharya stated as under: ". This is a case in which Dr. Singh 's function is not as a Speaker in the House. The facts of the case which are on record in this matter clearly show that Dr. Singh was acting as Authority under the Tenth Schedule to the Constitution and in that capacity certain orders were passed which gave rise to the present contempt petition. In a petition filed by the petitioner, Manilal Singh, directions issued by this Court relating to his service conditions which have, according to the allegations, not been respected by Dr. Singh. In this context and background, we do not have any doubt that the capacity in which Dr. Singh was functioning was not that of the Speaker of the House, but as administrative head of the Secretariat of the Legislature in relation to the rights of one of the employees. Accordingly, we hold that there is no merit at all in the plea raised regarding the jurisdiction of this Court and the objection is, therefore, rejected. We asked Mr. G. Ramaswamy, learned Attorney General to examine the matter and indicate his opinion as to the enforceability of the directions of this Court requiring the personal appearance of Dr. H. Borobabu Singh in Court. On earlier occasion also, learned Attorney General had indicated that this Court would have been justified in taking a far stricter view of the conduct of Dr. Singh and it is an appropriate case where it is not only within the power of this Court, but also its bounder duty to take such steps which will reassure the people of their faith in, and respect for the Institution, now that it is obvious that the indulgence granted so far to Dr. H. Borobabu Singh has been misplaced. Mr. Altar Ahmed, learned Additional Solicitor General appearing for the Union of India fully supports the opinion and submission of learned Attorney General. 777 3. Mr. Kapil Sibal who represents the Chief Secretary of Manipur also expressed his opinion on these lines. ' The remaining part of the order then considered the fact that Dr. H. Borobabu Singh was included as a Member of the Indian Parliamentary delegation to attend a conference abroad and the Court adjourned the matter to October 20, 1992 requiring the contemner, Dr. H. Borobabu Singh to give a written Undertaking, before he left the country that he would appear in the Court, and the Government of India was required to ensure compliance of that direction. It is sufficient to mention that the contemner, Dr. H. Borobabu Singh did not give such an undertaking in spite of the persuasion of senior officers of the Government of India as well as the Union Home Minister, as appears from the documents filed on behalf of the Government of India. Accordingly, the Government of India did not permit the contemner to leave the country. When the matter was taken up on October 20, 1992, the contemner, Dr. H. Borobabu Singh did not appear in spite of the earlier direction given and the indulgence granted to him. However, his counsel Shri Bhattacharya prayed for a short adjournment on the ground that he would be advising Dr. H. Borobabu Singh to file an unconditional affidavit to appear in person in court in pursuance to the direction of the court and to make a separate application for condoning his absence and exempting him from personal appearance in the court. In spite of the background, we granted further indulgence to the contemner and accepting the request of Shri Bhattacharya adjourned the case to October 23, 1992 stating that if in addition to the unconditional affidavit to appear personally in the court pursuant, to the direction, a separate application, as indicated by Shri Bhattacharya, for condoning his absence and exempting him from personal appearance was filed by the contemner, the same would be considered on its merits. At the request of Shri Bhattacharya, learned counsel for Dr. H. Borobabu Singh, we again adjourned the matter to November 12, 1992 recording his statement in the order as under : "Mr. S.K. Bhattacharya, the learned counsel for Dr. H. Borobabu Singh states that he has been instructed personally by Dr. H. B. Singh to make a statement in this Court that Dr. H.B. Singh will be filing his affidavit in the terms of our order of the last date. We asked Mr. Bhattacharya 778 to clarify whether our order has been correctly understood that the affidavit has to be filed giving an unconditional undertaking to appear in this Court in pursuance of a direction by this Court and the application which Dr. H. B. Singh wants to make with a prayer for dispensing with his personal presence will be filed separately and be not a condition of the affidavit. He states that the position has been correctly understood by Dr. H. B. Singh who has instructed Mr. Bhattacharya to state accordingly. Mr. Bhat tacharya further states that the affidavit could not be filed today as Dr. H. B. Singh could not come to Delhi because of the prevailing deterioration of law and order situation due to insurgency in the eastern part of the country due to which he was advised by the authorities responsible for his security not to undertake a journey to Delhi at this stage. He has also referred to the partial disruption in the air services between Manipur and Delhi. Mr. Bhattacharya adds that the affidavit shall be filed by the 5th or the 6th November, 1992. " When the matter was taken on November 12, 1992, the contemner, Dr. H. Borobabu Singh was again not present and the only thing done by him in the meantime was to file an affidavit dated November 6, 1992 indicating that he would not personally appear before the Court. Thus, in spite of the clear statement made by Shri Bhattacharya on instructions of Dr. H. Borobabu Singh as stated by him and recorded in the order dated October 23, 1992, the contemner once again remained absent and neither filed the requisite affidavit containing his undertaking to appear nor made any application praying for condoning his absence and exempting him from personal presence for cogent reasons. In these circumstances, it became necessary to consider the making of necessary consequential orders. The matter was, therefore, adjourned to November, 24, 1992 to hear the learned Attorney General of India and all the other counsel appearing in the case for deciding the future course of action. On November 24, 1992, the learned Solicitor General informed the Court that Mr. G. Ramaswamy had resigned from the office of Attorney General and, therefore, the matter may be adjourned to enable his successor in office to assist the court with his arguments. The matter was, 779 therefore, adjourned to December 8, 1992. On December 8, 1992 we have heard the learned Attorney General of India, the Solicitor General, on behalf of Union of India, Shri Kapil Sibal learned counsel for the Chief Secretary of the State of Manipur, Shri S.K Bhattacharya, learned counsel for the contemner, Dr. H. Borobabu Singh and learned counsel for the petitioner. It may be mentioned that the contemner, Dr. H. Borobabu Singh has filed affidavits, the last being of December 7, 1992, making it amply clear repeatedly that he would not obey the orders of this Court directing his personal presence in the contempt matter nor would he make any application for condoning his absence and exempting him from personal presence for any cogent reasons. The only reason indicated in the affidavit filed by Dr. H. Borobabu Singh and also reiterated by his counsel, Shri S.K. Bhattacharya is that by virtue of the office of Speaker of the Manipur Legislative Assembly held by Dr. H. Borobabu Singh, he is immune from the process of this Court even in a contempt proceeding where the direction for his personal presence has been given as a result of prima facie opinion formed by the court that he has wilfully disobeyed the orders of this Court in a capacity which does not relate to his functions as Speaker inside the House and has further deterred certain persons including the Chief Secretary of the State and officers of the Assembly Secretariat from acting in aid of this Court 's directions/orders in addition to taking ad ministrative action against the petitioner. Manilal Singh, Secretary of the Manipur Legislative Assembly as an act of reprisal for his acting in aid of this Court 's orders. This stand has been taken and continues to be persisted in spite of the contention being considered and rejected expressly on merits including in the order dated September 25, 1992. The question, therefore, is of the action to be taken and the kind of order which it would be appropriate to make in these circumstances for implementation of this Court 's orders, to uphold the majesty of law for preservation of the 'rule of law. The learned Attorney General submitted that the undisputed facts and the unequivocal stand taken by the contemner, Dr. H. Borobabu Singh leave no doubt about his wilful and contumacious disregard and disobedience of this Court 's orders which is without any doubt by itself sufficient to constitute criminal contempt of this Court. The learned Attor 780 ney General submitted that apart from the power which this Court has under the and the Rules framed thereunder, the power of this Court under several provisions of the Constitution of India is wide enough to indicate that the procedure available to it for ensuring compliance of its orders directing the personal presence of the contemner, Dr. H. Borobabu Singh are not confined merely to the provisions in the and the Rules framed thereunder. The learned Attorney General added that all steps considered necessary to ensure compliance of this Court 's order requiring the personal presence in this Court of the contemner, Dr. H. Borobabu Singh, are available to this Court which has a constitutional obligation to uphold the rule of law. He submitted that the stage has now reached when this step can no longer be avoided due to the continuing contemptuous conduct of the contemner in persistently refusing to obey this Court 's orders requiring his personal presence in this contempt matter. The learned Attorney General added that this Court also has the power to direct the Government of India to take the necessarily to produce the contemner, Dr. H. Borobabu Singh in this Court if the ordinary course of requiring a magistrate to produce him in the court is considered inappropriate in the present case. The learned Solicitor General of India on behalf of the Government of India supported the submissions of the learned Attorney General of India and assured us that in case the Court considered it necessary to direct the Government of India to take the necessary steps to produce the contemner. Dr. H. Borobabu Singh the direction would be duly and promptly complied with Shri Kapil Sibal on behalf of the Chief Secretary of the State of Manipur also supported the submission and so did the counsel for the petitioner, 1. Manilal Singh, Shri S.K Bhattacharya, learned counsel for the contemner, Dr. H. Borobabu Singh reiterated the stand taken by the contemner that by virtue of the office of the Speakar which he holds, he is immune from the court 's process even in a contempt matter like this which does not relate to his function as Speaker inside the House. The undisputed facts expose the conduct of the contemner, Dr. H Borobabu Singh, evident from the statement contained in his affidavits filed in this Court refusing to obey the orders of this Court directing him to appear in person in this Court to enable the hearing of the contempt proceedings against him, after the tentative opinion formed by this Court that his wilful and contemptuous violation of this Court 's orders and 781 deliberate obstruction of the persons acting in the aid of this Court 's orders coupled with his act of reprisal against the Secretary of the Legislative Assembly for obeying the orders made by this Court make out prima facie case of 'criminal contempt ', was recorded in the orders made in the presence of his counsel and known to him. The contemner had refused to accept the notices sent to him directly but continued to be represented by counsel Shri S.K Bhattacharya through whom he communicated with the Court, in addition to filing some of his own affidavits to clearly indicate his refusal to appear in Court. The only reason given by him, through counsel and in his affidavits is, that he being Speaker of a Legislative Assembly, is immune from process of court even in such a proceeding The present situation arises as a. result of repeated and emphatic refusal of the contemner to appear in person in this Court after due notice of the fact that his presence is required before the court on the date fixed for the hearing of the contempt proceeding to answer this charge of criminal contempt committed by him by acts done which were not per formed as a Speaker within the House. Reference may now be made to some provisions of law applicable to the situation as indicated by the learned Attorney General and the other counsel supporting his submissions. "The Rules to Regulate Proccedings for Contempt of the Supreme Court, 1975 ' framed by this Court provide in Rule 3 that the Court may take action even suo motu in such a matter. Rule 6 requires the contemner, unless otherwise ordered, to appear in person before the Court as directed on the date fixed for hearing of the proceeding and to continue to remain present during hearing till the proceeding is finally disposed of by order of the Court. Rule 10 provides that the Court may direct the Attorney General or the Solicitor General to appear and assist the Court. It is in this manner that the Attorney General was directed to appear. and assist the Court which the Solicitor General appeared in this matter for the Union of India. Rule 11 provides that the Court may, if it has reason to believe, that the person charged is absconding or is otherwise evading service of notice, or if he fails to appear in person or to continue to remain present in person in pursuance of the directions, direct a warrant bailable or non bailable for his arrest, addressed to one or more police officers and the warrant shall be executed by the officer or officers to whom it is 782 directed. These Rules, therefore, provides for procuring the personal appearance of the contemner in this Court if the Court has reason to believe that the contemner is evading service or he fails to appear in person in spite of the directions of this Court. In the present case, the contemner 's repeated and categorical refusal to appear in this Court in spite of this Court 's orders and grant of considerable indulgence to him till now is clear from the statements made in his affidavits and through his counsel who has appeared for him throughout. The learned Attorney General, the learned Solicitor General and Shri Kapil Sibal are right in their submission that the power of this Court in such matters is not confined merely to the provisions of the and the Rules framed thereunder but is plenary to punish any person for contempt of court, and for that purpose to require his presence in person in this Court in the manner considered appropriate in the facts of the case. They refer particularly to Articles 129 and 142 apart from Article 145 of the Constitution of India. Article 129 says that the Supreme Court shall be a court of record and shall have all the powers of such a court including the power to punish for contempt of itself Article 142 provides for enforcement of decrees and orders of Supreme Court and lays down that the Supreme Court shall have all and every power to make any order for the purpose of securing the attendance of any person, the discovery or production of any documents, or the investigation or punishment of any contempt of itself, Article 141 declares the binding effect of the law declared by the Supreme Court which is a clear provision to indicate that the meaning of 'law ' is to be understood as declared by the Supreme Court. Obviously, it is not for any one else including the Speaker to decide what the 'lay/ is, and make an interpretation of the 'law ' contrary to the declaration of law made by the Supreme Court. Article 144 contains the constitutional obligation of all authorities in the territory of India to act in aid of the Supreme Court. These provisions are well known and they are mentioned in this order once again in the, present case merely for the benefit of the contemner who has wilfully and deliberately refused to obey and ignored not merely the orders of this Court but has also chosen to ignore the provisions in the Constitution itself, to which he must have sworn allegiance before taking his seat as a Member 783 of the Manipur Legislative Assembly. The contention of the contemner 's immunity from the process of this Court even in a contempt proceeding, wherein a prima facie case of criminal contempt is made out against him, requiring his personal presence to answer that charge and to be present at the hearing, hinted by the contemner in his affidavits and raised by his counsel is totally misconceived, and this was indicated to his counsel repeatedly. The immunity given by Article 381 of the Constitution is not to a Speaker and no other provision supports this submission. From the documents filed by the Union of India, it is evident that even the Union Home Minister has strongly advised the conteimner to desist from the course he has chosen to adopt and to obey the orders of this Court, which is his constitutional obligation. The present Attorney General as well as his predecessor in office and the Solicitor General have also categorically and repeatedly expressed their opinion that it is the duty of the contemner to obey the orders of this Court and appear in this Court in person as directed. Shri Kapil Sibal who appears for the Chief Secretary of the State of Manipur has also expressed the same view in his submissions. After hearing learned counsel at laugh on December 8, 1992 we had reserved the order for further reflection. On further and in depth consideration of this matter on account of the fact that the contemner also happens to occupy the office of Speaker of a Legislative Assembly, we find that there is no escape from the obvious and logical conclusion emerging from the submissions made by the learned Attorney General of India and endorsed by the learned Solicitor General of India and Shri Kapil Sibal. While we reach this unfortunate decision in discharge of our constitutional obligation, we draw some solace from the fact that this situation is the creation of the contemner, Dr. H. Borobabu Singh himself who continues to persist in his contumacy by repeatedly declaring that he would not obey the orders of this Court directing his personal appearance to participate in the contempt proceedings against him. It is unfortunate that a person who holds the constitutional office of Speaker of a Legislative Assembly has chosen to ignore the constitutional mandate that this country is governed by the 'rule of law and what the law is, is for this Court to declare in discharge of its constitutional obligation which binds all in accordance 784 with Article 141 of the Constitution of India and Article 144 then says that all authorities are to act in aid of the orders made by this Court. The contemner has chosen to ignore also the obvious corollary of rule of law that no person is above law. Having done our best to make the contemner see reason and be present by granting him indulgence repeatedly to the extent that the learned Attorney General of India at one of the earlier stages said that our indulgence and leniency was being construed as the weakness of the court, we are constrained to now take the only appropriate and logical course to which the court is driven in these circumstances. That obvious course is to require the production of the contemner, Dr. H. Borobabu Singh in person before this Court, giving such a direction to the authority considered to be appropriate, in the circumstances of the case, to ensure compliance of this order. It is our constitutional duty which requires us to make this order, to uphold the majesty of law and justify the confidence of the people, that no one in this country is above the law and governance is not of men but of the 'rule of law. It is unfortunate that this action has to be taken against a person who happens to be the Speaker of a Legislative Assembly, but that does not permit us to apply the law differently to him when he was wilfully and contumaciouly driven the court to this course. We must remind ourselves that the 'rule of law ' permits no one to claim to be above the law and it means 'be you ever so high the law is above you. ' It was said long back : 'to seek to be wiser than laws, is forbidden by the law. We are also of the opinion that the issuance of a direction to any Magistrate to produce the contemner in this Court would be merely an exercise in futility in view of the obvious conduct of the contemner which includes the threat even to the Chief Secretary of the State as indicated by him. The learned Solicitor General of India appearing for the Union of India submitted that in case it is considered appropriate to issue such a direction to the Government of India, necessary action in this behalf would be taken by the Government of India to comply with the order. We have no doubt that in the existing situation to which this Court has been driven by the wilful and contumacious conduct of the contemner himself, the only appropriate order to make is to direct the Government of India to produce the contemner, Dr. H. Borobabu Singh in person in this Court on the next date of hearing, taking such steps as are necessary for the purpose direct, accordingly. It is further clarified that the Government of India 785 would be entitled to take all such steps, which are necessary including the use of minimilm force which may be required, for compliance of this Court 's order directing the production of the contemner in this Court. A copy of this order be sent forthwith by the Registrar (Judicial) to the Home Secretary, Government of India for prompt compliance. The next date of hearing is fixed for March 23, 1993 on which date the Government of India must produce the contemner, Dr. H. Borobabu Singh before this Court. List on March 23, 1993. ORDER In obedience to the earlier directions of this Court, Dr. H. Borobabu Singh is present in person in Court. We take note of his earlier affidavit filed on 18.3.93 that he has fully complied with all the orders and directions relating to the case of Manilal Singh. Dr. Singh has also expressed regret for the unhappy events. We appreciate this gesture on his part, though he could have done the same much earlier. We take note of this and drop all further proceedings in the matter. These contempt proceedings, therefore, come to an end. N.V.K Petitions dropped.

Dr. H. Borobabu Singh, the first respondent in the Contempt Petition held the office of Speaker of Manipur Legislative Assembly. This Court having held that the Speaker while deciding the question of disqualification of a Member of the Legislative Assembly under the Tenth Schedule to the Constitution acts as a statutory authority, in which capacity the Speaker 's decision is subject to judicial review by the High Court and this Court, made certain orders quashing the disqualification of certain members of the Manipur Legislative Assembly. In spite of the clear decision of this Court it was submitted, the contemner continued to resist the Implementation of such orders made by this court. petitioner In the contempt petition 1. Manilal Singh was then the of the Manipur Legislative Assembly, and as the Secretary be took steps to implement this Court 's orders. The allegation made by him was that the contemner Dr. H. Borobabu Singh got annoyed with him for his attempt to secure obedience and implementation of this Court 's orders and, therefore, as an act of reprisal, the contemner had made an 769 770 order of his compulsory retirement. The petitioner challenged the aforesaid order of his compulsory retirement, alleging that it was mala fide being an act of reprisal by the contemner for the petitioner 's obedience of this Court 's orders. This Court stayed the operation of the order of compulsory retirement as well as the order of suspension passed by the contemner. The petitioner then complained that the contemner was not permitting him to function as the Secretary of the Manipur Legislative Assembly, and was also not paying him his salary and other dues; and that another person had been appointed by the contemner to function as the Secretary. On July 22, 1992, this Court made an order reiterating that the petitioner shall be allowed to function as the Secretary of the Manipur Legislative Assembly without delay and that all concerned will enable him to so function. Further directions were also given. As a result of the grievance made by the petitioner that in spite of the orders of this Court, he was neither allowed to function as the Secretary nor paid his salary etc. another order was made on August 4, 1992 directing the Chief Secretary of the State to ensure that the direction given for payment of dues was promptly obeyed. On August 25, 1992 the Court after recording that the action to retire the petitioner from service on August 31, 1992 as Joint Secretary appeared to be prima facie in violation of the Court 's order, stayed the operation of the order, expression its concern at the apathy exhibited towards obedience of the mandate under Article 144 of the Constitution, and after hearing all the counsel made an order directing that the Chief Secretary, Deputy Secretary of the legislative Assembly and the contemner should be per sonally present in Court at the next hearing in September 9, 1992. On the aforesaid date the Chief Secretary and the Deputy Secretary were personally present, but on behalf of the contemner his Counsel sought an adjournment till September 22, 1992 on "he ground that the Manipur Legislative Assembly was in session, which was granted. On September 25, 1992 the contemner did not appear in person but his Counsel filed an affidavit that he is immune from the directions of the Court in view of his constitutional position as Speaker. The Court heard 771 the Counsel and rejected the contention and adjourned the matter to 20, 1"2 the contemner to give a written undertaking before be left the country as a member of the Indian parliamentary delegation that he would appear in the court. The contemner did not give the aforesaid undertaiking and when the matter was taken up on November 12, 1M, the contemner was not present and the only thing done by him was to Me an affidavit dated November 6, 1992 indicating that he would not personally appear before the Court In the aforesaid circumstances and having regard to the attitude adopted by the contemner It became necessary for the Court to consider the making of necessary consequential orders to secure the presence of the contemner. It accordingly heard arguments on December 8, 1992. The Attorney General of India submitted that the undisputed and the unequivocal stand taken by the contemner left no doubt about his wilful and contumacious disregard and disobedience of the Court 's orders which is without any doubt by Itself sufficient to constitute criminal contempt of this Court. That, apart from the power which this Court has under the and the Rules framed thereunder, the powers of this Coon under several provisions of the Constitution of India is wide enough to indicate that the procedure available to It for ensuring compliance of it,; orders Includes the taking of all steps considered necessary to ensure compliance of this Court 's orders which is a constitutional obligation of the Court, to uphold the role of law , and that the Court also had the power to direct the Government of India to take the necessary steps to produce the contemner in the Court if the ordinary course of requiring a Magistrate to produce him In the Court Is considered inappropriate. The Solicitor General of India on behalf of the Government of India; and the Counsel for the Chief Secretary and the petitioner supported the submissions of the Attorney General, while the Counsel for the contemner reiterated the stand taken by the contemner, that by virtue of the office of the Speaker which he holds, he is immune from the Court 's process even in a contempt matter which does not relate to his function as Speaker inside the House. Directing the production of the contemner Dr. H. Borobabu Singh before the Court on March 23, 1"3. HELD : 1. The undisputed facts expose the conduct of the contemner, Dr. H. Borobabu Singh, in refusing to obey the orders of this Court 772 directing him to appear in person in this Court to enable the hearing of the contempt proceedings against him, after the tentative opinion formed by this Court that his wilful and contumacious violation of this Court 's orders and deliberate obstruction of the persons acting in the aid of this Courts orders coupled with his act of reprisal against the Secretary of the legislative Assembly for obeying the orders made by this Court, make out a prima facie case of ' contempt, as recorded in the orders made and known to him. [780G H, 781A] 2.The contemner 's repeated and categorical refusal to appear in person in this Court in spite of this Court 's orders and grant of considerable indulgence to him is clear from the statements made in his affidavits and through his counsel, who has appeared for him throughout [782B] 3. From the documents filed by the Union of India, it is evident that even the Union Home Minister has strongly advised the contemner to desist from the course he has chosen to adopt and to obey the orders of this Court, which is his constitutional obligation. [783C] 4. Articles 141, 142 and 144 of the Constitution are well known and they are mentioned for the benefit of the contemner who has wilfully and deliberately refused to obey and ignored not merely the orders of this Court but has also chosen to ignore the provisions in the Constitution itself, to which he must have sworn allegiance before taking his sent as a Member of the Manipur Legislative Assembly. [782H] 5. The immunity given by Article 361 of the Constitution is not to a Speaker and no other provision supports the submission made by the contemner. It is unfortunate that a person who holds the constitutional officer of Speaker of a Legislative Assembly has chosen to ignore the constitutional mandate that this country is governed by the 'rule of law, and what the law is, is for this Court to declare in discharge of Its constitutional obligation which bind all in accordance with Article 141 of Constitution of India, and Article 144 then says that all authorities a are to act in aid of the orders made by this Court. The contemner has chosen to ignore also the obvious corollary of rule of law that no person is above law. [782F G] 773 7. Having doen its best to make the contemner see reason and be present by granting indulgence repeatedly, to the extent that the Attorney General said that the indulgence and leniency was being construed as the weakness of the Court, this Court is constrained to now take the only appropriate and logical course to which the Court is driven in these circumstances, viz. to require the production of the contemner Dr. H. ' Borobabu Singh in person before this Court It is the constitutional duty ' of this Court to uphold the majesty of law and justify the confidence of the people, that no one in this country is above the law and governance is not of men but of the 'rule of law '. [783B D] 8.The Government of India is directed to produce Dr. H. Borobabu ' Singh in person in this Court on the next date of hearing taking such steps as are necessary for the purpose. The Government of India would be entitled to take all steps, which are necessary including the use of minimum force which may be required for compliance. [784H, 795A] 9. A copy of the order to be sent forthwith by the Registrar (judicial) to Home Secretary, Government of India for prompt compliance. The next, date of hearing fixed for March 23, 1993. [785B]

Special Leave Petition (Civil) No. 4120 of 1978. From the Judgment and Order dated 8 3 78 of the Punjab and Haryana High Court in Civil Revision No. 801/76. Prem Malhotra and M. N. Shroff for the Petitioner. The Order of the Court was delivered by KRISHNA IYER, J. We refuse leave but with a message tag. The poor shall not be priced out of the justice market by insistence on court fee and refusal to apply the exemptive provisions of 185 Order XXXIII, C.P.C. So we are distressed that the State of Haryana, mindless of the mandate of equal justice to the indigent under the Magna Carta of our Republic, expressed in Article 14 and stressed in article 39A of the Constitution, has sought leave to appeal against the order of the High Court which has rightly extended the 'pauper ' provisions to auto accident claims. The reasoning of the High Court in holding that Order XXXIII will apply to tribunals which have the trappings of the civil court finds our approval. We affirm the decision. Even so it is fair for the State to make clear the situation by framing appropriate rules to exempt from levy of court fee cases of claims of compensation where automobile accidents are the cause. Here is a case of a widow and daughter claiming compensation for the killing of the sole bread winner by a State Transport bus; and the Haryana Government, instead of acting on social justice and generously settling the claim, fights like a cantankerous litigant even by avoiding adjudication through the device of asking for court fee from the pathetic plaintiffs. Two principles are involved. Access to court is an aspect of Social Justice and the State has no rational litigation policy if it forgets this fundamental. Our perspective is best projected by Cappelletti, quoted by the Australian Law Reform Commission: "The right of effective access to justice has emerged with the new social rights. Indeed, it is of paramount importance among these new rights since, clearly, the enjoyment of traditional as well as new social rights presupposes mechanisms for their effective protection. Such protection, moreover, is best assured by a workable remedy within the framework of the judicial system. Effective access to justice can thus be seen as the most basic requirement the most basic 'human right ' of a system which purports to guarantee legal right. "(1) We should expand the jurisprudence of Access to Justice as an integral part of Social Justice and examine the constitutionalism of court fee levy as a facet of human rights highlighted in our Nation 's Constitution. If the State itself should travesty this basic principle, in the teeth of Articles 14 and 39A, where an indigent widow is involved, a second look at its policy is overdue. The Court must give the benefit of doubt against levy of a price to enter the temple of justice 186 until one day the whole issue of the validity of profit making through sale of civil justice, disguised as court fee, is fully reviewed by this Court. Before parting with this point we must express our poignant feeling that no State, it seems, has, as yet, framed rules to give effect to the benignant provision of legal aid to the poor in Order XXXIII Rule 9A, Civil Procedure Code, although several years have passed since the enactment. Parliament is stultified and the People are frustrated. Even after a law has been enacted for the benefit of the Poor, the State does not bring into force by wilful default in fulfilling the conditio sine qua non. It is a public duty of each great branch of Government to obey the rule of law and uphold the tryst with the Constitution by making rules to effectuate legislation meant to help the poor. The second principle the State of Haryana has unhappily failed to remember is its duty under article 41 of the Constitution to render public assistance, without litigation, in cases of disablement and undeserved want. It is a notorious fact that our highways are graveyards on a tragic sale, what with narrow, neglected roads, reckless, unchecked drivers, heavy vehicular traffic and State Transport buses often inflicting the maximum casualties. Now that insurance against third party risk is compulsory and motor insurance is nationalised and transport itself is largely by State Undertakings, the principle of no fault liability and on the spot settlement of claims should become national policy. The victims, as here, are mostly below the poverty line and litigation is compounded misery. Hit and run cases are common and the time is ripe for the court to examine whether no fault liability is not implicit in the Motor Vehicles Act itself and for Parliament to make law in this behalf to remove all doubts. A long ago Report of the Central Law Commission confined to hit and run cases of auto accidents is gathering dust. The horrendous increase of highway casualties and the chronic neglect of rules of road safety constrains us to recommend to the Central Law Commission and to Parliament to senitize this tragic area of tort law and overhaul it humanistically. Another aspect must be noticed before we part with this petition. In many States, for want of judicial manpower or other pathological causes, the accident claims pend before tribunals in heartless slowness. Courts must give this bleeding class of cases high priority, adopt simplified procedures without breach of natural justice, try out pre trial settlements and narrow down the controversy and remember, that 'wiping every tear from every eye ' has judicial relevance. For, law must keep its promise to Justice. 187 While we dismiss the petition for leave, we hope the Haryana State will hasten to frame rules under the Motor Vehicles Act to enable claimants for compensation to be free from payment of court fee. M.R. Petition dismissed.

The respondents, a widow and her daughter, claimed compensation for the killing of their sole bread winner, by a Haryana State Transport bus, but could not afford to pay any court fee on their claim. The High Court held that the exemptive provisions of Order XXXIII, CPC, will apply to Accident Claims Tribunals, which have the trappings of the Civil Court. Dismissing the special leave petition the Court, ^ HELD: The State should frame appropriate rules to exempt from levy of court fee, cases of claims of compensation where automobile accidents are the cause. Two principles are involved. Firstly, access to court, is an integral part of social justice, and the State has no rational litigation policy if it forgets this fundamental, and secondly, it is the State 's duty under article 41 of the Constitution to render assistance, without litigation, in cases of disablement and undeserved want. [185 B C, D, 186 C] M. Cappelletti, Rabels Z, (1976) 669 at 672; quoted with approval. Obiter dictum: I. It is a public duty of each great branch of Government to obey the rule of law and uphold the tryst with the Constitution by making rules to effectuate legislation meant to help the poor. Now that insurance against third party risk is compulsory and motor insurance is nationalised, and transport itself is largely by State Undertakings, the principle of no fault liability and on the spot settlement of claims should become national policy. [186 B, C, D E] II. Courts must give the accident claims cases high priority, adopt simplified procedures without breach of natural justice, try out pre trial settlements and narrow down the controversy and remember, that 'wiping every tear from every eye ' has judicial relevance. For, law must keep its promise to justice. [186 G H]

CIVIL Appeals Nos. 2498 2500 of 1978. From the Judgement and Order dated 15th November, 1978 of the High Court of Orissa at Cuttack in O.T.C. No. 381: 182 and 881 of 1976. Shanti Bhushan and P. N. Misra for the appellants. L. N. Sinha, R. K. Mehta and A. P. Mohanty, for the Respondents. 4 The Judgment of the Court was delivered by DESAI, J. These three appeals are directed against the common judgment rendered by the High Court of Orissa at Cuttack in three writ petitions styled as C.J.C. No. 38 i, 182 and 881, all of 1976 moved by the appellants in these appeals. A common question of law permeates these three appeals and therefore, factual matrix will be extracted from C. A. No. 2499/78 filed by one Mr. Ashutosh Swain as representative of the facts necessary for disposal of these appeals. State Transport Authority, Orissa issued an advertisement dated June 24, 1974 inviting applications in the prescribed form for endorsement in the permit of the motor cabs or omnibuses enabling the holders of the permit to ply the vehicle as a tourist vehicle with all India operation. In other words, applications were invited from the operators for all India tourist permit. The last date for receiving the applications was July 13, 1974 In response to the advertisement number of intending operators including the appellants in these appeals submitted their applications for grant of all India tourist permit to the concerned authority within time. The State Transport Authority processed these applications and disposed of the applications at its meeting held on Feb. 2, 1975. The appellants herein were granted all India tourist permits for omnibus with passenger capacity not exceeding 29. Some of She applicants who failed to obtain a permit filed three appeals being M. V. Appeals Nos. 15, 16 and 17, all of 1975 to the State Transport Appellate Tribunal ( 'Appellate Tribunal ' for short) under Sec. 64 (2) of the (Act for short). The Appellate Tribunal dismissed all the appeals and confirmed the order made by the State Transport Authority granting all India tourist permits to the appellants. The writ petitions came to be filed by three unsuccessful applicants for permit questioning the correctness of the order granting the permit and dismissal of their appeals division Bench of the High Court by a common judgment allowed all the three writ petitions quashing and setting aside the order of the State Transport Appellate Tribunal as well as the State Transport Authority. Consequently these appellants surrendered their permits. Hence these three appeals by special leave. During the pendency of these appeals, appellants were granted temporary tourist permits in compliance with the interim orders made by this Court. 5 Mr. Shanti Bhushan, learned counsel who led on behalf of the appellants urged that the High Court erred in holding that only the holder of an existing contract carriage permit alone was eligible to make an application for endorsement of his existing permit enabling the permit holder to ply a tourist vehicle on all India operation, and consequently quashing the all India tourist permits granted to the appellants on the sole ground that the appellants did not have or hold existing contract carriage permit. It was next contended that the High Court was further in error in holding that the applications made by the appellants were incomplete as some of the columns were found blank. It was further submitted that the High Court was in error in relying upon sub rules (2), (3) and (4) of Rule 3 of the Orissa Tourist Vehicles Rules, 1967 (1967 Rules for short) because the concept of all India tourist permit received for the first time a legal format on the introduction of sub section (7) in Sec. 63 of the Act by Amending Act 56 of 1969 which came into force on October 1, 1970. The scheme of the forbids an owner of a transport vehicle to use or permit the use of a vehicle in any public place (whether or not such vehicle is actually carrying any passenger or goods) save in accordance with the conditions of a permit granted or countersigned by the authority therein mentioned authorising the use of the vehicle in the place and in the manner in which the vehicle is to be used. The expression 'transport vehicle ' is termed in Sec. 2 (33) of the Act to mean 'a public service vehicle or a goods vehicle. 'Public service vehicle ' is defined in Sec. 2 (25) of the Act to mean '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 the scheme of the Act envisages three kinds of permits in respect of a public service vehicle, namely, permit for the use of motor cab or a permit to use an omnibus for contract carriage or a permit to use the same as a stage carriage. 46 provides for application to be made for stage carriage permit. The holder of a stage carriage permit can use the vehicle to carry passengers for hire or reward at separate fares paid by or for individual passengers, either for the whole journey or for stages of the journey. The second kind of permit in respect of a public service vehicle is the one contemplated by Sec. 49 and styled as 'contract carriage permit. ' A vehicle in respect of which there is a contract carriage permit can be used for carrying passengers for hire or reward under a contract express or implied for the use of the vehicle as a whole at or for a fixed or agreed rate 6 of 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. By the Amending Act 56 of 1969, a concept of a tourist permit for a tourist vehicle was introduced in the Act. 'Tourist vehicle ' is defined in Sec. 2 (29A) to mean 'a contract carriage constructed or adapted and equipped and maintained in accordance with such specification as the State Government may, by notification in the Official Gazette, specify in that behalf. By the same Amending Act, sub s (7) of Sec. 63 was introduced enabling State Transport Authority of any State to grant permits valid for the whole or any part of India, in respect of such number of tourist vehicles as the Central Government may, in respect of that State, specify in this behalf, and such applications have to be dealt with according to the provisions of Sections 49, 50, 51, 57, 58, 59, 59 A, 60, 61 and 64. Section 44 confers power on the State Government to set up such transport authorities in the State being State Transport Authority and Regional Transport Authority. The State Transport Authority will have its jurisdiction over the whole State and the State will be divided into various regions in respect of which a Regional Transport Authority will be specified Any one desiring to obtain either a stage carriage permit or a contract carriage permit has to apply to the Regional Transport Authority in whose jurisdiction the vehicle is sought to be operated. 63 provides that permit granted by the Regional Transport Authority of any region shall not be valid in any other region unless the permit has been counter signed by the Regional Transport Authority of that region and a permit granted in one P State shall not be valid in any other State unless counter signed by the State Transport Authority of that other State or by the Regional Transport Authority concerned This scheme of law would manifestly reveal that a permit without the necessary counter signatures as hereinabove indicated, enabling the permit holder to have the whole of India as its area of operation was unknown to the Act. By introduction of sub sec. (7) in Sec. 63, the concept of a permit to be granted by State Transport Authority of a State within the limits of the quota prescribed by the Central Government which would enable the holder of the permit to operate in the whole of India, was introduced. For the sake of brevity, this permit is described as all India tourist permit. 7 Sub sec. (7) of Sec. 63 provides that for obtaining such a permit as envisaged therein which enables the holder of such a permit to ply vehicle as a tourist vehicle in the whole of India has to make an application to the State Transport Authority constituted for the State under Sec. 44. The underlying object for creating this new class of permit was to promote tourism. If a tourist vehicle is hired by a tourist party for moving from State to State, the vehicle cannot be taken to another State from the place of commencement of journey unless a valid contract carriage permit of that State is obtained or the existing permit is counter signed. This would impede tourism causing inconvenience to the tourists. To remove this barrier, Parliament introduced sub sec. (7) in Sec. 63 envisaging a new kind of permit to be granted by the State Transport Authority of the State within the prescribed quota which would enable the, holder of the permit to ply the tourist vehicle in the whole or any part of India. The impediment in the free flow of tourist traffic was sought to be suitably removed by this provision. Sub sec. (7) of Sec. 63 further provided that an application for such a permit has to be made to the State Transport Authority from whom the permit is sought to be obtained. The State Transport Authority has to process the application in the manner prescribed in the sections set out in sub s.(7), which amongst others includes Sec. provides for making an application for a contract carriage permit. Therefore, an all India tourist permit is primarily a contract carriage permit but while the ordinary contract carriage permit can be granted by the Regional Transport Authority, for operation within local jurisdiction, or when countersigned by Regional Transport Authority of adjacent area in more than that one such jurisdiction but not at any rate outside the State and not in any case on an all India basis. To this extent, an ordinary contract carriage permit differs from an all India tourist permit but an all India tourist permit is none the less a contract carriage permit. 50 prescribes the procedure for processing an application for contract carriage permit. 51 confers power on the Regional Transport Authority to grant contract carriage permit. Sub section (7) of Sec. 63 on the other hand confers power on the State Transport Authority to grant an all India tourist permit which in effect is a contract carriage permit but which permits plying of tourist vehicle throughout India. Even for obtaining such a permit, Sec. 51 will apply with this modification that the application for all India tourist permit has to be made to State Transport Authority of the State in which the permit is sought. Such an application may be further 8 processed according to the provision contained in Sec. 57 which prescribes procedure for applying and granting permit. 58 prescribes duration of a permit and renewal of it. 59 sets out general conditions attaching to all permits. 59 A prescribes general form of permits. 60 confers power on the authority granting the permit to cancel or suspend permits. 61 makes the permit heritable on the death of the holder and Sec. 64 provides for appeals against the orders of the Regional Transport Authority and the State Transport Authority. An Application for an all India tourist permit has to be processed in accordance with provisions contained in sections set out herein above. A resume of the relevant provisions and a brief outline of the Scheme of the Act sheds light on the concept of an all India tourist permit. This scheme of law nowhere expressly or by necessary implication suggests that an applicant for an all India tourist permit must of necessity or as a pre requisite have a contract carriage permit which alone can be endorsed for the purpose of all India operation. Sub s.(7) of Sec. 63, if read thus would render nugatory the affirmative provision that on a proper application being made and legally processed, the State Transport Authority can grant an all India tourist permit. If sub section (7) of Sec. 63 is read as interpreted by the High Court, one will have to redraft the section to read that the holder of a contract carriage permit may apply for an all India tourist permit. There is no warrant for reading the section like this. Undoubtedly, an application for an all India tourist permit has to be made under Sec. 49 which prescribes procedure for obtaining a contract carriage permit This ought to be so because in substance an all India tourist permit is none the less a contract carriage permit but with a much wider area of operation. That however, does not permit an inference that before obtaining an all India tourist permit, the intending operator must obtain a contract carriage permit from the Regional Transport Authority and then get it endorsed from the State Transport Authority to make it valid for the whole or any part of India. Sub section (7) of Sec. 63 does not speak of any endorsement on permit. It speaks of granting a permit. Endorsement may be another mode of enlarging the area of Operational But that is not contemplated by sub section (7) of Sec. 63. It speaks of granting a permit valid for the whole or any part of India When granted by a State Transport Authority in exercise of the power conferred by Sub Sec. (7) of Sec. 63 without any further endorsement of any other authority. Therefore, with respect, the High Court was not right in observing that 'it is clear from the 9 aforesaid provision of the rules and Schedule I that an holder of a permit issued in the State in relation to a motor cab or an omnibus is only competent to apply to the State Transport Authority for endorsement on that permit to the effect that the vehicle to which the permit relates is a tourist vehicle. ' There is nothing in sub section (7) of Sec 63 to warrant this construction. The High Court unfortunately did not look at the substantive provision enacted in sub section (7) of Sec. 63, did not analyse it to ascertain its width and content but merely referred to rules which would be presently shown to be not applicable and reached the conclusion on the meaning of sub section (7) of Sec. 63 without reference to it. The High Court referred to sub. (2), (3) and (4) of Rule 3 of 1967 Rules. Rule 3 confers power on the State Transport Authority to endorse any permit granted in the State in relation to any motor cab or omnibus to the effect that the vehicle to which the permit relates is an all India tourist vehicle. Sub rule (2) provides that 'any person who holds a permit issued in the State in relation to a motor cab or an omnibus may apply in the forms specified in Schedule I, to the State Transport Authority for an endorsement on the permit to the effect that the vehicle to which the permit relates is a tourist vehicle. ' Sub rule (3) provides that an application under sub rule (2) shall be made in the manner provided therein and within the time limit prescribed therein. Sub rule (4) provides for the procedure before granting the necessary endorsement. Having referred to these three sub rules, the High Court held that there must, be a pre existing contract carriage permit granted in the State which alone can be endorsed subsequently as an all India tourist permit. These rules were enacted in the year 1967 and were put into operation on 19/20 June, 1967. They were enacted in exercise of the power conferred by Sec. 68 of the . 68 confers powers on a State Government to make rules for the purpose of giving effect to the provisions of Chapter IV. These rules were made at a time when the only way to enlarge the area of operation in respect of a permit was endorsement by various authorities on the original permit granted by a Transport Authority. All India tourist permit was not conceptualised by the time 1967 Rules were framed. All India tourist permit as contemplated by sub section (7) of Sec. 63 was not on the statute book at the time when these rules were enacted. Therefore, the rules at the relevant time caters to a situation when the area of operation 10 specified in a contract carriage permit could be enlarged by endorsement by authority other than The grantor. The concept of all India tourist permit without any necessity of any endorsement by any authority save and except the grantor was then not known to law. In order to avoid endorsements by various authorities so as to enlarge the area of operation of a contract carriage permit and with avowed object of facilitating unimpeded free from of tourist traffic, the concept of all India tourist permit was introduced with effect from October 1, 1970. It also introduced a new type of vehicle specified as tourist vehicle. The aforementioned rules enacted in June 1967 when an all India tourist permit not necessitating any endorsement save the grant of it by the State Transport Authority and the concept of a tourist vehicle were foreign to the cannot be held to apply unless a provision to that effect was made in the substantive enactment conferring power on the State Transport Authority to grant an all India tourist permit which needs no endorsement for operation throughout India. One cannot read the concept of endorsement envisaged in the 1967 Rules in respect of a permit that can be granted as an all India tourist permit under sub s.(7) of Sec. 63 of the Act by insisting upon, as per the scheme of rules a pre existing contract carriage permit which alone can be endorsed. Therefore the conclusion is inescapable that these rules were not at all attracted while considering the applications for all India tourist permit made by the appellants under sub section (7) of Sec. 63. The High Court with respect fell into another error when it failed to take notice of the advertisement issued by the State Transport Authority on June 24, 1974 inviting applications for permits in respect of omnibus authorising it to ply as an all India tourist vehicle in the prescribed form. Two prescribed forms were annexed to the advertisement. The High Court overlooked the first form and only took notice of the second form. The first form was meant for those who had no existing contract carriage permit and were applying straightway for the first time for an all India tourist permit. The form itself shows that the application had to be made to the State Transport Authority for a contract carriage permit with an all India operation. There was another form which catered to the needs of the holder of the existing contract carriage permits who wanted the area of operation to be enlarged by converting an ordinary contract carriage permit into all India tourist permit. After referring to the second form, the High Court found fault with the applica 11 tions made by the present appellants by observing that some of the columns were left blank. For a . fresh applicant who had no existing contract carriage permit, the blanks could not have been filled in. This is another unfortunate error in which the High Court fell while granting a writ of certiorari quashing the order under which permits were granted to the applicants. Having thus examined the various aspects which appealed to the High Court in reversing the decision granting all India tourist permit to the appellants, we are of the opinion that none of them can be sustained. Firstly, it was not necessary that the applicants for an all India tourist permit must have a pre existing contract carriage permit which alone could be endorsed so as to convert it into an all India tourist permit. Secondly, the applications of the appellants for all relevant information were complete and the blanks were irrelevant and lastly sub rules (2), (3) and (4) of Rule 3 had absolutely no application to the proceedings of the State Transport Authority held for consideration of applications for all India tourist permit and granting them to the appellants. These were the grounds on which the High Court reversed the decision of the State Transport Authority and the State Transport Appellate Tribunal. But as these reasons are unsustainable, these appeals will have to be allowed. Accordingly these three appeals are allowed and the judgment of the High Court is quashed and set aside and the decision of the State Transport Authority granting all India tourist permits to the appellants is restored. As the appellants surrendered their all India tourist permits when they lost in the High Court and they plied their vehicles on temporary permits, it must be held that if the duration of the original permits has expired, they have to make a fresh application for all India tourist permit but in that event they will be treated as applications for renewal of all India tourist permit as contemplated by Sec. 58 of the Act and not as fresh applications under Sec. 63(7) read with Sec. the appeals are accordingly allowed with no order as to costs. S.R. Appeals allowed.

In response to an advertisement dated 25th June, 1974 issued by the State Transport Authority, Orissa inviting applications in the prescribed forms, from the operators for all India Tourist Permit, a number of intending operators including the appellants submitted their applications and at the meeting held on February 2, 1975, the State Transport Authority granted to the appellants all India Tourist Permits for omnibus with passenger capacity not exceeding 29. Some of the applicants who failed to obtain a permit filed three appeals being M. V. Appeals Nos. 15, 16 and 17 all of 1975 to the State Transport Appellate Tribunal under sec. 64 (2) of the . The Appellate Tribunal dismissed all the appeals and confirmed the order made by the State Transport Authority granting all India tourist permits to the appellants. Three unsuccessful applicants for permit filed three writ petitions styled as C.J.C. No. 381, 182 and 881, all of 1976 questioning the correctness of the order granting the permit and dismissal of their appeals in the High Court of Orissa. A Division Bench of the High Court, by a common judgment, allowed all the three writ petitions quashing and setting aside the order of the State Transport Authority. Consequently, these appellants surrendered their permits. Hence these three appeals by special leave. During the pendency of these appeals The appellants were granted temporary all India tourist permits in compliance with the interim orders made by the Court. Allowing the appeals, the Court 2 ^ HELD: 1.1 It was not necessary that the applicants for an all India tourist permit must have a pre existing contract carriage permit which could be endorsed so as to convert it into all India tourist permit [11 B C] 1.2 By introducing sub section 7 in section 63 of the the concept of all India permit to be granted by a State Transport Authority of a State within the limits of the quota prescribed by the Central Government which would enable the holder of the permit to operate in the whole of India, was introduced, for the first time with effect from 1st October, 1970. The underlying object for creating this new class of permit was to promote tourism and to remove the barrier caused by the earlier system under which if a tourist vehicle is hired by a tourist party for moving from State to State, the vehicle cannot be taken to another State from the place of commencement of journey unless a valid contract carriage permit of that State is obtained or the existing permit is counter signed. [6G H, 7A B] 1.3 An Application for an all India tourist permit has to be processed in accordance with the provisions of sections 49, 50, 51, 57, 58, 59, 60, 61 and 63 (7). An all India tourist permit is primarily a contract carriage permit but while the ordinary contract carriage permit can be granted by the Regional Transport Authority, for operation within local jurisdiction, or when counter signed by Regional Transport Authority of adjacent area in more than one such jurisdiction but not at any rate outside the State and not in any case on an all India basis. To this extent, an ordinary contract carriage permit differs from an all India tourist permit but an all India tourist permit is none the less a contract carriage permit. Sub section (7) Of section 63 on the other hand confers power on the State Transport Authority to grant an all India tourist permit which in effect is a contract carriage permit but which permits plying of tourist vehicle throughout India. Even for obtaining such a permit, section 51 will apply with this modification that the application for all India tourist permit has to be made to State Transport Authority of the State in which their permit is sought. This scheme of law nowhere expressly or by necessary implication suggests that an applicant for an all India tourist permit must of necessity or as a prerequisite have a contract carriage permit which alone can be endorsed for the purpose of all India operation. Sub section (7) of section 63 if read thus would render nugatory the affirmative provision that on a proper application being made and legally processed, the State Transport Authority can grant an all India tourist permit. [6D, 7E H, 8C D] 1.4 The fact that an application for an all India tourist Permit has to be made under section 49 which prescribes procedure for obtaining a contract carriage permit, because in substance an all India tourist permit is none the less a contract carriage permit but with a much wider area of operation, however, does not permit an inference that before obtaining an all India tourist permit, the intending operator must obtain a contract carriage permit from the Regional Transport Authority and then get it endorsed from the State Transport Authority to make it valid for the whole or any part of India. Sub section (7) of section 63 does not speak of any 3 endorsement on permit, though endorsement may be another mode of enlarging the area of operation It speaks of granting a permit valid for the whole or any part of India when granted by a State Transport Authority in exercise of The power conferred by sub section (7) of section 63 without any further endorsement of any other authority [8E H] 2. Sub Rules (2), (3) and (4) of Rule 3 of the Orissa Tourist Vehicles Rules, 1967 had absolutely no application to the proceedings of the State Transport Authority held for consideration of applications for all India Tourist Permit and granting them to the appellants. These Rules were enacted in the year 1967 in exercise of the power conferred by section 68 of the and were brought into operation on 19/20 June, 1967. These rules were made at a time when the only way to enlarge the area of operation in respect of a permit was by endorsement by various authorities on the original permit granted by a Transport Authority. All India tourist permit was not conceptualized by the time 1967 Rules were framed. Therefore, the rules at the relevant time catered to a situation When the area of operation specified in a contract carriage permit could be enlarged by endorsement by authority other than the grantor only. [9F H; 10A] 3. The applications of the appellants with all relevant information were complete and the blanks in their application forms were irrelevant. In the advertisement issued by the State Transport Authority on June 24, 1974 inviting applications for permits in respect of omnibus authorising it to ply as an all India tourist vehicle in the prescribed forms, two prescribed forms were annexed. The first form was meant for those who had no existing contract carriage permit and were applying straightaway for the first time for an all India tourist permit. The form itself shows that the application had to be made to the State Transport Authority for a contract carriage permit with an all India operation. There was another form which catered to the needs of the holder of the existing contract carriage permits who wanted the area of operation to be enlarged by converting an ordinary contract carriage permit into all India tourist permit. For a fresh applicant like the appellants who had no existing contract carriage permit, therefore, the blanks could not have been filled in. [10F H; 11A]

N: Criminal Appeal No. 255 of 1973. Appeal by Special Leave from the Judgment and Order dated 16 7 73 of the Rajasthan High Court in S.B. Crl. No. 309/73. A. N. Mulla and B. P. Singh for the Appellant. Sobhag Mal Jain and section K. Jain for the Respsondent. The Judgment of the Court was delivered by FAZAL ALI, J. This appeal by special leave is directed against a judgment of the Rajasthan High Court by which the conviction of the appellant under Section 494 I.P.C. and sentence of two years rigorous imprisonment and fine of Rs. 2,000/ have been upheld. The facts of this case have been detailed in the judgments of the courts below and it is not necessary to repeat them. Suffice it to say that the accused Gopal Lal married the complainant Kanchan sometime in the year, 1963 and a child was born out of this wedlock. Soon thereafter the parties appeared to have fallen out and parted company. While the first marriage was subsisting Gopal Lal contracted a second marriage which according to the custom prevalent amongst Tellis is a valid marriage commonly known as nata marriage. This marriage was contracted on 20th of March, 1969. The complainant Kanchan, the first wife having come to know about this marriage filed a complaint on the 22nd March, 1969, on the basis of 1173 which appellant was prosecuted and ultimately convicted as mentioned above. Mr. A. N. Mulla, learned counsel for the appellant, had submitted two points before us. In the first place it was contended that in view of the provisions of Section 17 of the , the second marriage being a void marriage, the provisions of Section 494 I.P.C. are not attracted at all. We have given our anxious consideration to this argument but we are of the opinion that the argument is wholly untenable. Section 494 runs thus: "Whoever, having a husband or wife living, marries in any case in which such marriage is void by reason of its taking place during the life of such husband or wife, shall be punished with imprisonment of either description for a term which may extend to seven years, and shall also be liable to fine. Exception This section does not extend to any person whose marriage with such husband or wife has been declared void by a court of competent jurisdiction, nor to any person who contracts a marriage during the life of a former husband or wife, if such husband or wife, at the time of the subsequent marriage, shall have been continually absent from such person for the space of seven years, and shall not have been heard of by such person as being alive within that time provided the person contracting such subsequent marriage shall before such marriage takes place, inform the person with whom such marriage is contracted of the real state of facts so far as the same are within his or her knowledge". The essential ingredients of this offence are: (1) that the accused spouse must have contracted the first marriage. (2) that while the first marriage was subsisting the spouse concerned must have contracted a second marriage and (3) that both the marriages must be valid in the sense that the necessary ceremonies required by the personal law governing the parties had been duly performed. It may also be noticed that Section 494 I.P.C. would come into play only if the second marriage becomes void by virtue of the fact 1174 that it had taken place in the life time of one of the spouses. Thus, it is not possible to accede to the contention of Mr. Mulla that merely because the second marriage was void under Section 17 of the hence Section 494 I.P.C. would not be attracted. Section 17 of the runs thus: "Any marriage between two Hindus solemnized after the commencement of this Act is void if at the date of such marriage either party had a husband or wife living; and the provisions of sections 494 and 495 of the Indian Penal Code shall apply accordingly". What Section 17 contemplates is that the second marriage must be according to the ceremonies required by law. If the marriage is void its voidness would only lead to civil consequences arising from such marriage. Section 17 makes it absolutely clear that the provision has to be read in harmony and conjunction with the provisions of Section 494 of the Penal Code which has been extracted above. Section 17 clearly provides that provisions of Sections 494 and 495 of the Penal Code shall apply accordingly. In other words though the marriage may be void under Section 17, by reason of the fact that it was contracted while the first marriage was subsisting the case squarely falls within the four corners of Section 494 and by contracting the second marriage the accused incurs the penalty imposed by the said statute. Thus the combined effect of Section 17 of and Section 494 I.P.C. is that when a person contracts a second marriage after the coming into force of the said Act, while the first marriage is subsisting he commits the offence of bigamy. (Emphasis ours). This matter no longer res integra as it concluded by a decision of this Court in Bhaurao Shankar Lokhande and Anr. vs State of Maharashtra & Anr.(1) This Court while considering the question of bigamy qua the provisions of Section 17 observed as follows: "Section 17 provides that any marriage between two Hindus solemnized after the commencement of the Act is void if at the date of such marriage either party had a husband or wife living, and that the provisions of sections 494 and 495 I.P.C. shall apply accordingly. The marriage between two Hindus is void in view of section 17 if two conditions are satisfied: (i) the marriage is solemnized after the commencement of the Act; 1175 (ii) at the date of such marriage, either party had a spouse living. If the marriage which took place between the appellant and Kamlabai in February 1962 cannot be said to be 'solemnized ', that marriage will not be void by virtue of section 17 of the Act and section 494 I.P.C. will not apply to such parties to the marriage as had a spouse living". The word 'solemnize ' means, in connection with a marriage, 'to celebrate the marriage with proper ceremonies and in due form ', according to the Shorter Oxford Dictionary. It follows, therefore, that unless the marriage is 'celebrated or performed with proper ceremonies and in due form ' it cannot be said to be 'solemnized '. It is therefore essential, for the purpose of section 17 of the Act that the marriage to which section 494 I.P.C. applies on account of the provisions of the Act should have been celebrated with proper ceremonies and in due form". It was thus pointed out by this Court that Section 17 of the requires that the marriage must be properly solemnized in the sense that the necessary ceremonies required by law or by custom must be duly performed. Once these ceremonies are proved to have been performed the marriage become properly solemnized and if contracted while the first marriage is still subsisting the provisions of Section 494 will apply automatically. In a decision of this Court in Kanwal Ram & Ors. vs The Himachal Pradesh Administration the earlier case was noticed by the Court and relied upon. The matter has also been fully discussed in Priya Bala Ghosh vs Suresh Chandra Ghosh. In view of the authorities of this Court, therefore, the following position emerges: where a spouse contracts a second marriage while the first marriage is still subsisting the spouse would be guilty of bigamy under Section 494 if it is proved that the second marriage was a valid one in the sense that the necessary ceremonies required by law or by custom have been actually performed. The voidness of the marriage under Section 17 of the is in fact one of the essential ingredients of Section 494 because the second marriage will become void only because of the provisions of Section 17 of the . In these circumstances, therefore, we are unable to accept the contention of Mr. Mulla that the second marriage being void Section 494 will have no application. It was next contended by Mr. Mulla that there is no legal evidence to show that the second marriage which is said to 1176 be a nata marriage was actually performed. We are afraid, we are unable to go into this question because three courts have concurrently found as a fact that the parties were governed by custom of nata marriage and the two essential ceremonies of this marriage are: (1) that the husband should take a pitcher full of water from the head of the prospective wife; (2) that the wife should wear chura by the husband. There is evidence of P.Ws. 2, 3, 4 and 5 who have proved fact that these ceremonies had been duly performed in their presence. That there was such a custom which requires these ceremonies was admitted by D.Ws. 3 and 5 who were examined by the appellant. The evidence led by the prosecution has been accepted by the High Court and the courts below and after perusing the evidence we are not in a position to hold that the finding of facts arrived by the courts below are wrong in law or perverse. From the evidence led by the prosecution, therefore, it has been clearly established that the second marriage which was performed by the appellant Gopal Lal with Gopi was a valid marriage according to the custom of the nata marriage prevalent in the Telli community to which the appellant belonged. This being so and the validity of the first marriage not having been disputed, Section 494 I.P.C. applies in terms and the appellant must be held to have committed the offence of bigamy as contemplated by Section 494 I.P.C. Lastly, Mr. Mulla pressed this appeal on the question of sentence. Bigamy is a serious offence and the maximum punishment under Section 494 is seven years. Therefore, where the offence of bigamy is proved the Court cannot take a very lenient view. In the instant case the appellant was sentenced to two years and a fine of Rs. 2,000/ . It appears that the appellant has already paid a fine of Rs. 2,000/ . In these circumstances, therefore, we feel that the ends of justice will be met by reducing the sentence of imprisonment from two years to one year but maintaining the sentence of fine. With this modification the appeal is dismissed. The appellant will now surrender and serve out the remaining portion of the sentence. S.R. Appeal dismissed.

After having fallen out and parted company with his wife Kanchan in the year 1963, the appellant, belonging to Telli community contracted a second marriage prevalent amongst his community with Gopi on 20th March 1969. A complaint filed by his first wife ended in his conviction under section 494 I.P.C. and sentence of two years R.I. and a fine of Rs. 2,000/ , the conviction and sentence having been upheld by the Rajasthan High Court. Dismissing the appeal by special leave, the Court, ^ HELD: 1. The second marriage was a valid marriage according to the custom of the nata marriage prevalent in the Telli community which requires the following two essential ceremonies: (a) that the husband should take a pitcher full of water from the head of the prospective wife, and (b) that the wife should wear chura by the husband. The prosecution through PWs. 2, 3, 4 and 5 having proved that these ceremonies have been duly performed, that there was such a custom which requires the said ceremonies having been admitted by the defence witnesses 3 and 5 and the validity of the first marriage not having been disputed, Section 494 I.P.C. applies in terms and the appellant must be held to have committed the offence of Bigamy as contemplated by section 494 I.P.C. [1176A E] 2. The combined effect of section 17 of the Hindu Marriage Act and section 494 I.P.C. is that when a person contracts a second marriage after the coming into force of the said Act while the first marriage is subsisting, such a person commits the offence of bigamy. [1174 E] Section 17 of the makes it absolutely clear that the provision has to be read in harmony and conjunction with the provisions of section 494 I.P.C., the essential ingredients of which are: (i) that the accused spouse must have contracted the first marriage (ii) that while the first marriage was subsisting the spouse concerned must have contracted a second marriage, and (iii) that both the marriages must be valid in the sense that the necessary 1172 ceremonies required by the personal law governing the parties had been duly performed and (iv) the second marriage must have become void by virtue of the fact that it had taken place in the life time of one of the spouses. [1173F H] 3. Where a spouse contracts a second marriage while the first marriage is still subsisting the spouse would be guilty of bigamy under section 494, I.P.C. if it is proved that the second marriage was a valid one in the sense that the necessary ceremonies required by law or by custom have been actually performed. The voidness of the marriage under section 17 of the is in fact one of the essential ingredients of section 494 because the second marriage will became void only because of the provisions of section 17 of the . Therefore, the contention that the second marriage being void section 494 I.P.C. will have no application is not correct. [1175F G] Bhaurao Shankar Lokhande and Anr. vs State of Maharashtra and Ors., [1965]2 S.C.R. 837; Kanwal Ram and Ors. vs The Himachal Pradesh Administration, [1966]1 S.C.R. 539 and Priya Bala Ghosh vs Suresh Chandra Ghosh; [1973]3 S.C.R. 961 applied. [Bigamy being a serious offence for which the maximum punishment is seven years, the Court while maintaining the conviction reduced the sentence to one year.]

ivil Appeal No. 140 of 1990. From the Judgment and Order dated 8.2.89 of the Madras High Court in L.P.A. No. 131 of 1987. A.K. Sen, N.D.B. Raju, K. Rajeshwaran and N, Ganapathy for the Appellants. K.R. Choudhary and V. Balachandran for the Respondents. The Judgment of the Court was delivered by K. JAGANNATHA SHETTY, J. Special Leave is granted. This appeal is from a decision of the Madras High Court which denied the appellants claim for setting aside a judi cial sale. The facts giving rise to the appeal, as found by the Courts, may be summarised as follows. Arumugham respondent 1 obtained money decree on the basis of a promissory note from the Subordinate Judge, Salem, in O.S. No. 388/1968. Sethuramalingam the judgment debtor appealed to the High Court but could not get the decree stayed. He could not furnish security for the decre tal amount which was a condition for stay. The decree was put into execution notwithstanding the pendency of the appeal. In February 1973, his two items of properties; (i) three houses and (ii) 10.93 acres of land were brought to court sale. They were purchased by Kuppa Goundar, respondent No. 2 for Rs.7550 and Rs.15,050 respectively. In October 1975, the High Court allowed the appeal on merits. The promissory note which was the basis of the suit was disbe lieved and rejected. The trial court judgment was set aside and the plaintiff was non suited. Thereupon the judgment debtor moved the executing court for setting aside the sale. He has alleged inter alia, that the sale 81 was vitiated by material irregularities and properties were deliberately sold for under value. The sale was collusive between decree holder and the auction purchaser. The latter was sambandhi of the former and just a name lender. It was also his contention that since the decree has been reversed, the sale should be nullified and restitution should be ordered. The Court rejected all the contentions relating to material irregularities for want of satisfactory evidence. The Court also held that subsequent reversal of the decree could not be depended upon since the sale has been confirmed in favour of the auction purchaser who was a stranger to the litigation. The judgment debtor appealed to the High Court and succeeded at first instance, before learned single Judge. The learned Judge found in effect that (a) the sale was vitiated by material irregularities resulting in fetch ing a low price to properties; (b) the decree holder and auction purchaser are close relatives and the sale seems to be collusive; and (c) after the Court sale they seemed to have entered into an agreement for selling the second item of properties for Rs.96,000. With these conclusions the sale was set aside. But on appeal, the Division Bench of the High Court has expressed contrary views on all those points and reversed the decision of learned single Judge. 'the judgment debtor died during the pendency of the appeal before the High Court. His legal representatives have now appealed. Mr. A.K. Sen, learned counsel for the appellants raised a number of questions. The important and central issue, however, relates to the underlying jurisdiction of the Court to set aside the confirmed sale upon subsequent reversal or modification of the decree. The question is whether the auction purchaser 's interest should be protected as against the judgment debtor who has since succeeded in getting rid off the decree against him. There are two authorities of this Court bearing on the question: (i) Janak Raj vs Gurdial Singh and Anr., ; and (ii) Sardar Govindrao Mahadik and Anr. vs Devi Sahai & Ors. , ; In Janak Raj case, the appellant was a stranger to the suit in which there was an ex parte money decree. In the execution of the decree, the immovable property of the judgment debtor was brought to sale in which the appellant became the high est bidder. The judgment debtor filed an application for setting aside the ex parte decree and the court allowed it before confirming the sale. Thereupon the judgment debtor objected to the confirmation of sale on the ground that the auctionpurchaser was in conspiracy and collusion with the decree holder and as such not entitled to have the sale confirmed. The execution court, 82 however, overruled the objection and confirmed the sale, Mitter, J., agreed with that view and observed (at 79): "The result is that the purchaser 's title relates back to the date of sale and not the confirmation of sale. There is no provision in the Code of Civil Procedure of 1908 either under O. XXI or elsewhere which provides that the sale is not to be confirmed if it be found that the decree under which the sale was ordered has been reversed before the confirmation of sale. It does not seem ever to have been doubted that once the sale is confirmed the judgmentdebtor is not entitled to get back the property even if he succeeds thereafter in having the decree against him reversed. 'The question is, whether the same result ought to follow when the reversal of the decree takes place before the confirma tion of sale. There does not seems to be any valid reason for making a distinction between the two cases. It is certainly hard on the defendant judgment debtor to have to lose his property on the basis of a sale held in execution of a decree which is "not ultimately upheld. Once however, it is held that he cannot complain after confirmation of sale, there seems to be no reason why he should be allowed to do so because the decree was reversed before such confirmation. The Code of Civil Procedure of 1908 contains elaborate provisions which have to be followed in cases of sales of property in execu tion of a decree. It also lays down how and in what manner such sales may be set aside. Ordinarily, if no application for setting aside a sale is made under any of the provisions of rr. 89 to 91 of O. XXI, or when any application under any of these rules is made and disallowed, the court has no choice in the matter of confirming the sale and the sale must be made absolute. If it was the intention of the Legis lature that the sale was not to be made absolute because the decree had ceased to exist, we should have expected a provi sion to that effect either in O. XXI or in Part II of the Code of Civil Procedure of 1908 which contains sections 36 to 74 (inclusive) . . " Finally, the learned judge rounded off the judgment thus (at 86): " . . The policy of the Legislature seems to be that 83 unless a stranger auction purchaser is protected against the viccissitudes of the fortunes of the suit, sales in execu tion would not attract customers and it would be to the detriment of the interest of the borrower and the creditor alike if sales were allowed to be impugned merely because the decree was ultimately set aside or modified. The Code of Civil Procedure of 1908 makes ample provision for the pro tection of the interest of the judgment debtor who feels that the decree ought not to have been passed against him. ' ' In Sardar Govindrao Mahadik, D.A. Desai, J., while referring to the principle in Janak Raj case said (at 224): "Ordinarily, if the auction purchaser is an outsider or a stranger and if the execution of the decree was not stayed of which he may have assured himself by appropriate enquiry, the court auction held and sale confirmed and resultant sale certificate having been issued would protect him even if the decree in execution of which the auction sale has been held is set aside. This proceeds on the footing that the equity in favour of the stranger should be protected and the situa tion is occasionally reached on account of default on the part of the judgment debtor not obtaining stay of the execu tion of the decree during the pendency of the appeal. " The learned Judge further said: "But what happens if the auction purchaser is the decree holder himself? In our opinion, the situation would materi ally alter and this decree holder auction purchaser should not be entitled to any protection. At any rate, when he proceeds with the execution he is aware of the fact that an appeal against the original decree is pending. He is aware of the fact that the resultant situation may emerge where the appeal may be allowed and the decree which he seeks to execute may be set aside. He cannot force the pace by exe cuting the decree taking advantage of the economic disabili ty of a judgment debtor in a money decree and made the situation irreversible to the utter disadvantage of the judgment debtor who wins the battle and loses the war. Therefore, where the auction purchaser is none other than 84 the decree holder who by pointing out that there is no bidder at the auction, for a nominal sum purchases the property, to wit, in this case for a final decree for Rs.500, Motilal purchased the property for Rs.300, atrocious situation, and yet by a technicality he wants to protect himself. To such an auction purchaser who is not a stranger and who is none other than the decree holder, the court should not lend its assistance." In Janak Raj case, a stranger auction purchaser was protected against vicissitudes of fortunes of the litiga tion. In S.G. Mahadik case such protection was not afforded to auction purchaser who happens to be the decree holder himself. The reason seems to be that the decree holder is not a stranger to the suit. Indeed, he is not since he is eonomine party to the appeal against the decree which he seeks to execute. He is aware of the fact that due to eco nomic hardship the judgment debtor was unable to have the decree stayed. He however, does not wait for final outcome of the litigation which he has initiated. He exploits the helpless situation of the judgment debtor and hastens the execution of the decree. The Court, therefore, should not lend its assistance to him to retain the property purchased if the decree is subsequently reversed. 'There is thus a distinction maintained between the decree holder who purchases the property in execution of his own decree which is afterwards modified or reversed, and an auction purchaser who is not party to the decree. Where the purchaser is the decree holder, he is bound to restore the property to the judgment debtor by way of restitution but not a stranger auction purchaser. The latter remains unaf fected and does not lose title to the property by subsequent reversal or modification of the decree. 'The Courts have held that he could retain the property since he is a bona fide purchaser. 'This principle is also based on the premise that he is not bound to enquire into correctness of the judgment or decree sought to be executed. He is thus distin guished from an eonomine party to the litigation. 'There cannot be any dispute on this proposition and it is indeed based on a fair and proper classification. 'The innocent purchaser whether in voluntary transfer or judicial sale by or in execution of a decree or order would not be penalised. The property bona fide purchased ignorant of the litigation should be protected. 'The judicial sales in particular would not be robbed off all their sanctity. It is a sound rule based on legal and equitable considerations. But it is 85 difficult to appreciate why such protection should be ex tended to a purchaser who knows about the pending litigation relating to the decree. If a person ventures to purchase the property being fully aware of the controversy between the decree holder and judgment debtor, it is difficult to regard him as a bona fide purchaser. The true question in each case, therefore, is whether the stranger auction purchaser had knowledge of the pending litigation about the decree under execution. If the evidence indicates that he had no such knowledge he would be entitled to retain the property purchased being a bona fide purchaser and his title to the property remains unaffected by subsequent reversal of the decree. 'The Court by all means should protect his purchase. But if it is shown by evidence that he was aware of the pending appeal against the decree when he purchased the property, it would be inappropriate to term him as a bona fide purchaser. In such a case the Court also cannot assume that he was a bona fide or innocent purchaser for giving him protection against restitution. No assumption could be made contrary to the facts and circumstances of the case and any such assumption would be wrong and uncalled for. 'The Patna High Court in Chhota Nagpur Banking Associa tion vs C.T.M. Smith & Anr., [1943] Patna 325 expressed a similar view. Fazl Ali, CJ., as he then was, said (at 327) that where there is clear and cogent evidence that a strang er purchaser was fully aware of the merits of the controver sy in regard to the property purchased by him and was also aware that the validity of the decree was under challenge, there is no room for presumption that he was a bona fide purchaser. Reference may also be made to the decision of the Sind Judicial Commissioner 's Court in Jamnomal Gurdinornal vs Gopaldas and Anr., AIR 1924 Sind 101 where similar com ment was made. 'The Madras High Court in R. Raghavachari v.M.A.Pakkiri Mahorned Rowther and Ors., AIR 19 has however, taken a contrary view. It was held that restitution under Section 144 CPC cannot be demanded as against a bona fide purchaser who was not a party to the decree. 'The High Court also remarked that the reversal of the decree by the appel late Court or the knowledge of the purchaser about the pendency of the appeal makes no material difference to the operation of that rule. This proposition, we are, however, unable to accept. In our opinion, the person who purchases the property in court auction with the knowledge of the pending appeal against the decree cannot resist restitution. His knowledge about the pending litigation would make all 86 the difference in the case. He may be a stranger to the suit, but he must be held to have taken calculated risk in purchasing the property. Indeed, he is evidently a specula tive purchaser and in that respect he is in no better posi tion than the decree holder purchaser. The need to protect him against restitution therefore, seems to be unjustified. Similarly the auction purchaser who was a name lender to the decree holder or who has colluded with the decree holder to purchase the property could not also protected to retain the property if the decree is subsequently reversed. There is one other aspect which is more important than what we have discussed hitherto. It was emphasized by Lord Cairns in Rodger vs The Comptoir D ' Escompte De Paris, [1869 71] LR 3 P.C. 465 at 475: ". that one of the first and highest duties of all Courts is to take care that the act of the Court does no injury to any of the suitors, and when the expression "the act of the Court", is used, it does not mean merely the act of the Primary Court, or of any intermediate Court of Appeal, but the act of the Court as a whole, from the lowest court which entertains jurisdiction over the matter up to the highest Court which finally disposes of the case. It is the duty of the aggregate of those Tribunals, if I may use the expres sion, to take care that no act of the Court in the course of the whole of the proceedings does an injury to the suitors in the Court. " This is also the principle underlying Section 144 of the Code of Civil Procedure. It is the duty of all the Courts as observed by the Privy Council "as aggregate of those tribu nals" to take care that no act of the court in the course of the whole of the proceedings does an injury to the suitors in the Court. The above passage was quoted in the majority judgment of this Court in A.R. Antulay vs R.S. Nayak and Ors. , ; at 672. Mukherjee, J., as he then was, after referring to the said observation of Lord Cairns, said (at 672): "No man should suffer because of the mistake of the Court. No man should suffer a wrong by technical procedure of irregularities. Rules or procedures are the handmaids of justice and not the mistress of the justice. Ex debito justitiae, we must do justice to him. If a man has been wronged so long as it lies within the human machinery of administration of justice that wrong must be remedied. " 87 It is well to remember that the Code of Civil Procedure is a body of procedural law designed to facilitate justice and it should not be treated as an enactment providing for punishments and penalties. 'he laws of procedure should be so construed as to render justice wherever reasonably possi ble. It is in our opinion, not unreasonable to demand resti tution from a person who has purchased the property in court auction being aware of the pending appeal against the de cree. We have carefully considered the evidence in the case. The judgment debtor who has been examined in the case has stated that the auction purchaser is a sambandhi of the decree holder. 'the decree holder 's daughter has been given in marriage to the son of auction purchaser. That evidence remains unchallenged. The evidence further indicates that after the purchase both of them have entered into an agree ment with a third party for sale of the second item of properties for Rs.96,000 and a case seems to be pending on the basis of that agreement. The evidence also discloses that the auction purchaser had no money of his own to pur chase the property. These circumstances are sufficient to hold that the auction purchaser was not a bona fide purchas er. The auction sale in his favour must, therefore, fall for restitution. 'he Court cannot lend assistance for him to retain the property of the judgment debtor who has since succeeded in getting rid of the unjust decree. In the result the appeal is allowed, the judgment of the Division Bench of the High Court is reversed and that of learned single Judge is restored. The appellants, however, must pay the costs of this appeal to the auction purchaser which we quantify at Rs.5,000. R.S.S. Appeal allowed.

Respondent No. 1 obtained a money decree against the original appellant, who has been substituted by legal heirs, on the basis of a promissory note. The appellant appealed to the High Court but could not get the decree stayed because he was unable to furnish security for the decretal amount. The decree was put into execution notwithstanding the pend ency of the appeal, and two items of appellant 's properties were purchased by respondent No. 2 at the court sale. Later, the High Court allowed the appellant 's appeal on merits and set aside the decree. Thereupon, the appellant moved the executing court for setting aside the court sale inter alia on the ground that (1) the sale was vitiated by material irregularities and properties were deliberately sold for under value; (2) the sale was collusive between decree holder and the auction purchaser; the latter, being the sambandhi of the former, was just a name lender; and (3) since the decree had been reversed, the sale should be nullified and restitution should be ordered. The executing court rejected these con tentions and held that subsequent reversal of the decree could not be depended upon since the sale had been confirmed in favour of the auction purchaser who was a stranger to the litigation. The learned Single Judge of the High Court, however, allowed the appellant 's appeal and held inter alia that (a) the sale was vitiated by material irregularities resulting in fetching a low price; and (b) the decree holder and auction purchaser were close relatives and the sale seemed to be collusive. But on appeal, the Division Bench reversed the decision of the learned Single Judge. Allowing the appeal, this Court, HELD: (1) A distinction is maintained between the decree holder who purchases the property in execution of his own decree which is 79 afterwards modified or reversed, and an auction purchaser who is not party to the decree. [84E] (2) Where the purchaser is a decree holder, he is bound to restore the property to the judgment debtor by way of restitution but not a stranger auction purchaser. The latter remains unaffected and does not lose title to the property by subsequent reversal or modification of the decree, and could retain the property since he is a bona fide purchaser. This principle is also based on the premise that he is not bound to enquire into correctness of the judgment or decree sought to be executed. He is thus distinguished from an eonomine party to the litigation. [84E F] Janak Raj vs Gurdial Singh, ; and Sardar Govindrao Mahadik vs Devi Sahai, ; , referred to. (3) The true question in each case is whether the stranger auction purchaser had knowledge of the pending litigation about the decree under execution. If it is shown by evidence that he was aware of the pending appeal against the decree when he purchased the property, it would be inappropriate to term him as a bona fide purchaser. Indeed, 'he is evidently a speculative purchaser and in that respect he is in no better position than the decree holder purchas er. [85B C] Chhota Nagpur Banking Association vs C.T.M. Smith, [1943] Patna 325 and Jamnomal Gurdinomal vs Gopaldas, AIR 1924 Sind 101, referred to. R. Raghavachari vs M.A. Pekkiri Mahomed Rowther, AIR 1917 Mad 250, overruled. (4) Similarly, the auction purchaser who was a name lender to the decree holder or who has colluded with the decree holder to purchase the property could not also be protected to retain the property if the decree is subse quently reversed. [86B] (5) The Code of Civil Procedure is a body of procedural law designed to facilitate justice and it should not be treated as an enactment providing for punishment and penal ties. The laws of procedure should be so construed as to render justice wherever reasonably possible. [87A B] Rodger vs The Comptoir De Paris, [1869 71] LR 3 PC. 465 at 475 80 and A.R. Antulay vs R.S. Nayak, ; , referred to. (6) The evidence on record is sufficient to hold that the auction purchaser was not a bona fide purchaser. The auction sale in his favour must, therefore, fall for resti tution. The Court cannot lend assistance for him to retain the property of the judgment debtor who has since succeeded in getting rid of the unjust decree. [87D E]

Appeal No.241 of 1961. Appeal from the judgment and decree dated March 4, 1958, of the Patna High Court in Appeal from Appellate Decree No. 1335 of 1952. 634 R.S. Sinha and R.C. Prasad, for the appellants. Sarjoo Prasad and B. P. Jha, for the respondents nos. 1 and 2. April 3, 1964. The judgment of the Court was delivered by DAS GUPTA, J. This appeal arises out of a suit for re demption of a large number of usufructuary mortgages in favour of the defendants. The plaintiff who owned 1.67 acres. of lands which were recorded in Khata 56 and 10.56 acres in Khata 57 in village Sarifabad gave 1.27 acres out of Khata 56 and 8.24 acres out of Khata 57 lands in mortgage to the several defendants by separate mortgage bonds. Part of the remaining land was sold by him and the rest settled by him with the first defendant on Batai terms. The plaintiff 's case is that under the terms of the mortgage bonds the mortgagees were liable to pay rent to the landlord. The mortgagees however defaulted in the payment of rent for some years. A suit for the arrears of rent was brought by the landlord and a decree obtained. In execution of the decree the lands were sold. The purchasers were one Besolal and Mst. Kirti Kuer, who according to the plaintiff, were only benamidars of defendants 1 and 2 and other mortgagees. It is his case that this purchase enured for the benefit of the mortgagor, that is, the plaintiff, and so the right of redemption of the mortgagees has not been affected. The prayers were for a declarations that the purchase was for the benefit of the plaintiff and for redemption of the mortgagees. The suit was contested by defendants 1 and 2 only. Of these defendants, Chamroo Sao is the purchaser, and Besolal, defendant 2 is the son of the other purchaser Mst. Kirti Kuer. They denied the allegation that Besolal and Mst. Kirti Kuer were their benamidars and contended that the right of redemption has been extinguished by the court sale. The Trial Court held that the plaintiff had failed to show that the auction purchasers were benamidars of the mortga gees and in that view dismissed the suit. On appeal, the Additional District Judge, Patna, came to a contrary conclusion. He held that the put chase, though in the name of Besolal and Mst. Kirti Kuer was really by the, first and the second defendants. He also accepted the plaintiff 's case that under the terms of the mortgage bonds the mortgagees were liable to pay the rent and the rent sale having been brought about due to the default of the mortgagor and the mortgagee they could not be allowed to take advantage of the sale. So, according to the learned Judge, the equity of 635 redemption in favour of the plaintiff still subsisted and that he was entitled to redeem the mortgaged property. Accordingly, he set aside the judgment of the Trial Court and passed a preliminary decree for redemption. Against this decree the two defendants appealed to the High Court of Patna. The appeal came up for hearing in the first instance before a Single Judge (Mr. justice Sahai). On a consideration of the evidence, he was of opinion that the liability of rent of 2.67 acres was upon defendant I and that payment of rent of 87 acres which was purchased and 1.76 acres which was taken in ijra, the total being 2.43 acres, was upon defendant 2, that for payment of rent of 3.83 acres was upon the other defendants, and the plaintiff was liable to pay the rent of only about 3.39 acres out of the entire area of 1.67 acres of Khata No. 56 and 10.65 acres of Khata No. 57. The question which therefore arose was whether section 90 of the Trusts Act would operate to keep the equity of redemption alive in cases where the sale took place due to the default of the mortgagor as well as the mortgagees, the default on the part of the mortgagees, who purchased the properties at the sale being also substantial. The learned Judge referred this point for decision to a Division Bench. The Division Bench of the High Court held that section 90 of the Trusts Act did not apply to these circumstances. In this view the High Court allowed the appeal, set aside the decree of the first appellate court and restored the decree of the Trial Court. The present appeal by Mst. Basmati Devi, who is the legal representative of the original plaintiff who was substituted in his place, is against the High Court 's decision dismissing the suit. In coming to a conclusion that section 90 of the Trusts Act did not apply to cases where the sale took place due to the default of the mortgagor as well as the mortgagee, the High Court appears to have followed a number of previous decisions of the same High Court. In support of the appeal it is urged that the view taken by the High Court in the present case as well as the previous decisions of the Patna High Court is incorrect and defeats the very object of section 90 of the Indian Trusts Act. Section 90 of the Indian Trusts Act is in these words: "Where a tenant for life, co owner, mortgagee or other qualified owner of any property, by availing himself of his position as such, gains an advantage in 636 derogation of the rights of the other persons interested in the property, or where any such owner, as representing all persons interested in such property, gains any advantage, he must hold, for the benefit. of all persons so interested, the advantage so gained but subject to repayment by such persons of their due share of the expenses properly incurred, and to, an indemnity by the same persons against liabilities properly contracted, in gaining such advantage. " The question for consideration is whether in circumstances like the present where the decree and the sale in execution of it are brought about by the default of both the mortgagor and the mortgagee, the mortgagee can be said to have taken advantage of his position by purchasing the property at the sale. The High Court appears to think that unless the sale was brought about by the default of the mortgagee alone the mortgagee cannot be said to have taken advantage of his position in making the purchases. What seems to have weighed with the learned Judges is that even if the mortgagee had done his duty by paying the rent he was liable to pay, the sale would still have taken place as the mortgagor did not pay that portion of the rent which he was liable to pay. So, they thought that the mortgagees, though they took advantage of the fact that the property had been brought to sale, could not be said to have taken advantage of their position as mortgagees. With this view we are unable to agree. In our opinion, the fact that the mortgagor had made a default, does not alter the position that the mortgagee had also defaulted in paying the rent he was liable to pay. By his default he has contributed to the position that a suit had to be brought for arrears of rent and ultimately to the position that the property was put to sale in execution of the decree obtained in the suit. This contribution to the bringing about of the sale was a. direct result of his position as a mortgagee. When therefore he purchased the property himself at the sale in execution of the rent decree he clearly gained an advantage by availing himself of his position as a mortgagee. This, in our opinion, is the position in law even if the mortgagee 's liability was to pay less than the major portion of the rent of the holdings. Whether this would be true even where the portion which the mortgagee is liable to pay is so very small that the property is not ordinarily likely to be brought to sale for that amount, it is unnecessary for us to decide in the present case. In the present case, the finding is that the liability of the defendants 1 and 2 was to pay a substantial portion of the rent. To say in such circumstances that they did not take 637 advantage of their position as mortgagees is entirely unrealistic Such a construction would put a premium on dishonesty on the part of mortgagees whenever the entire burden of payment of rent was not left squarely on the mortgagee as under the provision of s.76 of the Transfer of Property Act. Mr. Sarjoo Prasad, who appeared before us on behalf of the respondents, tried to persuade us that in any case the plaintiff 's suit should fail as regards the lands recorded in Khata No. 57. As, according to him, these mortgagees were not at all liable to pay any portion of the rent of this holding. He drew our attention in this connection to exhibit 2, the mortgage bond executed in favour of Chamroo Sao, and to the statement made therein: "Annual rent payable to the zamindar is the concern of me, the executant". This argument proceeds on the basis that the holding recorded in Khata No. 57 continued to be separate and distinct from the Khata No. 56. It is thus in direct conflict with the plea of these very defendants in their written statement that the two holdings had been consolidated into one holding with one rental. As the oral and documentary evidence on the Paper Book prepared in the appeal did not clearly show whether or not these two holdings had become one, we called for one of the documents, exhibit B which seemed likely to throw some light on the matter. The document has now been received. It is the copy of a judgment of a suit between these parties in which this very question, viz., whether the two holdings had been consolidated into one or not, was raised. It was decided hat such consolidation had taken place. It is clear that it was after such consolidation that the second rent suit was brought in respect of that consolidated holding and it was that consolidated holding which was sold in execution of the decree. It is clear therefore that the mortgage bond Ex.2 in which the mortgagor accepted liability to pay rent to the zamindar in respect of the mortgaged land in Khata No. 57 does not affect the correctness of the High Court 's finding that the liability to pay rent of the holding that was sold was partly of the mortgagor and partly of the mortgagees and, that it was the default of both the mortgagor and the mortgagees that brought about the sale. Accordingly, we allow the appeal, set aside the judgment and decree of the High Court and restore the decree made by the Additional District Judge, Patna. A Pleader Commissioner shall be appointed by the trial court on a deposit of Rs. 50/ as his fees by the present appellant within two months from this date for taking accounts as to the amount due to the defendants on the date of the decree. A preliminary decree for redemption shall be passed in the usual terms. As the suit as also the appeal before the District Judge had been brought in forma pauperis the High Court made an order 638 directing the plaintiff to pay the court fee on the plaint as well as on the memorandum of appeal. That order is set aside. Instead, we order the first and the second defendants in the suit to pay the court fee payable on the plaint as also on the memorandum of appeal. The present appeal to this Court has also been brought by the appellant as a pauper. As she has succeeded in the appeal, we order the contesting respondents, i.e., the first and the second defendants, to pay the court fee payable on the memorandum of appeal to this court. The appellant will get her costs from the first and the second defendants through out. Appeal allowed.

The plaintiff brought a suit for redemption of a large num ber of usufructuary mortgages in favour of the defendants. The case of the plaintiff was that under the terms of the mortgage bonds the mortgagees were liable to pay rent to the land lord. The mortgagees, however, defaulted in the payment of rent for some years. A suit for arrears of rent was brought by the land lord and a decree obtained. In execution of the decree the lands were sold. According to the plaintiff, the purchasers of the mortgaged lands were only benamidars of defendants 1 and 2 and other mortgagees. The plaintiff claimed that the right of redemption was not affected by the Court sale because the purchase was for the benefit of the plaintiff. The suit was contested by defendants 1 and 2 only. Their case was that the right of redemption had been extinguished by the court sale; that the purchasers were not the benamidars of the defendants. The Trial Court dismissed the suit. On appeal, the Additional District Judge set aside the judgment of the Trial Court and passed a preliminary decree for redemption. Against this decree the two defendants appealed to the High Court. The appeal was heard by the Division Bench. The High Court held that in the present case section 90 of the Trusts Act did not apply because the court sale took place due to the default of the mortgagor as well as the mortgagees. In this view the High Court set aside the decree of the first Appellate Court and restored the decree of the trial court. Held: The fact that the mortgagor had made a default, does not alter the position that the mortgagee had also defaulted in paying the rent he was liable to pay. By his default he has contributed, to the position that a suit had to be brought for arrears of rent and ultimately to the position that the property was put to sale in execution of the decree obtained in the suit. This contribution to the bringing about of the sale was a direct result of his position as a mortgagee. When therefore he purchased the property himself at the sale in execution of the rent decree he clearly gained an advantage by availing himself of his position as a mortgagee. This is the position of law even if the mortgagee 's liability was to pay less than the major portion of the rent of the holdings. In this view section 90 of the Trusts Act applies to the facts of this case.

Appeal No. 501 of 1957. Appeal by special leave from the judgment and order dated September 13, 1954, of the Bombay High Court in Income tax Reference No. 13 of 1954. K. N. Rajagopala Sastri and D. Gupta, for the appellant. A. V. Viswanatha Sastri and P. L. Vohra, for the respondent. April 6. The Judgment of section K. Das, J. L. Kapur, M. Hidayatullah and T. L. Venkatarama Aiyar, JJ. was delivered by Venkatarama Aiyar, J. J. C. Shah, J. delivered a separate Judgment. VENKATARAMA AIYAR, J. The respondents were the owners of a steamship called "El Madina". That was requisitioned by the Government during the last world war, and was lost by enemy action on March 16, 1944. As compensation therefore, the Government paid the respondents Rs. 20,00,000 on July 17, 1944; Rs. 23,00,000 on December 22, 1944; and Rs. 33,333 on August 10, 1946. The original cost of the ship was Rs. 24,95,016 and its written down value at the commencement of the year of account was Rs. 15,68,484. The difference between the cost price and the written. down value viz., Rs. 9,26,532 represents the deductions which had been allowed year after year on account of depreciation. As the total compensation received exceeded the cost price, the respondents have recouped themselves all the amounts deducted for depreciation. 792 On these facts, the point in controversy between the respondents and the Department is whether the amount of Rs. 9,26,532 is liable to be included in the total income of the company for the year of assessment which is 1946 47. The provision of law under which the charge is sought to be imposed is section 10(2)(vii) of the Indian Income tax Act, 1922, hereinafter referred to as the Act, and that is, omitting what is not relevant, as follows: "(2) Such profits or gains shall be computed after making the following allowances, namely: (vii) in respect of any such building, machinery or plant which has been sold or discarded or demolished or destroyed, the amount by which the written down value thereof exceeds the amount for which the building, machinery or plant, as the case may be, is actually sold or its scrap value: Provided further that where any insurance, salvage or compensation moneys are received in respect of any such building, machinery or plant as aforesaid, and the amount of such moneys exceeds the difference between the written down value and the scrap value no amount shall be allowable under this clause and so much of the excess as does not exceed the difference between the original cost and the written down value less the scrap value shall be deemed to be profits of the previous year in which such moneys were received:". It is not disputed by the respondents that the sum of Rs. 9,26,532 would be profits liable to be taxed under this proviso, if it applies. Equally it is not disputed by the appellant that apart from this proviso the amount in question could only be regarded as capital receipt, not liable to be taxed. Before the income tax authorities, the respondents sought to avoid the application of this proviso on the ground that on representations made by them with reference to this very matter, the Board of Revenue had directed that for the purpose of Rule 4, Schedule II, of the Excess Profits Tax Act, 1940, the amount payable as 793 compensation (both the initial advance as well as any further payment that may be made) should be taken into account as though it had actually been received within thirty days of the date of the loss of the ship; and that in consequence the amount should be deemed to have been received on April 16, 1944. If that contention is correct, the amounts would have been received not in the year of account which was July 1, 1944, to June 30, 1945, but in the year previous there to, and they could not therefore be included in the income of the company for the year of assessment. This contention, however, was rejected by all the income tax authorities. Dealing with it, the Appellate Tribunal observed in its Order dated July 15, 1953, that the concession which the Board of Revenue had intended to give was limited to excess profits tax, and could not in any event be relied on for the purpose of cutting down the operation of the statutory provision enacted in the relevant proviso ins. 10(2)(vii); and that the material date was when the compensation was in fact received and that was in the year of account and not when it became due and payable, in the year previous thereto. In the result, the Tribunal held that the amount was liable to be included in the total income of the company. The respondent then filed an application before the Tribunal, under section 66(l) of the Act, requiring certain questions to be referred to the court, and one of them was as follows: "Whether in view of the fact that the 4th proviso to section 10(2)(vii) of the Indian Income tax Act did not apply to the assessment for the Assessment year 1945 46 and under the law in force as applicable to that assessment year the sum of Rs. 9,26,532 which accrued in the previous year relevant to that Assessment year was not taxable at all, and the fact that having regard to the Assessee 's method of accounting the said sum should not be assessed in any other year, the Assessment in respect of the ' said sum in the subsequent Assessment year 1946 47 was valid in law." 794 By its order dated February 9, 1954, the Tribunal referred the following question for the opinion of the court: "whether the sum of Rs. 9,26,532 was properly included in the assessee company 's total income computed for the assessment year 1946 47. " The reference came up for hearing before a Bench of the Bombay High Court consisting of Chagla, C.J., and Tendolkar, J., and then the respondents raised the contention that the proviso to section 10(2)(vii) under which the charge was made could not be taken into account in making the present assessment, as the same had been introduced by the Income tax (Amendment) Act, 1946 (VIII of 1946), which came into force on May 4, 1946, whereas the liability of the company to be taxed fell to be determined as on April 1, 1946, when the Finance Act, 1946, came into force. The appellant raised a preliminary objection to this question being raised for the first time before the court, on the ground that it did not arise out of the Order of the Tribunal, having been neither raised before it nor dealt with by it, and that further it had not been referred to the court. Overruling this objection, the learned Judges observed that the form in which the question was framed was sufficiently wide to take in the new contention, that even if the particular aspect of the question had not been argued before the Tribunal, it was implicit in the question as. framed, and that therefore the assessee could raise it. On the merits they held that as the proviso was not retrospective in its operation, the amount in question was not liable to be included in the taxable income and answered the question in the negative. It is against this decision that the present appeal by special leave is directed. The main contention urged before us by the appellant is that it was not open to the High Court in the present reference to go into the question as to the applicability of the proviso to section 10(2)(vii), as it was neither raised before the Tribunal nor considered by it, and could not therefore be said to be a question arising out of the order of the Tribunal, which alone could be 795 referred for the decision of the court under section 66(l). The court had no jurisdiction, it is argued, to allow a question to be raised before it, which could not be referred to it under the section. The contention of the respondents is that all questions of law which arise on the findings given by the Tribunal in its order can properly be said to arise out of its order, and that in making a reference under section 66(l), the Tribunal is not limited to those questions only which were raised before it and dealt with in its order, nor even to those questions which were raised in the application for reference under section 66(l). It is further contended that in the present case, the question as framed and refer red was wide enough to take in the contention as to the applicability of the proviso and that the High Court was in consequence within its power in entertaining it and deciding the reference on it. We may now refer to the provisions of law bearing on the question. Section 66(l) of the Act confers on the assessee and the Commissioner a right to apply to the Tribunal in the prescribed form to refer any question of law arising out of its order for the decision of the High Court. If the Tribunal is satisfied that a question of law arises, then it has to draw up a statement of the case, and refer it to the decision of the High Court. But if it considers that no question of law arises on its order, and dismisses the application under section 66(l), then the assessee or the Commissioner, as the case may be, has a right to move the court under section 66(2), and if the court is not satisfied about the correctness of the decision of the Tribunal, it can require it to state the case and refer it to its decision. Under section 66(4) the High Court can, for the purpose of disposing of the reference which comes to it under section 66(l) and (2), call for additional statement from the Tribunal. Under section 66(5) the High Court is to decide the question of law raised in the case and send a copy of its judgment to the Tribunal and the latter is to pass appropriate orders for giving effect to it. Section 59 of the Act confers on the Central Board of Revenue power to make rules for carrying out the purpose of the Act and under sub section (5), the rules 796 made thereunder shall on publication in the official gazette have effect as if enacted under the Act. Rule 22A framed under this section provides that: "An application under sub ,section (1) of section 66 requiring the Tribunal to refer to the High Court any question Of law shall be in the following form. " The form is R(T) of which paragraphs 3 to 5 are relevant for the present discussion, and they are as follows: "3. that the facts which are admitted and/or found by the Tribunal and which are necessary for drawing up a statement of the case, are stated in the enclosure for ready reference. 4. .that the following questions of law arise out of the order of the Tribunal: (3) 5. .that the applicant, therefore, requires under sub section (1) of section 66 of the aforesaid Act that a statement of the case be drawn up and the questions of law numbered out of the questions of law referred to in paragraph 4 above be referred to the High Court. " On these provisions, the question that arises for decision is whether in a reference under section 66, the High Court can consider a question which had not been raised before the Tribunal and/or dealt with by it in its order even though it be one of law. On the answer to be given to it there has been a difference of opinion among the High Courts and that turns on the meaning to be given to the words, "any question of law arising out of" the order of the Tribunal. There is no pronouncement of this Court which concludes this ques tion, though there are decisions which afford guidance in the determination thereof. These decisions will now be considered. In Commissioner of Income tax, Madras vs Mtt. Arunachalam Chettiar (1), an order of assessment made by the income tax officer was corrected by the Appellate Tribunal not in an appeal under section 33(4) but in a miscellaneous application presented to it under (1) (1953] S.C.R. 463 471. 797 section 35. The Commissioner being dissatisfied with the order applied for a reference under section 66(l). The Tribunal was of the opinion that the order in question could be made in the exercise of its inherent jurisdiction and referred the question of its legality to the court under section 66(l). The Madras High Court declined to answer it on the ground that as the order was not one passed in an appeal, the reference under section 66(l) was incompetent, as under that provision the power of the Tribunal to refer was limited to questions of law arising out of an order passed in an appeal. In affirm ing this decision, this Court observed: "The jurisdiction of the Tribunal and of the High Court is conditional on there being an order by the Appellate Tribunal which may be said to be one under section 33(4) and a question of law arising out of such an order." This is an authority for the position that the jurisdiction of the Tribunal to make, and of the High Court to hear, a reference must be strictly sought within the four corners of section 66. In The Commissioner of Income tax, Bombay South vs Messrs. Ogale, Glass Works Ltd. (1), the question referred by the Tribunal under section 66(l) was whether certain amounts received by the assessee from the Government by cheques drawn on the Reserve Batik at Bombay were income received in British India within section 4(l)(a) of the Act. The High Court had held that. as the cheques were received in the State of Aundh, in unconditional discharge of the claim, the receipt was not in British India. On appeal to this Court, it was contended that as the cheques were posted in British India, the income must be held to have been received in British India. An objection was put forward to this contention being raised, on the ground that it was not argued before the Tribunal or decided by it and that therefore it did not arise out of its order as required by section 66(l). But this Court hold that as the question as framed and referred was of sufficient amplitude to cover the new point urged, and as no contention was raised that the question had not (1). [1955] 1 S.C.R. 185, 197. 798 been properly referred under section 66(l), it could be decided under section 66(5), and that in that view, it was not necessary "to express any opinion on the larger question as to the scope, meaning and import of the words 'any question of law arising. out of ' the Tribunal 's order on the interpretation of which there exists a wide divergence of judicial opinion". There was accordingly no decision on the point now under consideration. In New Jehangir Vakil Mills Ltd. vs Commissioner of Income tax (1) the point under discussion wag whether the High Court was competent under section 66(4) to call for additional statement with reference to a question which had not been referred to it under section 66(l) or section 66(2). This Court held that the scope of a reference under section 66(2) was coextensive with that of one under section 66(l) of the Act, that therefore the court had no power under section 66(2) to travel beyond the ambit of section 66(l), that under both these provisions it is only a question of law arising out of the order that could be referred, that the object of section 66(4) was to enable the court to obtain additional statements only for the purpose of deciding questions referred under section 66(l) and (2) and that accordingly no investigation could be ordered in respect of new questions which were not and could not be the subject matter of a reference under section 66(l) and (2). Here again there was no decision on the meaning of the words, "any question of law arising out of" the order of the Tribunal. In Kusumben D. Mahadevia vs Commissioner of Income tax (2), the question actually referred 'under section 66(l) to the court was whether a sum of Rs. 47,120 received by the assessee had accrued to her in the former State of Baroda or whether it had accrued or should be deemed to have accrued to her in British India. On this reference the High Court resettled the question so as to raise the contention as to whether the assessee was entitled to any concession under the Merged States (Taxation Concessions) Order, 1949, as regards the income of Rs. 47,120, and holding that she was not, answered the reference against her (1) ; (2) [196O] 3 S.C.R. 417. 422. 799 without deciding the question as to where the income accrued. Against this Judgment, the assessee appealed to this Court and contended that the High Court was in error in not deciding the question which was actually referred. This Court accepted this contention and remanded the case to the High Court for hearing on that point. So far this decision does not bear on the present controversy. But a further point was discussed and considered by this Court, and that was that it was not open to the court to raise the question about the applicability of the Merged States (Taxation Concessions) Order, 1949, as that was not a question which was raised before or considered by the Tribunal or referred under section 66(l). In agreeing with this contention, this Court observed: "Section 66 of the Income tax Act which confers jurisdiction upon the High Court only permits a reference of a question of law arising out of the order of the Tribunal. It does not confer jurisdiction on the High Court to decide a different question of law not arising out of such order. It is possible that the same question of law may involve different approaches for its solution, and the High Court may amplify the question to take in all the approaches. But the question must still be one which was before the Tribunal and was decided by it." These observations bear on the question now under consideration but the actual decision was one remanding the case with a direction to the High Court to decide the question that was referred to it. In Zoraster & Co. vs Commissioner of Income tax (1), the assessees were manufacturers of certain kinds of goods in Jaipur. The Government of India purchased these articles and paid the price by cheques on the Bombay branch of the Reserve Bank of India. The Tribunal held that the profits of these sales had been received in British India, but on the application of the assessees referred that question to the court. The High Court remanded the case to the Tribunal under section 66(4) for a supplemental statement observing that (1) [1961] 1 S.C. It. 800 "it would be necessary for the Appellate Tribunal to find, inter alia, whether the cheques were sent to the assessee firm by post or by hand and what directions. , if any, had the assessee firm given to the Department in the matter. " The correctness of this order was challenged by the assessee on the ground that the court had no power to call for a fresh statement for the investigation of a new point and reliance was placed on the decision in New Jehangir Vakil Mills Ltd. vs Commissioner of Income tax (1). This Court held, following that decision, that the jurisdiction to call for supplemental statement was confined (a) to the facts on record and/or found by the Tribunal, and (b) to the question which would arise from the Tribunal 's order; and that further it could be exercised with reference to a new question, if it was an integral or even incidental part of the question which had been referred. This decision also proceeds on the view that a question which is unconnected with the question already referred cannot be agitated for the first time in the reference. There being thus no direct decision of this Court on the precise meaning of the words "any question of law arising out of" the order of the Tribunal, we must examine the decision of the High Courts on the question, and as already stated they are in a state of conflict. In A. Abboy Chetty and Co. vs Commissioner of Income tax, Madras (2), the application of the assessee under section 66(l) required the Tribunal to refer a question of res judicata to the court. The Tribunal declined to do so on the ground that question had not been argued before it. The assessee then moved the court under section 66(2) for an order requiring the Tribunal to refer that question. Dismissing that application, Patanjali Sastri, J., as be then was, observed as follows: " Mr. Radhakrishnayya for the petitioner contends that a question, though not raised before the Appellate Tribunal, can well be said to 'arise out of its order ', if, on the facts of the case appearing from the order, the question fairly arises. I am unable (1) ; (2) ,444. 801 to agree with that view. I am of opinion that a question of law can be said to arise out of an order of the Appellate Tribunal only if such order discloses that the question was raised before the Tribunal. " Adverting to the contention that the Privy Council had in M. E. Moola Sons Limited vs Burjorjee (1) allowed a question of law arising on the facts found, to be raised for the first time before it, the learned Judge observed: "The case furnishes no useful analogy as the scope of the remedy under section 66 of the Indian Income tax Act has to be determined with reference to the language of the statute". This decision was followed by the Madras High Court in Commissioner of Income tax vs Modern Theatres Ltd., (2) and in The Trustees, Nagore Durgah vs Commissioner of Incometax (3). In G. M. Chenna Basappa vs Commissioner of Income tax (4), the Andhra High Court followed the decision in A. Abboy Chetty and Co. vs Commissioner of Income tax, Madras (5) and observed that a question not raised before the Tribunal "cannot be said to arise out of its order even if it could be sustained on the facts in the statement of the case by the Tribunal", and that further the order of the Tribunal should disclose that the point of law was raised before it. The same view was adopted by the Patna High Court in Maharaj Kumar Kamal Singh vs Commissioner of Income (ax (6). There, discussing the question with reference to the language of section 66(1) and (2) and Rule 22A, the court observed as follows: "The provisions of Section 66(1) and Section 66(2) do not confer upon the High Court a general jurisdiction to correct or to decide a question of law that may possibly arise out of the income tax assessment. The section, on the contrary, confers a special and limited jurisdiction upon the High Court to decide any specific question of law which (1) Rang. (3) (5) , 444. (2) (4) (6) , 86. 802 has been raised between the assessee and the Department before the Income tax Tribunal and upon which question the parties are at issue. " It was accordingly held that only a question of law which had been actually raised before the Tribunal or actually dealt with by it could be referred under section 66(1). This is also the view consistently held by the Calcutta High Court, III Commissioner of Excess Profits Tax vs Jeewanlal Ltd. (1), it was held, agreeing with the decision in A. Abboy Chetty and CO. V. Commissioner of Income tax, Madras (2), that a question of law not raised before the Tribunal could not be said to arise out of its order even if on the facts of the case appearing from the order the question fairly arises. In Chainrup Sampatram vs Commissioner of Income, tax (3), the assessee had applied under section 66(1) of the Act to refer the question whether a sum of Rs. 2,20,887 was on a true construction of section 14(2)(c) of the Act assessable to tax. The Tribunal dismissed the application on the ground that the question sought to be raised had not been mentioned at the hearing of the appeal and had not been dealt with by the Tribunal and was therefore not one which arose out of its order. The question having been brought up before the court under section 66(2), Chakravartti, J. held that under section 66(1) it was only a question that arose out of the Tribunal 's order that could be referred, and that that must be some question which was actually raised before the Tribunal and dealt with by it; and that under section 66(2) the words, "no question of law arises" could only mean that the question of which reference had been asked for by the applicant did not arise,, and that the High Court could not require the Tribunal to refer some question which was not proposed before it. The learned Judge then went on to observe: "The Indian Income tax Act has not charged the High Court with the duty of setting right in all respects ill assessments that might come to its notice; its jurisdiction is not either appellate or revisional; (1) (2) ,444. (3) , 495. 803 nor has it a general power of superintendence under Section 66. Its sole duty is to serve as the appointed machinery for resolving any conflict which may arise between an assessee or the Commissioner on the one hand and the Tribunal on the other regarding some specific question or questions of law. If, on an application under section 66(2), the High Court finds that the question which the applicant required the Tribunal to refer was not a question that arose out of the Tribunal 's appellate order, it ought, in my view, to refuse to require the Tribunal to refer any such question. " The same view was taken in Allahabad Bank Ltd. vs Commissioner of Income tax (1) and in Commissioner of Income tax vs State Bank of India (2). In Mash Trading Co. vs Commissioner of Income tax (3), a Full Bench of the Punjab High Court had to consider the true character of the jurisdiction under section 66. Therein Kapur, J., as he then was, held, on an examination of the section and on a review of the authorities that under section 66(1) it is only questions which had been raised before and dealt with by the Tribunal that could be referred to the High, Court, that the power of the High Court under section 66(2) to direct a reference is limited to questions which could be referred under section 66(1) and which the applicant required it to refer, that the Tribunal has no power to raise a question suo motu, and likewise the High Court cannot raise any question which had not been referred to it either under section 66(1) or section 66(2), but when once a question is properly raised and referred to the High Court, the High Court is bound to answer that question. In this view, it was held that a reference to the High Court on a question which was not raised before or considered by the Tribunal was not compe tent. Falshaw, J., while generally agreeing with this view considered that there might be cases in which strict adherence to this view might work injustice, as for example when a point raised before the Tribunal had not been dealt with by it owing to mistake or (1) (2) (3) 804 inadvertence, or when its jurisdiction itself was ques tioned. The learned Judge added that in the former case the point might be deemed to have been decided against the assessee in the order, thereby attracting section 66. It should be noted that all the Judges agreed in holding that the reference in question was incompetent as the point had not been raised before the Tribunal. We must now consider the decisions which have taken a somewhat different view. Vadilal Lallubhai Mehta vs Commissioner of Income tax (1) was a case under section 66 of the Act, as it stood prior to the amendment of 1939 and what was held there was that even though the assessee had not stated in his application for reference the questions which really arose out of the order, it was for the Commissioner to formulate the correct questions and refer them to the court, and where he had failed to do so, the court could direct him to do so. This is not a decision on the question as to whether questions not raised before or decided by the Commissioner could be held to be questions arising out of his order. In New Piece goods Bazar Co. Ltd. V. Commissioner of Income tax (2), the question that was referred under section 66(1) was whether taxes paid on urban immovable property by the assessee were an allowable deduction under section 9(1)(iv) and section 9(1)(v) of the Indian Income tax Act. An objection was raised before the court that the question as to the application of section 9(1)(iv) had not been argued before the Tribunal and therefore it could not be referred. Repelling this contention, Kania, J., as he then was, observed that the specific question had been put forward as a ground of appeal, and that was "quoted by the Tribunal in its judgment" but not dealt with by it, and that in the circumstances the proper order to pass was to refer the case back to the Tribunal and "invite it to express ' its opinion on this aspect of the contention and raise a proper question of law on that point also." This judgment. again proceeds on the view that it is only a question raised before and dealt with by the Tribunal (1) (2) 805 that could be referred under section 66(1), and that is clear from the observations of the learned Judge that the decisions of the Privy Council in Commissioner of Income tax vs Kameshwar Singh(1) and National Mutual Life Association V. Commissioner of Income tax (2), deprecating the practice of raising new questions in the, stage of argument on the reference in the High Court did not stand in the way of the case being referred back to the Tribunal. In Madanlal Dharnidharka V. Commissioner of Income tax (3), the Tribunal referred under section 66(1) the following question for the decision of the court: "Whether the remittance of Rs. 2,01,000 out of profits, made by the assessee in the years preceding the Maru year 1999 2000 as a nonresident, could be included tinder section 4(1)(b)(iii) of the Indian Income tax Act in his total income of the year of account in which he was a resident in British India?" This question had not been argued before the Tribunal, but the Tribunal itself referred it because it considered that it arose out of its order. The reference was heard by Chagla, C. J. and Tendolkar, J. Before them an objection was raised that the Tribunal could not refer this question under section 66(1) as the same had not been raised before it. Chagla, C. J., observed: "In my opinion it is necessary clearly to re state the jurisdiction of this court. This is not a Court of appeal. This court merely exercises an advisory jurisdiction. Its judgments are in the nature of advice given on the questions submitted to it by the Tribunal. Its advice must be confined to questions referred by the Tribunal to this court and those questions must be questions of law which must arise out of the order made by the Tribunal. Now, looking at the plain language of the section apart from any authority, I should have stated that a question of law arose out of the order of the Tribunal if such a question was apparent on the order itself or it could be raised on the facts found by the (1) (2) (3) , 233, 234. 806 Tribunal and which were stated in the order. I see no reason to confine the jurisdiction of this court to such questions of law as have been argued before the Tribunal or are dealt with by the Tribunal. The section does not say so and there is no reason why we should construe the expression 'arising out of such order ' in a manner unwarranted by the ordinary grammatical construction of that expression. This court has no jurisdiction to decide ques tions which have not been referred by the Tribunal. If the Tribunal does not refer a question of law under section 66(1) which arises out of the order then the only jurisdiction of the court is to require the Tribunal to refer the same Under section 66(2). It is true that the court has jurisdiction to resettle questions of law so as to bring out the real issue between the parties but it is not open to the court to raise new questions which have not been referred to it by the Tribunal. " Expressing next his disagreement with the decision of the Madras High Court in A. Abboy Chetty and Co. vs Commissioner of Income tax, Madras (1), the learned Judge observed: "The decision of the Madras High Court would also result in this extraordinary situation. An assessee may raise a question and argue it before the Tribunal, but if the Tribunal thought fit to ignore that argument and not to refer to that point of law in its order, then the court would have no jurisdiction to call upon the Tribunal to refer that question of law to the High Court. It is true that the Income tax Act is a very technical statute, but I see no reason why when the plain grammatical construction of the section does not make it necessary to come to that conclusion it is necessary to do so and arrive at such an anomalous result. " In Mohanlal Hiralal vs Commissioner of Income tax (2) a Bench of the Nagpur High Court, hearing a reference under section 66(1), held that on the statement of the case by the Tribunal, the question of law as framed was not correct. Then observing that in view (1) (2) , 452 453. 807 of the decision of the Privy Council in Commissioner of Income tax vs Kameshwar Singh (1), it could not itself resettle it, called for a fresh statement from the Tribunal under section 66(4). Thus far the judgment is on the same lines as New Piecegoods Bazar Co. Ltd. vs Commissioner of Income tax (2) and an earlier decision of the Nagpur High Court in Beohar Singh vs Commissioner of Income tax (3). When the case came back on the further statement under section 66(4), criticising certain remarks therein, that the court had no power to direct the Tribunal to refer a question not argued before it, the Court observed that they were made under a misconception, and quoted the observations of Chagla C.J., in Madanlal Dharnidharka vs Commissioner of Income tax (4) extracted above, with approval. This can hardly be said to be a decision on the present point. It will be seen from the foregoing review of the decisions that all the High Courts are agreed that section 66 creates a special jurisdiction, that the power of the Tribunal to make a reference and the right of the litigant to require it, must be sought within the four corners of section 66(1), that the jurisdiction of the High Court to hear references is limited to questions which are properly referred to it under section 66(1), and that such jurisdiction is purely advisory and extends only to deciding questions referred to it. The narrow ground over which the High Courts differ is as regards the question whether it is competent to the Tribunal to refer, or the High Court to decide, a question of law which was not either raised before the Tribunal or decided by it, where it arises 'on the facts found by it. On this question, two divergent views have been expressed. One is that the words, "any question of law arising out of" the order of the Tribunal signify that the question must have been raised before the Tribunal and considered by it, and the other is that all questions of law arising out of the facts found would be questions of law arising out of the order of the Tribunal. The 1latter is the view (1) (3) (2) (4) , 233. 234. 808 taken by the Bombay High Court in Madanlal Dharnidharka vs Commissioner of Income tax(1), and approved by the Nagpur High Court in Mohanlal Hiralal vs Commissioner of Income tax (2). The former is the view held by all the other High Courts. Now the argument in support of the latter view is that on the plain grammatical construction of section 66(1), any question of law that could be raised on the findings of fact given by the Tribunal, would be questions that arise out of the order, and that, to hold that they meant that the question must have been raised before the Tribunal and decided by it, would be to read into the section words which are not there. In support of this contention Shri Viswanatha Sastri, learned Counsel for the respondents, argued that it was a fundamental principle of jurisprudence that the duty of the litigants was only to state the facts and that it was for the court to apply the appropriate law to the facts found, arid he relied on the observations of Atkin, L. J., in Attorney General vs Avelino Aramavo & Co.(1), that the court was not limited to particular questions raised by the Commissioners in the form of questions on the case, and that if the point of law or the erroneous nature of the determination of the point of law was apparent on the case as stated and there were no further facts to be found, the court could give effect to it. , He also maintained that the position under the Indian law was the same as under the British statute, because under section 66(1) of the Act, the Tribunal has to refer not only questions of law arising out of its order, but also a statement of the case, that under section 66(2) the court can likewise require the Tribunal to state the case and refer it and that under section 66(5) the court has to decide the question of law raised by the case. We are unable to agree with this contention. Under the British statute when once a decision is given by the Commissioners, it is sufficient that the assessee should express his dissatisfaction with it and ask that the matter be referred to the decision of the High Court. (1) [1948]16 I.T.R. 227. (2) (3) 809 It is then for the Commissioners to draw up a statement of the case and refer it for the decision of the court. The British statute does not cast, as does section 66(1) of the Act, a duty on the assessee to put in an application stating the questions of law which he desires the Commissioners to refer to the court and requiring them to refer the questions which arise out of that order. In Commissioner of Income tax, Madras vs Mtt. section Ar. Arunachalam Chettiar (1), this Court has decided that the requirements of section 66(1) are matters affecting the jurisdiction to make a reference under that section. The attempt of the respondents to equate the position under section 66(1) of the Act with that under the British statute on the ground that the Tribunal has to draw up a statement of the case and refer it, and that the court is to decide questions of law raised by it, must break down when the real purpose of a statement in a reference is kept in view. A statement of case is in the nature of a pleading, where in all the facts found are set out. There is nothing in it which calls for a decision by the court. It is the question of law referred under section 66(1) that calls for decision under section 66(5) and it is that that constitutes the pivotal point on which the jurisdiction of the court hinges. The statement of the case is material only as furnishing the facts for the purpose of enabling the court to decide the question referred. It has been repeatedly laid down by the Privy Council that the Indian Act is not in pari materia with the British statute and that it will not be safe to construe it in the light of English decisions, vide Commissioner of Income tax vs Shaw Wallace & Co. (2). In view of the difference between section 66(1) and the corresponding provision in the British statute, we consider that no useful purpose will be served by referring to the English decisions for interpreting section 66. But the main contention still remains that the language of section 66(1) is wide enough to admit of questions of law which arise on the facts found by the Tribunal and that there is no justification for cutting (1) ; , 471. (2) (1932) L.R. 59 I. A. 206.102 810 down its amplitude by importing in effect words into it which are not there. There is considerable force in this argument. But then there are certain features, which distinguish the jurisdiction under section 66, and they have to be taken into consideration in ascertaining the true import of the words, "any question of law arising out of such order. " The jurisdiction of a court in a reference under section 66 is a special one, different from its ordinary jurisdiction as a civil court. The High Court, hearing a reference under that section, does not exercise any appellate or revisional or supervisory jurisdiction over the Tribunal. It acts purely in an advisory capacity, on a reference which properly comes before it under section 66(1) and (2). It gives the Tribunals advice, but ultimately it is for them to give effect to that advice. It is of the essence of such a jurisdiction that the court can decide only questions which are referred to it and not any other question. That has been decided by this Court in New Jehangir Vakil Mills Ltd. vs Commissioner of Income tax(2); Kusumben D. Mahadevia vs Commissioner of Income tax(2) and Zoraster & Co. vs Commissioner of Income tax (3). If the true scope of the jurisdiction of the High Court is to give advice when it is sought by the Tribunal, it stands to reason that the Tribunal should have had an occasion to consider the question so that it may decide whether it should refer it for the decision of the court. 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? It was argued for the respondents, that, in view of the fact that the court could compel the Tribunal to refer a question of law under section 66(2) for its decision, not much significance could be attached to the advisory character of its jurisdiction. It is not conceivable, it was said, that any authority should have a right to compel another authority to take its advice. We see no force in this contention. Section 66(2) (1) ; (2) ; (3) ; 811 confers on the court a power to direct a reference only where the Tribunal was under a duty to refer under section 66(1), and it is, therefore, subject to the same limitations as section 66(1). That has been held by this court in New Jehangir Vakil Mills Ltd. vs Commissioner of Income tax (1) and in Zoraster & Co. vs Commissioner of Income tax (2). Moreover, the power of the court to issue direction to the Tribunal under section 66(2) is, as has often been pointed out, in the nature of a mandamus and it is well settled that no mandamus will be issued unless the applicant had made a distinct demand on the appropriate authorities for the very reliefs which he seeks to enforce by mandamus and that had been refused. Thus, the power of the court to direct a reference under section 66(2) is subject to two limitations the question must be one which the Tribunal was bound to refer under section 66(1) and the applicant must have required the Tribunal to refer it. R(T) is the form prescribed under Rule 22A for an application under section 66(1), and that shows that the applicant must set out the questions which he desires the Tribunal to refer and that further, those questions must arise out of the order of the Tribunal. It is, therefore, clear that under section 66(2), the court cannot direct the Tribunal to refer a question unless it is one which arises out of the order of the Tribunal and was specified by the applicant in his application under section 66(1). Now,, if we are to hold that the court can allow a new question to be raised on the reference, that would in effect give the applicant a right which is denied to him under section 66(1) and (2), and enlarge the jurisdiction of the court so as to assimilate it to that of an ordinary civil court of appeal. It is again to be noted that, whereas section 6P(1), as it stood prior to the amendment of 1939, conferred on the Commissioner a power to refer a question of law to the court suo motu, that power has been taken away under the present section and it has accordingly been held that under section 66(1), as it now stands, there is no power in the Tribunal to refer a question of law suo motu for the decision of the court. If, as contended (1) ; (2) ; 812 for by the respondents, the court is to be held to have power to entertain in a reference, any question of law, which arises on the facts found by the Tribunal, its jurisdiction under section 66(5) must be held to be wider than under section 66(1) and (2). The correct view to take, in our opinion, is that the right of the litigant to ask for a reference, the power of the Tribunal to make one, and the jurisdiction of the court to decide it are all co extensive and, therefore, a question of law which the applicant cannot require the Tribunal to refer and one which the Tribunal is not competent to refer to the court, cannot be entertained by the court under section 66(5). In view of the above considerations, we are unable to construe the words, "any question of law arising out of such order," as meaning any question of law arising out of the findings in the order of the Tribunal. One of the reasons given by Chagla, C. J., in Madanlal Dharnidharka vs Commissioner of Income tax(1) for differing from the decision in A. Abboy Chetty and Go. vs Commissioner of Income tax, Madras (2) that it is only a question which was raised before the Tribunal that could be said to arise out of its order was that that view must result in great injustice in a case in which the applicant had raised a question before the Tribunal but it had failed to deal with it owing to mistake or inadvertence. In such a, case, it was said, the applicant would be deprived, for no fault of his, of a valuable right which the legislature had intended to give him. But we see no difficulty in holding that in those cases the Tribunal must be deemed to have decided the question against the appellant, as Falshaw, J. was disposed to do in Mash Trading Co. vs Commissioner of Income tax (3). This is only an application of the principle well known to law that a relief asked for and not granted should be deemed to have been refused. It is on this footing that Kania, J. held in New Piecegoods Bazar Co. Ltd. vs Commissioner of Income tax (4) that, in the circumstances stated above, the court could call upon (1) , 233, 234. (3) (2) (4) 813 the Tribunal to state a supplemental case after giving its own decision on the contention. That was also the procedure adopted in Mohanlal Hiralal vs Commissioner of Income tax(1). Such cases must be exceptional and cannot be founded on for putting a construction different from what the language of section 66(1) would otherwise warrant. There was also some argument as to the position under section 66(1) when the Tribunal decides an appeal on a question of law not raised before it. That would undoubtedly be a question arising out of the order, and not the less so because it Was not argued before it, and this conclusion does not militate against the construction which we have put on the language of section 66(1). The result of the above discussion may thus be summed up: (1) When a question is raised before the Tribunal and is dealt with by it, it is clearly one arising out of its order. (2) When a question of law is raised before the Tribunal but the Tribunal fails to deal with it, it must be deemed to have been dealt with by it, and is therefore one arising out of its order. (3) When a question is not raised before the Tribunal but the Tribunal deals with it, that will also be a question arising out of its order. (4) When a question of law is neither raised before the Tribunal nor considered by it. , it will not be, a question arising out of its order notwithstanding that it may arise on the findings given by it. Stating the position compendiously, it is only a question that has been raised before or decided by the Tribunal that could be held to arise out of its order. In this view, we have next to consider whether the question which was raised before the High Court was one which arose out of the order of the Tribunal, as interpreted above. Now the only question on which the parties were at issue before the income tax authorities was whether the sum of Rs. 9,26,532 was assessable to tax as income received during the year of (1) 814 account 1945 46. That having been decided against the respondents, the Tribunal referred on their application under section 66(1), the question, whether the sum of Rs. 9,26,532 was properly included in the assessee company 's total income for the assessment year 194647, and that was the very question which was argued and decided by the High Court. Thus it cannot be said that the respondents had raised any new question before the court. But the appellant contends that while before the income tax authorities the respondents disputed their liability on the ground that the amount in question had been received in the year previous to the year of account, the contention urged by them before the court was that even on the footing that the income had been received in the year of account, the proviso to section 10(2)(vii) had no application, and that it was a new question which they were not entitled to raise. We do not agree with this contention. Section 66(1) 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 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. That was the view taken by this Court in The Commissioner of Income tax, Bombay vs Messrs. Ogale Glass Works Ltd. (1) and in Zoraster & Co. vs Commissioner of Income tax (2), and we agree with it. As the question on which the parties were at issue, which was referred (1) (2) ; 815 to the court under section 66(1), and decided by it under s.66(5) is whether the sum of Rs. 9,26,532 is liable to be included in the taxable income of the respondents, the ground on which the respondents contested their liability before the High Court was one which was within the scope of the question, and the High Court rightly entertained it. It is argued for the appellant that this view would have the effect of doing away with limitations which the legislature has advisedly imposed on the right of a litigant to require references under section 66(1), as the question might be framed in such general manner as to admit of new questions not argued being raised. It is no doubt true that sometimes the questions are framed in such general terms that, construed literally, they might take in questions which were never in issue. In such cases, the true scope of the reference will have to be ascertained and limited by what appears on the statement of the case. In this connection, it is necessary to emphasize that, in framing questions, the Tribunal should be precise and indicate the grounds on which the questions of law are raised. Where, however, the question is sufficiently specific, we are unable to see any ground for holding that only those contentions can be argued in support of it which had been raised before the Tribunal. In our opinion, it is competent to the court in such a case to allow a new contention to be advanced, provided it is within the framework of the question as referred. In the present case, the question actually referred was whether the assessment in respect of Rs. 9,26,532 was proper. Though the point argued before the Income tax authorities was that the income was received not in the year of account but in the previous year, the question as framed is sufficient to cover the question which was actually argued before the court namely that in fact the assessment is not proper by reason of the proviso being inapplicable. The new contention does not involve re framing of the issues. On the very terms of the question as referred which are specific, the question is permissible and was open to the respondents. Indeed the very order of reference 816 shows that the Tribunal was conscious that this point also might bear on the controversy so that it cannot be said to be foreign to the scope of the question as framed. In the result, we are of opinion that the question of the applicability of the proviso is really implicit, as was held by Chagla, C.J., in the question which was referred, and, therefore, it was one which the court had to answer. On the merits, the appellant had very little to say. He sought to contend that the proviso though it came into force on May 5, 1946, was really intended to operate from April 1, 1946, and he referred us to certain other enactments as supporting that inference. But we are construing the proviso. In terms, it is not retrospective, and we cannot import into its construction matters which are ad extra legis, and thereby alter its true effect. Then it was argued that the amount of Rs. 9,26,532 having been allowed as deduction in the previous years, may now be treated as profits received during the year of assessment, and thereby subjected to tax. But this is a point entirely new and not covered by the question, and on the view taken by us as to the scope of a reference under section 66(1), it must be disallowed. In the result, this appeal is dismissed with costs. SHAH, J. The Income tax Appellate Tribunal, Bombay Bench "A" referred the following question to the High Court of Judicature at Bombay under section 66(1) of the Indian Income tax Act: "Whether the sum of Rs. 9,26,532 was properly included in the assessee company 's total income computed for the assessment year 1946 47. " The question comprehends two component parts, (1) whether the amount of Rs. 9,26,532 was properly included in the assessee 's income, and (2) whether the amount was properly included in the taxable income of the assessees for the assessment year 1946 47. The amount sought to be taxed was part of compensation received by the assessees from the Government of India for loss in 1944 by enemy action of their ship "El Madina." The assessees maintained before the 817 taxing authorities and the Tribunal that the compensation accrued to them on April 16, 1944. This plea was rejected, but rejection of that plea was not sufficient to make the amount taxable. it had still to be decided whether the amount which was received in the months of July and December, 1944, war, taxable as income. It is common ground that before the amendment by Act 8 of 1946 of section 10, sub section (2), cl. (7), by the inclusion of the fourth proviso, compensation received for loss of a capital asset like a ship was not taxable as income under the Indian Income tax Act. The tribunal observed that the compensation accrued when it was ascertained and was received by the assessees in the year of account and the amount, was therefore rightly brought to tax in the year of assessment 1946 47. Manifestly, the tribunal its attention to the statutory provision on the application of which the exigibility of the tax depended. But proviso IV to section 10, sub section (2), cl. (7) came into force on May 4, 1946. It was not in force on April 1, 1946, the day on which the liability to pay tax for the year of assessment 1946 47 crystallized. The tribunal erroneously assumed that the amending Act was in force at the date of commencement of the year of assessment and the assessees did not attempt to remove that misapprehension. But the question whether the amount sought to be taxed was properly included did arise out of the order of the tribunal, the tribunal having held that the amount of compensation was taxable by virtue of section 10, sub section (2), cl. (7), proviso IV. The question whether the statutory pro vision relied upon to tax the assessees was applicable to the amount sought to be assessed as income was as much a question arising out of the order of the tribunal as the question whether the interpretation placed by the tribunal upon that proviso was correct, may be. The assessees had maintained that they were not liable to be taxed under section 10, sub section (2), el. (7), proviso IV because the amount sought to be taxed was received before the year of account relevant for the 103 818 assessment year 1946 47. The tribunal held, negativing the contention, that it was taxable under section 10, sub section (2), el. (7), proviso IV. A question of law whether the amount was properly included in the taxable income for the year of assessment clearly arose and that question was referred by the tribunal to the High Court. The High Court under section 66, cl. (5) of the Income tax Act has to record its opinion on the questions arising out of the order of the tribunal and not on the arguments pro and con advanced before the tribunal. In my view, the High Court had jurisdiction on the question arising out of the order of the tribunal and referred, in deciding that the Act which made the amount taxable was not in operation at the material date. This would be sufficient to dispose of the appeal but counsel for the revenue submits that as it was never urged before the tribunal by the assessees that the amending Act 8 of 1946 which made the compensation received by the assessees, taxable as income, was brought into operation after the commencement of the year of assessment 1946 47, and the tribunal never directed its attention to that plea, it had no jurisdiction to refer that question to the High Court arid the High Court was not competent to answer that question even if on the facts found the question clearly arose out of the order of the tribunal. Counsel urges that the question arising out of the order of the tribunal is only that specific question which has been raise(] and argued before the tribunal and on which the tribunal has given its decision. We have heard elaborate arguments on the true meaning of the expression "any question of law arising out of such order" and the nature of the jurisdiction exercised by the High Court under section 66 of the Income tax Act. There is wide divergence of opinion oil the true import of this clause. Before I refer to the authorities, it would be useful to set out the scheme of the Income tax Act relating to reference of questions to the High Court under section 66, and the nature of the jurisdiction which the High Court exercises. 819 "(1) Within sixty days of the date upon which he is served with notice of an order under sub section (4) of section 33 the assessee or the Commissioner may, by application in the prescribed form require the Appellate Tribunal to refer to the High Court any question of law arising out of such order and the Appellate Tribunal shall draw up a statement of the case and refer it to the High Court: Provided. . (2) If on any application being made under sub section (1)the Appellate Tribunal refuses to state a case on the ground that no question of law arises, the assessee or the Commissioner as the case may be, may apply to the High Court, and the High Court may, if it is not satisfied of the correctness of the decision of the Appellate Tribunal, require the Appellate Tribunal to state a case and to refer it,, and on receipt of any such requisition the Appellate Tribunal shall state the ease and refer it accordingly. (3). . . (4) If the High Court is not satisfied that the statements in a case referred under this section are sufficient to enable it to determine the question raised thereby, the court may refer the case back to the Appellate Tribunal to make such additions thereto or alterations therein as the court may direct in that behalf. (5) The High Court upon the hearing of any such case shall decide the questions of law raised thereby and shall deliver its judgment thereon containing the ground, on which such. decision is founded and shall send a copy of such judgment. to the Appellate Tribunal which shall pass such orders as are necessary to dispose of the case conformably to such Judgment. (6) (7) (7A) (8). . . . Under the scheme of the Indian Income tax Act, the appellate tribunal is the sole judge of facts. The High Court indisputably exercises a special advisory 820 jurisdiction to record its opinion on questions submitted, by the tribunal; it does not act as a court of appeal or revision on questions of law or fact. After the disposal of the appeal by the tribunal under section 33(4) of the Income tax Act, the revenue or the tax payer may call upon the tribunal to state a case on the questions of law arising out of the order. If the tribunal refuses to state a case, the party aggrieved may move the High Court to call upon the tribunal to state a case and the High Court may so direct if it is not satisfied as to the correctness of the decision of the tribunal refusing to state a case. The question must be one of law and not, of fact and not merely academic; it must be a concrete problem bearing directly on the rights and obligations of the revenue or of the assessees. The power of the High Court is to require the tribunal to state a case only if it is satisfied that the view of the tribunal (not on the merits of the order under section 33, el. (4)) but on the application under section 66(1) is erroneous. If the tribunal is not called upon to refer a question, the High Court cannot arrogate to itself the power to call upon the tribunal to refer questions which arise out of the findings recorded by the tribunal but which the tribunal was not called upon to refer. But there is in my judgment no warrant for the view that the question which the tribunal may refer or which the High Court on the refusal of the tribunal may call upon the tribunal to refer, must be a question which was raised and argued before the tribunal at the hearing under section 33(4). The statute does not specifically impose such a restriction nor is it implied. To import in the meaning of the expression "any question of law arising out of such order" the concept that the question must have been argued before and dealt with by the tribunal in its judgment deciding the appeal, is to impose a fetter upon the jurisdiction of the High Court not warranted by the plain intendment of the statute. The source of the question must be the order of the tribunal; but of the question it is not predicated that the tribunal must have been asked to decide it at the hearing of the appeal. It may very well happen and frequently 821 cases arise in which the question of law arises for the first time out of the order of the tribunal. The tribunal may wrongly apply the law, may call in aid a statutory provision which has no application, may even misconceive the question to be decided, or ignore a statutory provision which expressly applies to the facts found. These are only illustrative cases: analogous cases may easily be multiplied. It would indeed be perpetrating gross injustice in such cases to restrict the assessee or the Commissioner to the questions which have been raised and argued before the tribunal and to refuse to take cognisance of questions which arise out of the order of the tribunal, but which were not argued, because they could not (in the absence of any indication as to what the tribunal was going to decide) be argued. A concrete question of law having a direct bearing on the rights and obligations of the parties which may be founded on the decision of the tribunal is one which in my judgment arises out of the order of the tribunal even if it is not raised or argued before the tribunal at the hearing of the appeal. It is the duty of the tribunal to draw up a statement of the case and to frame questions; that duty can only be performed adequately if specific questions relating directly to the dispute between the parties are raised. If the import of the question is unduly large, the High Court has, and is indeed bound in dealing with it to restrict it to its true content in the light of the findings recorded by the tribunal. But in dealing with the question, the High Court may not only entertain those aspects of the case which were argued before the tribunal, but all such aspects as have fairly a direct bearing on the dispute. The jurisdiction of the High Court is by statute not expressly circumscribed to recording its opinion on arguments advanced before the tribunal, and the nature of the jurisdiction exercised by the High Court does not demand that such a limitation should be implied. The court has jurisdiction to decide questions which arise out of the order of the tribunal, not merely those which were raised and argued before the tribunal. 822 On the meaning of the expression "question of law arising out of such order," judicial opinion in the High Courts is divided, and this court has not expressed any authoritative opinion thereon. No useful purpose will be served by entering upon an analysis of the decisions of ' the High Courts and there are many on this question. The decisions fall into two broad divisions. On the one hand it is ruled that "a question of law can be said to arise out of an order of the Appellate Tribunal within the meaning of section 66(1) of the Indian Income tax Act, only if such order discloses that the question was raised before the tribunal. A question not raised before the tribunal cannot be said to arise out of its order even if on the facts of the case appearing from the; order the question fairly arises. " The leading cases in support of this view are A. Abboy Chetty & Co. vs Commissioner of Income tax, Madras (1) and The Commissioner of Excess Profits Tax, West Bengal vs Jeewanlal Ltd., Calcutta (2). This view has been adopted with some variations in the norms of expression in the following cases: Maharaj Kumar Kamal Singh vs Commissioner of Income tax (3), G. M. Chenna Basappa vs Commissioner of Income tax, Hyderabad (4) and Punjab Distilling Industries Ltd. Commissioner of Income tax, Punjab (5). On the other hand is the view expressed by Chagla, C. J. in Madanlal Dharnidharka vs Commissioner of Income tax (6) where the learned Chief Justice recorded his conclusion as follows: "I should have stated that a question of law arose out of the order of the Tribunal if such a question was apparent on the order itself or it could be raised on the facts found by the Tribunal and which were stated in the order. I see no reason to confine the jurisdiction of this Court to such questions of law as have been argued before the Tribunal or are dealt with by the Tribunal. he section does not say so and there is no reason why we should construe the expression arising out of such order ' in a manner unwarranted by the (1) (3) (5) (2) (4) (6) 823 ordinary grammatical construction of that expression. " For the reasons already set out, in my view, the interpretation placed by Chagla, C. J. on the expression "arising out of such order" is the correct one. Appeal dismissed.

By section 66 (1) of the Indian Income tax Act, 1922 "the assessee or the Commissioner may, by application in the prescribed form . require the Appellate Tribunal to refer to the High Court any question of law arising out of such order and the Appellate Tribunal shall . draw up a statement of the case and refer it to 789 the High Court. " The respondents, who received compensation from the Government as owners of a requisitioned steamship lost in enemy action, were assessed to tax under the fourth proviso to section 1O(2)(Vii) of the Indian Income tax Act, which was inserted into the Act by the Income tax (Amendment) Act, 1946 (VIII Of 1946) that came into force on May 4, 1946. Before the Tax Authorities the respondents sought to resist the liability on the ground that the income was received not in the year of account but in the previous year but failed. No question as to the applicability of the said proviso was either raised before the Tribunal or dealt with by it. The question that was referred to the High Court was as follows: "Whether the sum of Rs. 9,26,532 was properly included in the assessee company 's total income computed for the assess ment year 1946 47." In the High Court the respondents contended that the said proviso had no application. The appellant took a preliminary objection to this contention being raised on the ground that it was not raised and argued before the Tribunal but the High Court overruled the objection and held that the compensation amount was not liable to charge as the proviso in question was not in force on the material date. Against this decision the Commissioner of Income tax appealed. The point for determination in the appeal was whether the High Court in answering a reference under section 66 could decide a question not raised or argued before the Tribunal. Held (per Das, Kapur, Hidayatullah and Venkatarama Aiyar, jj.), that the jurisdiction of the High Court under section 66 of the Indian Income tax Act is purely advisory and therefore different from its ordinary jurisdiction as a Civil Court. It is of the essence of such a jurisdiction that the High Court can decide only such questions as are referred to it and that implies that the questions must necessarily be those that the Tribunal had occasion to consider. The words "any question of law arising out of such order" in section 66(1) of the Indian Income tax Act, 1922, do not in the context mean any question of law arising out of the findings in the order of the Tribunal but only such questions as were raised before, or decided by the Tribunal. The Indian Income tax Act, I 922, is not in Pari materia with the British Statute and in view of the difference between section 66(i) and the corresponding provisions of the British Statute no useful purpose can be served by referring to English decisions for interpreting section 66 of the Indian Act. Commissioner of Income tax vs Shaw Wallace & Co., (1932) L.R. 59 I.A. 2o6, referred to. Attorney General vs Avelino Armavo & Co., , considered. 790 The power the High Court has under s: 66(2) Of the Act to direct a reference can make no difference since such power is subject to the same limitations as that of the Tribunal under section 66(i) of the Act. Commissioner of Income tax, Madras vs Mtt. section Ar. Arunachalam Chettiar, (1953] S.C.R. 463, New jehangir Vakil Mills Ltd. vs Commissioner of Income tax, [1960] 1 S.C.R. 249, Kusumben D. Mahadevia vs Commissioner of Income tax, and Zoraster & Co. vs Commissioner of Income tax, ; , referred to. Madanlal Dharnidharka vs Commissioner of Income tax, , disapproved. Case law reviewed. The jurisdiction of the High Court in deciding a reference under section 66(5) is co extensive with the right of the litigant to ask for a reference and the power of the court to make one. Therefore the High Court has jurisdiction in a reference to decide questions of law arising out of the order of the Tribunal, that is question of law raised and decided by the Tribunal, or question of law raised before the Tribunal but not decided by it or question of law decided by Tribunal, though not raised before it, but not questions not raised or decided by the Tribunal even though it may arise from its findings. A question of law may have more than one aspect and section 66(1) of the Act does not contemplate that each aspect of a question is by itself a distinct question. It only requires that the question of law which is referred to the Court must have been in issue before the Tribunal. It does not further require that the reference should be limited to those aspects of the question which had been argued before the Tribunal. The Commissioner of Income tax, Bombay South vs M/s. Ogale Glass Works Ltd. [1955] I S.C.R. 185 and Zoraster & Co. vs Commissioner of Income tax; , , approved. In the instant case, the question referred to the High Court was wide enough to cover the contention raised by the respondent and the High Court was right in holding that the fourth proviso to section 10(2)(Vii) Of the Act, not being retrospective in operation, bad no application. Per Shah, J. Section 66 of the does not contemplate that the question which tire Tribunal may refer, or which the High Court may call upon the Tribunal to refer, must be one that is raised and argued before the Tribunal at the hearing under section 33(4) Of the Act. The section does riot specifically impose such a restriction nor is it implied. To import into the expression "any question of law arising out of such order" any limitation that the question must either have been argued before the Tribunal or dealt with by it, would be not only to impose fetters upon the jurisdiction of the High 791 Court which were plainly not intended by the statute and in certain cases might involve gross injustice to the parties. Madanlal Dharnidharka vs Commissioner Of Income tax, , approved. Under section 66(5) Of the Act, the court has to record its opinion on the questions arising out of the order of the Tribunal and not on the arguments advanced before it. In the instant case the High Court, on the question arising out of the order of the Tribunal and referred to it, had jurisdiction to decide that the proviso which made the amount taxable was not in operation at the material date.

Criminal Appeal No. 393 of 1979. From the Judgment and Order dated 26.4.1979 of the Tamil Nadu High Court in Criminal Appeal No. 197 of 1978 and Crl. Revision Case No. 833 of 1977. U.R. Lalit and K.R. Choudhary for the Appellants. K.V. Venkataraman for the Respondent. The Judgment of the Court was delivered by KULDIP SINGH, J. Parusuraman @ Velladurai, Karuppaiah, Nagasundaram and four others (hereinafter referred to as A1 to A7) were tried for the murder of one Jawahar. Three charges were framed against them. A7 was charged under Section 302 read with Section 109, I.P.C. for instigating A1 to 6 to commit the murder. The second charge related to rioting wherein A1, A2, A4, A5 and A3, A6 were tried under Sections 147 and 148 I.P.C. respectively. The third charge under Section 302 read with Section 149, I.P.C. was against Al to A6 on the allegations that Al, A2, A4 and A5 armed with sticks, A3 armed with aruval (bill hook) and A6 armed with vel stick (spear stick), attacked Jawahar at about 8.30 A.M. on January 2.8, 1977 and caused him multiple injuries as a result of which he died on the same day. All the ac cused persons were acquitted by the learned Trial Judge. On appeal the High Court maintained the acquittal of A4 to A7 but reversed the findings in respect. of A1to A3. Believing the prosecution evidence, the High Court came to the conclusion that the commission of offence by A1 to A3 was proved. They were convicted under Section 304 Part I read with Section 34, I.P.C. and were sentenced to undergo rigor ous imprisonment for five years. This appeal by A1 to A3 via special leave petition is against the judgment of the High Court. While granting special leave to appeal this Court by its order dated August 10, 1979 allowed bail to the appel lants. We have heard learned counsel for the parties. We agree with the High Court that the participation of the appellants in the occurrence which resulted in the death of Jawahar has been proved beyond doubt. We are, however, of the view that keeping in view the nature of injuries on the person of the deceased and the facts and circumstances of this case the 3 offence committed by the appellants come within the mischief of Section 325 read with 34, I.P.C. Thirteen external in juries were found on the dead body of Jawahar. Out of those 11 were on lower legs and arms. The High Court while consid ering the nature of offence observed as under: "These accused and their associates who be set themselves on Jawahar could never have intend ed to cause the death of Jawahar for, if such was their intention, they could have certainly killed him especially after carrying him into the cholam field and left him dead there instead of merely causing simple and grievous injuries to him. Even with reference to the aspect whether the accused persons could have, intended to cause such injuries as would be sufficient, in the ordinary course of nature, to cause death, we are not able to give a finding in favour of the prosecution. Even according to Jawahar 's statement (Exhibit P 6) all that first accused had remarked was that the attack on him was in retaliation for the injuries Jawahar had caused on the first accused a few weeks earlier. " Agreeing with the above observations of the High Court we are of the opinion that the intention of the appellants was to cause grievous hurt and as such the offence committed by them comes within the parameters of Section 325, I.P.C. We, therefore, set aside the conviction and sentence of the appellants under Section 304 Part I, I.P.C. read with Sec tion 34, I.P.C. and instead convict them under Section 325, I.P.C. read with Section 34, I.P.C. We impose the sentence of imprisonment already undergone by the appellants. We also impose the sentence of Rs. 7,000 each as fine on the appel lants. The appellants shall deposit Rs. 7,000 each before the Trial Court within four months from today. In the event of non payment of fine the appellants shall undergo rigorous imprisonment for five years. The amount of Rs. 21,000 rea lised as fine from the appellants be paid to the father/mother of deceased Jawahar. In the event of none of them surviving the amount shall be paid to Indra sister of deceased Jawahar. The appeal is disposed of in the above terms. V.P.R Appeal disposed of.

Three charges were framed against the appellants A1 to A7. A7 was charged under Section 302 read with Section 109, I.P.C. for instigating A1 to 6 to commit the murder Al, A2, A4, A5 and A3, A6 were tried under Sections 147 and 148 IP.C., respectively and the third charge under section 302 read with Section 149, I.P.C. was against A1 to A6 on the allegations that Al, A2, A4 and A5 armed with sticks, A3 armed with/ aruval (bill hook) and A6 armed with vel stick (spear stick), attacked the deceased at about 830 A.M. on January 28, 1977 and caused him multiple injuries, as a result of which he died on the same day. All the accused persons were acquitted by the learned Trial Judge, against which when appeal was filed, the High Court maintained the acquittal of A4 to A7 but reversed the findings in respect of A1 to A3 and were convicted under Section 304 Part I read with Section 34, I.P.C. and were sentenced to undergo rigorous imprisonment for five years, against that, this appeal was filed by the appellants A1 to A3 via Special Leave Petition. Disposing the appeal, by modifying the sentence, this Court, HELD: 1. Thirteen external injuries were found on the dead body of the deceased. Out of these 11 were on lower legs and arms. The intention of the appellants was to cause grievous hurt and as such the offence committed by them comes within the parameters of Section 325, I.P.C. Keeping in view the nature of injuries on the person of the deceased and the facts and circumstances of this case the offence committed by the appellants comes within the mischief of Section 325 read with 34, I.P.C. and convicted them under Section 325, I.P.C. read with Section 34, I.P.C. imposing the sentence of imprisonment already undergone by them, and the sentence of Rs. 7,000 each as fine, to be deposited before the Trial Court, within four months, which be paid to the father/mother of deceased. 2 In the event of non payment of fine the appellants shall undergo rigorous imprisonment for five years. [3A, 3D F]

Appeal No. 372 of 1979. From the Judgement and Order dated 25.5.1978 of the Delhi High Court in Civil Writ Petition No. 1494 of 1973. Dr. N.M. Ghatate and D.N. Mishra (for J.B.D. & Co.) for the Appellant. V.C. Mahajan, C. Ramesh and C.V. Subba Rao for the Respon dents. The Judgment of the Court was delivered by B.P. JEEVAN REDDY, J. The appeal is preferred against the judgment of the Delhi High Court allowing the writ petition filed by the second respondent M/s Ferro Alloys Corporation Ltd. The writ petition was directed against the judgment and order of the Government of India, Ministry of Finance, dated September 19, 1973 in an appeal preferred under paragraph (9) of the Tax Credit Certificate (Exports) Scheme, 1965. The second respondent is the manufacturer cxportcr of ferro manganese and chrome concentrates. During the year 1964 65 (from February 28, 1965 to June 5, 1965) the second respondent entered into a number of agreements with the foreign buyers for the sale of the aforesaid two commodities. The export was routed through the M. M.T.C. the appellant herein, to bring it within the system of private barter introduced by the Government of India with a view to encourage exports. It would be appropriate to notice the essential features of the barter system in vogue during the relevant period at this stage. The main objective behind the system was to provide a mechanism which would result in increased export of particular commodities which were ordinarily difficult to sell abroad and to destinations, in which the selling countries were not able to _Pet a foot hold. This objective was sought to be achieved by linking them to imports of an equivalent or 15 lesser value of essential commodities, which, in any event, the country had to import. All barter proposals were scrutinized in the first instance by the M.M.T.C. and then by the Barter Committee. The essential stipulations were: "(i) All imports made under barter deals were subject to such sale price and distribution control as were laid down by the Government and (ii)All barter deals were to be routed through S.T.C./ M.M.T.C. unless otherwise decided upon by barter committee." As and when approval was given by the Government of India, a letter of indent used to be issued by the M.M.T.C. to the bartering firm or the local supplier, as the case may be. (In this case, there was no bartering firm. Ferro Alloys was directly sending the goods). As far as purchase and sale contracts were concerned, the M.M.T.C. insisted that there should be one contract of sale between the local supplier and the M.M.T.C. and another contract of sale by the M.M.T.C. to the foreign buyer on principal to principal basis. The foreign exchange so generated under this arrangement was the basis for issue of import licences, which were issued in the name of M.M.T.C. with the letter of authority in favour of the bartering firm or the local supplier, as the case may be. This enabled the bartering firm/local supplier to import the approved commodity under its approval barter and thus he in a position to recoup the losses incurred by it in arranging the supply or in supplying, as the case may be of export commodities to the M.M.T.C. It was agreed and understood that the ferro alloys should intimate the foreign buyer to enter into a direct contract with the M.M.T.C. treating it as the seller. It was also agreed that G. R.I. Form prescribed by the Reserve Bank of India under the Rules framed under the Foreign Exchange Regulation Act (for accounting the receipt of foreign exchange) was to be signed by the M.M.T.C. showing it as the exporter and seller vis a vis the foreign buyer. Letters of credit was also to be opened in the name of M.M.T.C.? which was to be assigned to the Feffo alloys. This was done with a view to enable the Ferro alloys to receive the payment directly for the goods supplied to M.M.T.C. The Shipping Bill, which is a document prescribed under the Customs Act, was also to be made out 16 showing M.M.T.C. as the exporter. The transactions were gone through. Dispute arose between the parties when the question of issuance of a tax credit certificate under Section 280 (Z) (C) of the Income Tax Act arose. Sub section (1) of section 280 (Z) (C), as in force at the relevant time, read as follows "Tax Credit Certificate in relation to exports (1) Subjects to the provisions of this section. a person who exports any goods or merchandise out of India after the 28th day of February, 1965, and receives the sale proceeds thereof in India in accordance with the Foreign Exchange Regulation Act, 1947 (7 of 1947), and the rules made thereunder, shall be granted a tax credit certificate for an amount calculated at a rate not exceeding fifteen per cent on the amount of such sale proceeds. " A reading of the sub section shows that the tax Credit Certificate is issued to the person "who exports any goods or merchandise out of India after the 28th day of February, 1965, and receives the sale proceeds thereof in India in accordance with the Foreign Exchange Regulation Act, 1947 and the Rules made thereunder. " Question, therefore, arose who is the person, in the case of this transaction, who can be said to have exported the goods and received the sale proceeds in the shape of foreign exchange. The matter was taken in appeal before the Government of India under paragraph (9) of the Tax Credit Certificate Exports Scheme, 1965. On an elaborate consideration of the bartering scheme and the several documents which came into existence in connection with the transactions between the parties, the Government of India held that the M.M.T.C. must be held to be the exporter for the purpose of Section.280(Z)(C) and not the Ferro alloys. This order was challenged by Ferro alloys by way of a writ petition in the High Court. The High Court allowed the writ petition on the following reasoning: "While the terms of the scheme of barter and the 17 arrangement between the exporter and the Corporation visualizes in theory that the contracts to be entered into between the exporter and the foreign buyers would be duly substituted by principal to principal contracts between the foreign buyer and the Corporation as well as the Corporation and the Indian supplier of the goods, so that the Corporation virtually gets substituted for the exporter for all external appearance, in actual practice, however, it appears that the substituted contracts are rarely executed and were, in any event, not executed in the present case at either of the two ends although the letter of credits were opened by the foreign buyers in favour of the Corpo ration and the shipments were made in some cases in the name of the Corporation on account of the exporter while in the others in the name of the exporter on account of the Corporation. No consideration, however, passed between the Corporation and the exporter on account of any sale of the commodity to the Corporation. The letters of credit being transferable are endorsed immediately on receipt in favour of the exporter by the corporation and the sale proceeds are directly realized by the exporters through their bankers and the commission of the Corporation agreed to is paid by the exporter to the Corporation. The declaration under Section 12 of the Foreign Exchange (Regulations) Act in Form GR I contains the name of the Corporation as the exporter. But the form lists the name of the exporters ' banker as the banker concerned. " In other words, the High Court 's approach was that while for external appearances, the corporation was given out as the exporters, Ferro alloys was the real exporter for all purposes and it was Ferro alloys which earned and received the foreign exchange. M.M.T.C. got only its commission of 2% and nothing more. Alternatively held the High Court even if it is held that the documents executed between the parties had the legal effect of transferring title in the goods to and in favour of the Corporation, even so Ferro alloys must be deemed to be 18 the real exporter for the purposes of Section 280(Z)(C), having regard to the objective underlying the said section viz., providing an additional incentive to the real exporter. The correctness of the said view is questioned in this appeal. Though the second respondent, Ferro alloys Corporation Ltd., has been served, no one appears on its behalf. We are, therefore, obliged to dispose of this appeal only with the assistance of the counsel for the M.M.T.C. May be that there are factors in this case supporting the contentions of both the parties. In such a case, we have to decide the question on a totality of relevant factors applying the test of predominance. It is true that there was initially an agreement or contract between Ferro alloys and the foreign buyer for export of manganese and other goods but that was substituted and superseded by the two contracts entered into with respect to the very same goods. One contract was between Ferro alloys and M.M.T.C. for sale of the said goods to and in favour of M.M.T.C. and the other was a sale by M.M.T.C. to the foreign buyer. It is significant to notice that these contracts were on principal to principal basis. Apart from this fact all the statutory documents viz., G. R.I. Form prescribed under the Foreign Exchange Regulation Act, 1947 and the shipping bill prescribed by the Customs Act were made out in the name of M.M.T.C. showing it as the exporter. We have perused the Form G.R.I.Column 1 pertains to exporter 'sname. Against this column is shown Minerals and Metals Trading Corporation of India Limited '. The Form contains a declaration to be signed by the exporter declaring that he is the seller/consignor of goods and a further undertaking that they will deliver to the Bank mentioned in the said Form, the foreign exchange resulting from the export of the goods mentioned therein. It was signed by the M.M.T.C. Letters of credit were opened in the name of M.M.T.C. All this was done as required by the system of barter. Ferro alloys availed of this system presumably because it was to its advantage. In fact, it appears that it was not able to sell the said goods otherwise. Be that as it may, whether by choice or for lack of alternative, it chose to route its goods through M.M.T.C. Is it open to the Ferro alloys now to say that all this must be ignored in the name of "external appearances" and it must be treated as the real exporter for the purposes of Section 280(Z)(C). It wants to be the gainer in both the events. A case of "heads I win, tails you lose. " As against the above circumstances, the factors appearing in favour of the 19 Ferro alloys are the following: The contract between the parties spoke of "commission" of two per cent payable to the M.M.T.C. Use of the expression "commission", it is pointed out, is indicative of the fact that M. M.T.C. was only an agent. For the M.M.T.C., it is explained that it was one way of describing the difference between the export price and the sale price. It is submitted that the said feature must be understood in the context of the totality of the scheme, which was not a mere commercial scheme but a scheme conceived in the interest of foreign trade, economy and balance of payments. Ferro alloys also relied upon a certificate given by the foreign buyer stating that the goods in question were sold to it by Ferro alloys. But as rightly pointed out by the Government of India, this certificate was obtained long after the relevant transactions were over and evidently to buttress its case with respect to the tax credit certificate. Not much significance can be attached to it, also because it is in the teeth of the contracts signed by the foreign buyer with the M.M.T.C. with respect to the very same It is also pointed out that some of the documents required to be executed according to (he system of barter were not actually executed between the parties. May be so. The fact yet remains that the entire export was done through M.M.T.C. in accordance with the system of barter. There is no half way house; either it is no '? barter system or it is. This is an undisputed fact as are the several statutory documents made out in the name of M.M.T.C., referred to here in before. On a consideration of all the relevant factors and circumstances, we are of the opinion that the M.M.T.C. must be held to be the exporter for the purpose of Section 280(Z)(C). The entire system of barter and the several documents executed in that behalf including those required by statutory provisions cannot be explained away as mere "external appearances". The Ferro alloys cannot come to M.M.T.C. when it is profitable to it and disavow it when it is not profitable to it. It cannot have it both ways. The title to goods passed to M.M.T.C. by virtue of the several documents executed between the parties. Indeed, that was the fulcrum of the entire scheme of Barter. We are also not convinced with the alternative reasoning of the High Court that even if it is held that the title to the goods passed to M.M.T.C., even so Ferro alloys must be held to be the real exporter, in view of the objective underlying Section 280(Z)(C). If M.M.T. C. has acquired the title to the goods and is the exporter for all other purposes it equally the exporter 20 for the purposes Section 280(Z)(C). There can he no dichotomy of the nature propounded by the High Court. We are, therefore of the opinion that the High Court was not right in holding to the contrary. The appeal is allowed. The judgment and order of the High Court of Delhi is set aside and the order of the Government of India dated September 19, 1973 is restored. The writ petition filed by the second respondent in the Delhi High Court is dismissed. No costs. G. N. Appeal allowed.

The Second Respondent (Ferro Alloys Corporation), manufac turer exporter of ferro maganese and chrome concentrates, entered into a number of agreement . with foreign buyers for sale of the said commodity. The export was routed through the appellant to bring it within the system of private barter introduced by the Government of India with a view to encourage exports. The main objective of barter system was to provide a mechanism which would result in increased export of particular commodities which were ordinarily difficult to sell abroad where the selling countries were not able to get a foot hold. This objective was sought to he achieved by linking them to exports of an equivalent or lesser value of essential commodities which in any event had to he imported. As for as purchase and sale contracts were concerned, M.M.T.C. insisted that there should be one contract of sale between the local supplier and the M.M.T.C. and another contract of sale by the M.M.T.C. to the foreign buyer on principal to principal basis. It was agreed that Ferro Alloys should intimate the foreign buyer to enter into a direct contract with M.M.T.C. treating it as the seller. , Also, the G.R.I. form prescribed by the Reserve Bank of India under the Rules framed under FERA was to be signed by M.M.T.C. showing it as the exporter and seller. Letters of credit was opened in the name of M.M.T.C. which was to be assigned to Ferro Alloys so that Ferro Alloys could receive the payment directly. for the goods supplied to 13 M.M.T.C. The shipping documents also showed M.M.T.C. as the exporter. The transactions were gone through. Dispute arose between the parties when the question of issuance of Tax Credit Certificate u/S 280ZC of the Income tax arose as to who could be said to have exported the goods and received the sale proceeds in the shape of foreign exchange. The matter was taken in appeal before the Government of India. It held that M.M.T.C. was the exporter for the purpose of S.280ZC. Ferro Alloys challenged the said order before the High Court by way of a Writ Petition. The High Court allowed the Writ Petition, and held that the real exporter was Ferro Alloys which earned and received the foreign exchange and M.M.T.C. got only its commission of 2% and nothing more. Aggrieved by the judgment of the High Court, M.M.T.C. preferred the present appeal. Allowing the appeal. this Court, HELD: 1. The entire export was done through M.M.T.C. in accordance with the system of barter. There is no half way house; either it is not barter system or it is in accordance with the system of barter. This is an undisputed fact as , are the several statutory documents made out in the name of M.M.T.C. Thus M.M.T.C. is the exporter for the purpose of Section 280ZC of the Income tax Act, 1961. The entire system of barter and the several documents executed in that behalf including those required by statutory provisions cannot be explained away as mere "external appearances". Ferro alloys cannot come to M.M.T.C. when it is profitable to it and disavow it when it is not profitable to it. It cannot have it, both ways. The title to goods passed to M.M.T.C by virtue of the several documents executed between the parties. Indeed,that was the fulcrum of the entire scheme of Barter. (19 E F). This Court is not convinced with the alternative reasoning of the High Court that even if it is viewed that the title to the goods passed to M.M.T.C., even so Ferro alloys must be held to be the real exporter, in view of the objective underlying Section 280ZC. If M.M.T.C. has acquired the title to the goods and is the exporter for all other purposes it is equally the exporter for the purpose of Section 14 280ZC. There can be no dichotomy of the nature propounded by the High Court. (19 H, 20 A).

ivil Appeal No. 1278 of 1982. From the Judgment and Order dated 30.9.1981 of the Punjab and Haryana High Court in Service Appeals of the Appellants. V.M. Tarkunde, Mrs. Urmila Kapur and Ms. Janki Sriniva san for the Appellants. Kapil Sibal and Ratbin Dass for the Respondents. The Judgment of the Court was delivered by KHALID, J. 1. The appellants were the employees in the ministerial establishment of the Courts at Ferozepore and Zira having entered into service varying from the year 1952 to 1965. They are members of the Punjab Civil Courts Clerks Association. On 24th July, 1980, there was an incident in the Court of Shri N.S. Mundra, Judicial Magistrate, 1st Class, Zira. On that day, one Jagdish Lal, a Senior Ahmad of the Court was slapped. He is one of the appellants in this appeal. On the day he was slapped, he presented a represen tation to the District and Sessions Judge Shri Nehra. An enquiry was directed to be held by the Senior Sub Judge, Ferozepore into the incident. In this enquiry, it was found that Shri Mundra, Judicial Magistrate, Zira slapped Jagdish Lal. This incident caused resentment in the Association and the Association, therefore, felt that something should be done to demonstrate this resentment. Accordingly, it was decided by the Association that a request should be made to the District and Sessions Judge, Ferozepore, to transfer Jagdish Lal from the Court at Zira to any other Court so that calm could be restored. The appellants among others met the District and Sessions Judge for this purpose on 28 71980. It is alleged that the Sessions Judge did not accede to the request of the representatives of the Association to plead their case before him. This aggravated the situation. Though the association and their representatives including the appellants were keen to resolve the matter, the District and Sessions Judge adopted a hardened attitude. The matter came to the notice of the High Court. An enquiry by Justice S.P. Goyal of the High Court of Punjab and Haryana was directed to be held and it was scheduled for 9th August, 1980. He was to reach the Canal Rest House at 4.00 P.M., but he could reach only at 7.30 P.M. At that time, the District and Sessions Judge, along with other Judicial 1010 officers were present to receive him. A demonstration was organised by the subordinate Court officials. There was continued slogan shouting from 4.00 P.M. till 7.30 P.M. before Justice Goyal 's arrival. The appellants are said to have taken a prominent part in raising objectionable slo gans. The slogans are: "N.S. Mundra Murdabad; N.S. Mundra Hai Hai; Dakia Mahajan Superintendent Murdabad; B.S. Nehra Murdabad; B.S. Nehra naun Chalta Karo; Katal Nehra Murdabad; B.S. Nehra Murdabad;" The appellants were charge sheeted for this conduct of theirs. Justice Goyal alighted from his car and went inside the visiting room of the rest house. He called the represen tatives of the Association. Some of them met him. They came out after the meeting. There were other demonstrators wait ing for the result of the talks. After they came back, those who raised slogans disbursed. On 11th August, 1980, the District Judge sent a letter to Shri G.S. Khurana, Chief Judicial Magistrate, Ferozepore, to hold preliminary enquiry into the demonstration by the Court officials in front of the Canal Rest House and the slogans raised there. Mr. Khurana recorded the statements of some officers on the same day and submitted his report on that very day itself. Ac cording to his report, the appellants had taken a prominent part in raising objectionable slogans in question. On the basis of this report, the District Judge placed the appel lants under suspension by his order dated 14 8 1980. On 12th August, 1980, the District Judge had intimated the High Court about the finding in the preliminary report and had sought guidance of the High Court. The appellants were supplied with the articles of the charges and statements of imputation etc. They gave their replies. While admitting that they had taken part in the demonstration on the day in question they denied that they had taken a prominent part in the demonstration as leaders in raising objectionable and defamatory slogans against their superior officers. A formal enquiry was ordered against these appellants. After a de tailed enquiry it was found that the appellants had contra vened inter alia Rule 7(1) of the Government Employees (Conduct) Rules, 19.66. and had thus acted prejudicially to the public order, decency and morality and thereby contra vened Rule 7(1) of the Government Employees (Conduct) Rules, 1966. The District Judge, Ferozepore in his capacity as the punishing authority then served a show cause notice on all the appellants as to why the penalty of dismissal from serv ice be not imposed on them. The appellants submitted their explanation. After 1011 considering the replies, the District Judge, by his order dated 17.11.1980, imposed on them punishment of dismissal from service. The appellants preferred a service appeal in the High Court of Punjab and Haryana at Chandigarh. The High Court considered the various contentions raised by the appellants in detail and dismissed the appeal as having no merit. One of the employees who had also filed appeal before the High Court withdrew his appeal and is now reported to be practis ing law. This appeal has, therefore, come up before us by special leave under Article 136, against the order of the Single judge in the above mentioned service appeal. We have given only the bare facts in this judgment for the reason that this Court issued notice on the SLP for consideration of a preliminary point only which will be evident by the orders passed on 3.12. 198 1, 4 1 1982 and 2 4 1982. "Order of the Court on 3 12 1981: Issue show cause notice on SLP returnable on 4 1 1982, on the question as to whether the High Court in disposing of the appeal of the petitioners was acting in administrative capacity or as a Tribunal or as High Court. There will be interim injunction restraining the respondents from evicting petitioner No. 2 from Government accommodation held by him on the condition that the said petitioner contin ues to pay rent or compensation at hitherto charged, pending notice." "Order of the Court on 4. 1982: Special leave petition to be heard on the question whether the High Court in disposing of the appeal of the petitioners was acting in an administrative capacity under Article 235 or as a Tribunal or as the High Court. The special leave petition to be heard on 9.2.1982 on this question. Stay to continue till then." "Order of the Court on 2.4. 1982: Special leave granted. Printing of records and filing of statement of case dispensed with. Security dispensed with. Appeal will be heard on present papers on the preliminary issue as to whether the High Court in disposal of appeal 1012 was acting in administrative capacity under Article 235 or as Tribunal or as a High Court and the circumstances in which the appeal was maintained, if so. Hearing of appeal will be fixed on second Tuesday in July 1982 pre emptorily subject to overnight 's part heard. " From the above orders it is clear that the question that is to be decided in this appeal is whether an appeal under Article 136 lies to this Court from the order under chal lenge. That being so, it is necessary to consider the nature of the appeal before the High Court and the rules governing that appeal, before discussing the questions of law raised by the appellant 's counsel with reference to various author ities of this Court, to contend that article 136 was at tracted. The appointment of the ministerial officers of the District Courts and Courts of Small Causes and their suspen sion and removal are provided under Section 35 of the Punjab Courts Act, 1918. That Section reads as follows: "35(1) The ministerial officers of the District Courts and Courts of Small Causes shall be appointed and,may be suspended or removed by the Judges of those Courts respec tively. (2) The ministerial officers of all Courts controlled by a District Court, other than Courts of Small Causes, shall be appointed, and may be suspended or removed by the Dis trict Court. (3) Every appointment under this section shall be subject to such rules as the High Court may prescribe in this behalf, and in dealing with any matter under this Section, a Judge of a Court of Small Causes shall act subject to the control of the District Court. (4) Any order passed by a District Judge under this section shall be subject to the control of the High Court. The High Court framed rules under this section for the subordinate services attached to or controlled by Dis trict Courts. These rules apply to subordinate services attached to Civil Courts other than the High Court, namely to ministerial and menial establishment of District and Sessions Judge, Sub Judge and Courts of Small Causes. Chap ter 1013 18 A of the rules is the one relevant for our purpose. A close study of the scheme and the various provisions of Chapter 18 A would make it abundantly clear that the ap pointments, promotions, punishments etc. of the ministerial officials of the Courts subordinate to the High Court, were fully within the powers of the District and Sessions Judge subject to the control of the High Court. Chapter 18 A is captioned 'control '. Though there were changes effected by notifications issued by the State of Punjab regarding ap pointments, promotions in other services, after the coming into force of the Government of India Act, 1935, it is enough to note for our purpose that the appointment, promo tion and punishment of ministerial officials in the District or other Civil Courts continued to be governed by the rules in Chapter 18 A of the High Court Rules and Orders. Control in chapter 18 A is the same as control under Article 235 of the Constitution of India, Articles 233, 234 and 235 of the Constitution of India deal with the High Courts ' control over the subordinate judiciary. Article 227 deals with the power of superintendence over all Courts by the High Court. Its predecessor section in the Government of India Act, 1935 was Section 224 which dealt with administra tive functions of the High Court. Article 233 deals with the appointment of District Judges and Article 234 with the recruitment of persons other than the District Judges to the judicial service. Article 235 deals with the control over subordinate courts and the control under this Article is wider than the control under the corresponding provision of the Government of India Act. For our purpose, it is suffi cient to note that Chapter 18 A contains provisions relating to the control of the High Court over the subordinate judi ciary. For the purpose of this appeal, we are concerned only with Rules IX and X of the rules in Chapter 18 A. Rule IX deals with punishment. We extract the entire section since it would be profitable to have a correct look at this sec tion. "IX Punishment (1) The following penalties may for good and sufficient reasons be imposed upon members of the ministerial staff: (i) Censure, (ii) Fine of an amount not exceeding one month 's salary for misconduct or neglect in the performance of duties, 1014 (iii) Recovery from pay of the whole or part of any pecuniary loss caused to Govern ment by negligence or breach of orders, (iv) Withholding of increments or promo tion including stoppage at efficiency bar, (v) Suspension, (vi) Removal, and (vii) Dismissal. (2)(a) Any of the above penalties may be inflicted by the District Judge on the minis terial officers of his own Court of any Court subordinate to him other than a Court of Small Causes, and on the menials of his own Court. (b) The Judge of a Court of Small Causes may inflict any of the above penalties on the ministerial officers or menials of his own Court. (c) The District Judge may, with the previous sanction of the High Court, delegate to any Subordinate Judge the power to inflict penalties given in clause (a) to be exercised by the Subordinate Judge in any specified portion of the district subject to the control of the District Court. Note: This delegation has been made to the Senior Sub Judge,. 1st Class, in each district in regard to the proc ess serving establishment of all Courts in the district except that of the District Judge 's Court and the Court of the Judge, Small Causes, Lahore, Amritsar and Delhi. (d) Any Subordinate Judge may fine, in an amount not exceeding one month 's salary, any ministerial officer of his own Court for misconduct or neglect in the performance of his duties. (e) The Senior Subordinate Judge may inflict any of the above penalties on menials of his own Court or the Courts of other Subordinate Judges in the same district. " In Sub Rule (1), eight penalties are categorised. Sub Rule (2) enables the District Judge to inflict any of the penalties mentioned in Sub Rule (1). Rule IX(2)(c) enables the District Judge, with the previous sanction of the High Court, to delegate to any Subordinate Judge 1015 the power to inflict penalties given in clause (a). Then comes the important section that deals with appeals i.e. Rule X. We think it useful to extract the Rule in full. "X. Appeals. (1) The District Judge may on appeal or otherwise reverse or modify any order made under rule IX(2) by any Court under his control including a Court of Small Causes, and his order shall be final: Provided that nothing in this rule shall preclude the High Court from altering where it deems fit any such appellate order of a District Judge on petition by an aggrieved person or otherwise: Provided further that the District Judge shall not enhance any punishment but should, if he considers enhancement desirable, refer the case to the High Court for orders. (2) Appeals against penalties in flicted by a District Judge shall lie to the High Court in the following cases only: (a) Penalties mentioned in Rule IX(iii) to (viii) in respect of ministerial servants, holding permanent and pensionable posts; (b) Orders of substantive appointment by promotion or otherwise to a permanent and pensionable post the maximum pay of which is Rs.75 or more per mensem; (c) Orders of temporary appointment which is to last more than three months or has in fact lasted more than three months in respect of posts the maximum pay of which is Rs.75 or more per mensem. (3) Persons appealing to the High Court under this rule shall do so by petition. Such petition, accompanied by a copy of the order complained against, shall be presented to the District Judge who passed the order within one month of the date of such order (the period between the 1016 date of application for the copy and the date on which it is supplied being excluded). The District Judge will forward the petition to the Registrar of the High Court without unnec essary delay, and in forwarding the same he will be at liberty to record any remarks which he may wish to make concerning any matter stated in the petition. After reading the petition, the High Court may either (a) Summarily reject it without hear ing the petitioner; (b) refer it to the District Judge for report and on receipt of such report reject the petition without hearing the petitioner; or (c) hear the petitioner, and in cases where other persons are held to be concerned in the subject of the petition, such other person in open Court. Nothing in these rules shall debar the High Court or a District Judge, from altering, if deemed fit, any order of punish ment or appointment not provided for above which may be passed by a District Judge, Senior Subordinate Judge OF the Judge of a Small Causes Court in respect of ministerial or menial establishment when an aggrieved person petitions or otherwise. District and Sessions Judges should not, therefore, with hold any petition addressed to the High Court whether an appeal lies to it in the case or not under these rules. In a case in which no appeal lies the District and Sessions Judge should forward it without any comments and relevant documents unless he wishes to do so or is so required by the High Court. (4) Petitioners are forbidden to attend personally at the High Court unless summoned to do So. Orders on their petitions will be communicated to them through the District Judge concerned. (5) In order that a dismissed offi cial may be able to exercise his right of appeal, the charge against him should be reduced to writing, his defence should either be taken in, or reduced to writing and the decision on such defence 1017 should also be in writing. The record of the charge, defence and decision should in all cases be such as to furnish sufficient infor mation to the appellate authority to whom the dismissed official may prefer an appeal. (6) Establishment orders, in which an appeal lies to the High Court as a matter of right, should state briefly the claims of the persons appointed as well as those of their seniors, if any, who are considered unfit for the appointments in question, and where the order of seniority has not been followed the reasons for departure from it should be stated. Rule X(1) deals with the powers of the District Judge to reverse or modify any order made under Rule IX(2) passed by any Court under his control. This sub section contains two provisos. The first proviso gives the High Court an absolute power to alter when it deems fit any order passed by the District Judge in appeal when an aggrieved person moves the High Court or even suo moto. The second proviso restricts the powers of the District Judge to enhance any punishment imposed and makes it subject to the orders of the High Court when such a case is referred to the High Court for orders. Rule X(2) deals with appeals against penalties inflicted by District Judge as in the case on hand. This section provides that appeals shall lie to the High Court from orders imposing penalties by the District Judge, but not in all cases. Appeals lie only against orders imposing penalties mentioned in Rule IX(iii) to IX(viii). In other words, an appeal does not lie when the District Judge passes an order imposing a penalty of censure or of fine of not more than one month 's salary for misconduct or neglect in the performance of duties. We are not concerned here with the orders mentioned in Rule X(2)(b) and (c). Sub rule (3) of Rule X deals with the procedure in filing appeals to the High Court. It states that appeals shall be by a petition. It obligates presenta tion of the petition to the District Judge who passed the order within the time prescribed therein. The District Judge is directed to forward the petition to the Registrar of the High Court without unnecessary delay. The District Judge is given powers to record his remarks which he may wish to make concerning any matter stated in the petition. A reading of this sub rule makes it abundantly clear that the appeal to be heard by the High Court is something which it has to do in 1018 exercise of its powers of control over the subordinate courts on the administrative side. The appeal has to be by a petition. It is to be routed through the District Judge who sends it to the Registrar of the High Court. These are the procedural formalities which normally govern appeals pre ferred before the High Court, on the administrative side. The permission given to the authority who imposes penalty to record his own remarks which he wishes to make concerning his own order is further proof of the fact that what the High Court has to consider is not a matter on the judicial side but one in its power of control and superintendence over the subordinate courts. Appeals under the general law have their own procedure, which is different from the proce dure detailed for the appeals under these rules of the deciding authority forwarding the appeal through the proper channel to the controlling authority and of the freedom of the deciding authority to give its own remarks over and above the order already passed. This procedure robs the appeal to the High Court of the characteristics of the normal appeal culminating in judicial orders. The matter will be further clear when we look at the procedure that is to be followed by the High Court in disposing of the appeals contained in this subsection itself. Rule X(3) enables the High Court to summarily reject the appeal without hearing the petitioner or refer it to the District Judge for report and on receipt of such report reject the petition without hearing the petitioner; secondly to hear the petitioner, and in cases where other persons are held to be concerned in the subject of the petition, such other person in open court. The procedure contained in this rule of hearing the petition is not similar to the procedure followed in regular judicial proceedings. Under these rules it is not obligatory for the High Court to hear the peti tioner. It can go into the papers and reject it summarily without giving the petitioner an opportunity to be heard. It can also refer it to the District Judge for report. The second method of disposal of this petition is to get a report from the District Judge and on receipt of such a report to dismiss it without hearing the petitioner and thirdly to give a hearing to the petitioner and also those who will be affected by the disposal of the petition. The manner of disposal of the petition under this rule makes it abundantly clear that this petition which the appellants call an appeal is not strictly a judicial proceeding involv ing a lis between two adversaries and the decision thereon is not a judicial decision. It has all the trappings of an administrative proceeding and an administrative decision. 1019 Sub clause (4)gives further insight into the nature of the appeal. It reads: "(4) Petitioners are forbidden to attend personally at the High Court unless summoned to do so. Orders on their petitions will be communicated to them through the District Judge concerned. " This again marks a complete departure from the normal judi cial proceeding before a court. The petitioners are forbid den to attend personally at the High Court. They can do so only when summoned to do so. In a judicial proceeding, the party has a right to appear personally or through his coun sel. Here that right is denied to him. This denial also robs the appeal of its character of a judicial proceeding. Orders passed by the High Court on such petitions will be communi cated to the parties through the District Judge concerned. A close study of these rules leaves no doubt in our mind that in deciding the appeal under Rule X, the High Court exercises only a supervisory administrative control and does not act as a Tribunal disposing of an appeal in volving a lis between two rival parties and arriving at a judicial decision. As indicated above Rule X is in Chapter 18 A which deals with control. This gives the administrative shade to the proceeding under this rule. Section 35(3) contains the rule making power. Section 35(4) stipulates that any order passed by the District Judge under this section shall be subject to the control of the High Court, thus fortifying our conclusion that the proceedings under this section and the decisions made thereunder are not judicial in nature. This appeal can be disposed of with this conclusion and it is not necessary to refer to the various authorities cited before us. However, for the completeness of the judgment, we think it proper to briefly refer to the various authorities cited before us, for and against the position that the High Court, while deciding this appeal, acted as a Tribunal whose order can be challenged before this Court under Article 136 of the Constitution, though in our view the decisions cited dealt with situations different from the one we are dealing here. In Durga Shankar Mehta vs Thakur Raghuraj Singh and Others, [1955] 1 SCR 267 a Constitution Bench of this Court was considering the jurisdiction of the Supreme Court under Article 136 of the Constitution in an election case. It is not necessary for our purpose to state the facts of the case here. It was contended that the special jurisdiction that was conferred in the Election Tribunal could be in 1020 voked by an aggrieved party only by means of an election petition, whose decision was final and conclUsiVe and that therefore a challenge to the order of the Tribunal under Article 136 of the Constitution was not maintainable. To support this contention Article 329 and the nonobstante clause therein were called in to aid. This Court repelled that contention as untenable though apparently attractive. This Court held that the expression 'Tribunal ' as used in Article 136 did not mean samething as 'Court ', but included in its ambit all adjudicating bodies provided they were constituted by the State and were invested with the judicial as distinguished from purely administrative or executive functions. This decision has been pressed into service by the appellants ' counsel to contend that the High Court in the case on hand having been constituted by the State and invested with judicial power was a Tribunal and therefore, its decision could be examined by this Court under Article 136. In our view, this decision cannot help the appellants because this decision clearly held that if the power exer cised was administrative in nature it would exclude such a Tribunal from the ambit of Article 136. In Bachhittar Singh vs The State of Punjab, [1962] Suppl. 3 SCR 7 13, an employee in PEPSU was dismissed by the Revenue Secretary. Against this order he preferred an appeal to the State Government. The Revenue Minister, PEPSU felt that the order of dismissal was too harsh and instead, he should be reverted and made an endorsement to that effect on the file, but no written order was served on the employee. After the merger of PEPSU with Punjab, the Revenue Minister, Punjab, sent the file to the Chief Minister for his advice. The Chief Minister passed an order confirming the order of dismissal and the order was duly communicated to the employ ee. This order was challenged by him before the High Court. It was contended before the High Court by the State of Punjab, with success, that the order of dismissal started with proceedings beginning with the enquiry and culminating in punishment and that the first part involved a decision on evidence while the second part of taking action an adminis trative one. This dichotomy was ingeniously put forward before this Court to render the appeal not maintainable by contending that the order of dismissal was not a judicial order. This Court repelled that contention. This Court held that departmental proceedings taken against a Government servant were not divisible in the sense in which the High Court understood it. There is just one continuous proceeding though there are two stages in it. Mudholkar, J. speaking for the Constitution Bench observed thus in repelling this contention: 1021 " . . There is just one continuous pro ceedings though there are two stages in it. The first is coming to a conclusion on the evidence as to whether the charges alleged against the Government servant are established or not and the second is reached only if it is found that they are so established. That stage deals with the action to be taken against the Government servant concerned. The High Court accepts that the first stage is a judicial proceeding and indeed it must be so because charges have to be framed, notice has to be given and the person concerned has to be given an opportunity of being heard. Even so far as the second stage is concerned, Article 311(2) of the Constitution requires a notice to be given to the person concerned as also an opportunity of being heard. Therefore, this stage of the proceeding is no less judicial than the earlier one. Consequently any action decided to be taken against a Government servant found guilty of misconduct is a judi cial order and as such it cannot be varied at the will of the authority who is empowered to impose the punishment. Indeed, the very object with which notice is required to be given on the question of punishment is to ensure that it will be such as would be justified upon the charges established and upon the other attend ant circumstances of the case. It is thus wholly erroneous to characterise the taking of action against a person found guilty of any charge at a departmental enquiry as an admin istrative order." This judgment will not help us in this case. It only lays down a general principle that a departmental enquiry and a decision is one continuous process consisting of the enquiry part and the decision making part, both the aspects of which are judicial in nature, and the decisions taken therein are in exercise of judicial power. The counsel for the appellants placed strong reliance on the decision of a Constitution Bench in the case of Asso ciated Cement Companies Ltd. vs P.N. Sharma and another; , , to contend that the decision of the High Court in this case was a judicial decision of a Tribunal within the scope of Article 136. In that judgment this Court considered most of its previous decisions relating to the scope of Article 136. What fell to be decided in that case was whether the State Government was a Tribunal when it exercised its authority under Rule 6(5) and 6(6) of the Punjab Welfare Officers Recruitment and Conditions of Serv ice Rules, 1952. It is necessary to 1022 briefly state the facts of the case. The employer company appointed the first respondent as a Welfare Officer as re quired by the Factories Act. 1984 and as per the rules men tioned above. The letter of appointment stated that the first respondent was liable to be transferred from one unit of the company to another and that his services could bet terminated by one month 's notice or with one month 's pay in lieu thereof. The Welfare Officer was not prepared to go 10 a place to which he was transferred. Thereupon the company terminated the services of the 1st respondent with one month 's salary. He appealed to the State of Punjab under Rule 6(6). The State of Punjab ordered his reinstatement. As the previous concurrence of the Labour Commissioner, as required by rule 6(3), proviso (2) was not obtained, the company brought the matter to this Court under Article 136(1) of the Constitution. A preliminary objection was raised before this Court that the appeal to this Court was incompetent because the second respondent was not a Tribunal when it decided the appeaL.within the meaning of Article 136(1) of the Constitution. Rule 6(6) read as follows: "6(6) A welfare officer upon whom the punish ment mentioned in clause (v) of sub rule (3) is imposed may appeal to the State Government against the order of punishment within thirty days from the date of receipt of the order by him. The decision of the State Government shall be final and binding. " It was by virtue of this rule that the State Government got the powers of appeal. Dealing with the preliminary objection the Constitution Bench speaking through Gajendragadkar, CJ referred to this Court 's earlier decision in Harinagar Sugar Mills Ltd. vs Shyam Sundar Jhun jhunwala and oth ers; , , and observed as follows: " . . On the preliminary question as to whether the appeals were competent, the learned Judge agreed with the majority deci sion that the Central Government was a tribu nal within the meaning of Article 136(1). Construing Article 136(1), the learned Judge observed that courts and tribunals act judi cially in both senses which he had earlier discussed and in the term 'tribunal ' are included all others, which are not so includ ed. Among the powers of the State, said Hi dayatullah, J. is included the power to decide controversies between parties. This is un doubtedly one of the attributes of the State and is aptly called the judicial power 1023 Of the State. Broadly speaking, certain spe cial matters go before tribunals, and the residue goes before the ordinary courts of civil judicature. Their procedure ', may dif fer, but the functions are not essentially different (pp. 362 63). Thus, it would be noticed that all the learned Judges who heard this case, were agreed in taking the view that the essential power which was exercised by the courts and tribunals alike was the judicial power of the State. This Court then referred to its decision in Jaswant Sugar Mills Ltd. vs Lakshmichand and Others, [1963] Suppl. 1 SCR 242 in which the finding that an appeal under Article 136(1) against the order of a Conciliation Officer was incompetent, was considered. Under clause 29 of the order promulgated in 1954 under the U.P. Industrial Disputes Act. 1947, the Conciliation Officer could grant or refuse permis sion to alter the terms of employment of workmen at the instance of the employer. This Section did not suit the employer. That was challenged before this Court. This Court held that the Conciliation Officer was not a Tribunal be cause he was not invested with the judicial power of the State as he was empowered merely to lift the ban statutorily imposed on the employers ' rights and was not authorised to pronounce a final and binding decision in any dispute. Regarding the conclusion in that case this Court observed as follows: " . . The condition precedent for bringing a tribunal within the ambit of Article 136, observed Shah, J., who spoke for the Court, 'is that it should be constituted by the State ' and he added that a tribunal would be outside the ambit of Article 136 if it is not invested with any part of the judicial func tions of the State but discharges purely administrative or executive duties. After examining the scheme of the relevant provi sion, it was observed that 'in deciding wheth er an authority required to act judicially when dealing with matters effecting rights of citizens may be regarded as a tribunal ' though not a court, the principal incident is the investiture of the 'trappings of a court 'such as authority to determine matters in cases initiated by parties. sitting in public, power to compel attendance of witnesses and to examine them on oath, and others . . Some, though not necessarily all such trap pings, will ordinarily make the authority which is under a duty to act judicially, a 'tribunal '. " 1024 17. Then dealing with the question whether the State Government when it exercised its authority under rule 6(5) and rule 6(6) was a tribunal or not, this Court observed as follows: "The question which we have to decide in the present appeal is whether the State Government is a tribunal when it exercises its authority under Rule 6(5) or Rule 6(6). No rules have been made prescribing the procedure which the State Government should follow in dealing with appeals under these two sub rules, and there is no statutory provision conferring on the State Government any specific powers which are usually associated with the trial in courts and which are intended to help the court in reaching its decisions. The requirements of procedure which is followed in courts and the possession of subsidiary powers which are given to courts to try. the cases before them, are described as trappings of the courts, and so, it may be conceded that these trappings are not shown to exist in the case of the State Government which hears appeals under Rule 6(5) and Rule 6(6). But as we already stated, the consideration about the presence of all or some of the trappings of a court is really not decisive. The presence of some of the trappings may assist the determination of the question as to whether the power exercised by the authority which possesses the said trappings, is the judicial power of the State or not. The main and the basic test however, is whether the adjudicating power which a particular authority is empowered to exercise, has been conferred on it by a statute and can be described as part of the State 's inherent power exercised in discharging its judicial functions. Applying this test, there can be no doubt that the power which the State Govern ment exercises under Rule 6(5) and Rule 6(6), is a part of the State 's judicial power. It has been conferred on the State Government by a statutory Rule and it can be exercised in respect of disputes between the management and its Welfare Officers. There is, in that sense, a lis; there is affirmation by one party and denial by another, and the dispute necessarily involves the rights and obligations of the parties to it. The order which the State Government ultimately passes is described as its decision and it is made final and binding. Besides, it is an order passed on appeal. Having regard to these distinctive features of the power conferred on the State Government by Rule 6(5) and Rule 1025 6(6), we feel no hesitation in holding that it is a Tribunal within the meaning of Article 136( 1). " What follows from this case and the authorities referred therein is this: The State is invested in Some cases with a power to decide controversies between parties. This power is undoubtedly one of the attributes of the State and that is called the judicial power of the State. What has to be remembered is that this power is exercised to resolve con troversies between parties. In Associated Cement 's case also this Court took notice of the fact that a dispute existed between the management and its welfare officer. It was held that there existed a lis the decision of which lis was rendered by the State in exercise of its judicial power. This was the test that has to be applied to find out whether an order is a judicial order or not. In Engineering Mazdoor Sabha vs Hind Cycles Limited, Bombay, [1963] Suppl. 1 SCR 625 the question considered by a Constitution Bench was whether the decision of an arbitrator to whom industrial disputes were voluntarily referred under Section 10 A of the . was quasi judicial in character and his decision amounted to a determination or order under Article 136(1) of the Constitu tion of India. This Court held that for invoking Article 136(1), two conditions must be satisfied (1) The proposed appeal must be from any judgment, decree, determination, sentence or order, that is to say, it must not be against a purely executive or administrative order. If the determina tion or order giving rise to the appeal is a judicial or quasi judicial determination or order, the first condition is satisfied. (2) The second condition imposed by the Arti cle is that the said determination or order must have been made or passed by any Court or Tribunal in the territory of India. These conditions, therefore, require that the order complained against must have a judicial or quasi judicial character and the authority whose order is complained against must be a Court or a Tribunal. Unless both the conditions are satisfied, Article 136(1) cannot be invoked. The decision of the arbitrator, it was held, could be cha racterised as quasi judicial one, but the power of the arbitrator is not in exercise of the sovereign power or one by conferment of a statutory power by the State. He gets the power to adjudicate by virtue of the authority given by the parties. It was held that an appeal from the order of the arbitrator did not lie under article 136(1) of the Constitu tion. In Indo China Steam Navigation Co. Ltd. vs Jasjit Singh, Additional Collector of Customs and Others, ; the question 1026 debated was whether the Central Board of Revenue exercising its appellate power under Section 190 of the Sea Customs Act or the Central Government exercising its revision jurisdic tion under Section 191 could be held to be a Tribunal under Article 136. This Court repeated the principle laid down in the earlier decisions that two conditions have to be satis fied before an appeal could be entertained in this Court under Article 136: the order impugned must be an order of a judicial or quasi judicial character and should not be purely an administrative or executive order; and that the said order should have been passed either by a Court or a Tribunal in the territory of India. After examining the earlier decisions and the tests laid down therein and also after examining the procedure prescribed in the Act in relation to the adjudication of disputes under these sec tions, it was held that the Central Board of Revenue and the revisional authority, the Central Government, had the char acter of a Tribunal under Article 136 of the Constitution and thus the preliminary objection that the appeal was not maintainable was overruled. Since great stress was laid by the learned counsel for the appellants on this authority, we would like to extract the relevant portion on which such reliance was placed to distinguish it from the facts of our case. " . The fact that the status of the Customs Officer who adjudicates under Section 167 (12A) and section 183 of the Act is not that of a Tribunal, does not make any differ ence when we reach the stage of appeal or revision. A period of limitation is prescribed for the appeal, a procedure is prescribed by Rule 49 that the appeal or revision must be accompanied by a copy of the decision or order complained against, and the obvious scheme is that both the appellate and the revisional authorities must consider the matter judicial ly on the evidence and determine it in accord ance with law. It is obvious that heavy fines are imposed in these proceedings and the confiscation orders passed may affect ships of very large value. By his appeal or revisional application the ship owner naturally contends that the order of confiscation is improper or invalid and he sometimes urges that the fine imposed is unreasonable and excessive. Where disputes of this character are raised before the appellate or the revisional authority, it would be difficult to accede to the argument that the authority which deals with these disputes in its appellate or revisional juris diction is not a tribunal under Article 136. These authorities are constituted by the legislature and they are empowered to deal with the 1027 disputes brought before them by aggrieved persons. Thus, the scheme of the Act, the nature of the proceedings brought before the appellate and the revisional authorities, the extent of the claim involved, the nature of the penalties imposed 'and the kind of enquiry which the Act contemplates, all indicate that both the appellate and the revisional authori ties acting under the relevant provisions of the Act constitute Tribunals under Article 136 of the Constitution, because they are invested with the judicial power of the State, and are required to act judicially. Therefore, we must over rule the preliminary objection raised by the Additional Solicitor General and proceed to deal with the appeal on the merits. " This judgment can be easily distinguished from the case on hand on the finding that the High Court in this case, as already indicated by us, was acting purely administratively and was not making a judicial decision and the procedure adopted was totally different from the procedure in a Court. This decision, therefore, cannot create any hurdle for our conclusion against the appellants. In APHLC vs M.A. Sangma, ; this Court was dealing with the jurisdiction of the Election Commission to decide the question of a symbol to the parties contesting the election. It was held that the decision from the Elec tion Commission was amenable to appeal under Article 136 of the Constitution of India since the powers were conferred on the Election Commission by rules, that the Election Commis sion was dealing with the matter between two rival parties and that the decision taken was a judicial decision. Here again, the Court reiterated the several tests to determine whether a particular body or authority was a Tribunal within the ambit of Article 136 or not. These tests are not exhaus tive. The two necessary pre requisites for that authority to come within Article 136(1) are that it must be constituted by the State and invested with some judicial power of the State. These two tests, it was held, were unfailing one, while some of the other test or tests may not be present. At pages 409 and 410 the matter is made abundantly clear in the following statement of law by the Court: " . There is thus a lis between two groups of the Conference. The Commission is undoubtedly the specified and exclusive adju dicating authority of this lis. The Commission is created by the Constitution and the power to adjudicate the dispute flows from Article 324 as well as 1028 from Rule 5 and is thus conferred under the law as a fraction of judicial power of the State. The Commission has prescribed its own procedure in the Symbols Order, namely, to give a hearing to the parties when there is a dispute with regard to recognition or regard ing choice of symbols . . " " . . To repeat, the power to decide this particular dispute is a part of the State 's judicial power and that power is conferred on the Election Commission by Arti cle 324 of the Constitution as also by rule 5 of the rules. The principal and non failing test which must be present in order to deter mine whether a body or authority is a tribunal within the ambit of Article 136(1), is ful filled in this case when the Election Commis sion is required to adjudicate a dispute between two parties, one group asserting to be recognised political party of the State and the other group controverting the proposition before it, but at the same time not laying any claim to be that party . . 21. We have considered the above decisions carefully. In our view, the principles laid down in these cases cannot help the appellants in support of the plea that the High Court While disposing of the appeal was acting as a tribunal. The relevant provisions quoted in the earlier part of the judgment relating to the appeal in question, in our judgment, clearly establish that the High Court acted on the administrative side in deciding the ap peal. There is a clear distinction between courts of law exercising judicial powers and other bodies. Decisions by courts are clearly judicial. That is not the case with bodies exercising administrative or executive powers. In certain matters even Judges have to act administratively and in so doing may have to act quasi judicially in dealing with the matters entrusted to them. It is only where the authorities are required to act judicially either by express provisions of the statute or by necessary implication that the decisions of such an authority would amount to a quasi judicial proceeding. When Judges in exercise of their administrative functions decide cases it cannot be said that their decisions are either judicial or quasi judicial decisions. Every decision or order by an authori ty which has a duty to act judicially is not subject to appeal to this Court. Article 136 contemplates appeals to this Court only from adjudications of courts and tri 1029 bunals. Such adjudication must doubtless be judicial. This does not mean that every au thority which is required to act judicially, either by its constitution or by virtue of the authority conferred upon it, is necessarily a tribunal for the purpose of Article 136 A tribunal, whose adjudication is subject to appeal, must besides being under a duty to act judicially, be a body invested with the judi cial power of the State. In the appeal before the High Court, the High Court was following its own proce dure, a procedure not normally followed in judicial matters. The High Court was not resolving any dispute or controversy between two adversaries. In other words, while decid ing this appeal there was no |is before the High Court. The High Court was only exercising its power of control while deciding this appeal. We have. therefore, no hesitation to hold that the appeal is not maintainable. However, we do not propose to dismiss it without leaving any remedy to the appellants. We direct the Registrar to transfer the re cords of the case to the Punjab and Haryana High Court requesting the High Court to take this petition on its file as a petition under Article 226 and dispose of the matter as expeditiously as possible on the available pleadings and documents. There will be no order as to costs. P.S.S. Appeal dismissed.

Sub section (2) of Section 35 of the Punjab Courts Act, 1918 confers power of appointment of ministerial officers of all courts controlled by a District Court and their suspen sion and removal on the District Court. Sub section (3) makes every appointment subject to such rules as the High Court may prescribe in this behalf, while sub section (4) makes orders passed by the District Judge subject to the control of the High Court. Chapter 18 A of the High Court Rules and Orders framed under Section 35(3) controls the appointments, promotion and punishment of ministerial officials in the District and other civil courts, other than the High Court. Sub rule 2(a) of Rule IX in that Chapter enables the District Judge to inflict any of the penalties mentioned in sub rule (1): censure, fine, recovery of any pecuniary loss, withholding of increments or promotions, suspension, removal and dis missal of the ministerial officers of his own court or any court subordinate to him other than the Court of Small Causes. Sub rule (2) of Rule X provides 'for appeals to the High Court against penalties. Sub rule (3) requires the persons appealing to the High Court to do so by a petition to the District Judge, who shall forward the same to the Registrar of the High Court with remarks that he may wish to make. After reading the petition the High Court may either (a) summarily reject it without hearing the petitioner; (b) refer it to the District Judge for report and on receipt of such report reject the petition without hearing; or (c) hear the petitioner, and where other persons are held to be concerned such other person in open court. 1006 Sub rule (4) forbids the petitioners to attend personally at the High Court unless summoned and provides for communica tion to them of orders on their petitions through the Dis trict Judge. The appellants, who were the employees in the ministeri al establishment of the courts at Ferozepur and Zira, were alleged to have taken a prominent part in raising objection able slogans against the Judicial Magistrate and the Dis trict Judge, in a demonstration organised by the subordinate court officials, to protest against the slapping of a subor dinate by the Judicial Magistrate, Zira. They were charge sheeted for their misconduct. After enquiry it was found that they contravened Rule 7(1) of the Government Employees (Conduct) Rules, 1966 by acting prejudicially to the public order, decency and morality and were dismissed from service by the District Judge in his capacity aS the punishing authority. The appellants preferred a service appeal before the High Court which was dismissed. While granting the special leave on 2nd April, 1982 this Court made the following order: "Appeal will be heard . . on the prelim inary issue as to whether the High Court in disposal of appeal was acting in administra tive capacity under article 235 or as a Tribunal or as a High Court and the circumstances in which the appeal was maintained, if so. " It was contended on behalf of the appellants that the decision of the High Court in this case was the judicial decision of a tribunal which could be examined by this Court under Article 136 of the Constitution. Dismissing the appeal, the Court, HELD: 1.1 The appeal is not maintainable. Every decision or order by an authority which has a duty to act judicially is not subject to appeal to this Court. Article 136 contem plates appeals only from adjudications of courts and tribu nals. Such adjudication must doubtless be judicial. if the power exercised was administrative in nature it would ex clude such a tribunal from the ambit of Article 136. [1029C; 1028H; 1020D] 1.2 Every authority which is required to act judicially either by its constitution or by virtue of the authority conferred upon it is 1007 not necessarily a tribunal for the purposes of Article 136. A tribunal, whose adjudication is subject to appeal must besides being under a duty to act judicially, be a body invested with the judicial power of the State. [1029A] 1.3 There is a clear distinction between courts of law exercising judicial powers and other bodies. Decisions by courts are clearly judicial. That Is not the case with bodies exercising administrative or executive powers. In certain matters even judges have to act administratively and in so doing may have to act quasi judicially in dealing with matters entrusted to them. It is only where the authorities are required to act judicially either by express provisions of the statute or by necessary implication that the decision of such an authority would amount to a quasi judicial pro ceeding. When Judges in exercise of their administrative functions decide cases it cannot be said that their deci sions are either judicial or quasi judicial decisions. The test that has to be applied to find out whether an order is a judicial order or not is the existence of a lis between the parties. [1028F; 1025C] In the instant case, the High Court while disposing of the appeal was not acting as a tribunal. It was acting purely administratively. It was not resolving any dispute or controversy between two adversaries but only exercising its power of control over the subordinate judiciary which is the same as control under Article 235 of the Constitution of India. [1028E; 1027C; 1029B; 1013C] Durga Shankar Mehta vs Thakur Raghuraj Singh & Ors., [1955] 1 SCR 267; Bachhittar Singh vs The State of Punjab, [1962] Snppl. 3 SCR 713; Associated Cement Companies Ltd. vs P.N. Sharma & Anr, ; ; Harinagar Sugar Mills Ltd. vs Shyam Sundar Jhunjhunwala, ; ; Jaswant Sugar Mills Ltd. vs Lakshmichand and others, [1963] Suppl. 1 SCR 242; Engineering Mazdoor Sabha vs Hind Cycles Limited, Bombay, [1963] Suppl. 1 SCR 625; Indo China Steam Navigation Co. Ltd. vs Jasjit Singh, Additional Collector of Customs & Ors., ; and APHLC vs M.A. Sangma, ; , referred to. 2.1 In deciding the appeal under Rule X in Chapter 18 A the High Court exercises only a supervisory administrative control over the subordinate courts and does not act as a tribunal disposing of an appeal involving a lis between two rival parties and arriving at a judicial decision. [1019D] 1008 2.2 The appeal under Rule X(3) has to be by a petition, to be routed through the District Judge who sends it to the Registrar of the High Court. These are procedural formali ties which normally govern appeals preferred before the High Court on the administrative side. The permission given to the authority who imposes penalty to record his own remarks which he wishes to make concerning his own order is further proof of the fact that what the High Court has to consider is not a matter on the judicial side but one in its power of control and superintendence over the subordinate courts. [1018A] 2.3 The procedure contained in Rule X(3) of hearing the petition not similar to the procedure followed in regular judicial proceedings. It is not obligatory for the High Court to hear the petitioner. It can go into the papers and reject it summarily without giving the petitioner an oppor tunity to be heard. Alternative, it could get a report from the District Judge and on receipt of such a report dismiss it without hearing the petitioner. Thirdly, it could give a hearing to the petitioner and also those who will be affect ed. This manner of disposal of the petition makes it appar ent that it is not strictly a judicial proceeding but has all the trappings of an administrative proceeding and an administrative decision. [1018E H] 2.4 Sub rule (4) of Rule X again marks a complete depar ture from the normal judicial proceeding before a court. The petitioners are forbidden to attend personally at the High Court. They can do so only when summoned. In a judicial proceeding, the party has a right to appear personally or through counsel. This denial also robs the appeal of its character of a judicial proceeding. [1019C] 2.5 The fact that Rule X is found in Chapter 18 A, which deals with control, also gives the administrative shade to the proceeding under this Rule. Section 35(4) of the Punjab Courts Act, 1918, which stipulates that any order passed by the District Judge under this section shall be subject to the control of the High Court, further fortifies the view that the proceedings under Rule X(3) and the decisions made thereunder are not judicial in nature. [1019E] It cannot, therefore, be said that in the instant case the High Court while deciding the appeal acted as a tribunal whose order can be challenged before this Court under Arti cle 136 of the Constitution. [1019F] [The Registrar to transfer the records of the case to the High Court. The latter to take the petition on its file as a petition under 1009 Article 226 and dispose of the matter expeditiously.] [1029D]

Appeal No. 1735 of 1972. From the Judgement and Order dated the 29th October 1971 of the High Court of Goa, Daman and Diu in S.C.A. No. 31 of 1970. V. section Desai and Miss A. Subhashini for the, Appellant. section T. Desai, M. V. Shah and R. P. Kapur for Respondent. The Judgment of the Court was delivered by CHANDRACHUD, C.J. The respondent, Gosalia Shipping Private Limited, which is a company incorporated under the Indian Companies Act does the business of Clearing and Forwarding and as Steamship Agents. In 1970, respondent acted as the shipping agent of 'Aluminium Company of Canada, Limited ' which is a non resident company. The, Aluminium Company time chartered a ship "M. V. Sparto" belonging to a non resident company called Sparto Compania Naviera of Panama. The said ship called at the port of Betul, Goa, on March 1, 1970 where it loaded 13,000 long tons of bauxite belonging to the time charterers, the Aluminium Company. On March 20, 1970 the ship left for Alfred port, Canada. The ship was allowed to leave the port of Betul on the basis of a guarantee bond executed by the respondent in favour of the President of India, undertaking to pay the income tax payable by the time charterers under section 172 of the Income tax Act, 1961. On April 15, 1970, the First Income tax Officer, Margao, Goa, issued a demand notice to the respondent for payment of Rs. 51,191 by way of income tax under the aforesaid provision. The respondent filed Special Civil Application No. 31 of 1970 in the Court of the Judicial Commissioner, 'boa, asking for a writ of Mandamus directing the Income tax Officer to withdraw the demand notice. By a judgment dated October 29, 1971, 945 the learned Judicial Commissioner allowed the respondent 's Writ Petition and passed an order quashing the demand notice. Having obtained from the Judicial Commissioner a certificate of fitness to appeal to this Court under article 133(1)(b) and (c) of the constitution, the Union of India has filed this appeal. The question as to whether the respondent is liable to pay the income tax demanded of it by the Income tax Officer, depends for its decision on the construction of section 172 of the Income tax Act, 1961, which read as follows at the relevant time : "172. (1) The provisions of this section, shall, notwithstanding anything contained in the other provisions of this Act, apply for the purpose of the levy and recovery of tax in the case of any ship, belonging to or chartered by a nonresident, which carries passengers, live stock, mail or goods shipped at a port in India. (2) Where such a ship carries passengers,live stock, mail or goods shipped at a port in India ,one sixth of the amount paid or payable on account of such carriage to the owner or the charterer or to any person on his behalf, whether that amount is paid or payable in or out of India, shall be deemed to be income accruing in India to the owner or charterer on account of such carriage. (3) Before the departure from any port in India of any such ship, the master of the ship shall prepare and furnish to the Income tax Officer a return of the full amount paid or payable to the owner or charterer or any person on his behalf, on account of the carri age of all passengers, live stock, mail or goods shipped at that port since the last arrival of the ship thereat : Provided that where the Income tax Officer is satisfied that it is not possible for the master of the, ship to furnish the return required by this sub section before the departure of the ship from the port and provided the master of the ship has made satisfactory arrangements for the filing of the return and payment of the tax by any other person on his behalf the Income tax Officer may, if the return is filed within thirty days of the departure of the ship, deem the filing of the return by the person so authorised by the master as sufficient compliance with this subsection. (4) On receipt of the return, the Income tax Officer shall assess the income referred to in sub section (2) and determine the sum payable as tax thereon at the 946 rate or rates in force applicable to the total income of a company which has not made the arrangements referred to 'in section 194 and such sum shall be payable by the master of the ship. (5) For the purpose of determining the tax payable under sub section (4), the Income tax Officer may call for such accounts or documents as he may require. (6) A port clearance shall not be granted to the ship until the Collector of Customs, or other Officer duly authorised to grant the same, is satisfied that the tax assessable under this section has been duly paid or that satisfactory arrangements have been made for the payment thereof. (7) Nothing in this section shall be deemed to prevent the owner or charterer of a ship from claiming before the expiry of the assessment year relevant to the previous year in which the date of departure of the ship from the Indian port falls, that an assessment be made of his total income of the previous year and the tax payable on the basis thereof be determined in accordance with the other provisions of this Act, and if he so claims, any payment made under this section in respect of the passengers, live stock, mail or goods shipped at Indian port during that previous year shall be treated as a payment in advance of the tax leviable for that assessment year, and the difference between the sum so paid and the amount of tax found payable by him on such assessment shall be paid by him or refunded to him, as the case may be. " Section 172 occurs in Chapter XV which is entitled "liability in special cases" and the sub heading of the section is "Profits of nonresidents from occasional shipping business. " It creates a tax liability in respect of occasional shipping by making a special provision for the levy and recovery of tax in the case of a ship belonging to or chartered by a non resident which carries passengers livestock mail or goods shipped at a port in India. The object of the section is to ensure the levy and recovery of tax in the case of ships belonging to or chartered by nonresidents. The section brings to tax the profits made by them from occasional shipping, by means of a summary them assessment in which one sixth of the gross amount received by of the is deemed to be the assessable profit. Before the departure ship, the master of the ship has to furnish to the Income tax Officer a return of the full amount paid or payable to the owner or charterer on account of the carriage of passengers, goods etc., shipped at the port in India since the last arrival of the ship at the port. In the event that, to the satisfaction of the Income tax Officer, the master is 9 47 unable so to do, he has to make Satisfactory arrangements for the filing of the return and payment of the tax by any other person on his behalf. A port clearance cannot be granted to the ship until the tax assessable under the section is duly paid or satisfactory arrangements have been made for the payment thereof. The assessee in this case is the Aluminium Company of Canada which had time chartered the ship and on whose behalf its shipping agent, the respondent, had executed the guarantee bond. Since the Company is a non resident and the ship carried goods which were shipped at a port in India, the conditions specified in sub section (1) are satisfied and the provisions of section 172 will apply for the purpose of levy of tax, notwithstanding anything contained in the other provisions of the Income tax Act. The charging provision it contained in sub section (2) of section 172, the relevant part of which provides that where a ship belonging to or chartered by a nonresident carries goods shipped at a port in India, one sixth of the amount paid or payable "on account of such carriage" to the owner or the charterer or to any person on his behalf shall be deemed to be income accruing in India to the owner or char terer on account of such carriage. The ship was delivered to the time charterers at Betul, Goa, whereupon they loaded it with their own goods to the fullest capacity of the ship. Under the charter party, the charterer had agreed to pay to the owners of the ship a sum of 4.50 U.S. dollars per ton on the total dead weight carrying capacity per calendar month, commencing on and from the date of the delivery of the ship. The short question for consideration is whether the amount which the time charterers had agreed to pay to the owners of the ship was payable "on account of" the carriage of goods. If any guidance is to B sought from the terms of the agreement between the parties, the conclusion seems inescapable that the amount which the time charterers where required to pay to the owners of the ship was not payable on account of the carriage of goods but was payable on account of the use and hire of the ship. The charter party provided by clause (4) that the charterers shall pay a sum at the rate of 4.50 U.S. dollars on the total dead weight carrying capacity of the ship, "for the use and hire of the said vessel". It is true that one cannot place over reliance on the form which the parties give to their agreement or on the label which they attach to the payment due from one to the other. One must have regard to the substance of the matter and, if necessary, tear the veil in order to see whether the true character of a payment is something other than what, by a clever device of drafting, it is made to appear. But we see no reason to hold that the real intention of the parties was something different from what the words used by them convey in their accepted sense. The charterparty was drawn in a standard form approved by the 'New York Produce Exchange ' and there is no warrant for supposing that though the payment which the Charterers bound themselves to make to the owners of the ship was on account of the 948 carriage of goods, the parties described it as; being payable for the use and hire of the vessel, in order to avoid the payment of Indian income tax. Indeed, the other terms of the charterparty and the general tenor of the document show that the payment was in fact to be made by the time charterers for use and hire of the ship. Under the agreement, charterers had the "liberty to sublet" the vessel for all or any part of the time covered by the agreement. The Captain of the ship was to be under the orders and directions of the, charterers as regards employment and agency. And if the vessel be lost, money paid in advance and not earned was to be returned by the owners to the charterers at once. These terms and conditions of the contract between the parties are not consistent with the theory that the charterers were liable to pay to the owners any amount on account of the carriage of goods. In order that it may be said that the amount was payable on account of the carriage of goods. Under the terms of charterparty, the the consideration for the other, that is to say, that the payment which the charterers had agreed to make to the owners of the ship was in consideration of the carriage of goods. If the charterers are liable to pay the amount irrespective of whether they carry the goods or not, it would be difficult to say that the amount was payable on account of the carriage of goods. Under the terms of Charterparty, the owners of the ship received the amount as charges for the use and hire of the ship. The character of the payment cannot change according to the use to which the charterers put the ship or according as to whether the ship is loaded with goods in a port in India. What is payable as hire charges for the use of the ship cannot transform itself into an amount payable on account of the carriage of goods, by reason of the circumstance that the ship was loaded with goods in India. It is relevant, for the decision of the question under consideration. that the time charterers loaded the ship at Betul, Goa, with their own goods. They did not sub let the ship for the purpose of carriage of goods nor did they load the ship with, goods belonging to a third party in which event they might have earned some freight on account of the carriage of goods. They paid hire charges to the owner of the ship for the use of the ship and since they loaded the ship with their own goods, they received nothing on account of the carriage of the goods. Neither the one nor the other, therefore, received any amount on account of the carriage of the goods. The weakness of the argument advanced by the appellant 's counsel consists in its assumption that the charterparty has to be, an agreement for the carriage of something like goods, passengers, livestock or mail. A contract by charterparty, says, B. C. Mitra in his "Law of Carriage by Sea" (Tagore Law Lectures 1972), : "is a contract by which an entire ship or some principal part thereof is let to a merchant who is called the charterer, for the conveyance of goods on a determined voyage to one or more places, or until the expiration of a specified period; in the former case it is called a 'voyage charterparty ', and in the latter a 'time charterparty ' ". A time charter, according to the 949 author is "one in which the ownership and also possession of the ship remain in the original owner whose remuneration or hire is generally calculated at a monthly rate on the tonnage, of the ship, while a voyage charter is a contract to carry specified goods on a defined voyage on a remuneration or freight usually calculated according to the quantity of cargo carried. " In Carver 's "Carriage by Sell" (Eleventh ed., 1963, page 263), it is stated that "all charterparties are not contracts of carriage. Sometimes the ship itself, and the control over her working and navigation, are transferred for the time being to the persons who use her. In such cases the contract is really one of letting the ship, and, subject to the express terms of the charterparty, the liabilities of the shipowner and the charterer to one another are to be determined by the law which relates to the hiring of chattels and not by reference to the liabilities of carriers and shippers. " According to Scrutton on Charterparties (seventeenth ed., 1964, page 4), charterparties fall into three main categories (i) charters by demise (ii) time charters (not by way of demise), and (iii) voyage charters. Sometimes categories (i) and (ii) are both referred to as time charters as distinguished from category (iii), and they have this in common that the shipowner 's remuneration is reckoned by the time during which the charterer is entitled to the use of services of his ship. " The contract in the instant case is of the nature of time charterparty, whether there is a demise of the ship or not being immaterial. Clause 4 of the charterparty provides for the payment by the charterers "for the use and hire" of the vessel at the rate of U.S. 4.50 dollars per ton on vessel 's total dead weight carrying capacity, per calender month, commencing on and from the date of deliver of the ship, "hire to continue until the hour of the day of her redelivery. " These clauses of the charterparty show that the Aluminium company took the ship from its owners on a time charterparty, that the owners were entitled to payment for the use and hire of the ship, that the amount was payable irrespective of what use the ship was put to by the time charterers or indeed, whether it was put to any use at all and that no part of the payment can be said to have been made on account of the carriage of goods. Similies can be misleading but if a hall is hired for a marriage, the charges payable to the owner of the place are for the use and hire of the place, not on account of marriage. For these reasons we confirm the judgment of the learned Judicial Commissioner and dismiss the appeal with costs. S.R. Appeal dismissed.

The respondent which is a company incorporated under the Indian Companies Act does the business of Clearing and Forwarding and as Steamship agents. In 1970, respondent acted as the shipping agents of "Aluminium Company of Canada Ltd." which is a non resident company. The Aluminium company time chartered a ship "M.V. Sparto" belonging to another nonresident company. Clause 4 of the Charter party provided for the payment by the charterers "for the use and hire" of the vessel at the rate of U.S. 4.50 dollars per ton on vessels ' total dead weight carrying capacity per calendar month commencing on and from the date of delivery of the ship. "hire to continue until the hour of the day of her redelivery". The said 'ship called at the port of Betul. Goa on March 1, 1970 and loaded 13000 long tons of bauxite belonging to the time charterers, the Aluminium Co. The ship was allowed to leave the port of Betal on the basis of the guarantee bond executed by the respondent in favour of the President of India undertaking to pay the income tax payable by the time charterers under Section 172 of the Income Tax Act, 1961. On April 15, 1970, the First Income Tax Officer, Margoa issued a demand notice to the respondent for the payment of Rs. 51,191/ by way of income tax under the aforesaid provision. The respondent filed a Writ Petition asking for a mandamus directing the Income Tax Officer to withdraw the notice. The petition was allowed by the Judicial Commissioner Goa. Dismissing the appeal by Certificate, the Court HELD : 1. The amount which the time charterers were required to pay, to the owners of the ship was not payable on account of the carriage of goods but was payable on account of the use and hire of the ship. [947 E F] 2. It is true that one cannot place over reliance on the terms which the parties give to their agreement or on the label which they attach to the payment due from one to the other. One must have regard to the substance of the matter and if necessary, tear the veil in order to see whether the true character of a payment is something other than what, by a clever device of drafting, it is made to appear. [947 F G] In the instant case there is no reason to hold that the real intention of the parties was something different from what the words used by them, convey in their accepted sense. The charter party was drawn in a standard form approved by the "New York Produce Exchange" and there is no warrant for supposing that though the payment which the charterers bound themselves to make to the owners of the ship was on account of the carriage of goods, the parties described it as being payable for the use and hire of the vessel, in order to avoid the payment of Indian income Tax. The character of the payment cannot change according to the use to which the charterers put the ship or according as to whether the ship is loaded with goods in a port in India. What is payable as hire charges for the use of the ship cannot transform itself into an amount payable on account of the carriage of goods, by reason 944 of the circumstance that the ship was loaded with goods in India. The time charterers loaded the ship at Betul, Goa, with their own goods. They did not sub let the ship for the purpose of carriage of goods nor did they load the ship with goods belonging to a third party in which event they might have earned some freight on account of the carriage of goods. They paid hire charges to the owner of the ship for the use of the ship and since they loaded the ship with their own goods, they received nothing on account of the carriage of the goods. Neither the one nor the other, therefore, received any amount on account of the carriage of the goods. [947 G H, 948 A, B, F G] 3. A contract by charter party is a contract by which an entire ship or some principal part thereof is let to a merchant who is called the charterer, for the conveyance of goods on a determined voyage to one or more places, or until the expiration of a specified period. The contract ' in the instant case is of the nature of time charter party, whether there is a demise of the ship or not being immaterial. Clause 4 of the charter party provides for the payment by the charterers "for the use and hire" of the vessel at the rate of U.S. 4.50 dollars per ton on vessel 's total dead weight carrying capacity ' per calendar month, commencing on and from the date of delivery of the ship, "hire to continue until the hour of the day of her redelivery". These clauses of the charter party show that the Aluminium Company took the ship from its owners on a time charter party, that the owners were entitled to payment for the use and hire of the ship, that the amount was payable irrespective of what use the ship was put to by the time charterers or indeed, whether it was put to any use at all and that no part of the payment can be said to have been made on account of the carriage of goods. [948 G H, 949 D F]

N: Criminal Appeal No. 499 of 1976. Appeal by Special Leave from the Judgment and Order dated 22 7 1975 of the Punjab & Haryana High Court in Criminal Appeal No. 166/75 and Murder Reference No. 10/75. O.P. Sharma and M. section Dhillon for the Appellant. R.K. Jain for Respondents Nos. 1 and 3 to 6. R.K. Kohli and R. C. Kohli for the complainant. The Judgment of the Court was delivered by SARKARIA, J. This appeal by the State of Punjab is directed against a judgment, dated July 22, 1975, of the High Court of Punjab and Haryana, whereby the appeal of the respondents (hereinafter referred to as the accused) was accepted and they were acquitted of the double murder charge against them. The prosecution story narrated by Resham Singh (P.W. 2), who claims to be an eyewitness of the occurrence, runs as follows. Resham Singh (P.W.2) used to live with his brother in law, Hazara Singh deceased, in a hamlet in the fields outside the habitation of village Cheema. One Ajit Singh of village Dhual was murdered, and Wassan Singh accused and his party men were tried therefor. At the trial, Hazara Singh deceased appeared as an eyewitness of that murder. The trial court convicted Wasson Singh and his companions in that case. They went in appeal to the High Court. Pending the appeal the High Court enlarged Wasson Singh accused on bail. The occurrence now in question in the instant case took place when Wasson Singh was on bail. The lands of Avtar Singh, Mukhtar Singh and Harbhajan Singh accused (respondents) adjoin the lands of Hazara Singh deceased. Three or four days prior to the incident in question, the cattle of these accused persons trespassed on the land of Hazara Singh and damaged his cotton crop. Thereupon, a sharp altercation took place 620 between Hazara Singh and Resham Singh on one side and Harbhajan Singh and Mukhthar Singh on the other. Gajjan Singh son of Gopal Singh resident of the village interceded and pacified the parties. Joginder Singh accused respondent is the brother of Mukhtar Singh accused respondent while Harbhajan Singh Respondent is their first cousin. Mukhtar Singh and Harbhajan Singh accused are alleged to be partyman of Wasson Singh. On August 4, 1973 at about 3.30 p.m., Resham Singh (P.W.2). Resham Singh (deceased) son of another Hazara Singh and Hazara Singh deceased were proceeding by the foot path from the Bus Stand Amarkot to their hamlet. On the way Bachan Singh, brother of Hazara Singh, met them and proceeded along with them. When they reached near the fields of Jarmaj Singh Sarpanch of Mahmoodpura, all the six accused, namely, Wasson Singh, Baj Singh, Meja Singh, Joginder Singh, Mukhtar Singh and Harbhajan Singh emerged from the sann crop and came to the bank of the watercourse. Baj Singh was armed with a pistol and the other five accused were armed with rifles. Wasson Singh, Joginder Singh and Mukhtar Singh fired their rifles at Hazara Singh. The rifle shots hit Hazara Singh on the left side of his head, and he dropped dead. Resham Singh (P.W.2), Bachan Singh and Resham Singh deceased started running towards the ploughed fields. Meja Singh, Harbhajan Singh and Baj Singh chased them. Meja Singh and Harbhajan Singh encircled Resham Singh deceased and shot him dead with rifle shots. Baj Singh chased Resham Singh (P.W. 2) and Bachan Singh (P.W. 3) and fired at them with his pistol. When these two were running away, the other two accused also fired at them. Resham Singh and Bachan Singh, however, succeeded in escaping unhurt. Resham Singh (P.W. 2) immediately reached the Bus Stand Amarkot, picked up his motor cycle which was lying there at a shop and drove fast to Police Station Valtoha, where he lodged the First Information Report (exhibit PE) at 4.30 p.m. Police Sub Inspector Bishambar Lal recorded the report of Resham Singh and sent a copy of the same as a special report to the superior officers, including the Judicial Magistrate, First Class at Patti, who received the copy of the F.I.R. at 6.30 p.m., on the same day. While running away from the spot Resham Singh (P.W. 2) had left behind his shoe (exhibit P 1) near the scene of murders. Sub Inspector Bashambar Lal reached the scene of occurrence at 5.30 p.m. and started investigation. He prepared the inquest reports regarding the deaths of Hazara Singh and Resham Singh deceased persons. He also took into possession blood stained earth 621 and other relevant articles lying near the two dead bodies. He found two empty cartridge cases at the scene of Hazara Singh 's murder. He took them into possession and sealed them into a parcel. He also seized two pairs of shoes lying at the spot. After his arrest, Mukhtar Singh accused was interrogated by the Investigating Officer on August 31, 1973. After making a statement, Mukhtar Singh accused, in the presence of witnesses, led the police to the discovery of the rifle (exhibit P 7) and some live cartridges. The rifle and the empty cartridges earlier found at the scene of crime were sent to the ballistic expert for examination and opinion. After examination, the ballistic expert of the Forensic Science Laboratory, Chandigarh, reported (vide exhibit P. 9) that the 303 fired cartridge, marked C, had been fired through the 303 rifle marked `A ' by him. But no definite opinion could be given regarding the linkage of the fired cartridge marked C, with the 303 rifle marked `A ' due to lack of sufficient individual characteristic marks on C2. Joginder Singh accused was arrested on August 24, 1973 and Baj Singh accused on December 18, 1973. The post mortem examination of the dead body of Resham Singh was performed by Dr. Gursharan Kaur on August 5, 1973 at 8 a.m. The Doctor found five gun shot injuries on his body. Two of these were wounds of entry, with everted margins on the back of the left chest. No charring was present on any of these gun shot wounds. The death in the opinion of the Doctor was due to shock and haemorrhage resulting from gun shot injuries on the chest which were sufficient to cause death in the ordinary course of nature. On the same day, Dr. Gursharan Kaur conducted the autopsy on the dead body of Hazara Singh and found four fire arm injuries, two of which were wounds of entry and two were wounds of exit. All these injuries were on the skull. They involved fracture of the skull and damage to the brain. These injuries had been caused with firearm and were sufficient to cause death instantaneously, in the ordinary course of nature. At the trial, the main stay of the prosecution was the testimony of the two eye witnesses, Resham Singh (P.W.2) and Bachan Singh (P.W.3). Examined under Section 342, Cr. P.C., Wasson Singh accused admitted that he along with others was tried for the murder of Ajit Singh of village Dhual and Hazara Singh deceased had appeared against him as eye witness of that murder; and that he (Wasson Singh) was convicted by the Court of Session, but had been released on bail 622 pending his appeal in the High Court. He denied the rest of the prosecution case and stated that he had been falsely implicated by the relations of Ajit Singh deceased on suspicion; and that on the day of occurrence, he was working as a Conductor on a truck at Muzaffarnagar. The plea of Baj Singh was one of plain denial of the prosecution case. He stated that his brothers Punjab Singh, Narinder Singh and Bagicha Singh had been prosecuted for the murder of one Puran Singh who was a relation of Bachan Singh (P.W.3); that Punjab Singh and his companions were acquitted in that case. Baj Singh added that he used to look after the defence of the accused in Puran Singh 's murder case; and that on account of this, he had been falsely implicated. He further stated that at the time of occurrence, he was residing in U.P. Meja Singh accused, also, denied the prosecution case. He stated that one Balkar Singh of Village Wan had been murdered. He (Meja Singh) used to look after the defence of Jarnail Singh (his wife 's brother, who was being tried for the murder of Balkar Singh; that on account of this, the relation of the said Balkar Singh had, in connivance with the complainant party, falsely implicated him in the instant case. The remaining accused, also, denied the circumstances appearing in evidence against them. The learned Additional Sessions Judge, Amritsar, who tried the case against these six accused persons, found that Wasson Singh had a strong motive to murder Hazara Singh deceased, because the latter had appeared as an eye witness against Wasson Singh in Ajit Singh 's murder case. The trial Judge further accepted the prosecution evidence in regard to the fact that a few days before this occurrence in question, there was a: quarrel between Hazara Singh deceased and Resham Singh (P.W. 2) on one side and Mukhtar Singh, and Harbhajan Singh accused on the other, when the cattle of the accused had trespassed on the land of the deceased and damaged his cotton crop; and that on account of this ill will, Joginder Singh, Mukhtar Singh and Harbhajan Singh accused had a sufficient motive to join hands with Wasson Singh accused to murder Hazara Singh deceased. The trial Judge further found that the prosecution had failed to establish the exact nature of the motive which might have actuated Meja Singh and Baj Singh to murder Resham Singh deceased. The trial Judge further held that the F.I.R. which had been lodged by Resham Singh with great promptitude at Police Station Valtoha, which was about three miles from the place of occurrence, furnished valuable corroboration of the evidence of Resham Singh (P.W. 2). 623 He accepted the evidence of Resham Singh and Bachan Singh. He further found that Sub Inspector Bishambar Lal had tried to favour Joginder Singh accused by fabricating a note in his zimini at some subsequent stage. This note is to the effect, that Joginder Singh was, in fact, present irrigating his nearby fields and he joined the police investigation on the very day of occurrence and had remained with the police till the investigation by the Deputy Superintendent of Police. The trial Judge disbelieved the plea of alibi set up by Meja Singh accused. In the absence of independent evidence, the trial Judge was unable to hold from the bare testimony of Bishamber Lal, Sub Inspector, that the rifle (exhibit P 7) had been recovered from Mukhtar Singh accused. He, however, criticised the conduct of Sub Inspector Bishamber Lal in not sending the empty cartridges found at the spot to the ballistic expert of the Forensic Laboratory, Chandigarh, with due promptitude. In the result, the trial Judge held that Wasson Singh, Joginder Singh and Mukhtar Singh accused had fired their rifles at Hazara Singh deceased, and had caused his death. He therefore, convicted these three accused for the substantive offence under Section 302, Penal Code. He further held that the common object of the unlawful assembly constituted by the six accused was to murder Hazara Singh deceased. He therefore, further convicted all the six accused under Section 302 read with Section 149, Penal Code, for the murder of Hazara Singh. The trial Judge found that the murder of Resham Singh did not appear to have been caused in prosecution of the common object of the said unlawful assembly. He therefore, convicted Baj Singh, Meja Singh and Harbhajan Singh accused only under Section 302 read with Section 34, Penal Code, for the murder of Resham Singh deceased and sentenced each of them to imprisonment for life and a fine of Rs. 200/ . In respect of the murder of Hazara Singh, Wasson Singh was sentenced to death, while each of the other five accused were sentenced to imprisonment for life and a fine. The trial Judge referred the case to the High Court for confirmation of the death sentence of Wasson Singh. All the accused, also appealed against their conviction and sentences. The High Court allowed the appeal, declined the reference and rejected the evidence of the eye witnesses, Resham Singh (P.W. 2) and Bachan Singh (P.W. 3), for these reasons: (i) Both these witnesses are closely related to the deceased Hazara Singh, who was the principal target of the accused. (ii) (a) Excepting in the case of Wasson Singh who had undoubtedly a grudge against Hazara Singh deceased, it has not been 624 satisfactory established by the prosecution that the other five accused had any motive to commit the murders in question. (b) Gajjan Singh, who is said to have interceded and pacified both the parties at the time of the alleged quarrel over cattle trespass, three or four days prior to the occurrence, between Mukhtar Singh and Harbhajan Singh on one hand and Hazara Singh deceased and Resham Singh (P.W. 2) on the other, has not been examined by the prosecution. (c) There was no mention about this earlier incident in the statement of Bachan Singh (P.W. 3) before the police during investigation. (iii) Both Resham Singh and Bachan Singh, P.Ws. had earlier been involved in cases of serious crime, and Bachan Singh was admittedly registered as a bad character with the Police. On account of their antecedents, Resham Singh and Bachan Singh do not appear to be reliable people. (iv) The prosecution story is highly unnatural. The presence of these two eye witnesses along with the deceased persons was unlikely. Had these witnesses been with Hazara Singh deceased, they would have been the target of attack after Hazara Singh was killed and not Resham Singh deceased against whom the accused had no grudge. (v) Hazara Singh deceased, Bachan Singh and Resham Singh, P.Ws. , all admittedly reside in the hamlet of Hazara Singh deceased, and if they had to go to Amarkot for making purchases, they would have in all probability gone together. Bachan Singh 's version, that he had gone to Amarkot to make enquiries regarding the availability of diesel and on his return journey in the way, met and joined the company of his brother Hazara Singh deceased, and his companions, was not believable, because there was no need for Bachan Singh to have gone to Amarkot for the purchase of diesel as he could have asked Hazara Singh to make the necessary enquiries. (vi) There is a material inconsistency in the testimony of the two eye witnesses as to when Hazara Singh deceased and Resham Singh (P.W. 2) had left their behak (hamlet). From the statement of Resham Singh (P.W. 2), it appears that from their behak they had gone to Amarkot that very day for purchasing cloth and on the return journey they met Bachan Singh. As against this, the story told by Bachan Singh is that a day earlier Hazara Singh deceased and Resham Singh, P.W. had left their behak for some unknown destination and that a day later they had met him at the adda, after their departure from the behak the previous day. This version completely belies the version of Resham Singh (P.W. 2) that they had left their behak 625 in order to make purchases of cloth and other articles. (vii) Another odd feature brought out from the evidence of Resham Singh (P.W. 2) is the presence of motor cycle at Amarkot on that day. It is surprising that he could afford to maintain a motorcycle from the meagre income that he would have got from his 5 or 6 acres of land. His explanation as to why he left the motor cycle at Amarkot, is also not convincing. (viii) The investigation of the case conducted by the Sub Inspector Bishamber Lal (P.W. 13) does not inspire confidence. (a) The evidence relating to the recovery of empty cartridges (vide exhibit P.G.) and pair of shoes from the spot near the dead body of Hazara Singh, was not reliable, because P.W. 13 did not mention about the presence of these articles in the inquest report (exhibit PDZ). (b) Though the empty (crime) cartridges recovered from the spot were sent to the ballistic expert earlier, they were returned to the Police Station on the plea that the test cartridges had not been sent along with those empties. "Even if it was so, there was no need of sending the crime cartridges to the Police Station, as the test cartridges could be sent for through a separate letter. In this situation, the suggestion that the crime cartridge had been later on fired through rifle (exhibit P7) when it was recovered cannot be considered improbable". (ix) "On arrival at the scene of the incident, P.W. 13 found Joginder Singh accused at a distance of about 100 yards irrigating his field. According to Bishamber Lal, he interrogated Joginder Singh there and then, but did not arrest him. If Joginder Singh accused had been found near the scene of the crime within a short time, engaged in his normal activities, his participation in the crime would be highly improbable". Learned counsel for the appellant vehemently contends that the reasoning of the High Court is manifestly unsound, if not wholly perverse. Great emphasis has been laid on the fact that the First Information Report, in this case was lodged by Resham Singh (PW 2) with utmost promptitude, and even its copy had reached the Magistrate at about 6 or 6 30 p.m. at Patti, on the same day. In the First Information Report, proceeds the argument, all the material facts including the names of the accused and of the witnesses have been mentioned It is submitted that since this F.I.R. was made without delay in circumstances in which the informant had no time to concoct a false story, it furnished valuable corroboration of the evidence of Resham Singh (P.W. 2), and made his evidence safe enough to be 626 accepted. It is further maintained that in the first place, the prosecution had established that Mukhtar Singh, Harbhajan Singh and Joginder Singh had also a motive to join hands with Wasson Singh to murder Hazara Singh deceased, and that even if it was held that such motive on the part of the companions of Wasson Singh accused had not been substantiated as the High Court has held then P.Ws. 2 and 3 had also no motive or animus to falsely implicate them. Counsel have criticised the failure of the High Court to discuss the value and effect of the F.I.R. lodged by P.W. 2. It is emphasised that the circumstance that the F.I.R. was made without delay was a circumstance of paramount importance in evaluating Resham Singh 's evidence in particular and the prosecution evidence in general. It is argued that the omission on the part of the High Court to deal with and discuss the F.I.R. has caused serious aberration in its approach and vitiated its appreciation of the evidence of the eye witnesses. On the other hand, Shri R. K. Jain, learned counsel for the respondents, has submitted that since the reasons given by the High Court in support of the acquittal of the accused cannot be called perverse, this Court should not, in keeping with its practice, disturb the acquittal even if it feels inclined to hold that the view of the evidence taken by the trial court is also reasonable. Shri Jain has further tried to support the reasoning of the High Court. We have carefully considered the contentions canvassed on both sides. We are also not unmindful of the fact that we are dealing with an appeal against an order of acquittal in a double murder case. Even so, we find that the reasons given by the High Court for holding that Resham Singh (P.W. 2) was not an eye witness of these murders, are utterly unsustainable. The mere fact that Resham Singh (P.W. 2) had succeeded in escaping unhurt, or that there are discrepancies in the statements of Resham Singh (P.W. 2) and Bachan Singh (P.W. 3), as to whether they had gone to Amarkot with Hazara Singh deceased on the very day of occurrence or a day earlier, was no ground for jumping to the conclusion that P.W. 2 was not in the company of the deceased or nearabout the scene of occurrence when Hazara Singh and Resham Singh were shot dead. The occurrence took place on August 4, 1973, While Resham Singh (P.W. 2) and Bachan Singh (P.W. 3) were examined at the trial on December 27, 1974, that is to say, 17 months after the incident. Such discrepancies in regard to collateral or subsidiary facts or matters of detail occur even in the statements of truthful witnesses, particularly when they are examined to depose to events which happened long before their examination. Such discrepancies are 627 hardly a ground to reject the evidence of the witnesses when there is general agreement and consistency in regard to the substratum of the prosecution case. As rightly observed by the trial court, Resham Singh (P.W.2) was never cross examined by the defence regarding his whereabouts and that of Hazara Singh deceased on the previous night. The mere fact that P.W. 2 did not make any purchases at Amarkot could hardly be a reason to hold that his being in the company of Hazara Singh deceased at the material time, was improbable. It is common ground that there was no love lost between Wassan Singh appellant and Hazara Singh deceased. Wassan Singh, though convicted by the trial court for the murder of Ajit Singh, was released on bail by the High Court pending his appeal. P.W. 3 is the brother and P.W. 2 a relation of the deceased. All these three were living together in the same hamlet in the fields. It is in the evidence of these witnesses that the other accused are partymen of Wasson Singh. It is further in evidence that sometime before the occurrence both Hazara Singh and Resham Singh,(P.W. 2) were arrested and handcuffed by Darshan Singh, Police Sub Inspector on the allegation that they were indulging in smuggling and would be liquidated. Both of them however, escaped and appeared with handcuffs on before the Deputy Home Minister and complained against the Police Sub Inspector. Both were prosecuted for smuggling betel leaves across the border. It was therefore, not improbable that this trio consisting of Hazara Singh deceased, P.W. 2 and P.W. 3 was, as usual, moving about or carrying on their activities together. Moreover, the deceased Hazara Singh must have known that Wasson Singh accused who was inimically disposed towards him, was at large on bail. This was an added reason for this troika to move about for their security, if not for anything else, in the company of each other. Nor could P.W. Bachan Singh 's presence at the scene of crime be discounted and his evidence discarded merely on the score that there was no necessity for him to go to Amarkot for enquiring about the availability of diesel. There is one towering circumstance which goes a long way to lend assurance to the claim of P.W. 2 that he was an eye witness of the occurrence. It is that the F.I.R. (exhibit P.E.) was lodged by him at Police Station Valtoha, so promptly that he had practically no time to spin out a false story. 628 The learned trial Judge has accepted, and rightly so, the sworn testimony of Resham Singh (P.W. 2) and Sub Inspector Bishamber Lal (P.W. 13), who was then Station House Officer, Valtoha, to the effect, that the F.I.R. (exhibit P.E.), was recorded in the Police Station at 4.30 p.m. Police Station Valtoha is three miles from Bus Stand Amarkot. According to Resham Singh, the occurrence took place at about 3.30 p.m. On seeing the occurrence and after eluding the pursuit, Resham Singh, as he says, ran to Adda Amarkot through the fields covering a distance of about one kilometre. According to P.W. 2, his motor cycle was lying at a shop in Amarkot. He picked up his motor cycle from there and drove to the Police Station, Valtoha and without loss of time lodged the first information, there. The endorsement on exhibit PE, bears out that the copy of the First Information was in the hands of Shri K. K. Garg, Judicial Magistrate, First Class, Patti, at 6.30 p.m. This circumstance assures the truth of the prosecution evidence on the point that the First Information Report was made by Resham Singh (P.W. 2) at the Police Station at 4.30 p.m., that is within two hours of the occurrence without undue delay. The learned Judges of the High Court have not at all dealt with the F.I.R. or the promptitude with which it was made. They doubted Resham Singh 's version that from Amarkot he went on his own motor cycle to Valtoha Police Station. The argument employed by the High Court is that Resham Singh owned only four or five killas of land, and could not acquire and maintain a motor cycle from the income of his petty holding. However, this was not the defence case. In cross examination, the defence themselves, brought out and tried to establish that he was earning by smuggling betel or other things to Pakistan. Thus, according to the own showing of the defence, P.W. 2 had a source of income other than his agricultural income. It was, therefore, nothing improbable if Resham Singh owned a motor cycle. Sub Inspector Bishamber Lal (P.W. 13) was not questioned in cross examination as to whether or not Resham Singh had come to the Police Station on a motor cycle. He (P.W. 13) was however, questioned as to what transport he had used for going from the Police Station to the scene of murders. The witness replied that he went on a motor cycle upto Amarkot and from there went on foot to the scene of occurrence. Resham Singh stated that since it had recently rained, the kacha path from Amarkot to their hamlet in village Ban, had became muddy and unsafe for riding a motor cycle because of the high risk of skidding. That was why, the witness had left the motor cycle at Adda Amarkot with a shopkeeper. 629 It may be noted that the occurrence took place on August 4, 1973 when the rainy season would be in full swing. This explanation of Resham Singh (P.W. 2) regarding the kacha path from Amarkot to the scene of occurrence, being non motorable on the day of occurrence, receives inferential support from the fact appearing in the evidence of Bishamber Lal (P.W. 13), that he had to cover the distance from Adda Amarkot to the place of occurrence, on foot. Thus, the reason employed by the High Court for disbelieving the version of Resham Singh (P.W. 2) regarding his owning and going on a motor cycle from Amarkot to Police Station Valtoha was manifestly unsound. It was argued before the trial court on behalf of the accused that the occurrence might have taken place at about 2 p.m. when Resham Singh (P.W. 2) was about 400 or 500 yards away in his hamlet, and that on hearing the report of gun fire he was attracted to the scene of crime, and he having seen the dead bodies lying there, went home, took his motor cycle and then drove to the Police Station Valtoha and brought Sub Inspector Bishamber Lal to the scene of occurrence and the Sub Inspector prepared the F.I.R. at the spot after deliberation with Resham Singh and others. This contention was rightly rejected by the trial court. As observed earlier, since it had rained a day prior to the occurrence, the kacha path from Amarkot to the scene of occurrence and to the hamlet of the deceased must have been muddy and slippery. Therefore, the very suggestion that from village Ban to Amarkot and thereafter to Valtoha, Resham Singh went on his motor cycle, was improbable. Moreover, from the conduct of the Investigating Officer, Bishamber Lal, it appears that he was not favourably disposed towards the deceased and the informant. Indeed, a suggestion was put to Bishamber Lal (P.W. 13) by the Public Prosecutor, that he has been unfair in the investigation of the case and tried to favour Joginder Singh and Meja Singh accused. The learned trial Judge found that the investigation conducted by Sub Inspector Bishamber Lal was biased in favour of Joginder Singh and Meja Singh accused persons, and that the Sub Inspector fraudently interpolated a note in his zimini to help Joginder Singh accused. The High Court has, also, found that this note in the zimini was a fraudulent insertion. This being the case, Sub Inspector Bishamber Lal would be least disposed to join hands with Resham Singh informant in preparing the First Information Report, after deliberation with him (P.W.2) at the spot. 630 Dr. Gursharan Kaur (P.W. 1) who performed the post mortem examination of the dead bodies of Resham Singh and Hazara Singh on August 4, 1973 between 8 a.m. and 9 a.m. respectively, opined that the time which elapsed between these deaths and their post mortem examination was about 18 hours. Thus, according to the Doctor 's opinion, also, the deaths took place at about 2 or 3 p.m. on August 4, 1973. The opinion of the medical witness thus corroborated the version of Resham Singh (P.W. 2) in as much as the latter has testified that the murders took place at about 3.30 p.m. This means, that the statement of Resham Singh (P.W. 2) in the First Information Report was made without undue delay, and, as such, furnished very valuable corroboration of his testimony at the trial, in all material particular. If the presence of Resham Singh (P.W. 2) and Dalip Bachan Singh (P.W. 3) at the time and place of murders was probable the further question would be, how far their evidence could be safely accepted against each of the accused persons ? It is true that both these witnesses are related to the deceased, and, as such, are interested witnesses. Their antecedents, also, are of a questionable nature. But their antecedents or mere interestedness was not a valid ground to reject their evidence. Persons with such antecedents are not necessarily untruthful witness. Nor mere relationship with the deceased was a good ground for discarding their testimony, when, as we have already held, their presence at the scene of occurrence was probable. All that was necessary was to scrutinise their evidence with more than ordinary care and circumspection with reference to the part or role assigned to each or the accused. An effort should have been made to sift the grain from the chaff; to accept what appeared to be true and to reject the rest. The High Court did not adopt this methodology in appreciating their evidence. Instead, it took a short cut to disposal, and rejected their evidence whole sale against all the accused, for reasons which, as already discussed, are manifestly untenable. Keeping the principle enunciated above, we have scrutinised the entire material on record with particular focus on the evidence of P.W.2 and P.W.3, against each of the accused. Excepting the immaterial discrepancies considered earlier, the evidence of P.W. 2 and P.W. 3 was consistent, and their presence as already mentioned, at the time and place of murders was probable. Even so, as a matter of abundant caution, it will be safe to act on their interested evidence 631 to the extent to which some assurance is coming forth from surrounding circumstances or other evidence. The story narrated by the eye witnesses, Resham Singh and Bachan Singh is that Wasson Singh, Mukhtar Singh and Joginder Singh first fired a volley of rifle shots at Hazara Singh deceased as a result of which he dropped dead at the spot. The evidence of the Doctor who performed the autopsy on the dead body of Hazara Singh is to the effect that there were two bullet wounds of entry on the left side of the head. These wounds were located at a distance of 2 1/2 cms. from each other. There were two corresponding wounds of exit. There was no blackening or charring around these wounds of entry. This indicates that these injuries were caused by bullets fired almost simultaneously from two separate rifles from a distance beyond 6 feet. This means at least the rifles fired by two of the three aforesaid accused did find their mark, causing instantaneous death of the deceased. Now, both the courts below have concurrently found that Wasson Singh had a strong motive to murder Hazara Singh deceased. This circumstance, by itself, is sufficient to lend the necessary assurance to the evidence of Resham Singh (P.W. 2) and Bachan Singh (P.W. 3) and make it a safe basis for convicting Wasson Singh accused for the murder of Hazara Singh. The trial court had accepted the evidence of Resham Singh (P.W.2) in regard to the quarrel over cattle trespass that took place 3 or 4 days prior to these murders between Mukhtar Singh and Harbhajan Singh accused on one side, and Hazara Singh deceased and P.W. 2 on the other. This story finds particular mention in the F.I.R. (exhibit PE) which was lodged by P.W. 2 without undue delay. The High Court has rejected this story about this previous quarrel on the three fold ground, namely: (a) Gajjan Singh who interceded and pacified the parties has not been examined, (b) No evidence of the extent of damage done to the crop or of any complaint made to village Panchayat has been produced, (c) Bachan Singh (P.W.3), did not mention about this earlier incident in his police statement. In our opinion, none of these was a valid ground for rejecting the evidence of Resham Singh (P.W.2) in regard to this incident. Resham Singh 's consistent testimony on this point corroborated by the F.I.R. (exhibit PE) was sufficient to establish this fact beyond doubt. Thus, it was proved by the prosecution that Mukhtar Singh accused had also a motive to join Wasson Singh accused in killing Hazara Singh. The circumstance that Mukhtar Singh had also a motive to participate in the murder of Hazar Singh deceased lends assurance to the 632 testimony of Resham Singh (P.W.2) and Bachan Singh (P.W.3), and strengthens the inference of guilt against the said accused, also. It is in the evidence of Sub Inspector Bishamber Lal (P.W.13) that Mukhtar Singh was arrested on August 18, 1973 and on August 31, 1973 Mukhtar Singh accused, whilst under Police custody, made a disclosure statement in the presence of Ajit Singh and Sardul Singh Constables, that he had kept concealed a 303 rifle with 5 cartridges wrapped in a piece on cloth in a bundle of reeds lying inside the courtyard of his house at village Thathiwala and he could get the same discovered. P. W. 13 recorded that statement (exhibit P 1). Thereafter, the accused was taken to village Thathiwala where he led the Sub Inspector in the presence of Sardul Singh and Ajit Singh Constables, to that bundle and got discovered the rifle (exhibit P7) and the cartridges (exhibit P8 to 12) therefrom. The Sub Inspector prepared the sketch of the rifle and the memo (exhibit PM) which was attested by the aforesaid Constables. The rifle and the cartridges were sealed into parcels and were thereafter sent through Constable Ajit Singh, with seals intact, to the Police Station where they were received by the Moharrir Head Constable Natha Singh (P.W. 10). P.W. 13 has also, stated that he had on August 4, 1973 on inspecting the scene of murders, found two empty cartridges (exhibit P3 and exhibit P4) from near the dead body of Hazara Singh. The witness took them into possession and sealed them into a parcel in the presence of Anokh Singh and Gajjan Singh witnesses, and prepared the memo (exhibit PG). The parcel containing the empties was later deposited by the Sub Inspector, with seals in tact, in the Malkhana of the Police Station. The evidence of Sub Inspector Bishamber Lal, with regard to the seizure of the empty (crime) cartridges from the scene of occurrence on August 4, was supported by Anokh Singh (P.W.4) who is an attesting witness of the memo, Ex.PG. The witness is a resident of village Cheema. In cross examination, he revealed that these two fired cartridges were lying at a distance of 1.5 karams (8 or 9 feet) from the dead body of Hazara Singh. Nothing was brought out in cross examination to show that the witness was in any way interested in the prosecution or was related to the deceased or had any animus against the accused. Thus, it has been clearly proved that two fired cartridges were picked up from the scene of crime and sealed into parcels which were later deposited with seals intact in the Police Station. In the memo (exhibit PG), it is mentioned that these fired cartridges were of 303 bore rifle. 633 Ajit Singh Moharrir Head Constable (P.W.11) swore in his affidavit that on August 4, 1973, he received the sealed parcel of 2 empty cartridges from Sub Inspector Bishamber Lal. The seals on the parcel remained intact so long as the parcel remained in his custody. Then, there are the affidavits of Avtar Singh Constable (P.W. 9) and Natha Singh Moharir Head Constable showing that on September 24, 1973, the sealed parcels containing the rifle (exhibit P7) and the five live cartridges were sent through P.W. 9 to the Forensic Science Laboratory Chandigarh, who delivered the same in the said Laboratory with seals intact. The evidence of P.W. 13 regarding the discovery of the rifle (exhibit P7) from Mukhtar Singh accused was fully corroborated by Constable Sardul Singh (P.W. 12). His cross examination reveals that Mukhtar Singh was interrogated in the Police Station at 4 5 A.M. when he made the statement (exhibit PL), leading to the discovery of the rifle (exhibit P7). Sub Inspector Bishamber Lal (P.W. 13) has stated that the sealed parcel containing the empty cartridges, that had been found at the scene of crime, was sent to the Forensic Science Laboratory Chandigarh at a date earlier than the one on which the parcel containing the rifle (exhibit P7) and the five live cartridges was sent to the said Laboratory, but it was returned with the objection that it should have been sent along with the test cartridges. Consequently, this parcel containing the empties was again sent to the Forensic Laboratory along with the sealed parcel containing the rifle (exhibit P7) and the live cartridges recovered from Mukhtar Singh accused. In the Report (exhibit PQ) of the Ballistic Expert (L. A. Kumar) which was tendered in evidence and admitted without objection, it is opined that the empty (crime) cartridge, marked C1, had been fired through the rifle (exhibit P7). In cross examination, the defence suggested to P.W. 13, that he had purposely recalled the parcel containing the empty cartridges from the Forensic Science Laboratory for creating evidence against the accused and he did so by firing one cartridge through the rifle (exhibit P7). The oblique suggestion was that the cartridge, marked C1 which in the opinion of the Ballistic Expert had been fired through the rifle (exhibit P7) was substituted for the original empty cartridge that had been found at the scene of murder. The Sub Inspector emphatically denied the suggestion. It was further suggested to P.W. 13 that the rifle (exhibit P7) had, in fact, been handed over to the Police by the relations of the deceased after procuring it from some source. This was also stoutly denied by P.W. 13. 634 The learned trial Judge discarded this evidence relating to the discovery of the rifle (exhibit P7) at the instance of the accused, Mukhtar Singh, for the reason that Sub Inspector Bishamber Lal, for no good reason, had failed to join respectables of the locality to witness the discovery of the rifle, and that he (P.W. 13) "has tried to be a defence witness rather than the investigating officer". The trial Judge accepted Anokh Singh 's statement regarding the recovery of the two fired cartridges from the scene of Hazara Singh 's murder on August 4, but he adversely commented on the conduct of Bishamber Lal in delaying the despatch of those crime cartridges to the Forensic Science Laboratory Chandigarh till after the recovery of the rifle. He observed: "In all probability, Sub Inspector Bishamber Lal wanted to help the accused by creating suspicion with respect to the identity of the firing impressions" (on the empties). For this reason, according to the trial Judge, the ballistic evidence "will not be corroborative evidence for the prosecution. " We agree with the trial Court that the investigating officer did not deliberately join with him respectables of the locality to attest the statements (exhibit PL) made by Mukhtar Singh, and to witness the sub sequent discovery of the rifle (exhibit P7) at the instance of Mukhtar Singh. There was substance in the observation of the trial Judge that the investigation was biased in favour of the accused. If that was so, the failure of Bishamber Lal (P.W. 13) to join with him respectables of the locality was, by itself, no ground for ruling out the evidence of the discovery of the rifle, altogether. The partiality of Bishamber Lal towards the defence, rather assures the genuineness of the discovery He was least disposed to 'collaborate ' or 'cooperate ' with the relations of the deceased to procure this rifle (exhibit P7) from some other source and then foist it on Mukhtar Singh. For the same reason, it is not possible to hold that he recalled the sealed parcel containing the fired (crime) cartridges from the Laboratory at Chandigarh, for substituting a cartridge fired through the rifle (exhibit P7) or for fabricating evidence in support of the prosecution. Moreover, the parcel containing the two empties must have been returned by the Director of the Forensic Laboratory on his own initiative and not at the instance of the Sub Inspector (P.W. 13). The omission on the part of this investigating officer to join with him some independent persons or respectables of the locality to witness the recovery devalues that evidence but does not render it inadmissible. Although a suggestion of "planting" the rifle, and fabricating the evidence of the empty cartridge (C1) was put to Sub Inspector Bishamber Lal in cross examination, no such allegation was 635 made, nor any such plea was set up by Mukhtar Singh accused when the evidence relating to the recovery of the two empties from the spot, the discovery of the rifle (exhibit P7) at his instance and the opinion (exhibit PQ) of the Ballistic Expert was put to this accused in his examination under Section 342, Cr. P.C. The circumstance of the recovery of the rifle (exhibit P7) and the opinion of the Ballistic Expert that the empty cartridge (marked C1) (found on August 4, at the scene of murder) had been fired through the rifle (exhibit P7), though feeble it might be was relevant and furnished a further pointer to the participation of Mukhtar Singh in the commission of Hazara Singh 's murder by rifle fire. In sum, sufficient assurance of the testimony of P.W. 2 and P.W. 3, was available from the circumstantial evidence discussed above, regarding the participation of Wasson Singh and Mukhtar Singh accused in the murder of Hazara Singh. The evidence of the eyewitnesses therefore, could safely be acted upon for convicting Wasson Singh and Mukhtar Singh accused respondents for the murder of Hazara Singh. But such assurance of the evidence of these eyewitnesses was not available against the remaining accused regarding either of the murders in question. Joginder Singh accused admittedly was not present when the quarrel over cattle trespass took place between Hazara Singh deceased and P.W. 2 on one side, and Mukhtar Singh and Harbhajan Singh accused on the other. It has neither been alleged nor proved that Joginder Singh had any motive of his own to murder Hazara Singh deceased. Although, the investigation betrays a tilt in favour of the accused, and P.W. 13 made a fraudulent insertion in the zimini to help Joginder Singh accused, it cannot be said that the version of P.W. 13 to the effect that when he went to the scene of murders at 5.30 P.M., he found Joginder Singh irrigating his nearby fields at a distance of about 100 yards therefrom and he (P.W. 13) interrogated him there and then, but did not think it necessary to arrest him, is necessarily false. The absence of motive, and the presence of Joginder Singh near the scene of crime shortly after the murders, engaged in normal agricultural activities does cast a doubt about his participation in the commission of these murders. P.W. 2 and P.W. 3 have stated that they started running away from the spot, immediately after Hazara Singh was shot dead. The surrounding circumstances, natural probabilities and the normal course of human conduct also suggest the same inference, that 636 immediately on seeing Hazara Singh being shot down, these witnesses who were following Hazara Singh, ran fast for their lives. Had they tarried for a while at the scene of Hazara Singh 's murder, it would have been too late for them to escape unhurt. In such a situation, when they were being pursued by persons armed with fire arms, they could, if at all they turned and looked behind have only a fleeting glimpse in the distance of the assailants of Resham Singh deceased. That is why, Resham (P.W. 2) is not consistent in his statements as to which of the accused had fired at him when he was running away for his life. Moreover, it has not been established that any of the six accused had any motive, whatever, to murder Resham Singh deceased. For the foregoing reasons, we partly allow this appeal by the State, set aside the acquittal of Wassan Singh and Mukhtar Singh accused (respondents) and convict them under Section 302 read with Section 34, Penal Code for the murder of Hazara Singh deceased and sentence each of them to imprisonment for life. We would, however, accord the benefit of doubt to the rest of the accused (respondents) and maintain their acquittal on all the counts. Wasson Singh and Mukhtar Singh shall surrender to their bail bonds to serve out the sentences inflicted on them. N.V.K. Appeal partly allowed.

The prosecution case against the six accused (Respondents) was that prior to the incident in question, there was an altercation between the two deceased on one side and the six accused on the other over trespass of cattle of the accused persons on the land of the deceased, which damaged his cotton crop. On the day of the incident when P.W. 2, P.W. 3 and the two deceased were going by a foot path, the six accused suddenly emerged out of a field and fired. The two deceased fell dead, while P.W. 2 and 3 ran and escaped unhurt. P.W. 2 reached the bus stand, picked up his motor cycle parked at a shop and drove to the nearest police station to lodge the F.I.R. The Additional Sessions Judge found that one of the accused had a strong motive to murder one of the deceased because of an old feud and that on account of this ill will, some of the accused had a strong motive in joining hands with the others to murder the deceased, but that no motive could be established for murdering the second deceased. He also found that the fact that the F.I.R. was lodged by P.W. 2 with the utmost promptitude furnished valuable corroboration of his evidence and also disbelieved the evidence of the police Sub Inspector (P.W. 13). In the result he convicted all the six accused under section 302 read with section 149 I.P.C. for murder of one of the deceased and sentenced them to imprisonment. In the case of first accused however, he was sentenced to death for the murder of one of the deceased. All the accused appealed against their conviction and sentence to the High Court which allowed the appeal and rejected the reference. It rejected the evidence of the eye witnesses, P.W. 2 and P.W. 3 on the ground that these witnesses were closely related to the first deceased who was the principal target of the accused and that it had not been satisfactory established by the prosecution that the other five accused had any motive to commit the murders in question. It found that the prosecution story was highly unnatural and that the presence of the two eye witnesses alongwith the deceased persons was un 616 likely. It further held there was material inconsistency in their testimony, as to when the first deceased and P.W. 2 had left the hamlet, and that the investigation of the case conducted by the Sub Inspector (P.W. 13) did not inspire confidence. In the appeal by the State to this Court it was contended on behalf of the State that the reasoning of the High Court was manifestly unsound, if not wholly perverse. The fact that the F.I.R. was lodged by P.W. 2 with utmost promptitude and all the material facts including the names of the accused and of the witnesses having been mentioned therein, indicated that there was no time to concoct a false story. On behalf of the respondents it was submitted that the acquittal could not be disturbed, as the reasons given by the High Court could not be called perverse. ^ HELD : 1(i) The acquittal of respondent Nos. 1 and 2 are set aside and they are convicted under section 302 read with section 34 Indian Penal Code for the murder of the first deceased and sentenced to imprisonment for life. The benefit of doubt to the rest of the accused (respondents) and their acquittal on all the counts maintained. [636 C D] (ii) Sufficient assurance of the testimony of P.W. 2 and P.W. 3 was avail able from the circumstantial evidence regarding the participation of respondents Wasson Singh and Mukhtar Singh in the murder of deceased Hazara Singh. The evidence of the eye witnesses therefore, could safely be acted upon for convicting these respondents for the said murder. [635 C D] 2. The reasons given by the High Court for holding that P.W. 2 was not an eye witness of these two murders are utterly unsustainable. The reason that P.W. 2 had succeeded in escaping unhurt, or that there are discrepancies in the statements of P.W. 2 and P.W. 3 as to whether they had gone with the deceased on the very day of occurrence or a day earlier was no ground for the conclusion that P.W. 2 was not in the company of the deceased or near about the scene of occurrence when the two deceased were shot dead. [626 F G] 3. Discrepancies in regard to collateral or subsidiary facts or matters of detail occur even in the statements of truthful witnesses, particularly when they are examined to depose to events which happened long before their examination. Such discrepancies are hardly a ground to reject the evidence of the witnesses when there is general agreement and consistency in regard to the substratum of the prosecution case. [626H 627A] In the instant case the occurrence took place on August 4, 1973, while P.W. 2 and P.W. 3 were examined at the trial on December 27, 1974 i.e. seventeen months after the incident. The trial court has rightly observed that P.W. 2 was never cross examined by the defence regarding his whereabouts and those of the deceased on the previous night. The mere fact that P.W. 2 did not make any purchase at Amarkot could hardly be a reason to hold that his being in the company of the deceased at the material time was improbable. [626G, 627B] 4. P.W. 3 is the brother and P.W. 2 relation of the deceased. All three were living together in the same hamlet in the fields. It is in the evidence of 617 these witnesses that the other accused are partymen of respondent No. 1. It is further in evidence that sometime before the occurrence both the deceased and P.W. 2 were arrested and handcuffed by a police Sub Inspector on the allegation that they were indulging in smuggling and would be liquidated. It was, therefore, not improbable that this trio consisting of first deceased, P.W. 2 and P.W. 3 were as usual moving about or carrying on their activities together. Moreover the deceased must have known that Respondent No. 1 who was inimically disposed towards him was at large on bail. This was an added reason for this troika to move about for their security, if not for anything else, in the company of each other. [627C F] 5. (i) The High Court has not all dealt with the First Information Report or the promptitude with which it was made. [628D] (ii) The towering circumstance which lends assurance to the claim of P.W. 2 that he was an eye witness of the occurrence is that the First Information Report was lodged by him at the Police Station so promptly that he had practically no time to spin out a false story. The reason employed by the High Court for disbelieving the version of P.W. 2 regarding his owning and going on a motor cycle to the Police Station was manifestly unsound. The Sub Inspector P.W. 13 was not questioned in cross examination as to whether or not P.W. 2 had come to the Police Station on a motor cycle. He was, however, questioned as to what transport he had used for going from the Police Station to the scene of murders. The witness replied that he went on a motor cycle upto Amarkot and from there went on foot to the scene of occurrence. This explanation of P.W. 2 regarding the kacha path from Amarkot to the scene of occurrence, being non motorable on the day of occurrence, receives inferential support from the fact appearing in the evidence of P.W. 13 that he had to cover the distance from Adda Amarkot to the place of occurrence, on foot. [627H, 629E, 628G 629A] 6. The conduct of the Investigation Officer (P.W. 13) indicates that he was not favourably disposed to the deceased and P.W. 2. A suggestion was also put to P.W. 13 by the Public Prosecutor that he had been unfair in the investigation of the case and tried to favour the 3rd and 4th respondent. The High Court found that the note in the zimini was a fraudulent insertion. This being the case, Sub Inspector (P.W. 13) would be least disposed to join hands with P.W. 2 informant in preparing the First Information Report, after deliberation with P.W. 2 at the spot. [629F H] 7. The opinion of the medical witness P.W. 1 corroborates the version of P.W. 2 in as much as the latter has testified that the murders took place at about 3.30 p.m. This means that the statement of P.W. 2 in the F.I.R. was made without undue delay, and, as such, furnished very valuable corroboration of his testimony at the trial in all material particulars. [630B C] 8. (i) Both P.W. 2 and P.W. 3 are related to the deceased, and as such are interested witnesses. Their antecedents, also, are of a questionable nature. But their antecedents or mere interestedness was not a valid ground to reject their evidence. All that was necessary for the Court was to scrutinise their evidence with more than ordinary care and circumspection with reference to the part or role assigned to each of the accused. An effort should have been made to sift the grain from the chaff; to accept what appeared to be true and to reject the 618 rest. The High Court did not adopt this methodology in appreciating their evidence. Instead it took a shortcut to disposal and rejected their evidence whole sale against all the accused for reasons which are manifestly untenable. [630E G] (ii) Excepting for immaterial discrepancies the evidence of P.W. 2 and P.W. 3 was consistent and their presence at the time and place of murders was probable. Even so, as a matter of abundant caution it will be safe to act on their interested evidence to the extent to which some assurance is coming forth from surrounding circumstances or other evidence. [630H 631A] 9. The prosecution has proved that the respondent No. 2 had also a motive to participate in the murder of the second deceased. This lends assurance to the testimony of P.W. 2 and P.W. 3 and strengthens the inference of guilt against the said accused also. P.W. 2 's consistent testimony corroborated by the F.I.R. was sufficient to establish this fact beyond doubt. [631H 632A] 10. It had been clearly proved that two fired cartridges were picked up from the scene of crime and sealed into parcels which were later deposited with seals intact in the Police Station. On the memo it is mentioned that these fired cartridges were of 303 bore rifle. [632H] 11. There was substance in the observation of the trial Judge that the investigation was biased in favour of the accused. If that was so, the failure of P.W. 13 to join with him respectables of the locality was by itself no ground for ruling out the evidence of the discovery of the rifle, altogether. The partiality of P.W. 13 towards the defence, rather assures the genuineness of the discovery. He was least disposed to 'collaborate ' or cooperate with the relations of the deceased to procure this rifle from some other source and then foist it on respondent Mukhtar Singh. The omission on the part of this Investigating Officer to join with him some independent persons or respectables of the locality to witness the recovery devalues that evidence but does not render it inadmissible. [634D F, H] 12. The circumstance of the recovery of the rifle (exhibit P. 7) and the opinion of the Ballistic Expert that the empty cartridge (C1) had been fired through the rifle though feeble it might be was relevant and furnished a further pointer to the participation of Mukhtar Singh in the commission of Hazara Singh 's murder by rifle fire. [635B] 13. Although the investigation betrays a tilt in favour of the accused, and P.W. 13 made a fraudulent insertion in the zamini to help Joginder Singh accused, it cannot be said that the version of P.W. 13, that when he went to the scene of murders at 5.30 p.m. he found Joginder Singh irrigating his nearby fields at a distance of about 100 yards therefrom and he interrogated him there and then but did not think it necessary to arrest him is necessarily false. The absence of motive and the presence of Joginder Singh near the scene of crime shortly after the murders, engaged in normal agricultural activities does cast a doubt about his participation in the commission of these murders. [635 F G] 14. P.W. 2 and P.W. 3 have stated that they started running away from the spot, immediately after deceased Hazara Singh was shot dead. The surrounding circumstances, natural probabilities and the normal course of human conduct 619 also suggest the same inference, that immediately on seeing Hazara Singh being shot down, these witnesses who were following him ran fast for their lives. Had they tarried for a while at the scene of the murder, it would have been too late for them to escape unhurt. In such a situation, when they were being pursued by persons armed with fire arms, they could if at all they turned and looked behind have only a fleeting glimpse in the distance of the assailants of Resham Singh deceased. That is why P.W.2 is not consistent in his statements as to which of the accused had fired at him when he was running away for his life. Moreover it has not been established that any of the six accused had any motive, whatever to murder Resham Singh deceased. [635H 636C]

il Appeal No. 2860 of 1993. From the Judgment and Order dt. 31.10.1990 of the Punjab and Haryana High Court in L.PA. No. 1427 of 1982. K. Lahiri and J.D. Jain for the Appellant. D.V. Sehgal and K.K. Mohan for the Respondents. The Judgment of the Court was delivered by G.N. RAY, J. Special leave granted. Heard learned counsels for the parties. 867 On the application for special leave to appeal notice was issued by this Court on the respondents indicating therein that the said application for special leave to appeal will be disposed of finally at the notice stage itself on the short question as to why the disciplinary proceedings and the order passed therein should not be set aside and a fresh enquiry should be ordered on the ground that one of the participants of the enquiry committee was biased. Such notice was served on the respondents and the respondent Nos. 1 and 4 have entered appearance through a ' learned counsel and also filed counter affidavit to the special leave petition. The appellant was appointed as Principal of Dr. Hari Ram (Co education) Higher Secondary School, Datarpur in Tehsil of Dasuya in the District of Hoshiarpur. He was placed under suspension by the Managing Committee of the said School and charge sheet containing 12 charges was issued to the appellant. Charge No. 12 was to the following effect: "the following amounts are reported to have been used by you and are unaccounted for: A sum of Rs. 129.37 on account of amalgamated fund for the ' month of December, 1969 given to you by Shri Maru Ram teacher ' incharge amalgamated fund. " The school authorities appointed an enquiry committee consisting of three members of which the said Shri Maru Ram was one of the members. It is an admitted position that the said Shri Maru Ram appeared as a witness in support of charge No. 12 on behalf of administration in the said enquiry proceedings. The appellant raised an objection for inclusion of the said Shri Maru Ram in the enquiry, committee but the said objection of the appellant was overruled by the Enquiry ' Committee inter alia on the ground that "similarly your objection to the appointment of Shri Maru Ram in the enquiry committee is ill conceived, unfounded, unjustified and invalid because, Shri Maru Ram is as good a member of the Managing Committee as any one else and as such as member is entitled to act on any sub committee formed by the Managing Committee and even perhaps more in this case because to give you a fair trial, it was necessary to have a teachers ' union 's representative on the Enquiry Committee. Shri Maru Ram represented the Union of the staff of the school and is thus your own representative as such. " 868 There is no dispute to the fact that the said Shri Maru Ram himself deposed in the enquiry proceeding in support of Charge No. 12 against the appellant and he also participated as one of the members of the Enquiry Committee. Tile Enquiry Committee found the appellant guilty on some of the charges including the said charge No. 12. The Managing Committee proposed to dismiss the appellant from service. It is not disputed that the disciplinary proceeding against the petitioner is to be carried out in accordance with the provisions of the Punjab Aided (Schools Security of Service) Act, 1969. Sub Section (2) of Section 3 of the said Act is set out hereunder: "No order of dismissal or removal or reduction in rank of an employee shall take effect unless it has been confirmed by the Deputy Commissioner who may refuse to do so, if in his opinion the provisions of Sub section (1) have not been complied with." In view of such provision in the aforesaid Act, the report of the Managing Committee and the proposal for dismissal of the appellant from service were sent for confirmation by the Deputy Commissioner. The appellant being informed of the decision of the Managing Committee to dismiss him from service subject to the confirmation by the Deputy Commissioner, Hoshiarpur, made an application to the President of the Managing Committee for the inspection of the stipend register and the office file of the case of December 29, 1970 ' so that he could make a proper representation to the Deputy Commissioner of Hoshiarpur. The Managing Committee. however, did not give inspection to the appellant of the said records but the original application made by the appellant to the President of the Managing Committee was not entertained but then and there returned with the remarks "under what rules do you wish to see the file please. Sd/ R.D. Sharma 29.12. 1970. " The appellant there after submitted his representation to the Deputy Commissioner against the proposed order of dismissal of the appellant and it was urged by the appellant that the Managing Committee acted in a prejudicial manner and had been trying to urge his dismissal on unfounded grounds. By order dated March 18,1971, the Deputy Commissioner rejected the representation of the appellant. The appellant thereafter preferred an appeal against the order of con on by the Deputy Commissioner under Sub section (5) of Section 3 of the said Act to the Commissioner, Jullundur Division but such appeal was also dismissed by the Commissioner on December 3, 1973. The appellant thereafter moved a Writ 869 Petition in the High Court of Punjab and Haryana being Civil Writ Petition No. II 21 of 1974 inter alia praying for qushing the enquiry report and the orders passed by the Managing Committee, Deputy Commissioner, Hoshiarpur and the Commissioner, Jullundur Division. The Managing Committee contested the said Writ Petition by entering appearance though Paras Ram, Local Manager cumVice President of the Managing Committee and the counter affidavit was also filed to the Writ Petition. The Managing Committee disputed the contention of the appellant that the enquiry committee was biased, partial and inimical towards the appellant and Shri Maru Ram, a member of the staff with whom the appellant was not on good terms and who was the root cause of the trouble became the member of the enquiry committee and after his inclusion the enquiry was summed up in a slip shed manner. In the counter affidavit it was contended on behalf of the Managing Committee that in the Managing Committee members of the staff are required to be taken. Two members from teaching staff were taken on the Managing Committee and the appellant Principal was one of the members and the other member was the said Shri Maru Ram. As the appellant himself was the accused, the only member who could be taken in the enquiry committee was the other representative of the teachers union, Shri Maru Ram. It was further stated that the appellant had raised objection before the Committee against his inclusion in the enquiry committee but such objection was not entertained, and it was stated that the enquiry committee was neither partial nor inimical towards the appellant and the enquiry committee was comprised of three members including the President Shri B.B. Kashyap and the said Shri Maru Ram, teachers representative in the Managing Commiittee. In the counter affidavit, it was further stated that the appellant had applied for inspection of the stipend register but such demand of inspection was made after the appellant was dismissed. Even then, the inspection was not denied and the appellant had been asked to indicate under what rules he could see the file. At this stage, it may be indicated that when the appellant had asked for inspection, there was no question of the appellant being dismissed because under the said Act the proposed order of dismissal cannot take effect until such proposal is confirmed by the Deputy Commissioner. The appellant asked for inspection of the register to make effective representation before the Deputy Commissioner. But such inspection was not given and the application itself was returned then and there apparently on the ground of absence of any specific rule for such inspection. A Single Bench of the Punjab and Haryana High Court allowed the Writ Petition on the ground that the departmental proceeding was vitiated for the flagrant violation of the principle of natural justice. The learned Judge indicated that Charge No. 12 was sought to be proved by Shri Maru Ram himself who appeared as a witness before the enquiry committee although he was one of the 870 members of the enquiry committee. Since one of the members of the Managing Committee acted both as a Judge and as a witness to prove one of the charges against the appellant despite the objections made by the appellant against the inclusion of such member in the Committee, the entire enquiry proceeding was vitiated. The learned Judge further held that the contention of the respondents that the bias of Shri Maru Ram, even if any, should be restricted only to charge No. 12 and as such the order of dismissal also on the basis of other charges should not be set aside, could not be accepted. The learned Judge was of the view that since Shri Maru Ram conducted the enquiry with bias, the said bias continued and percolated to the entire proceeding and such bias therefore should not be restricted to charge No. 12 only. The learned Judge also rejected the contention of the respondents that as the appellant did not raise the plea of bias on the part of Shri Maru Ram before the Deputy Commissioner or the Commissioner specifically, the appellant should not be allowed to raise the question of bias. The learned Judge held inter alia that it was evident from the enquiry proceeding and the report of the enquiry committee that the said Shri Maru Ram was member of the enquiry committee and had also deposed as a witness in the enquiry proceeding. Since such report was required to be considered by the Deputy Commissioner for the purpose of affirming, the proposed order of dismissal, the said fact of bias and prejudice was required to be considered and the appellant was not debarred from raising such vital plea of bias in the Writ proceeding. The learned Judge was of the view that in the facts and circumstances of the case, the decision of the Managing Committee and the orders passed by the Deputy Commissioner and the Commissioner on the basis of an illegal and biased enquiry against the petitioner could not he sustained. The learned Judge therefore, allowed the said petition, set aside the proposed order of dismissal and the order of confirmation passed by the Deputy Commissioner and the appellate order passed by the Commissioner and directed the Deputy Commissioner to decide the reference made by the Managing Committee for confirmation of the proposed order of dismissal passed by the Deputy Commissioner in the light of the observations made in the judgment. The Managing Committee being aggrieved by the said decision of the learned Single Judge of the Punjab and Haryana High Court preferred an appeal before a Division Bench of punjab and Haryana High Court being L.P.A. No. 1427 of 1992. The Division Bench, however, held that it had not been brought on record as to what objection was taken and in what form against Shri Maru Ram who was a member of the enquiry committee. The Division Bench, however, noted the order passed by the Managing Committee rejecting the objection of inclusion of Shri Maru Ram in the Managing Committee by quoting the order passed by the enquiry committee. The Division Bench was of the view that the plea of bias could be waived and if the appellant felt that the enquiry proceeding was vitiated by the 871 reason of bias because of inclusion of Shri Maru Ram, he could have raised specific plea of bias before the Deputy Commissioner and Commissioner. Since such specific plea was not raised before the Deputy Commissioner and Commissioner, the appellant should not be allowed to raise such contention in the Writ Petition. The Division Bench also held that the plea of bias of Shri Maru Ram as indicated in the Writ Petition was also very vague. The Division Bench further held that the Deputy Commissioner gave opportunity to the appellant to meet certain charges and he was not influenced by Charge No. 12 only in respect of which the said Shri Maru Ram appeared as witness. As it appeared from the order that the Deputy Commissioner was impressed with some other char ges for which the order of dismissal could be confirmed, no interference was called for against the impugned order. The Division Bench, therefore, allowed the appeal and dismissed the Writ Petition. As aforesaid, the appeal is directed against the said impugned judgment of ,he Division Bench in L.P.A. No. 1427 of 1982 dismissing the Writ Petition. In terms of the notice issued on the special leave application the short question as to why the enquiry and the order passed therein should not be set aside and a fresh enquiry should not be ordered on the ground that one of the participants of the Committee was biased, is required to be considered in this appeal. In Administrative Law, Rules of natural justice are foundational and fundamental concepts and law is now well settled that the principles of natural justice are part of the legal and judicial procedures. On the question whether the principles ofnatural justice are also applicable to the administrative bodies, formerly, the law courts in En land and India had taken a different view. It was held in Franklin vs Minister of Town and Country Planning ; that the duty imposed on the minister was merely adn Anistrative and not being judical or quasijudicial, the principle of natural justice as applicable to the judicial or quasi judicial authorities was not applicable and the only question which was required to be considered was whether the Minister had complied with the direction or not. Such view was also taken by the Indian courts and reference may be made to the decision of this Court in Kishan Chand Arora vs Commissioner of police, Calcutta ; It was held that the compulsion of hearing before passing the order implied in the maxim audi alteram pertem applied only to judicial or quasi judicial proceedings. Later on, the law courts in England and also in India including this Court have specifically held that the principle of natural justice is applicable also in administrative proceedings. In Breen vs Amal ganaled Engineering Union Lord Denning emphasised that Statutory body is required to act fairly in function whether administrative or judicial or quasi judical Lord 872 morris observed (as noted by this Court in Maneka Gandhi 's decision that. "We can think, take pride in what has been done in recent periods and particularly in the field of administrative law by invoking and by applying these principles which we broadly classify under the designation of natural justice. Many testing problems as to their application yet remain to be solved. But I affirm that the area of administrative action is but one area in which the principles are to be deployed. " It may be indicated herein that the aforesaid observation was quoted with approval by this Court in the decision in Maneka Gandhi vs Union of India 1. In State of Orissa vs BinapaniDei ; , this Court also accepted the application of the principle of natural justice in the order which is administrative in character. It was observed by Shah,J. : "It is true that the order is administrative in character, but even an administrative order which involves civil consequences. must be made consistently with the rules of natural justice." Similar view was also taken in A.K. Kraipak vs Union of India & Ors. and the observation of Justice Hedge may be referred to "Till very recently it was the opinion of the courts that unless the authority concerned was required by the law under which it functioned to act judicially. there was no room for the application ofthe rules of natural justice. The validity of that limitation is now questioned. If the purpose ofthe rules of natural justice is to prevent miscarriage of justice, one fails to see why those rules should be made inapplicable to administrative enquiries. " There are number of decisions where application of principle of natural justice in the decision making process of the administrative body having civil consequence has been upheld by this Court but it is not necessary to refer to all such decisions. Prof Wade in his Administrative Law, (1988) at page 503, has very aptly observed that the principles of natural justice are applicable to almost the whole range of administrative powers. Since the rules of natural justice were not emodied rules it is not possible and 873 practicable to precisely define the parameter of natural justice. In Russel vs Duke of Norfold 19491 1 All ER 109 Tucker, L.J. observed: "There are, in my view no words which are of universal application to every kind of inquiry and the every kind of domestic tribunal. The requirements of natural justice must depend on the circumstances of the case, the nature of the inquiry, the rules under which the tribunal is acting, the subject matter that is being dealt with, and so forth. " It has been observed by this Court in Union of India vs P.K. Roy. ; that "The extent and application of the doctrine of natural justice cannot be imprisoned within the strait jacket of a rigid formula. The application of the doctrine depends upon the nature of the jurisdiction conferred on the administrative authority, upon the character of the rights of the persons affected, the scheme and policy of the statute and other relevant circumstances disclosed in the particular case. " Similar view was also expressed in A.K Kraidak 's case (ibid). This Court observed: "What particular rule of natural justice should apply to a given case must depend to a great extent on the facts and circumstances of that case, the framework of the law under which the enquiry is held and the constitution of the Tribunal or body of persons appointed for that purpose. Whenever a complaint is made before a court that some principle of natural justice had been contravened, the court has to decide whether the observance of that rule was necessary for a just decision on the facts of that case. " Prof. Wade in his Administrative Law has succinctly summarised the principle of natural justice to the following effect: "It is not possible to lay down rigid rules as to when the principles of natural justice are to apply: not as to their scope and extent. Everything depends on the subject matter, the application for principles of natural justice, resting as it does upon statutory 874 implication, must always be in conformity with the scheme of the Act and with the subject matter of the case. In the application of the concept of fair play there must be real flexibility. There must also have been some real prejudice to the complainant: there is no such thing as a merely technical infringement of natural justice. The requirements of natural justice depend on the facts and the circumstances of the case, the nature of the enquiry, the rules under which the tribunal is acting, the subject matter to be dealt with, and so forth. " One of the cardinal principles of natural justice is : Nemo debetesse judex in propria causa (No man shall be a judge in his own cause). The deciding authority must be impartial and without bias, It has been held by this Court in Secretary to Government Transport Department vs Munuswamy ; that a predisposition to decide for or against one party without proper regard to the true merits of the dispute is bias. Personal bias is one of the three major limbs of bias namely pecuniary bias, personal bias and official bias. A classic case of personal bias was revealed in the decision of this Court in state of U.P. vs Mohd. Nooh In the said case, a departmental enquiry was held against an employee. One of the witnesses against the employee turned hostile. The officer holding the enquiry then left the enquiry, gave evidence against the employee and there after resumed to complete the enquiry and passed the order of dismissal. This Court quashed the order of dismissal by holding inter alia that the rules of natural justice were grievously violated. In the instant case, Charge No. 12 states that a particular sum on account of amalgamated fund for the month of December was given to the appellant by Shri Maru Ram who was teacher incharge of the amalgamated fund. In the enquiry committee comprising of the three members, the said Shri Maru Ram was taken as one of the members and he himself deposed to establish the said Charge No. 12 and thereafter again joined the enquiry committee and submitted a report holding the appellant guilty of some of the charges including the said Charge No. 12. Shri Maru Ram was interested in establishing the said charge. From the charge itself, it is apparent that he had a predisposition to decide against the appellant. It is really unfortunate that although the appellant raised an objection before the enquiry committee by clearly indicating that the said Shri Maru Ram was inimical towards him and he should not be a member in the enquiry committee, such objection was rejected on a very flimsy ground, namely, that since the said Shri Maru Ram was one of the members of the Managing Committee and was the representative of the teachers in the Managing Committee it was necessary to include him in the enquiry 875 committee. It is quite apparent that the enquiry committee could have been constituted with other members of the Managing Committee and the rules of the enquiry are not such that Shri Maru Ram being teacher 's representative was required to be included in the said enquiry committee so that the doctrine of necessity maybe attracted. If a person has a pecuniary interest, such interest, ever it very small, disqualifies such person. For appreciating a case of personal bias or bias to the subject matter the test is whether there was a real likelihood of a bias even though such bias has not in fact taken place. De Smith in his Judicial Review of Administrative Action, (1980) at pace 262 has observed that real likelihood of bias means at least substantial possibility of bias. In R.v. Sunderland Justices (373) it has been held that the Court will have to judge the matter as a reasonable man would judge of any matter in the conduct of his own business. In R versus Sussex Justices (259) it has been indicated that answer to the question whether there was a real likelihood of bias depends not upon what actually was done but upon what might appear to be done. In Halsbury Laws of England, (4th Edn.) Vol.2, para 551, it has been indicated that the test of bias is whether a reasonable intelligent man, fully apprised of all the circumstances, would feel a serious apprehension of bias. The same principle has also been accepted by this Court in Manak Lal vs Dr. Prem Chand ; This Court has laid down that the test is not whether in fact, a bias has affected the judgment; the test always is and must be whether a litigant could reasonably apprehend that a bias attributable to a member of the tribunal might have operated against him in the final decision of the tribunal. It is in this sense that it is often said that justice must not only be done but must also appear to be done. In the facts of the case, there was not only a reasonable apprehension in the mind of the appellant about the bias of one of the members of the enquiry committee, namely, the said Shri Maru Ram but such apprehension became real when the said Shri Maru Ram appeared as a witness against the appellant to prove the said charge and thereafter proceeded with the enquiry proceeding as a member of the enquiry committee to uphold the correctness of his deposition as a Judge. The learned Single Judge considering the aforesaid facts came to the finding that the participation of Shri Maru Ram as a member of the enquiry committee has vitiated the enquiry proceeding because of flagrant violation of the principles of natural justice. Unfortunately, the Division Bench set aside such judgment of the learned Single Judge and dismissed the Writ Petition improperly, to say the least, on a technical ground that plea of bias of Shri Maru Ram and his acting as a Judge of his own case by being a member of the enquiry committee was not specifically taken before the Deputy commissioner and also before the appellate authority, namely, the Commissioner by the appellant and as such the said plea should not be allowed to be raised in writ proceeding, more so, when the case of prejudice on 876 account of bias could be waived by the person suffering such prejudice. General] v, a point not raised before be tribunal or administrative authorities may not be allowed to be raised for the first time in the writ proceeding more so when the interference in the writ jurisdiction which is equitable and discretionary is not of course or must as indicated by this Court in A.M. Allison versus State of Assam; , particularly when the plea sought to be raised for the first time in a Writ proceeding requires investigation of facts. But if the plea though not specifically raised before the subordinate tribunals or the administrative and quasi judicial bodies, is raised before the High Court in the writ proceeding for the first time and the plea goes to the root of the question and is based on admitted and uncontroverted facts and does not require any further investigation into a question of fact, the High Court is not only justified in entertaining the plea but in the anxiety to do justice which is the paramount consideration of the Court, it is only desirable that litigant should not be shut out fromraising such plea which goes to the root of the lis involved. The aforesaid view has been taken by this Court in a number of decisions and a reference may be made to the decisions in A.S. Arunachalam Pillai vs M/s. Southern Roadways Ltd. and another , The Cantonment Board, Ambala vs Pyarelal In our view, the learned Single Judge has very rightly held that the Deputy Commissioner was under an obligation to consider the correctness and propriety ofthe decision of the Managing Committee based on the report of the enquiry committee which since made available to him, showed on the face of it that Shri Ramu Ram was included and retained in the enquiry committee despite objection of the appellant and the said Shri Maru Ram became a witness against the appellant to prove one of the charges. It is really unfortunate that the Division Bench set aside the decision of the learned Single Bench by taking recourse to technicalities that the plea of bias on account of inclusion of Shri Maru Ram in the enquiry committee and his giving evidence on behalf of the department had not been specifically taken by the appellant before the Deputy Commissioner and the Commissioner. The Division Bench has also proceeded on the footing that as even apart from Charge No. 12, the Deputy Commissioner has also considered the other charges on consideration of which along with Charge No. 12, the proposed order ofdismissal was made, no prejudice has been caused to the appellant. Such view, to say the least, cannot be accepted in the facts and circumstances of the case. The learned Single Judge, in our view, has rightly held that the bias of Shri Maru Ram, one of the members of the enquiry commttee had percolated throughout the enquiry proceeding thereby vitiating the principles of natural justice and the findings made by the enquiry committee was the product of a biased and prejudiced mind. The illegality committed in conducting the departmental proceedings has left an indelible stamp of infirmity on the decision of the Managing Committee since affirmed by the Deputy Commissioner and the Commissioner. The observatiory of S.R. Das, C.J. 877 in Mohd nooh 's case (ibid) may be referred to in this connection: "Where the error, irregularity or illegality touching jurisdiction or procedure committed by an inferior court or tribunal of first instance is so patent and loudly obstrusive that it leaves on its decision an indelible stamp of infirmity or vice which cannot be obliterated or cured on appeal or revision. If an inferior court or tribunal of first instance acts wholly without jurisdiction or patently in excess of jurisdiction or manifestly conducts the proceedings before it in a manner which is contrary to the rules of natural justice and all accepted rules of procedure and which offends the superior court 's sense of fair play, the superior court may, we think, quite properly exercise its power to issue the prerogative writ of certiorari to correct the error of the court or tribunal of first instance, even if an appeal to another inferior court or tribunal was available and recourse was not had to it or if recourse was had to it, it confirmed what ex facie was a nullity for reasons aforementioned. " We have, therefore, no hesitation in allowing the appeal by setting aside the impugned judgment of the Division Bench of Punjab and Haryana High Court and the order of dismissal of the appellant passed by the Managing Committee of the School confirmed by the Deputy Commissioner and affirmed in appeal by the Commissioner. This decision, however, will not preclude the Managing Committee. however, from proceeding a fresh with the departmental proceedings from the stage of issuance of charge sheet. It is, however, made clear that if a fresh enquiry proceeding is initiated it should be ensured that the enquiry committee is not composed with any of the members of the previous enquiry committee and such proceeding should be completed within a period of four months from today. In the special facts of the case and in view of the financial difficulties pleaded by the respondent we do not think that it will be proper to compel the management to pay full back wages. The school authorities and other concerned authorities are directed to pay one fourth of the salary to the appellant from the date of dismissal till today and thereafter go on paying the salary with such increments which the appellant would have been entitled to in the absence of initiation of the departmental proceeding. Considering the facts of the case, we allow this appeal with costs against the appearing respondents.

The appellant, appointed Principal of Dr. Hari Ram (Co education) Higher Secondary School, was placed under suspension and a charge sheet containing 12 charges issued to him. Charge No. 12 accused him of use of an unaccounted sum of Rs. 129.37, given to him by Maru Ram, teacher in charge of amalgamated fund. The enquiry committee constituted comprised 3 members, of which the said Maru Ram was a member. Maru Ram deposed as a witness for the administration in support of charge No. 12. The appellant 's objection to the inclusion of Maru Ram on the enquiry committee was overruled, and he was found guilty of some of the charges including the said charge and the Managing Committee proposed to dismiss him from service. The appellant 's application for inspection of documents to enable him to make his representation before the Deputy Commissioner the confirming authority under S.3(2) of the Punjab Aided Schools (Security of Service) Act, 1969 was rejected by the Managing Committee, the Deputy Commissioner and the Commissioner. The appellant then filed a writ petition in the High Court for quashing the enquiry report and the orders passed by the Managing Committee, the Deputy Commissioner and the Commissioner. The Managing Committee, opposing the petition, contended that the enquiry committee was not partial or inimical towards the appellant. It was 864 contended that maru Ram was the only teacher member of the Managing Committee other than the appellant himself , therefore only Maru Ram could be taken in the enquiry committee as a representative of the teachers ' union. It was further contended that though the application for inspection had been made after his dismissal, he had not been refused permission for inspection; he had been asked to indicate the rules under which he could see the file. A Single Judge of the Punjab and Haryana High Court allowed the petition on the ground that the departmental proceeding was vitiated by the flagrant violation of natural justice. Since one of the members of the Managing Committee acted both as a Judge and as a witness to prove one of the charges against the appellant despite the objections made by the appellant against the inclusion of such member in the committee, the entire enquiry proceeding was vitiated. He held that the bias continued and percolated to the entire proceeding and should not be restricted to charge no. 12. Since the enquiry report was required to be considered by the Deputy Commissioner for the purpose of affirming the proposed order of dismissal, the fact of bias and prejudice was required to be considered and the appellant was not debarred from raising such vital plea of bias in the writ proceeding. The decision arrived at on the basis of an illegal and biased enquiry could not be sustained. On appeal, the Division Bench reserved the order of the Single Judge. It held that the plea of bias was vague; that the appellant had waived it by not raising it specifically before the Deputy Commissioner and Commissioner, and that as the Deputy Commissioner was not influenced by charge no.12 only but was impressed with some other charge, no interference with the impugned order was called for. Allowing the appeal, this Court, HELD: 1. In Administrative Law, Rules of natural justice are foundational and fundamental concepts and the law is now well settled that the principles of natural justice are part of the legal and judicial procedures. (871 E) Franklin vs Minister of Town and Country Planning ; Kishan Chand Arora vs Commissioner of Police, Calcutta ; ; Breen vs Amalgamated Engineering Union ; Maneka Gandhi vs Union of India [1978] 2 SCR 621; State of Orissa vs Bina pani Dei and A.K.Kraipak vs Union of India & Ors.[1970] 1 SCR 457, 865 referred to. 2.Since the rules of natural justice are not embodied rules, it is not possible and practicable to precisely define the parameters of natural justice. (872 H) Russel vs Duke of Norfolk [1949] ALL ER109; Union of India vs P.K. Roy ; ; A.K.Kraipak vs Union of India and Prof. Wade. Administrative Law, edn 1988 p. 503 referred to. 3.One of the cardinal principles of natural justice is: Nemo debet esse judex in propria causa: No man shall be a judge in his own cause. The deciding authority must be impartial and without bias. (874 C) Secretary tit Government Transport Department vs Munuswamy ; and State of U.P. vs Mohd. Nooh ; , referred to. (874 C) For appreciating a case of personal bias, the test is whether there was a real likelihood of a bias even though such bias has not in fact taken place. De Smith, Judicial Review of Administrative Action [1980] p. 269 R Sunderlal Justices at 373; R. vs Sussex Justices at 259; Halsbury 's Laws of England (4th Edn.) Vol.2, para 551 and Manak Lal vs Dr. Prem Chand ; , referred to. It is in this sense that it is often said that justice must not only be done but must also appear to be done. (875 E) 4.In the facts of this case, there was not only a reasonable apprehension of bias (if one of the members of the enquiry committee, but such apprehension became real when Maru Ram appeared as a witness against the appellant, and. thereafter proceeded with the enquiry proceeding as a member of the enquiry committee to uphold the correctness of his deposition as a Judge. (875 F) 5.The Division Bench dismissed the writ petition improperly on a technical ground that the plea of bias could not be raised in a writ proceeding especially when it was not specifically taken before the Deputy Commissioner and the Commissioner; more so when this defence could be waived by the person suffering the prejudice. (876 E) 866 Generally a point not raised before the tribunal or administrative authorities may not be allowed to be raised for the first time in writ proceedings. Which is equitable and discretionary and interference is not a matter of course particularly when the plea sought to be raised for the first time in a writ proceedings requires investigation of facts. (876 A) A.M. Allison vs State of Assam. , ; , referred to. But if the plea goes to the root of the question and is based on admitted and uncontroverted facts and does not require any further investigation into a question of fact, it is only desirable that a litigant should not he shut out from raising such plea. (pp. 19 20) (876 C) A.S. Arunachalam Pillai vs M/s. Southern Roadways Ltd. ; and The Cantonment Board vs Pyarelal ; , referred to. 6.The bias of Shri Maru Ram, one of the members of the enquiry committee had percolated throughout the enquiry proceeding thereby vitiating the principles of natural justice and the findings made by the enquiry committee was the product of a biased and prejudiced mind. The illegality committed in conducting the departmental proceedings has left an indelible stamp of infirmity on the decision of the Managing Committee since affirmed by the Deputy Commissioner and the Commissioner. (876 G) State of U.P. vs Mohd. Nooh. ; , relied on.

ition Nos 5880 82, 6176 A 77, 5921, 5922, 6220, 6426 27, 6355 56, 6264 70,6276, 6178 79, 6191, 1718 of 1980 and 220 22, 2113 of 1981. (Under Article 32 of the Constitution) K K Venugopal, (6355 56 of 1980) (In W P. Nos. 6212, 6427 & 5880 82/80) F.S. Nariman, (In W.P. Nos. 6264 70/80) R.K Gargo, (In W.P. Nos. 6191 & 6426/80), S.N. Kackar, (In W.P. Nos: 5921/80 & 220/81 and G.L. Sanghi, (In W.P. No. 1718/81) for the Petitioners. C.S. Vaidyanathan, Vineet Kumar, Parthasarathi, A.T.M. Sampath. Miss Lily Thomas, N.A. Subramanium, Naresh Kumar, Mahakir Singh and section Srinivasan for the Petitioners. Lal Narayan Singh, Attorney General (In W.P. No 5880180) M.R Banerjee, Addl. Solicitor General (In W.P. No. 6355/80) R. Rrishnamoorthy, Adv. T.N. (In W.P. Nos. 1718 & 6276/ 1980) for the Respondents. D Dr. Y. section Chitale, (In W.P. No. 6426/80), L. M. Singhvi, (In W.P. 6264/80) Mr. Laxmi Kant Pandey and S.S. Ray, (In W.P. 6212 of 1980) for the Respondents. A.V. Rangam, (In all matters) for the Respondents. In these writ petitions, the petitioners who were holders of posts of part time village officers in the State of Tamil Nadu or associations of such persons have questioned the constitutional validity of the Tamil Nadu Abolition of posts of part time Village officers ordinance, 1980 Tamil Nadu ordinance No. 10 of 1980) (hereinafter referred to as 'the ordinance ') and the Tamil Nadu Abolition of posts of part time Village officers Act, 1981 (Tamil Nadu Act No. 3 of 1981) (hereinafter referred to as 'the Act) which replaced the ordinance. The total number of posts abolished by the Act is 23,010 In Tamil Nadu, as in other parts of India, the village has been the basic unit of revenue administration from the earliest times of which we have any record. The administration was being carried on at the lowest level by a chain of officers in regular gradation one above the other at the commencement of the Christian era. The 634 same system has been in vogue uptil now. It was generally known as the borabaluti system ordinarily consisting of twelve functionaries. In Tamil Nadu, these functionaries were known as (I) headman, (2) karnan or accountant, (3) shroff or notazar, (4) nirganti, (5) toty or taliary, (6) potter, (7) smith, (8) jeweller, (9) carpenter, (10) barber, (11) washerman and (12) astrologer. Of them, the first five only rendered service to Government. The headman who goes by various names such as monigar, potail, naidoo, reddy, peddakapu etc. is an important officer. He represented the Government in the village, collected the revenue and had also magisterial and judicial powers of some minor nature. As a magistrate he could punish persons for petty offences and as a Judge could try suits for sums of money or other personal property upto Rs. 10/ in value, there being no appeal against his decision. With the consent of the parties, he could adjudicate civil claims upto Rs. 100 in value. The headman has been generally one of 1 the largest landholders in the village having considerable influence over its inhabitants. The karnam or the village accountant maintained all the village accounts, inspected all fields in the village for purposes of gathering agricultural statistics, fixation of assessment and prevention and penalisation of encroachments, irregular use of water and verification of tenancy and enjoyment. The nirgantis guarded the irrigation sources and regulated the use of water. The toty or taliary assisted the village accountant in his work. By the end of the nineteenth century, two Acts were brought into force in the Presidency of Madras for the purpose of regulating the work of some of the village officers. The Madras Proprietary states ' Village Service Act, 1894 (Madras Act No. II of 1894) dealt with three classes of village officers viz. village accountants, village headmen and village watchmen or police officers in permanently settled estates, in unsettled palaiyams and in inam villages. It provided for their appointment and remuneration and for the prevention and summary punishment of misconduct or neglect duty on their part and generally for securing their efficiency. The Madras Hereditary Village offices Act, 1895 (Madras Act No. III of 1895) regulated the succession to certain other hereditary village offices in the Presidency of Madras; for the hearing and disposal of claims to such offices or the emoluments annexed thereto; for the appointment of persons to hold such offices and the control of the holders thereof. The Village officers dealt with by this Act were (i) 635 village munsifs, (ii) potels, monigars and peddakapus, (iii) karnams, (iv) nirgantis, (v) vettis, totis and tar dalgars and (vi) talayaris in ryotwari villages or inam villages, which for the purpose of village administration, were grouped with ryotwari villages. Under both these statutes, the village offices were considered as hereditary in character and the succession to all hereditary village offices devolved on a single heir according to the general custom and rule of primogeniture governing succession to impartible zamindaris in Southern India. When the person who would otherwise be entitled to succeed to a hereditary village office was a minor, such minor was being registered as the heir of the last holder and some other person qualified under the statutes in question to discharge the duties of the office was being appointed to discharge the duties of the office until the person registered as heir on attaining majority or within three years thereafter was qualified to discharge the duties of the office himself when he would be appointed thereto. If the person registered as heir remained otherwise disqualified for three years after attaining majority, he would be deemed to have forfeited his right to office and on such forfeiture or on his death, the vacancy had to be filled up in accordance with the provisions of the statutes as if he was the last holder of the office. It is stated that in cases to which the above two statutes were inapplicable, provision had been made by the Standing orders promulgated by the Board of Revenue which were known as the Board 's Standing orders for appointing village officers again generally on a hereditary basis. Some of the other distinct features of the service conditions of the village officers appointed under the Madras Act No. II of 1894 of the Madras Act No. III of 1895 or the Board 's Standing orders were that they were part time employees of the Government; that the records maintained by them were allowed to be retained in their houses that there was no attendance register and no fixed hours of duty were prescribed in their case. They were appointed directly by the Revenue Divisional officer and against his order, an appeal lay to the District Revenue officer and then a revision to the Board of Revenue and a second revision to Government. They were not constituted into any distinct service, There was no provision for reservation of posts of village officers G for Scheduled Castes/Scheduled Tribes and backward classes There was no minimum general qualification prescribed prior to the year 1970 for persons to be appointed as village officers under the said statutes or the Board 's Standing orders. It was enough if they were able to read and to write. No period of probation was pres 636 cribed after they were appointed. The Fundamental Rules applicable to all other State Government servants, the Pension Rules and the Leave Rules were not applicable to these village officers. They could take up part time work or occupation after securing necessary permission from the concerned Revenue authorities. There was no age of superannuation fixed in their case and they were not entitled to retirement benefits such as gratuity and pension. All village head men including those who belonged to Scheduled Castes and Scheduled Tribes had to furnish security in the form of property or cash the estimated value of which was not less than half the amount of land revenue and loan demand of the village. They could not be transferred outside their district. In fact very rarely they were transferred. During the period of leave, no honorarium was paid to them and during the period of suspension, no subsistence allowance was paid. The honorarium paid to them was a fixed amount with no element of dearness allowance. In M. Ramappa vs Sangappa & Ors. where this Court had to consider whether the officers holding the hereditary village offices under the Mysore Village offices Act, 1908 which contained provisions similar to the provisions of the two Madras Acts referred to above were qualified for being chosen as members of the State Legislative Assembly, it was held that such officers who were appointed to their offices by the Government, though it might be that the Government had no option in certain cases but to appoint an heir of the last holder, held offices of profit under the State Government since they held their office by reason of appointment made by the Government and they worked under the control p and supervision of the Government and that their remuneration was paid by the Government out of the Government funds and assets. Accordingly this Court came to the conclusion that such village officers were disqualified under Article 191 (I)(a) of the Constitution from contesting at an election to the State Legislative Assembly. In Gazula Dasaratha Rama Rao vs The State of Andhra Pradesh & Ors this Court held that section 6(1) of the Madras Hereditary Village offices Act, 1895 (Madras Act No. 3 of 1895) which Provided that in choosing Persons to fill the new village offices of 637 an amalgamated village under that Act, the Collector should select the persons whom he considered to be the best qualified from among the families of the last holders of the offices in the villages which had been abolished as a consequence of such amalgamation was void as it contravened Article 16 (2) of the Constitution. After the above decision, instructions were issued by the Madras Board of Revenue on March 12, 1962 to the effect that in respect of future vacancies in village offices governed by the Madras Act No. II of 1894 and the Madras Act No. III of 1895 the appointments should be made on temporary basis only following the procedure prescribed under the Board 's Standing order No. 156. Since it was felt that the above two Madras Acts which contained provisions providing for appointment to village offices on hereditary basis were violative of Article 16 of the Constitution in view of the pronouncement of this Court in Gazula Dasaratha Rama Rao 's case (supra), the State Legislature passed the Madras Proprietary Estates ' Village Service and the Madras Hereditary Village offices (Repeal) Act, 1968 (Madras Act No. 20 of 1968) repealing the above two statutes viz. the Madras Act No. II of 1894 and the Madras Act No. III of 1895. The said Act was brought into force with effect from December 1, 1968. It extended to the whole of the State of Madras, except the Kanyakumari district and the Shencottah taluk of the Tirunelveli district (vide section I (2) of the Madras Act No. 20 of 1968). Sub section (3) of Section 2 of that Act, however, provided that every holder of a village, office, appointed under the Acts repealed by it would, notwithstanding the repeal continue to hold office subject to such rules as may be made under the proviso to Article 309 of the Constitution. Section 3 of that Act directed that any vacancy arising after the date of the commencement of that Act in the village once referred to in subsection (3) of section 2 thereof should be filled up in accordance with the provisions of the Rules made under the proviso to Article 309 of the Constitution. On December 1, 1968, the Governor of Tamil Nadu promulgated a Rule under the proviso to Article 309 of the Constitution providing that "the Standing orders of the Board of Revenue applicable to non hereditary village offices shall apply to every holder of a village office to which the Madras Proprietary Estates Village Service Act, 1894 (Madras Act No. II of 1894) or the Madras Hereditary Village offices Act, 1895 (Madras Act No. Ill of 1895) was applicable immediately before the 1st day of December, 1968" on which date the Madras Act No. 20 of 1968 came into force. Pursuant to section 3 of the Madras Act No. 20 of 1968, the Governor of Tamil Nadu 638 promulgated under the proviso to Article 309 of the Constitution the Tamil Nadu Village officers Service Rules, 1970 providing for the constitution of the Tamil Nadu Village officers Service consisting of (i) village headman, additional village headman, (ii) village karnam, additional village karnam and (iii) talayari and nirganti and the method of recruitment to the said posts. The said Rules came into force on December 16, 1970 and they extended to the whole of the State of Tamil Nadu except the Kanyakumari District and the Shenootah taluk of the Tirunelveli district and the city of Madras. Rule 18 of the said Rules, however, stated that nothing contained in them would apply to persons, who on the date of coming into force of the said Rules, were holding the posts of village headman or additional village headman, village karnam or additional village karnam either temporarily or permanently. Consequently the said Rules were not applied to the holders of village offices who had been appointed temporarily or permanently under the two repealed Acts and under the Board 's Standing orders before the date on which the said Rules came into force. These Rules prescribed that every person who made an application for appointment the post of village headman or additional village headman or village karnam or additional village karnam should possess the following qualifications, namely (i) he should have completed the S.S.L.C. Examination held by the Government of Tamil Nadu and (ii) he should have secured a pass in the special tests specified in cl. (2) of the table given in Rule S thereof in respect of the posts specified in column (I) thereof. On the same date, the Tamil Nadu Village officers (Classification, Control and Appeal) Rules, 1970 and the Tamil Nadu Village officers Conduct Rules, 1970 promulgated under the proviso to Article 309 of the Constitution by the Governor of Tamil Nadu came into force. These Rules were applicable not merely to the village officers appointed after that date but also to those who had been appointed under the repealed Acts and under the Boards Standing order prior to December 16, 1970. The Tamil Nadu Civil Services (Classification, Control and Appeal) Rules dealt with the disciplinary proceedings that might be instituted against the village officers governed by the them. The Tamil Nadu Village officers Conduct Rules provided that the Tamil Nadu Government Servants Conduct Rules, 1960 as amended from time to time would apply to the village officers subject to the modification specified in rule 3 thereof which provided that the village officers being part time Government servants might take up part time work or occupation 639 provided that (I) such part time work or occupation did not interfere A with their legitimate duties as village officers and (2) the previous permission in writing had been applied for and obtained from the Revenue Divisional officer concerned if the work or occupation was confined to the charge village and from the District Collector concerned if the work or occupation extended beyond the charge village. From November 15, 1973 all the three sets of Rules which came into force on December 16, 1970, as stated above, became applicable to the village officers in the Kanyakumari district and the Shencottah taluk of the Tirunelveli district also. They, however, continued to be inapplicable to the city of Madras. In the year 1973, the Administrative Reforms Commission headed by Mr. T.A. Verghese, I.C.S. recommended that the existing part time village officers should be replaced by regular whole time transferable public servants and that they should form part of the Revenue hierarchy, disciplined in the tradition of that department and motivated by the incentive of career advancement available in that department. They also recommended that 16,585 survey villages in the State of Tamil Nadu should be grouped into 11,9554 revenue groups. The Commission further recommended that the 11,954 revenue groups should be regrouped into larger village panchayats with a population of about 5,000 and the 8 annual panchayat tax demand of the order of Rs. 5,000. The Commission envisaged that with some marginal adjustment the enlarged village panchayat would be of the order of 4,000 in the State of Tamil Nadu and that there should be a village officer, a village clerk and a village peon in respect of each such enlarged village panchayat and on appointment to these offices, the holders of village offices appointed under, the two repealed statutes and the Board 's Standing orders should be removed and the former village offices should be abolished since the Commission felt that "the administration at the grass root level, provided by the present generation of village officers with feudal traditions, is inconsistent with the egalitarian principles aimed at in our democratic constitution". The Commission further felt that "the reform of village administration has high priority, as it would benefit the whole mass of rural population." The Commission, however, took note of the fact in paragraph 2.11 of its Report that the Government had, in the recent years, attempted to remedy the situation by repealing the Madras Hereditary Village offices Act, 1895 and by framing a set 640 Of new service rules for village establishment under Article 309 of the Constitution. But it was of the opinion that the said Rules, however, did not go far enough as they were not applicable to the existing set of village officers. It was of the view that full time officers could be expected to service a much larger area than the existing villages or groups of villages and such regrouping of villages into larger groups had to be done carefully taking into account local conditions such as compactness of the group, easy intercommunications, nature of land, number of holdings etc. The Commission, however, was of the view that such of those among the existing village headmen and karnams, who had passed the S.S.L.C. Examination might be considered for the posts of the village officers and village clerks on their past performance. Similarly as regards village officers working in the Kanyakumari district and the Shencottah taluk of the Tirunelveli district which came over to the State of Tamil Nadu from Kerala in 1956 on the reorganisation of States, the Commission observed that l most of the village officers of those transferred territories who were qualified and full time Government servants should be absorbed in the new set up as envisaged by the Commission. On May 17,1975, the Governor of Tamil Nadu promulgated the Tamil Nadu Village officers (appointed under B.S. Os) Service Rules, 1974 under the proviso to Rule 309 of the Constitution in respect of the village officers appointed prior to December 16, 1970. The above Rules were, however, kept in abeyance by an order made on July 1, 1975 on receipt of representations from the village officers in regard to the fixation of the age of superannuation at SS years. On August 24,1977, the Chief Minister of Tamil Nadu announced on the floor of the Legislative Assembly that the Government proposed to set up a Committee to . examine whether the posts of karnams could be dispensed with. Thereafter on October 9,]978, the Tamil Nadu Village officers (appointed under B.S.Os) Service Rules, 1978 were issued fixing the age of retirement of the village officers at 60 years. Sub rule (2) of & Rule I of the said Rules stated that the said Rules would apply to all village officers holding the posts of village headman or additional village headman, village karnam or additional village karnam, talayari, vetti or nirganti either permanently or temporarily on December 16, 1970 provided that at the time of their appointment, they were qualified under the Board 's Standing orders. The Government thought that the said Rules would be applicable to all village officers who were holding village offices on December 16,1970 refer 641 red to in Rule 1(2). But some of the holders of the village offices who had been appointed under the Madras Act No. III of 1895 prior to the decision of this Court in Gazula Dasaratha Rama Rao 's case (supra) which as rendered on December 6, 1960, filed writ petitions on the file of the High Court of Madras stating that the Tamil Nadu Village officers (appointed under the b.) Service Rules, 1978 which fixed the age of superannuation of village officers at 60 years were not applicable to them since on a true construction of the said Rules, they were inapplicable to them. The High Court of Madras allowed the said writ petitions by its judgment dated August 18, 1980 holding: "We have already extracted sub rule (2) of rule 1 of the rules. That rule expressly states that the rules will apply to village officers, who, at the time of their appointment, were qualified under the Board 's Standing orders applicable to them and their appointment had been made by the authority competent under the Board 's Standing orders. In respect of these petitioners, who were appointed under the provisions of Madras Act 3 of 1895 before 6th December, 1960, there was no question of their being qualified to be appointed to the village office under the Board 's Standing orders applicable to them, and their qualifications and appointment rested solely on the provisions contained in Section 10 of the Act. Consequently the petitioners herein will not answer the description contained in sub rule (2) of rule (1) of the rules. If they do not answer the description contained in sub rule (2) of rules, the rules are not applicable to them and therefore, they can not be required to retire under rule 4 (1) of the rules. " It would appear that some of the other village officers to whom the said Rules had been made applicable had also filed writ petitions on the file of the High Court questioning the validity of the Rules on the ground that the said Rules made a discrimination between them and the village officers who were holding office prior to December 16, 1970 to whom the said Rules were held to be inapplicable by the judgment of the High Court delivered on August 18, 1980 and those petitions were posted for hearing during the first week of December, 1 980. Before the said petitions were taken up for hearing the Governor of Tamil Nadu issued the ordinance on November 13, 1980 abolishing the posts of part time village officers in the State of Tamil Nadu. Immediately after the promulgation of the ordinance, steps were taken to take possession of all the records with the village officers who were holding offices on that day and to replace them by Officers appointed under 642 section 14 of the ordinance. Immediately after the promulgation of the said ordinance, some of the village officers who were affected by it questioned its validity before this Court in Writ Petitions Nos. 5880 82 of 1980 and 5921 of 1980. The other connected writ petitions came to be filed thereafter. In the meanwhile the Tamil Nadu State Legislature passed the Act which is impugned in these petitions replacing the ordinance. The petitioners have challenged in these writ petitions the Act also by seeking appropriate amendment of their petitions. The broad features of the Act are these: The object of the Act is set out in its preamble. Because the State Government was of the opinion that the system of part time village officers was outmoded and did not fit in with the modern needs of village administration and the State Government had after careful consideration taken a policy decision to abolish all the posts of part time village officers on grounds of administrative necessity and to introduce a system of whole time officers to be incharge of village administration, the Act came to be enacted with effect from November 14, 1980 in the place of the ordinance. The Explanatory Statement attached to the ordinance also contained a statement to the same effect indicating the object of the Ordinance. The expression 'part time village officers ' is defined in section 2 (e) of the Act as village headman (including additional village (headman village) karnam (including chief karnam and additional village karnam) or Triune officer (who was exercising functions of three different village officers) appointed under the Madras Act II of 1894, the Madras Act III of 1895, the Board 's Standing orders, the Tamil Nadu village Service Rules, 1970 officers Kuvalar, or any other law but does not include, Grama Kavalar Grama Paniyalar and Pasana Kavalar. Village Administrative officer means an officer appointed under section 4(1) of the Act. By sec. 3 of the Act, the posts of part time village officers were abolished with effect from November 14, 1980 and every officer holding post so abolished ceased to hold such post. The Act provided for appointment of Village Administrative officers. Section 5 of the Act provided for payment of compensation to those who ceased to be part time village officers calculated in accordance with the formula mentioned in it. Section 10 of the Act provided that the Act would not apply to the posts of karnams which were held by whole time Government servants in the city of Madras and the posts of village officers and village assistants which were held by the whole 643 time Government servant in the Kanyakumari district and Shencottah taluk of the Tirunelveli districts. Three principal points are urged before us by the petitioners in these petitions (i) that the ordinance and the Act are violative of article 19(1)(g) of the Constitution, (ii) that they are violative of Article 311 (2) of the Constitution and (iii) that they contravene Article 14 of the Constitution. The State Government contends that since by the ordinance and the Act, certain posts have been abolished, the officials who were incumbents of the abolished posts cannot raise any of the grounds raised by them. Entry 41 in List II of the Seventh Schedule to the Constitution confers the power on the State Legislature to make laws with respect to State public services subject to the provisions of the Constitution. Article 309 of the Constitution provides that subject to the provisions of the Constitution, the State Legislature may regulate the recruitment and conditions of service of persons appointed to public services and posts in connection with the affairs of the State. Article 311 (2) of the Constitution states that no person who is a member of a civil service of the Union or an all India service or a civil service of a State or holds a civil post under the State shall be dismissed or removed or reduced in rank except after an inquiry in which he has been informed of the charges against him and given a L reasonable opportunity of being heard in respect of those charges. Article 14 of the Constitution guarantees equality before the law and equal protection of the laws. It is not disputed that any law that is passed in relation to a Government employee should not contravene any of these provisions Article 19 (1)(g), Article 311 (2) and Article 14 of the Constitution. We shall now proceed to examine the case with reference to each of them. The power to abolish a civil post is inherent in the right to create it. The Government has always the power, subject, of course, to the constitutional provisions, to reorganise a department to provide efficiency and to bring about economy. It can abolish an office or post in good faith. The action to abolish a post should not be just a pretence taken to get rid of an inconvenient incumbent. We have the following statement of the law in American Jurisprudence 2nd, Vol. 63 at Pages 648 649 : 644 "37. Manner, sufficiency, validity, and effect. It is not always easy to determine whether a public office has been abolished. It is not sufficient merely to declare that a particular office is abolished, if in fact it is not abolished, and the duties thereof are continued. An office is abolished when the act creating it is repealed. But the repeal of the statute creating an office, accompanied by the re enactment of the substance of it, does not abolish the office. Abolition of an office may also be brought about by a constitutional provision, or by a new constitution or a constitutional amendment. A non constitutional office may be indirectly abolished as by legislating away the duties and emoluments of the office. The legislature may not evade constitutional provisions by a sham or pretended abolition of an office, as where there is mere colorable abolition of the office for the purpose of getting rid of its incumbent. This may happen where an office is abolished in terms and promptly recreated under the same or a different name, provided the legislature does not attach duties and burdens to the new office of a character such as to make it in reality a different office. Where an office is duly abolished by the legislature or the people, it ceases to exist and the incumbent is no longer entitled to exercise the functions thereof, or to claim compensation for so doing, unless he is under contract with the state so as to come within the protection of the constitutional inhibition against impairment of the obligation of contract. Since a de jure office is generally essential to the existence of a de facto officer, persons cannot act as de facto officers of an office which has been abolished. " H. Eliot Kaplan writes in his book entitled "The Law of Civil Service" at pages 214 115 thus : "8. "Good Faith" in Abolition of Positions There of course, is no vested right to employment in the public service. The notion, much too prevalent, that any one who has been appointed after a competitive examination is entit 645 led to be retained in the service is erroneous. Where there is any reasonable justification for eliminating positions in the public service, even where such abolition of positions may be subject to judicial review, the inclination of the courts is not to interfere, avoiding substitution of judicial wisdom or judgment for that of the administrator. A position is not lawfully abolished solely because it has been left vacant for a short period of time and subsequently filled by another appointee than the one laid off and entitled to re employment. Good faith of a head of department in abolishing a position on alleged grounds of economy has often been challenged. Most courts have held that the issue of good faith on the part of an administrative official is one of law solely for the court to pass on, and not an issue of fact which may be submitted to a jury for determination. The jury may determine the facts, which the court in turn may find as a matter of law constitute bad faith; but a verdict by a jury that a department head had acted in bad faith in abolishing a position was set aside as a conclusion of law, and not properly finding of fact. What constitutes bad faith as a matter of law in abolishing positions must be determined by the precise facts in each case. As a general rule, where positions are purported to be eliminated and incumbents laid off, and thereafter identical or similar positions are re established and the positions filled by others not entitled under the Civil service law and rules to such employments, the courts will not hesitate to order re employment of the laid off employees. " The above passages sum up the law on the question of abolition of posts in civil service as it prevails in United States of America. In England too there is provision for compulsory premature retirement in the public interest on structural grounds, grounds of limited efficiency and redundancy. (Vide paragraph 1303, Vol. 8 Halsbury 's Laws of England 4th Edn.) 646 In the instant case, the abolition of the posts of village officers is sought to be achieved by a piece of legislation passed by the State Legislature. Want of good faith or malafides cannot be attributed to a Legislature. We have only to see whether the legislation is a colourable one lacking in legislative competence or whether it transgresses any other constitutional limitation. So far as the argument based on Article 19 (1) (g) of the Constitution is concerned, we are bound by the view expressed by the Constitution Bench of this Court in Fertilizer Corporation Kamgar Union (Regd), Sindri & Ors. vs Union of India & Ors. in which Chandrachud, C.J. has observed at pages 60 61 thus : "The right to pursue a calling or to carry on an occupation is not the same thing as the right lo work in a particular post under a contract of employment. If the workers are retrenched consequent upon and on account of the sale, it will be open to them to pursue their rights and remedies under the Industrial Laws. But the point to be noted is that the closure of an establishment in which a workman is for the time being employed does not by itself infringe his fundamental right to carry on an occupation which is guaranteed by Article 19 (1) (g) of the Constitution. Supposing a law were passed preventing a certain category of workers from accepting employment in a fertiliser factory, it would be possible to contend then that the workers have been deprived of their right to carry on an occupation. Even assuming that some of the workers may eventually have to be retrenched in the instant case, it will not be possible to say that their right to carry on an occupation has been violated. It would be open to them, though undoubtedly it will not be easy, to find out other avenues of employment as industrial workers. Article 19 (1) (g) confers a broad and general right which is available to all persons to do work of any particular kind and of their choice. It does not confer the right to hold a particular job or to occupy a particular post of one 's choice. Even under Article 311 of the Constitution, the right to continue in service falls with the abolition of the post in 647 which the person is working. The workers in the instant case can no more complain of the infringement of their fundamental right under Article 19 (1) (g) than can a Government servant complain of the termination of his employment on the abolition of his post. The choice and freedom of the workers to work as industrial workers is not affected by the sale. The sale may at the highest affect their locum, but it does not affect their locus, to work as industrial workers. This is enough unto the day on article 19 (1) (g). " In view of the above ruling, it is not possible to hold that the Act violates Article 19 (1) (g) as it does not affect the right of any of the incumbents of the posts to carry on any occupation of their choice even though they may not be able to stick on to the posts which they were holding. We shall next examine the argument based on Article 311 (2) of the Constitution. We have already seen in the Fertilizer Corporation Kamgar Union 's case (supra) the observation to the effect 'Even under Article 311 of the Constitution, the right to continue in service falls with the abolition of the post in which the person is working. ' It is said that the 'act of removing a person from a chair is different from the act of removal of the chair itself ' although the incumbent loses the chair in both the cases. Since it is. strenuously urged before us that there is some amount of contradiction in some of the rulings of this Court, we shall review the legal position to the extent necessary before reaching our own conclusion on the question. The doctrine that the tenure of a holder of a civil post is dependent upon the pleasure of the Crown is peculiar to English law. In India, Article 310 of the Constitution of India provides : "310 (1) Except as expressly provided by this Constitution, every person who is a member of a defence service or of a civil service of the Union or of an all India service or holds any post connected with defence or any civil post . under the Union holds office during the pleasure of the President, and every Person who is a member of a civil 648 service of a State or holds any civil post under a State holds office during the pleasure of the Governor of the State. (2) Notwithstanding that a person holding a civil post under the Union or a State holds office during the pleasure of the President or, as the case may be, of the Governor of the State, any contract under which a person, not being a member of a defence service or of an all India service or of a civil service of the Union or a State, is appointed under the Constitution to hold such a post may, if the President or the Governor, as the case may be, deems it necessary in order to secure the services af a person having special qualifications, provide for the payment to him of compensation, if before the expiration of an agreed period that post is abolished or he is, for reasons not connected with any misconduct on his part, required to vacate that post. " While the doctrine of pleasure incorporated in Article 310 cannot be controlled by any legislation, the exercise of that power by the President or the Governor, as the case may be, is however made subject to the other provisions of the Constitution, one of them being Article 311, which is not made subject to any other provision of the Constitution and is paramount in the field occupied by it. The contention urged before us is that every kind of termination of employment under Government would attract Article 311 (2) of the Constitution and a termination on the abolition of the post cannot be an exception. While construing Article 311 (2) of the Constitution, as it stood then, in Parashotam Lal Dhingra vs Union of India, Das, C.J. Observed : "The Government cannot terminate his service unless it is entitled to do so (I) by virtue of a special term of the contract of employment, e.g., by giving the requisite notice provided by the contract or (2) by the rules governing the conditions of his service, e.g., on attainment of the age of superannuation prescribed by the rules, or on the fulfillment of rule conditions for compulsory retirement or subject to certain safeguards, on the abolition of the post or on being 649 found guilty, after a proper enquiry on notice to him, of misconduct, negligence, inefficiency or any other disqualification." (emphasis added) Again at pages 857 858 in the same judgment, the learned Chief Justice observed : "The foregoing conclusion, however, does not solve the entire problem, for it has yet to be ascertained as to when an order for the termination of service is indicted as and by way of punishment and when it is not. It has already been said that where person is appointed substantively to a permanent post in Government service, he normally acquires a right to hold the post until under the rules, he attains the age of superannuation or is compulsorily, retired and in the absence of a contract, express or implied, or a service rule, he cannot be turned out of his post unless the post itself is abolished or unless he is guilty of misconduct, negligence, inefficiency or other disqualifications and appropriate proceedings are taken under the service rules read with article 311 (2). " (emphasis added) It may be mentioned here that the words "subject to certain safeguards" found in the earlier extract are not used with reference to abolition of posts in the above extract. Later on, Das, C.J observed that the Court should apply two tests namely (1) whether the servant had a right to the post or the rank or (2) whether he had been visited with evil consequences such as loss of pay and allowances, a stigma affecting his future career in order to determine whether the removal of an officer from a post attracted Article 311 (2). The decision in Parshotam Lal Dhingra 's case (supra) was reviewed by a Bench of seven Judges of this Court in Moti Ram Deka etc. vs General Manager, N.E.F. Railways, Maligaon, Pandu vs etc. In that case the question which arose for consideration was whether Rules 148 (3) and 149 (3) of the Indian Railway Establishment Code violated either Article 311 (2), or Article 14 of the Constitution. Sub rules (1) and (2) of Rule 148 dealt with temporary railway servants and apprentices respectively. The relevant part of Rule 148 (3) read thus : 650 "148 (3) other (non pensionable) railway servant: The service of other (non pensionable) railway servants shall be liable to termination on notice on either side for the periods shown below. Such notice is not however required in cases of dismissal or removal as a disciplinary measure after compliance with the provisions of Clause (2) of Article 311 of the Constitution, retirement on attaining the age of superannuation, and termination of service due to mental or physical incapacity. " Rule 149 was brought into force in the place of Rule 148 in the case of pensionable servants in November, 1957. Here again, sub rules (1) and (2) of Rule 149 dealt with temporary railway servants and apprentices. Rule 149 (3) read thus: "149 (3) other railway servants: The services of other railway servants shall be liable to termination on notice on either side for the periods shown below. Such notice is not however, required in cases of dismissal or removal as a disciplinary measure after compliance with the provisions of clause (2) of Article 311 of the Constitution, retirement on attaining the age of superannuation, and termination of service due to mental or physical incapacity. " The majority judgment in this case, however, observed that a Government servant on being appointed to a post permanently acquired a right to hold the post under the Rules until he attained the age of superannuation or was compulsorily retired or was found guilty of an act of misconduct in accordance with Article 311(2). It disapproved the statement found in Parshotam Lal Dhingra 's case (supra) at pages 857 858 to the extent it recognised the removal of a permanent Government servant under a contract express or imp lied or a service rule. After referring to one passage at page 841 and another at page 843 in Parsotam Lal Dhingra 's case, Gajendragadkar, J. (as he then was), who delivered the majority judgment in Moti Ram Deka 's case (supra) observed at pages 718 719 thus: 'Reading these two observations together, there can be no doubt that with the exception of appointments held under special contract, the Court took the view that wherever a civil servant was appointed to a permanent post substantively, he had a right to hold that post until. he reach ed the age of superannuation or was compulsorily retired, 651 or the post was abolished. In all other cases, if the services of the said servant were terminated, they would have to be in conformity with the provisions of article 311(2), because termination in such cases amounts to removal. The two statements of the law to which we have just referred do not leave any room for doubt on this point." (emphasis added) It may be noticed that removal of a Government servant from a post on its abolition is recognised in the above passage as a circumstance not attracting Article 311(2) of the Constitution. The Court after a review of all the decisions before it including the decision in Parshotam Lal Dhingra 's case (supra) held that the above two Rules 148 (3) and 149 (3) which authorised the removal officers holding the posts substantively by issuing a mere notice infringed Article 311 (2) of the Constitution. The question of abolition of posts did not arise for consideration in this case. The validity of removal of a Government servant holding a permanent post on its abolition was considered by Desai, J. and Chandrachud, J. (as he then was) in P.V. Naik & Ors. vs State of Maharashtra & Anr.(1) The learned Judges held that the termination of service of a Government servant consequent upon the abolition of posts did not involve punishment at all and therefore did not attract Article 311(2). Since much reliance is placed by the petitioners on the decision of this Court in State of Mysore vs H. Papanna Gowda & Anr. etc.(2) it is necessary to examine that case in some detail. The facts of that case were these: The respondent in that case was holding the post of a chemical assistant in the Agricultural Research Institute, Mandya in the Department of Agriculture of the State of Mysore. Under the Mysore University of Agricultural Sciences Act, 1963 which came into force on April 24, 1964, the University of Agricultural Sciences was established. Sub section (5) of section 7 of that Act provided: "7. (5) Every person employed in any of the colleges specified in sub section (1) or in any of the institutions referred to in sub section (4) immediately before the appointed 652 day or the date specified in the order under sub section (4), as the case may be, shall, as from the appointed day or the specified date, become an employee of the University on such terms and conditions as may be determined by the State Government in consultation with the Board. " The Board referred to in the above sub section was the Board of Regents of the University. By a notification dated September 29, 1965 issued under section 7(4) and (5) of that Act, the control and management of a number of research and educational institutions under the Department of Agriculture were transferred to the University. Alongwith them, the Institute in which the respondent was working was also transferred to the University. The result was that the respondent ceased to be an employee of the State Government and became an employee of the University. Thereupon he questioned the validity of sub sections (4) and (5) of section 7 of the said Act on the ground that they contravened Article 311(2) of the Constitution before the High Court of Mysore, which upheld his plea. The State Government questioned the decision of the High Court before this Court in the above case. This Court affirmed the decision of the High Court holding that Article 311(2) of the Constitution had been contravened as the prospects of the respondent in Government service were affected. In this case the parties proceeded on the basis that there was no abolition of post as such as can be seen from the judgment of the High Court. The only ground was whether when the post continued to exist though under a different master, in this case it being the University, it was open to the State Government to transfer its employee to the control of a new master without giving an option to him to state whether he would continue as a Government employee or not. The court was not concerned about the consequences of abolition of a post as such in this case. As can be seen from the judgment of the High Court in this case (vide Papanna Gowda vs State of Mysore(1) one serious infirmity about the impugned provisions was that whoever was holding the post in any of the institutions transferred to the University automatically ceased to be the Government servant. Even if the case was one where abolition of the post was involved, the law should have made provision for the determition of the employees in the cadre in question who would cease to be 653 Government employees with reference to either the principle of 'last come, first go ' or any other reasonable principle and given them an option to join the service under the new master instead of just transferring all the employees who were then working in the institutions to the University. The impugned provisions were not rules dealing with the age of superannuation or compulsory retirement. Nor the case was dealt with on the principle of abolition of posts. The decision in this case takes its colour from the peculiar facts involved in it. One principle that may be deduced from this decision is that if a post is not a special post and its incumbent is a member of a cadre his rights as a member of the cadre should be considered before deciding whether he has cased to be a government employee on the abolition of the post. It is likely that on such scrutiny the services of another member of the cadre may have to be terminated on its abolition or some other member of the cadre may have to be reverted to a lower post from which he may have been promoted to the cadre in question by the application of the principle of 'last come, first go '. If, however, where the post abolished is a special post or where an entire cadre is abolished cadre and there is no lower cadre to which the members of the abolished can reasonably be reverted, the application of this principle may not arise at all. In the circumstances, the petitioners cannot derive much assistance from this decision. The question whether Article 311(2) would be contravened if Government servant holding a civil post substantively lost his employment by reason of the abolition of the post held by him directly arose for consideration before this Court in M. Ramanatha Pillai vs The state of Kerala & Anr.(1) Two points were examined in that case: (i) whether the Government had a right to abolish a post in a service and (ii) whether abolition of a post was dismissal or removal within the meaning of Article 311 of the Constitution. The Court held that a post could be abolished in good faith but the order abolishing the post might lose its effective character if it was established to have been made arbitrarily, mala fide or as a mask of some penal action within the meaning of Article 311 (2). After considering the effect of the decisions in Parashotam Lal Dhingra 's case (supra), Champaklal Chimanlal Shah vs The Union of India,(2) 654 Moti Ram Deka 's case (supra), Satish Chandra Anand vs The Union of India (1) and Shyam Lal vs State of U.P. and Union of India.(2) This Court observed in this case at page 526 thus: "The abolition of post may have the consequence of termination of service of government servant. Such termination is not dismissal or removal within the meaning of Article 311 of the Constitution. The opportunity of showing cause against the proposed penalty of dismissal or removal does not therefore arise in the case of abolition of post. The abolition of post is not a personal penalty against the government servant. The abolition of post is an executive policy decision. Whether after abolition of the post, the Government servant who was holding the post would or could be offered any employment under the State would therefore be a matter of policy decision of the Government because the abolition of post does not confer on the person holding the abolished post any right to hold the post. " The true effect of the decision in Moti Ram Deka 's case (supra) on the question of applicability of Article 311 (2) of the Constitution to a case of abolition of post has been clearly explained in this case and we have very little to say anything further on it. Suffice it to say that the Moti Ram Deka 's case (supra) is no authority for the proposition that Article 311 (2) would be attracted in such a case. The above view was followed by this Court in State of Haryana vs Des Raj Sangar & Anr.(1) to which one of us (Murtaza Fazal Ali, J.) was a party. Khanna, J. speaking for the Court observed at pages 1037 38 thus: "Whether a post should be retained or abolished is essentially a matter for the Government to decide. As long as such decision of the Government is taken in good faith the same cannot be set aside by the court. It is not open to the court to go behind the wisdom of the decision and substitute its own opinion for that of the Government on the point as to whether a post should or should not be 655 abolished. The decision to abolish the post should, however, as already mentioned, be taken in good faith and be not used as a cloak or pretence to terminate the services of a person holding that post. In case it is found on consideration of the facts of a case that the abolition of the post was only a device to terminate the services of an employee, the abolition of the post would suffer from a serious infirmity and would be liable to be set aside. The termination of a post in good faith and the consequent termination of the services of the incumbent of that post would not attract Article 311. " Before concluding our discussion on this topic, it is necessary to refer to a decision of the Jammu and Kashmir High Court in Abdul Khalik Renzu & Ors. vs The State of Jammu and Kashmir(1) to which one of us (Murtaza Fazal Ali, J. (as he then was) was a party in which the validity of the abolition of posts constituting the special police squad of the State of Jammu and Kashmir was questioned. In that case, the High Court while recognising the power of the State Government to abolish the posts and to terminate the services of the incumbents of such posts held that such action could be validly taken only subject to certain safeguards and in the absence of any such safeguards the abolition was bad. The High Court did not clearly spell out the nature and extent of safeguards referred to therein. The High Court relied on the words 'subject to certain safeguards, on the abolition of posts ' in the passage occurring at page 841 in Parshotam Lal Dhingra 's case (supra) which is extracted above to reach the conclusion that unless the abolition of posts was accompanied by such safeguards, Article 311 would be infringed. With respect, it should be stated that the High Court did not notice that in another passage at pages 857 858 in the same decision, which is also extracted above, the abolition of posts referred to therein was unqualified. In this passage there is no reference to any safeguards at all. Probably the 'safeguards ' referred to in the passage at page 841 in Parshotam Lal Dhingra 's case (supra) meant an abolition of posts which was in good faith and not a pretence of abolition of a post resorted to in order to get rid of its incumbent and the creation of the same post with a different form or name with a new incumbent. The above view of the High Court of Jammu and Kashmir is however, in conflict with the decision in Ramanatha 656 Pillai 's case (supra) and hence must be considered as having been overruled by this Court. In modern administrations, it is necessary to recongnise the existence of the power with the Legislature or the Executive to create or abolish posts in the civil service of the State. The volume of administrative work, the measures of economy and the need for streamlining the administration to make it more efficient may induce the State Government to make alterations in the staffing patterns of the civil service necessitating either the increase or the decrease in the number of posts. This power is inherent in the very concept of governmental administration. To deny that power to the Government is to strike at the very roots of proper public administration. The power to abolish a post which may result in the holder thereof ceasing to be a Government servant has got to be recognised. But we may hasten to add that any action legislative or executive taken pursuant to that power is always subject to judicial review. It is no doubt true that Article 38 and Article 43 of the Constitution insist that the State should endeavour to find sufficient work for the people so that they may put their capacity to work into economic use and earn a fairly good living. But these articles do not mean that every body should be provided with a job in the civil service of the State and if a person is provided with one he should not be asked to leave it even for a just cause. If it were not so, there would be no justification for a small percentage of the population being in Government service and in receipt of regular income and a large majority of them remaining outside with no guaranteed means of living. It would certainly be an ideal state of affairs if work could be found for all the able bodied men and women and everybody is guaranteed the right to participate in the production of national wealth and to enjoy the fruits thereof. But we are today far away from that goal. The question whether a person who ceases to be a Government servant according to law should be rehabilitated by giving an alternative employment is, as the law stands today, a matter of policy on which the Court has no voice. On a fair construction of the provisions of Article 311 (2) of the Constitution and a consideration of the judicial precedents having a bearing on the question, we are of the view that it is not possible to hold that the termination of service brought about by 657 the abolition of a post effected in good faith attracts Article 311 (2). An analysis of Article 311 (2) shows that it guarantees to a person who is a member of a civil service of the Union or an all India service or a civil service of a State or holds a civil post the right to defend himself in any proceeding leading to his dismissal, removal or reduction in rank. It requires that in such a case an inquiry should precede any such action, at that inquiry he should be informed of the charges against him and given a reasonable opportunity of being heard in respect of those charges. Where it is proposed after such inquiry to impose upon him any such penalty, such penalty may be imposed on the basis of the evidence adduced during such inquiry and it shall not be necessary to give such person any opportunity of making representation on the penalty proposed. The second proviso to Article 311 (2) of the Constitution sets out the circumstances when that clause would not apply. These provisions show that Article 311 (2) deals with the dismissal, removal, or reduction in rank as a measure of penalty on proof of an act of misconduct on the part of the official concerned. This fact is emphasised by the introduction of the words 'an inquiry in which he has been informed of the charges against him ' in article 311(2) when it was substituted in the place of the former clause (2) of Article 311 by the Constitution (Fifteenth Amendment) Act, 1963 which came into force on October 5, 1963. In the circumstances, it is difficult to hold that either the decision in Moti Ram Deka 's case (supra) or the decision in Papanna Gowda 's case (supra) lays down that the provisions of Article 311 (2) should be complied with before the services of a Government servant are terminated as a consequence of the abolition of the post held by him for bona fide reasons. In view of the foregoing, it cannot be said that the Act impugned in these petitions by which the village offices in the State of Tamil Nadu were abolished contravenes Article 311(2) of the Constitution. We have now to consider the submission based on Article 14 of the Constitution. This aspect of the case has to be examined from two angles (i) whether the step taken by the Legislature to abolish the village offices in question is so arbitrary as to conflict with Article 14 of the Constitution and (ii) whether unequals have been treated as equals by the Legislature. While dealing with the first point it is to be observed that the posts of village officers which were governed by the Madras Act II of 1894, the Madras Act III of 1895 and the Board 's Standing Orders 658 were feudalistic in character and the appointments to those posts were governed by the law of primogeniture, the family in which the applicant was born, the village in which he was born, and the fact whether he owned any property in the village or not. Those factors are alien to modern administrative service and are clearly opposed to Articles 14 and 16 of the Constitution. No minimum educational qualifications had been prescribed. It was enough if the applicants knew reading and writing in the case of some of them. The posts were not governed by the regular service rules applicable generally to all officials in the State service. Rightly therefore, the Administrative Reforms Commission recommended their abolition and reorganisation of the village service. The relevant part of the Report of the Administrative Reforms Commission reads thus: "The concept of service was conspicuously absent in this relationship. Village officers were part time employees and not subject to normal civil service discipline. They do not function from public offices where they were expected to receive people and transact public business. All accounts, survey and registry records were in their private custody. Villagers had to go to the residences of Village officers and await the latter 's convenience for referring to public records or for getting extracts from them. This reduced the accessibility particularly of "high caste" village officers to the poor farmers of the "backward and untouchable" communities. Their emoluments for the part time service, were meagre and appeared to be an honorarium rather than a living wage. Communications and living conditions in villages being difficult, subordinate inspecting officers were dependent on the private hospitality of village officers during their official visits. These factors led to the village officers developing an attitude of condescension in their dealings with villagers. Even though the hereditary principle was held to be unconstitutional recently, the members of their families still get preferential treatment, even if informally, in filling up vacant offices. In recent times, village officers have generally ceased to be leading and affluent riots and are reduced to earn their livelihood largely through the misuse of their position. " 659 The problems involved in the reorganisation of Revenue villages in Tamil Nadu were also discussed in the Report of Mr. S.P. Ambrose, I.A.S. submitted to the State Government in January, 1980. In the course of the Report, he observed: "4.2 Reorganization of Revenue Villages 4.2.1. In view of the considerable increases in the total beriz of villages, particularly those with extensive irrigated areas, new rules for the regulation and distribution of water in the project areas and in old ayacut areas, and the reduced work and responsibilities of the talayaris on account of the increase in the strength of the regular Police establishments the norms, for determining the strength of the villagee establishment, as laid down in B.P. Ms. No. 324, dated the 9th December 1910, read with B.P. Ms. No. 231, dated the 23rd February 1921, no longer held good. 4.2.2. The size of the survey villages vary widely; 4.77 hectares is the extent of the smallest village and 20,947 hectares is the extent of the biggest village. In terms of population, the smallest has population of 33, while the largest has a population of 12,777. Even though survey villages have been grouped to form convenient revenue groups for purposes of village administration, the size of revenue groups also vary widely. With the increases in the area cultivated, area irrigated (both from Government and private sources) and the number of pattas the work load in most villages has increased considerably now. The question for consideration is whether a comprehensive exercise to reorganise the revenue villages into convenient and viable village administrative units with reference to the existing work load should be attempted, and thereafter to revise the strength of the village establishment by laying down fresh norms for determing its strength. This will be a major administrative exercise. If convenient village administrative units with, more or less, equal work load are to be constituted, several factors like area cultivated (gross and net), area irrigated, crop pattern, population, number of pattadars and beriz have to be taken into account 660 Before this is attempted, the major policy issue is whether to continue the present part time system of village officers or to have regular, transferable Government servants as Village Officers in charge of bigger administrative units as recommended by the Administrative Reforms Commission." Having regard to the abolition of similar village offices in the neighbouring States of Karnataka and Andhra Pradesh and the agitation in the State of Tamil Nadu for reorganisation of village service, it cannot be said that the decision to abolish the village offices which were feudalistic in character and an achronisms in the modern age was arbitrary or unreasonable. Another aspect of the same question is whether the impugned legislation is a colourable one passed with the object of treating the incumbents of village offices in an unjust way. A similar contention was rejection by this Court in B.R. Shankaranarayana and Ors. vs The State of Mysore and Ors.(1) in which the validity of the Mysore Village Offices Abolition Act (14 of 1961) which tried to achieve more or less a similar object arose for consideration, with the following observations at pages 1575 1576: "(13) As pointed out by this Court in Gajapati Narayan Deo 's case; , , the whole doctrine of colourable legislation resolves itself into the question of competency of a particular legislature to enact a particular law. If the legislature is competent to pass the particular law, the motives which impel it to pass the law are really irrelevant. It is open to the Court to scrutinize the law to ascertain whether the legislature by device, purports to make a law which, though in form appears to be within its sphere, in effect and substance, reaches beyond it. (14) Beyond attempting the argument that the impugned Act is a piece of colourable legislation, learned Counsel for the appellant has not succeeded in substantiating his contention that the Act and the rules made there under are merely a device for removing the present incumbents from their office. The provisions of the Act and the 661 rules made thereunder plainly provide for the abolition of hereditary village offices and make those offices stipendiary posts. The Act makes no secret of its intention to abolish the hereditary posts. (15) It is argued that even after abolition, the same posts are sought to be continued. It is no doubt true that the names of the offices have not been changed but there is a basic structural difference between the posts that have been abolished. The posts created by the new Act are stipendiary posts. They carry salaries according to the grades created by the rules. The incumbents are transferable and their service is pensionable. Different qualifications are prescribed for the new posts. From a consideration of the incidents attaching to the new posts it is clear that the old posts have been abolished and new posts have been created and that the whole complexion of the posts has been changed. (16) The result is that in our opinion the impugned Act cannot be held to be a piece of colourable legislation and as such invalid. " A learned discussion on all the points raised in the above case is found in the judgment of the High Court of Mysore in B.H. Honnalige Gowda vs State of Mysore and Anr.(1) Hence the above contention has to be rejected. The next contention of the petitioners which is of some substance and which is based again on Article 14 needs to be examined here. It is seen from section 2 (e) of the Act that the expression 'part time village officer ' is defined as follows: "2. (e) "part time village officer" means Village Headman (including Additional Village Headman, Village Karnam (including Chief Karnam and Additional Village Karnam) or Triune Officer appointed under 662 (i) the Madras Proprietary Estates ') Village Service Act, 1894 (Madras Act II of 1894) or the Madras Hereditary Village offices Act, 1895 (Madras Act III of 1895); (ii) the Board 's Standing orders; (iii) the Tamil Nadu Village officers Service Rules, 1970 or any other rules made under the proviso to Article 309 of the Constitution; or (iv) any other law, but does not include Grama Kuvalar, Grama Paniyalar and Pasana Kavalar;" By section 3 of the Act, the posts held by the part time village officers, as defined above, are abolished. As a consequence of the above provision not merely posts of officers appointed under the Madras Act No. II of 1894, the Madras Act No. III of 1895 and the Board 's Standing orders prior to December 16, 1970 but also the posts held by officers appointed after that date under the Rules made under the proviso to Article 309 of the Constitution i.e. The Tamil Nadu Village Officers Service Rules, 1970 or any other rule made by the Governor have been abolished. It is argued that the abolition of posts of officials appointed after December 16, 1970 under the Rules made under the proviso to Article 309 of the Constitution is violative of Article 14 of the Constitution. We have given our anxious consideration to this submission. Any classification should satisfy two tests (i) that there exists an intelligible differentia between those who are grouped together and those who are not included in the group and (ii) that there exists a reasonable nexus between the differentia and the object for which classification is made. As stated earlier the object of the impugned legislation is to abolish posts which were part time in nature and which had come into existence under laws which were feudalistic in character and to replace them by posts held by new incumbents who are recruited under it. The question for consideration is whether the grouping together of the part time posts mentioned in section 2 (e) of the Act is unconstitutional. There is no dispute that upto December 16, 1970 all appointments to village offices were being made under the two Madras Acts referred to above and the Board 's 663 Standing orders on the basis of factors dealt with above. But after December 16, 1970, recruitment was being made in accordance with the Tamil Nadu Village Officers Service Rules, 1970 By the said Rules a new service of part time village officers was constituted. Rule 5 thereof prescribed the minimum educational qualification and the tests which an applicant had to be eligible for being appointed. The Rules fixed the age of superannuation at 55 years. But even under these Rules, the persons who were appointed were part time village officers who were paid a fixed amount every month by way of remuneration. The nature of duties performed by them and the responsibilities they had to discharge were also the same. The posts held by them were non pensionable posts. Under the Act and the Rules framed thereunder, the village administrative officers to be appointed are to be recruited directly. No person shall be eligible for appointment to the post of a village administrative officer unless he possesses the minimum general educational qualification referred to in Rule 12 (a) (i) of Part II of the Tamil Nadu State Subordinate Services Rules and prescribed Schedule I to the said Part II. Every person appointed to the post has within a period of one year from the date on which he joins duty to undergo the training and pass the tests prescribed by Rule 9 of the Rules made under the Act. Every person appointed as a village administrative officer is liable to be transferred from one place to another. The age of superannuation is fixed at 58 years. The said posts are no longer part time posts and the holders thereof are full time Government officials entitled to draw salary every month in the scale of Rs. 350 10 420 15 600 and other allowances and these posts are pensionable posts. It is also to be seen from the recommendations of the Administrative Reforms Commission and other material placed before us that the revenue village will be reorganised so as to form viable administrative units which would require the services of a whole time village administrative officer. The area under a village administrative officer is much larger than many of the existing revenue villages. When such reorganisation of the village administration is contemplated, it would not be possible to allow charges of diverse sizes to continue to remain in any part, of the State of Tamil Nadu. In these circumstances, even though the village officers appointed after December 16, 1970 are in a way different from the village officials appointed prior to that date, they too cannot be equated with the new village administrative officers who will be appointed under the Act and the Rules made thereunder. 664 It cannot, therefore, be held that Article 14 of the Constitution has been violated in abolishing the posts held by those appointed after December 16, 1970. The petitioners in Writ Petitions Nos. 6191, 6355 and 6356 of 1980 who are holders of village offices in Tiruttani Taluk and Pallipatu area have questioned the impugned Act on the ground that the State Legislature could not pass the law without the previous approval of Central Government as required by the proviso to sub section (4) of section 43 of the (Central Act 56 of 1959). The area in which these petitioners were working as village officials forms part of the transferred territories transferred from Andhra Pradesh to Tamil Nadu under the aforesaid Act. Their contention is that since they were working as village officials in the said area prior to the commencement of the above said Act the conditions of their service could not be altered to their prejudice without obtaining the previous approval of the Central Government. Section 43 of the reads: "43. Provisions relating to services (1) Every person, who immediately before the appointed day, is serving in connection with the affairs of Andhra Pradesh or Madras shall, as from that day, continue so to serve, unless he is required by general or special order of the Central Government to serve provisionally in connection with the affairs of the other State. (2) As soon as may be after the appointed day, the Central Government shall by general or special order, determine the State to which every person provisionally allotted to Andhra Pradesh or Madras shall be finally allotted for service and the date from which such allotment shall take effect or be deemed to have taken effect. (3) Every person who is finally allotted under the provisions of sub section (2) to Andhra Pradesh or Madras shall, if he is not already serving therein, be made 665 available for serving in that State from such date as may be agreed upon between the two State Governments or in default of such agreement, as may be determined by the Central Government. (4) Nothing in this section shall be deemed to affect, after the appointed day, the operation of the provisions of Chapter I of of the Constitution in relation to the determination of the conditions of service of persons serving in connection with the affairs of Andhra Pradesh or Madras. Provided that the conditions of service applicable immediately before the appointed day to the case of any person provisionally or finally allotted to Andhra Pradesh or Madras under this section shall not be varied to his disadvantage except with the previous approval of the Central Government. (5) The Central Government may at any time before or after the appointed day give such directions to either State Government as may appear to it to be necessary for the purpose of giving effect to the foregoing provisions of this section and the State Government shall comply with such directions. " The answer of the State Government to the above contention is that the petitioners in these petitions are not allotted under section 43 (2) of the above said Act to the State of Tamil Nadu and hence the proviso to sub section (4) of section 43 is not applicable. The petitioners have not shown any such order of allotment under section 43 (2). Hence the proviso to sub section (4) of section 43 is not attracted. Under section 43 (4) of the above said Act, the State Government is entitled to deal with all the officials in the areas transferred to them in accordance with Chapter I of Part XIV of the Constitution. The above contention is, therefore, rejected. In the course of the hearing on a suggestion made by the Court, the learned Attorney General filed a memorandum which reads as follows: 666 "All the erstwhile Village officers who possess the minimum general educational qualification as required under the Abolition Act and irrespective of their age (but subject to the rule of retirement framed under the Abolition Act and the Rules framed thereunder) will be screened by a Committee to be appointed by the Government. They need not make any application and they need not also appear for any test conducted by the Tamil Nadu Public Service Commission for the post of Village Administrative officer. Guidelines to the Committee will be as follows: (1) Punishment (2) Physical condition. All the persons selected by the Committee will be appointed by the competent authorities and relaxation in respect of age will be given. They will be new appointees under the Abolition Act and will be governed by the provisions of the Act and the rules made thereunder. Compensation will not be available to those who are so appointed. The remaining vacancies will be filled up from among the candidates already selected by the Tamil Nadu Public Service Commission. " After the above petitions were filed under the interim order passed in these cases all the officials involved in these cases are being paid the honorarium by the State Government. Those who fail in these petitions would have become liable to repay the amount which they have thus drawn in excess of the compensation, if any, they may be entitled to. It is submitted by the learned counsel for the State of Tamil Nadu that the State Government will not take steps to recover such excess amount. The above statement is recorded. The attitude displayed by the State Government in filing the memorandum referred to above and in making a statement to the effect that the amount paid pursuant to the interim orders in in excess of the compensation payable the village officials concerned will not be recovered is a highly commendable one and we record 667 our deep appreciation for the laudable stand taken by the Government. It was, however, strenuously urged by Shri R. K. Garg that those who have to vacate the posts would be without any work and some of them have large families and that compensation, if any, payable to them is very inadequate He urged that it was the duty of the State Government to make adequate provision pursuant to Article 38 and Article 43 of the Constitution. These Articles are in Part IV of the Constitution. They are not enforceable by the courts but they are still fundamental in the governance of the country. The nature of the relationship that exists or ought to exist between the Government and the people in India is different from the relationship between the ruler and his subjects in the West. A study of the history of the fight for liberty that has been going on in the West shows that it has been a continuous agitation of the subjects for more and more freedom from a king or the ruler who had once acquired complete control over the destinies of his subjects. The Indian tradition or history is entirely different. The attitude of an Indian ruler is depicted in the statement of Sri Rama in the Ramayana thus: Kshatrirairdharyate chapo nartshabdo bhavaideeti (Ramayana III 10 3) (Kshatriyas (the kings) bear the bow (wield the power) in order to see that there is no cry of distress (from any quarter). The duty of the administrator, therefore, is that he should promptly take all necessary steps to alleviate the sufferings of the people even without being asked to do so. While attending to his duties an administrator should always remember the great saying of the Tamil saint Tiruvalluvar: 668 Do nought that soul repenting must deplore, If thou hast sinned, "its well if thou dost sin no more. (Let a minister never do acts of which he would have to grieve saying, "What is this I have done", (but) should he do (them), it were good that he grieved not.) (No. 655 in Tirukkural: Translation by Rev. Dr. G.U. Pope and others (Reprint 1970) p. 175). An administrator 's actions should be such as he is not driven to repent for the mistakes he may have committed. But if he has committed any mistakes in the past he should try to avoid a repetition of such mistakes. It is significant that in Tamil language the equivalent of the word 'people ' is 'Makkal ' which is also sometimes used as the equivalent of 'children '. It is for the State Government to consider what can be done to those who fail in the petitions. This observation is made particularly in regard to those who were recruited after December 16, 1970 under the rules made under the proviso to Article 309 of the Constitution in view of the fact that their recruitment was not made on the hereditary principle. Those who have passed S.S.L.C. examination amongst them come within the scope of the statement made by the learned Attorney General. But those who have merely completed S.S.L.C. examination but not passed it fall outside the scope of that statement even though they have gained experience while they were in office. We hope and trust that the State Government will look into this matter purely from a humanitarian point of view. This is only a suggestion and not a direction. In the result the petitions are dismissed subject to the following: (i) The State Government will give effect to the memorandum filed on its behalf which is incorporated in this judgment in the case of those who possess the minimum general qualifications prescribed under the Act and the Rules made thereunder and who were holding the posts of part time village officers immediately before the Act came into force. The State Government shall re employ all such persons who have not crossed the age of superannuation and who are selected as per the 669 memorandum in the new cadre within four months from today. Until they are so selected, they will not be paid any remuneration. Even if they are re employed, the amount paid to them pursuant to the interim orders will not be recovered from them. (ii) The compensation, if any, payable by the State Government under section 5 of the Act to those who cease to be village officers shall be adjusted against the amount paid pursuant to the interim orders passed in these cases. The State Government will not recover from them any amount paid to them pursuant to the interim orders passed in these cases in excess of the compensation, if any, payable to them. (iii) The interim orders stand vacated with effect from April 15, 1982. (iv) No costs.

In the State of Tamil Nadu the administration was carried on at the village level by a chain of officers in regular gradation one above the other since the commencement of the Christian era. This system known as the barabaluti system consisted of twelve functionaries :(1) headman, (2) karnam or accountant, (3) shroff or notazar, (4) nirganti, (5) toty or taliary, (6) potter, (7) smith, (8) jeweller. (9) carpenter, (10) barber, (11) washerman and (12) astrologer. The first five rendered service to the Government. By the end of the nineteenth century, two Acts were enacted for the purpose of regulating the work of these village offices. The Madras Proprietary States ' Village Service Act, 1894 (Madras Act No. 11 of 1894) dealt with three classes of village officers viz. village accountants, village headman and village watchman. It provided for their appointment, remuneration and summary punishment of misconduct or neglect of duty. The Madras Hereditary Village offices Act 1895 (Madras Act No. 111 of 1895) regulated the succession to certain other hereditary village offices and provided for the appointment of persons to hold such offices and the control of the holders thereof. Under both these statutes, the village offices devolved on a single heir according to the general custom and rule of primogeniture governing succession to impartible zamidaris. In cases to which the aforesaid two statutes were inapplicable provision was made by the Standing orders promulgated by the Board of Revenue, which were known as the Board 's Standing orders for appointing village officers on a hereditary basis. 629 The distinctive features of the service conditions of the village officers appointed under the aforesaid two Acts or the Board 's Standing orders were that they were part time employees of the Government, they were appointed directly by the Revenue officer, the records maintained by them could be retained in their houses, no fixed hours of duty were prescribed, they were not constituted into any distinct service, could not be transferred outside their district, and that they were paid honorarium for the services that they discharged. The Fundamental Rules applicable to all other State Government employees, the Pension Rules, and the Leave Rules were not applicable to these village officers. This Court in Gazula Dasaratha Rama Rao vs The State of Andhra Pradesh & ors. ; having held that section 6 (1) of the Madras Act No. 3 of 1895 was void as it contravened Article 16 (2) of the Constitution, instructions were issued by the Board of Revenue on March 12, 1962 that in respect of future vacancies in village offices governed by the Madras Act No. 2 of 1894, and the Madras Act No. 3 of 1895, the appointments should be made on a temporary basis, and the State Legislature enacted the Madras Proprietary Estates ' Village Service and the Madras Hereditary Village offices (Repeal) Act, 1968 repealing the 1894 and 1895 Acts. Pursuant to section 3 of this Act, the State Government promulgated that Tamil Nadu Village officers Service Rules, 1970 which provided for the constitution of the Tamil Nadu Village officers Service, consisting of (i) Village headman, additional village headman, (ii) village karnam, additional village karnam, and (iii) talayari and nirganti and the method of recruitment to the said posts. In the year 1973, the Administrative Reforms Commission set up by the State Government recommended that the existing part time village officers should be replaced by regular whole time transferable public servants who should form part of the Revenue hierarchy. The State Government accepted this recommendation and promulgated on May 17, 1975 the Tamil Nadu Village officers (appointed under B.S. Os) Service Rules 1974. Thereafter on October 9, 1978 the Tamil Nadu Village officers (appointed under B.S.Os) Service Rules 1978 were issued fixing the age of retirement of village officers at 60 years. On November 13, 1980, the Tamil Nadu Abolition of posts of part time Village officers ordinance, 1980 was promulgated abolishing the posts of part time village officers in the State. The ordinance was later replaced by the Tamil Nadu abolition of posts of part time Village officers Act 1981, which provided for the appointment of Village Administrative officers. By section 3 of the Act, the posts of part time village officers were abolished with elect from November 14, 1980 and every officer holding a post so abolished ceased to hold such post, and section S provided for payment of compensation to those who ceased to be part time village officers. The petitioners in their writ petition to this Court contended that the ordinance and the Act were violative of Article 19 (1) (g); Article 311 (2), and contravened Article 14 of the Constitution. The State Government contested the petitions and contended that the State Government being of the opinion that the 630 system of part time Village officers was out moded and did not fit in with the modern needs of village administration, after careful consideration taken the policy decision to abolish all the posts of part time village officers on grounds of administrative necessity and to introduce a system of whole time officers to be incharge of the village administration. To achieve this, the ordinance was promulgated on November 14, 1980 which was later replaced by the Act. It was further contended, that since by the ordinance and the Act, certain posts had been abolished, the petitioners who were incumbents of the abolished posts could not raise any of the grounds raised by them. Dismissing the petitions, ^ HELD: 1. (i) The power to abolish a civil post is inherent in the right to create it. The Government has always the power, subject to the constitutional provisions to reorganise a department to provide efficiency and to bring about economy. It can abolish an office or post in good faith. The action to abolish a post should not be just a pretence taken to get rid of an inconvenient incumbent. [643 G] American Jurisprudence 2d vol.63 p. 648 649: H. Eliot Kaplan The Law of Civil Service pp 214 215 referred to. In the instant case the abolition of the posts of village officers was sought to be achieved by a piece of legislation passed by the State Legislature, namely the Tamil Nadu Abolition of posts of part time Village officers Act, 1981. Want of good faith or malafides cannot be attributed to the Legislature. [646 A] (ii) The Act is not violative or Article 19 (1) (g) as it does not affect the right of any of the incumbents of the posts to carry on any occupation of their choice even though they may not be able to stick on to the posts which they were holding. [647 C] Fertilizer Corporation Kamgar Union (Regd) Sindri & ors. vs Union of India & ors. ; , referred to. (i) The doctrine of pleasure incorporated in Article 310 cannot be controlled by any legislation; but the exercise of that power by the President or the Governor, is however made subject to the other provisions of the Constitution, one of them being Article 311, which is not made subject to any other provision of the Constitution and is paramount in the field occupied by it. [648 D E] (ii) The termination of service of a Government servant consequent upon the abolition of posts does not involve punishment at all and therefore does not attract Article 311(2). [654 B; 654 E] Parashotam Lal Dhingra vs Union of India ; at 841, Moti Ram Deka etc. vs General Manager, N.E.F., Railways, Maligaon, Pandu etc. 631 ; and P.V. Naik 8. vs state of Maharashtra & Anr., AIR 1967 Bom. 482, referred to. (iii) If a post is not a special post and its incumbent is a member of a cadre his rights as a member of the cadre should be considered before deciding whether he has ceased to be a government employee on the abolition of the post. On such scrutiny it is likely that the services of another member of the cadre may have to be terminated or some other member of the cadre may have to be reverted to a lower post from which he may have been promoted to the cadre in question by the application of the principle of 'last come, first go '. If, however, where the post abolished is a special post or where an entire cadre is abolished and there is no lower cadre to which the members of the abolished cadre can reasonably be reverted, the application of this principle may not arise at all. [653 C D] State of Mysore vs H. Papanna Gowda & Anr. ; , referred to. (iv) In modern administration, it is necessary to recognise the existence of the power with the Legislature or the Executive to create or abolish posts in the civil services of the State. The volume of administrative work, the measures of economy and the need for streamlining the administration to make it more efficient may induce the State Government to make alterations in the staffing patterns of the civil service necessitating either the increase or the decrease in the number of posts. This power is inherent in the very concept of governmental administration. To deny that power to the Government is to strike at the very roots of proper public administration. This power to abolish a post which may result in the holder thereof ceasing to be a Government servant has got to be recognised, but any action legislative or executive taken pursuant to that power is always subject to judicial review. (656 A)) M. Ramanatha Pillai vs The State of Kerala Anr. ; , Champaklal Chimanlal Shah vs The Union of India [1964] S S.C.R. 190, Satish Chandra Anand vs The Union of India ; , Shyam Lal vs State of U.P. and Union of India ; , State of Haryana vs Des Raj Sangar of Anr. ; , referred to. Abdul Khalik Renzu & Ors. vs The State of Jammu and Kashmir A.I.R. 1965 J & K 15, overruled. In the instant case it cannot be said that the State Act by which the village officers in the State of Tamil Nadu were abolished, contravenes Article 311 (2). [657 F] (v) The posts of village officers which were governed by the Madras Act II of 1894, the Madras Act III of 1895 and the Board s Standing orders were feudalistic in character and the appointment to these posts were governed by the law of primogeniture, the family in which the applicant was born, the village in which he was born, and the fact whether he owned any property in the village or not. These factors are alien to modern administrative service and clearly 632 opposed to Articles 14 and 16. The Administrative Reforms Commission rightly recommended their abolition and reorganisation of the village service. [657 H; 658 A C] (vi) Having regard to the abolition of similar village offices in the neighbouring States of Karnataka and Andhra Pradesh and the agitation in the State of Tamil Nadu for reorganisation of village service, the decision to abolish the village offices which were feudalistic in character and an anachronism in the modern age cannot be said to be arbitrary or unreasonable. [660 C] R. Shankaranarayana & Ors. vs the State of Mysore & ors. A.I.R. 1966 S.C. 1571. B.H. Honnalige Gowda vs State of Mysore & Anr., A.I.R. , referred to. (i) Any classification under Article 14 should satisfy two tests: (i) that there exists an intelligible differentia between those who are grouped together and those who are not included in the group, and (ii) that there exists a reasonable nexus between the differentia and the object for which classification is made. [662 F] (ii) Upto December 16, 1970 all appointments to Village officers were being made under the two Madras Acts and the Board 's Standing orders on the basis of factors dealt with therein, but after December 16, 1970 recruitment was made in accordance with the Tamil Nadu Village officers Service Rules 1970. By these rules a new service of part time Village officers was constituted and the;, persons who were appointed were paid a fixed amount every month by way of remuneration. Under the Act Of 1981 and the Rules framed thereunder the Village Administrative officers were to be appointed and to be recruited directly. The posts were no longer treated as part time posts and holders thereof were full time government officials entitled to draw salary every month. Even though the Village officers appointed after December 16, 1970 were in a way different from the village officials appointed prior to that date the two cannot be equated with the new Village officers who were to be appointed under the 1981 Act and the rules made thereunder. It cannot therefore be stated that Article 14 of the Constitution has been violated in abolishing the posts held by those appointed after December 16, 1970. [662 H; 663 A E; 663 H; 664A] 4 (i) The State Government will give effect to the memorandum filed on its behalf in the case of those who possess the minimum general qualification prescribed under the Act and the Rules. The State Government shall re employ all such persons who have not crossed the age of superannuation and who are selected in the new cadre. Until they are so selected they will not be paid any remuneration. Even if they are re employed the amount paid to them pursuant to the interim orders will not be recovered. [668 G H; 669 A] (ii) The compensation, if any payable by the State Government under section s of the Act to those who cease to be village officers shall be adjusted against the amount paid pursuant to the interim orders, and any amount in excess of the compensation, shall not be recoverable. [669 B C] 633

ivil Appeal Nos. 1562 to 1573 of 1971. From the Judgment and Decree dated the 13 4 1966 and 3 9 1968 of the Patna High Court in Appeals from Original Decree Nos. 127 130, 246 and 247 of 1958. section P. Nayar for the Appellants. P. K. Chatterjee and Rathin Dass for Respondents in C. As. 1567, 1572 and 1573 of 1971. A. N. Sinha and P. K. Mukherjee for Respondents in C.As. 1562 65 and 1568 71 of 1971. The Judgment of the Court was delivered by RAY, C.J. These appeals are by certificate from the judgment and decree of the High Court at Patna dated 13 April, 1966 and 3 September, 1968. Four suits were filed by Sugauli Sugar Works Limited for recovery of money on account of non delivery of consignments. Two suits were filed by Majhaulia Sugar Works for recovery of money on account of non delivery of two consignments. The suits were filed in the Court of the Subordinate Judge, Motihari in Bihar. The plaintiffs are respondent. The case of the respondents was that goods were booked on 5 September, 1955 to several destinations under railway risk. The goods did not reach the destinations. The respondents alleged that non delivery was on account of gross negligence and misconduct on the part of the Railways. The defence was that the wagons containing the goods in suit along with other wagons were taken on Barge No. 6 from Samaria Ghat to Mokamah Ghat on 7 September, 1955. There was an accident. The Barge with all the wagons sank in the river Ganges. The Railways contended that the employees were not guilty of any negligence or misconduct. The Subordinate Judge dismissed all the suits and held that the accident was not because of the negligence of the railway employees. The High Court accepted the appeals filed by the respondent. The High Court held that the consignments were booked at railway risk and there was no explanation given for the sinking of the Barge. 616 The High Court held that the Barge sank because of serious negligence of the railway employees and it was not a case of inevitable accident. The High Court also held that the railway did not take the care which it was required to take as a bailee. The High Court delivered the judgment on 13 April, 1966 and sent to the trial court for determination of the issue: "What is the amount for which the plaintiffs are entitled to a decree in this case?" One group of appeals is against the judgment of the High Court dated 13 April, 1966 which determined the liability. The Additional Subordinate Judge, Motihari, who tried the issue on remand by an order dated 10 September, 1966 gave decrees in favour of the respondent. The High Court by judgment dated 3 September, 1968 set aside the judgment and decree of the trial court on remand. The High Court awarded decrees in favour of the respondents. The second group of appeals is by certificate against the judgment of the High Court dated 3 September, 1968. One of the contentions raised before the High Court and repeated here is that the High Court should not have relied on an enquiry report into the accident. The High Court held that there was an enquiry under Rule 18 of the Rules made by the Railway Board. The High Court referred to sections 83 and 84 of the Railways Act. Section 83 provides that if there is any accident attended with loss of human life or grievous hurt or with serious injury to property, notice shall be given to various persons. Section 84 confers power on the Central Government to make Rules for several purposes including the purpose of prescribing the duties of railway servants, police officers, inspectors and Magistrates on the occurrence of an accident. Section 2 of the Indian Railway Board Act authorises the Central Government to invest the Railway Board with all or any of the powers or functions of the Central Government under the Railways Act. The Central Government authorised the Railway Board to make rules in pursuance of section 84 of the Railways Act. Rule 18 of the Railway Board Rules provides that whenever an accident has occurred in the course of working a Railway, the Agent or Manager shall cause an enquiry to be promptly made by a committee of railway officers (to be called a joint enquiry) for the thorough investigation of the cases which led to the accident. It is also provided in the rule that an enquiry may be dispensed with in certain cases. In the present case the enquiry was held by three officers. The enquiry report which is marked as Exhibit 9 was contended by the respondent to be admissible under sections 5, 7, 9 and 35 of the Evidence Act. The Railway contended that the report was a privileged document and further claimed that the enquiry was a private enquiry. The High Court rightly rejected both the contentions. First, the High Court held that no privilege had been claimed and there was no affidavit of the Minister in charge or the Secretary of the department to support a claim for privilege. The High Court 617 also referred to the fact that the report was called for by the Court of the Subordinate Judge at Gaya and the Railways did not claim any privilege there. Second, the High Court also rightly held that the enquiry report was admissible under sections 5, 7 and 9 of the Evidence Act. The High Court did not go into the question whether it was admissible under section 35 of the Evidence Act. The High Court further held that the Railways did not examine important witness, viz., the Commander of the ferry who was on the spot when the Barge was in trouble. The High Court held that the Railways suppressed important documents like the marine certificate and the stock register which would have given the life history and the capacity of the Barge. The High Court correctly drew adverse inference against the appellants for non production of important witness and important documents. The liability of the railway was that of a bailee. The consignments were booked at railway risk. The onus of proving that the railway employees took the necessary amount of care and that they were not guilty of negligence rested on the Railway Authorities. The High Court held that it was not a case of unavoidable accident and that the Barge sank because of gross negligence of railway employees and the railways did not take the amount of care which it was required to take as a bailee. The question of onus is not important when the entire evidence is before the Court. The High Court found that Rasul the Sarang of 'Chapra ' was responsible for the accident because he had failed to exercise proper judgment while manoeuvring his own vessel for the purpose of heaving up the anchor of Barge No. 6 and he failed to exercise initiative to save the barge by breaching it on the nearest char, instead of taking it to the Simariaghat goods jetty. The High Court also held that the Commander of the ferry found that he visited the steamer 'Samastipur ' and Barge No. 6 when there was difficulty in heaving the anchor of the barge and thereafter went away, leaving the matter entirely in the hands of the sarang. The High Court held that these officers were responsible for not staying on board until the barge was out of trouble. The High Court found that Barge No. 6 was very old. It was built in 1897. It underwent heavy repairs in 1953. The time of the accident was at about 2 20 p.m. on 7 September, 1955. "Samastipur" started towing the barge, went about a mile when the radius rod of Samastipur broke down. Radius rod is a part of the paddle by which a steamer is driven. The radius rod of Samastipur was repaired in due course. It then heaved up its anchor. The anchor of the barge could not be lifted. There was a danger whistle. Rasul, the Sarang of "Chapra" came with his steamer to the aid of Samastipur. Two officers Lall and Devia herein before mentioned left the matter in the hands of the three sarangs. Lall, the Commander of the Ferry was not examined. The Assistant Mechanical Engineer was examined. The High Court found that Rasul did not take the steamer and the barge to the Diara but took them to Simarighat. The steamer and the 618 barge reached jetty at Simariaghat. When the barge was about to be attached to the jetty, it sank. The High Court found that the strength of the current in the month of September was a known factor. The railway employees were used to ply the steamer and the barge between the two ghats during the month of September. The railway employees were found to equip themselves with appropriate appliances and necessary skill for the job of taking the barge across. The High Court found that there was no satisfactory explanation for the sinking of the barge. The High Court also found that there was no explanation why the anchor of the barge could not be lifted. According to the High Court, this might have been due to defective or insufficient appliance for haulage of the anchor. The High Court also found that there was no evidence to show that there was any unforeseen difficulty, by reason of which the anchor could not be heaved up. The fact that the anchor could not be lifted was held by the High Court to be on account of the negligence of the railway employees. The High Court also referred to the fact that the barge developed a big hole and there was no explanation how this happened. The High Court felt that this could be explained by assuming that Chapra pulled the barge in such a way as to make the anchor chain rub against the bottom plates of the barge so as to create the hole. The High Court found no other reasons because there is no suggestion that there was any submerged tree or stone, and the hole was caused because the barge accidentally struck against any such substance. Since the creation of the hole could not be attributed, according to the High Court to anything unforeseen, it was due to the negligence of the railway employees. The High Court further found that if the barge had been towed to the Diara, it could not sink. The water near the Diara must have been shallow so that the wagons upon the barge could not be submerged in the water near it. On the other hand, Rasul took the steamer and the barge to a much longer distance and the passage must have taken a considerable time. Besides, the water near the jetty was undoubtedly deep and the wagons were also submerged. The High Court on these findings correctly came to the conclusion that the barge sank because of the serious negligence of the railway employees and the railways did not take the care which it was required to take as a bailee. The High Court passed decrees awarding the respondents price of sugar and costs of damages and interest pendente lite and future interest. The appellant contended that the contract price should not have been awarded. The High Court said that the evidence of plaintiff 's witness Gaya Prasad showed the selling rate of sugar and there was no challenge to that evidence. The High Court found that the goods were despatched on 4 September, 1955. The barge sank on 7th September, 1955, and, therefore, the contract price would be the correct 619 measure of damages. The High Court on the facts and circumstances of the case found that the contract price would also be the same as the market price at that time. The market rate is a presumptive test because it is the general intention of the law that, in giving damage for breach of contract, the party complaining should, so far as it can be done by money, be placed in the same position as he would have been in if the contract had been performed. The rule as to market price is intended to secure only an indemnity to the purchaser. The market value is taken because it is presumed to be the true value of the goods to the purchaser. One of the principles for award of damages is that as far as possible he who has proved a breach of a bargain to supply what he has contracted to get is to be placed as far as money can do it, in as good a situation as if the contract had been performed. The fundamental basis thus is compensation for the pecuniary loss which naturally flows from the breach. Therefore, the principle is that as far as possible the injured party should be placed in as good a situation as if the contract had been performed. In other words, it is to provide Compensation for pecuniary loss which naturally flows from the breach. The High Court correctly applied these principles and adopted the contract price in the facts and circumstances of the case as the correct basis for compensation. For these reasons, the judgment of the High Court is affirmed. The appeals are dismissed with one set of costs. S.R. Appeals dismissed.

The non delivery of the goods booked by the respondent on September 5, 1955 to several destinations under "Railway Risk" due to the sinking of "Barge No. 6, carrying the wagons containing the goods" led to the filing of four suits which were dismissed by the Trial Court holding that the accident was not due to the negligence of the Railway employees. The High Court, accepting the appeal of the respondent by its judgment dated April 13, 1966 held that the sinking of Barge was not due to "inevitable accident" but due to the serious negligence of the Railway employees and their failure of duty to take due care which it was required to take as a bailee as revealed by their own Enquiry Committee held with reference to Ss. 83 and 84 of the Railways Act read with section 2 of the Indian Railways Board Act (4 of 1905) and rule 18 of the Railway Board Rules. The High Court remanded the suits for determination of the quantum of the decretal amount due to the respondent. The trial court after remand gave decrees in favour of the respondent on 10th September, 1966 without interest claimed up to the date of filing of the suit and interest "pendent lite". The High Court, on appeal by the respondent by its judgment dated 3 9 1968 allowed interest "pendent lite" and future interest at the rate of 4 1/2% per annum. Dismissing the two sets of appeal by the Union, one by Special Leave against the order dated 13 4 1966 determining the liability and another by certificate against the judgment dated 3 9 1968 awarding interest the High Court. ^ HELD: (1) The liability of the Railway was that of a bailee. The consignments were booked at Railway risk. The onus of proving that the Railway employees took the necessary amount of care and they were not guilty of negligence rested on the Railway Authorities. The question of onus is not important when the entire evidence is before the court. In the instant case there was no legal evidence to prove "inevitable accident" but suppression of important documents and non production of important witnesses in charge of the Barge. The Barge sank because of the serious and gross negligence of the railway employees and the railways did not take due care which it was required to take as a bailee. [617B D; 618F G] (II) The Enquiry Committee, in the instant case, is a Joint Enquiry, under the rules and the report is admissible under Ss. 5, 7 and 9 of the Evidence Act. The claim for privilege is not admissible because no such claim was made before the Courts below and there was no affidavit of the Minister incharge or the Secretary of the Department to support a claim for privilege. [616G H] (III) One of the principles for award of damages is that so far as possible he who has proved a breach of a bargain to supply what he has contracted to get is to be placed as far as money can do it, in as good a situation as if the contract had been performed. The fundamental basis thus is compensation for the pecuniary loss which naturally flows from the breach. Therefore, 615 the principle is that as far as possible the injured party should be placed in as good a situation if the contract has been performed. In other words, it is to provide compensation for the loss which naturally flows from the breach. The market rate is a presumptive test because it is the general intention of law that in giving damages for breach of contract, the party complaining should, so far as it can be by money, be placed in the same position as he would have been in if the contract had been performed. The rule as to market price is intended to secure only an indemnity to the purchaser. The market value is taken because it is presumed to be the true value of the goods to the purchaser. In the instant case, the High Court correctly applied these principles and adopted the contract price in the facts and circumstances of the case as the correct basis of compensation. [619 D]

vil Appeal No. 27(NM) of 1989. From the Judgment and Order dated 20.9.88 of the Government 817 Of India, Ministry of Industry, Department of Company Af fairs, Shastri Bhavan, New Delhi in No. 2/51/85 M II. Anil B. Divan, Nitin Thakkar, P.H. Parekh and section Dogra for the Appellant. Anil Dev Singh, H. Sharma, Sushma Suri, Harish Salve, Mohini Sud and Praveen Kumar for the Respondents. The Judgment of the Court was delivered by RANGANATHAN, J. 1. This appeal has been preferred under section 55 of the Monopolies & Restrictive Trade Practices Act ( 'the Act ') from an order of the Central Government (C.G.) dated 20.9.88. By the said order the C.G. granted an application made by respondent No. 1 (hereinafter referred to as 'the Modis ') under section 22 of the Act for permis sion to establish an undertaking for the manufacture of Ossein and Gelatine in the State of Rajasthan. The petition er, which claims to be an association of Ossein and Gelatin manufacturers in India, made representations before the C.G. objecting to the grant of the application by the Modis. These objections having been rejected and the application granted by the said order, the aggrieved petitioner has preferred this appeal. We admit the appeal and, having heard counsel on both sides, proceed to dispose of the appeal finally. The following contentions have been urged by Sri Divan in support of the appeal: (a) The order dated 20.9.88 is vitiated as it merely sets out the bald conclusion of the officer concerned. It is not a reasoned or well considered order. (b) The appellant had pointed out that the grant of permission to Modis would be against public interest. It would completely cripple the small scale business of the members Of the appellant association which, even earlier, had been functioning far below capacity due to insufficient supply of crushed bones. These objections had not been properly dealt with in the order. (c) The order has been passed by one Sri Vijayaraghavan whereas a personal oral hearing in the matter had been given by Sri S.S. Khosla. This has resulted in the violation of the fundamental rule of natural justice that "he who hears must decide". 818 (d) The hearing had taken place on 23.1.86 while the final order was passed more than two and half years later. This, coupled with the change in personnel referred to above, has resulted in the denial of natural justice to the petitioner. (e) Modis had stated in their application that bonemeal would be the raw material used by them but, later, they changed it into "crushed bones". The appellant had no opportunity of meeting the new case. (f) The representative of Modis had presented certain documents at the personal hearing but copies thereof had not been supplied to the appellant despite a grievance made by it the very next day. The appellant 's contentions broadly fall under two heads: one, the denial of natural justice and two, the failure to pass a reasoned order. It will be convenient to deal with the latter objection first. We are unable to accept the appellant 's contention that the impugned order is bald, unreasoned or cryptic and vio lates the requirements for such an order enunciated in the Oramco case , where this Court reaffirmed the following observations made in the Bombay Oil case ; "We must, however, impress upon the Government that while disposing of applications under Sections 21, 22 and 23 of the , it must give good reasons in support of its order and not merely state its bald conclusion. The faith of the people in administrative tribu nals can be sustained only if the tribunals act fairly and dispose of matters before them by well considered orders . . " The order of the Government is a detailed and elaborate one. It sets out the contentions and deals with them seriatim. The point made that existing units were already functioning below capacity due to insufficient supply of crushed bones and that the entry of the Modis into the arena would drive them out of business has not been overlooked. Only, as against this the Government has considered to be more weighty the economic advantages in granting the application of the Modis arising out of the circumstances: (a) that they would be setting up the industry in a backward area; (b) that they had categorically 819 undertaken to export at least 60% of their proposed produc tion; (c) that since they would be producing their own hydrochloric acid, the availability of such acid to others will not be affected; and (d) that the short supply of the raw material (crushed bones) may not be a constraint for permitting the manufacture of value added products like Ossein and Gelatine. The order bears testimony to the fact that the pros and cons have been fully considered and a decision taken. It is not within the province of the Courts to appraise the evidence or review the conclusion of the Government. The first branch of the argument of the counsel for the appellant, therefore, fails. On the issue of natural justice, we are satisfied that no prejudice has been caused to the appellant by any of the circumstances pointed out by the appellant. It is true that the order has been passed by an officer different from the one who heard the parties. However, the proceedings were not in the nature of formal judicial hearings. They were in the nature of meetings and full minutes were recorded of all the points discussed at each meeting. It has not been brought to our notice that any salient point urged by the petitioners has been missed. On the contrary, the order itself summa rises and deals with all the important objections of the petitioners. This circumstance has not, therefore, caused any prejudice to the petitioners. The delay in the passing of the order also does not, in the above circumstances, vitiate the order in the absence of any suggestion that there has been a change of circumstances in the interregnum brought to the notice of the authorities or that the author ity passing the order has forgotten to deal with any partic ular aspect by reason of such delay. The argument that the application of the Modis had referred to bonemeal as the raw material used and this was later changed to "crushed bones" is pointless because it is not disputed that all along the petitioners were aware that the reference to bonemeal was incorrect and that the Modis were going to use crushed bones in their project. The last contention that some documents were produced at the hearing by the Modis which the peti tioners could not deal with effectively is also without force as, admittedly, the assessee 's representatives were shown those documents but did not seek any time for consid ering them and countering their effect. There has, there fore, been in fact, no prejudice to the petitioners. They have had a fair hearing and the Government 's decision has been reached after considering all the pros and cons. We are unable to find any ground to interfere therewith. There was some discussion before us on a larger question as to whether the requirements of natural justice can be said to have been 820 complied with where the objections of parties are beard by one officer but the order is passed by another. Sri Salve, referring to certain passages in Local Government Board vs Alridge, ; Ridge vs Baldwin, ; ; Regina vs Race Relations Board, Ex parte Selvarajan, and in de Smith 's Judicial Review of Administra tive Action, Fourth Edn. p. 219 220 submitted that this was not necessarily so and that the contents of natural justice will vary with the nature of the enquiry, the object of the proceeding and whether the decision involved is an "institu tional" decision or one taken by an officer specially empow ered to do it. Sri Divan, on the other hand, pointed out that the majority judgment in Gullappalli Nageswara Rao vs APSR TC, [1959] Supp. 1 SCR 3 19 has disapproved of Al ridge 's case and that natural justice demands that the hearing and order should be by the same officer. This is a very interesting question and Alridge 's case has been dealt with by Wade (Administrative Law, 6th Edition at pp. 507 et seq.) We are of opinion that it is unnecessary to enter into a decision of this issue for the purposes of the present case. Here the issue is one of grant of approval by the Government and not any particular officer statutorily desig nated. It is also perfectly clear on the records that the officer who passed the order has taken full note of all the objections put forward by the petitioners. We are fully satisfied, therefore, that the requirements of natural justice have been fulfilled in the present case. For the reasons stated above, the appeal stands dismissed. No costs. G.N. Appeal dismissed.

Respondent No. 1 made an application to the Central Government for permission to establish an undertaking for the manufacture of Ossein and Gelatine in the State of Rajasthan. The appellant Association made representations before the Central Government objecting to the grant of the said application inter alia on the ground that it would cripple the small scale business of its members, who were already functioning far below capacity on account of short supply of crushed bones. The Central Government rejected the objections and granted the application of the Respondent, under section 22 of the , by its order dated 20.9.1988. Aggrieved by the said order, appellant association has preferred this appeal under section 55 of the MRTP Act. On behalf of the appellant, it was contended that the Central Government has failed to pass a reasoned order and has not followed the principles of natural justice. Dismissing the appeal, HELD: 1. The order of the Government is a detailed and elaborate one. It sets out the contentions and deals with them seriatim. The point made that existing units were already functioning below capacity due to insufficient supply of crushed bones and that the entry of the Respondent No. 1 into the arena would drive them out of business has not been overlooked. Only, as against this, the Government has considered to be more weighty the economic advantages in granting the application of Respondent No. 1 arising out of the circumstances that they would be setting up the industry in a backward area; that they had categorically undertaken to export at least 60% of their proposed pro 816 duction; that since they would be producing their own hydro chloric acid, the availability of such acid to others will not be affected; and that the short supply of the raw mate rial (crushed bones) may not be a constraint for permitting the manufacture of value added products like Ossein and Gelatine. The order bears testimony to the fact that the pros and cons have been fully considered and a decision taken. It is not within the province of the Courts to ap praise the evidence or review the conclusion of the Govern ment. [818G H; 819A B] Oramco Chemicals Pvt. Ltd. vs Gwalior Rayon Silk Manu facturing (Weaving) Company Ltd. & Anr., and Bombay Oil Industries vs Union of India, ; , referred to. In the instant case, requirements of natural justice have been fulfilled and no prejudice has been caused to the appellant. Of course the order has been passed by an officer different from the one who heard the parties. However, the proceedings were not in the nature of formal judicial hear ings. They were in the nature of meetings and full minutes were recorded of all the points discussed at each meeting. The order itself summarises and deals with all the important objections. The delay in the passing of the order also does not vitiate the order in the absence of any suggestion that there has been a change of circumstances in the interregnum brought to the notice of the authorities or that the author ity passing the order has forgotten to deal with any partic ular aspect by reason of such delay. The contention that the application of Respondent No. 1 had referred to bonemeal as the raw material used and this was later changed to 'crushed bones ' is pointless because it is not disputed that all along the appellant was aware that the reference to bonemeal was incorrect and that Respondent No. 1 was going to use crushed bones in the project. That some documents were produced at the hearing by Respondent No. 1 which the appel lant could not deal with effectively is also without force as, admittedly, the appellant 's representatives were shown those documents but they did not seek any time for consider ing them and countering their effect. Moreover, the issue is one of grant of approval by the Government and not any particular officer statutorily designated. It is also per fectly clear on the records that the officer who passed the order has taken full note of all the objections put forward by the petitioners. [819C H; 820A D]

appeal Nos. 1450 51 of 1993. From the Judgment and Order dated 16.7.92.of the Delhi High Court in Civil Writ Petition No. 1780 of 1992 and Civil Misc. No. 3485 of 1992. K.T.S. Tulsi, Addl. Solicitor General and S.N. Terdol for the Appellants. Kapil Sibal, Vikas Singh, L.R. Singh, Yunus Malik and Gopal Singh for the Respondents. The Judgment of the Court was delivered by R.M. SAHAI, J. Was there any valid justification for the appellants, the Union of India, to withhold the payment of subsidy to the respondents, the small scale manufacturers of fertiliser, is the main question that arises for consideration in this appeal directed against the judgment and order of the Delhi High Court? Two other questions that arise in this connection are if the High Court committed any error in exercise of its extraordinary jurisdiction to interfere at the stage of show cause and if a report prepared by the Project Development India Limited (in brief 'PDIL ') behind the back of the respondents could be relied for rejecting the specification of standard fertilizer produced by the respondents. Before adverting to these issues we consider it necessary to mention that the payment of subsidy to manufacturers of fertilisers was introduced in 1982 under a scheme framed by the Government of India in pursuance of which every manufacturer was required to give a written undertaking to the President of India. In 1985 Government of India issued a Fertilizer (Control) Order under the Essential Commodities Act. Sub clause (h) of Clause (2) of the order defines 'fertilizer ' to mean, any substance used or intended to be used as a fertiliser of the soil and/or crop and specified in Part A of Schedule I and includes a mixture of fertiliser, mixtures of micro nutrient fertilisers and special mixture of fertilisers '. Sub clause (q) of the same clause explains 'prescribed standard of fertilizer ' as under: "Prescribed standard" means (i) in relation to fertiliser included in Column 1 of Part A of 763 Schedule 1, the standard set out in the corresponding entry in Column 2, subject to the limits of permissible variation as specified in Part B of that Schedule; and (ii)in relation to a mixture of fertilisers, the standard set out in respect of that mixture under sub clause (1) of Clause 13 by the Central Government, subject to the limits of permissible variation as specified in Part B of Schedule 1; (iii)in relation to a [mixture of NPK fertilisers, mixture of micronutrient fertilisers and combination thereof], the standard set out in respect of that mixture under sub clause (2) of Clause 13 by the State Government, subject to limits of permissible variation as specified in Part B of Schedule 1.;" And standard specified of single super phosphate (SSP) sulphur manufactured by the respondents is described in Schedule I of the Order as under: "Single Super Phosphate Granulated) (i) Moisture, per cent by weight, maximum (ii) free phosphoric acid (as P 2 0 5) per cent by weight, maximum (iii) Water soluble phosphates (as P 205 per cent by weight , maximum (iv) Particle size Notless than 90 per cent of the material shall pass through 4 nun IS sieve and shall be retained on 1 mm IS sieve. Not more than 5 per cent shall pass through 1 mm IS sieve. " The Control Order further deals in detail with price control, distribution,restriction on manufacturers and sale etc. of fertiliser. Chapter VII deals with enforcement authorities. Paragraph 27 empowers the State Government and the Central Government to appoint inspectors of fertilisers. Paragraph 28 empowers the inspectors to secure compliance of the Order by requiring the wholesaler or retail dealer to give any information in his possession with respect to manufacture, draw samples of any fertiliser, enter upon and search any premises etc. How the sample has to be analysed has been provided by Schedule 11 of the Order. The basic raw material for manufacture of fertiliser is rock phosphate. There 764 are various mines spread all over the country from where these rocks are obtained. They are canalised through State mineral corporations. One of such mines is located in Hirapur in the State of Madhya Pradesh. The Government of the State requested the PDIL to undertake laboratory test of these rocks and submit a report for determining disability allowance payable to SSP producers. The conclusion o f the report is extracted below : "The world reserve of good quality rock phosphate is gradually depleting making the use of non standard and low grade phosphate, in the manufacture of phosphatic fertiliser as essential. In India, compared to other countries, the availability of usable quality rock phosphate is rather limited, though available in abundance. This study was made, at the request of Madhya pradesh Government with a view to effectively utilise, to the extent possible the lower grade indigenous rock phosphate from HIRAPUR MINES for SSP production. Experiments in PDIL laboratory has shown that this rock phosphate cannot be processed in the conventional route to produce SSP, as such, and it is imperative to make blends with any standard rock phosphate. The report establishes that the rock phosphate available in our country whether it is in Madhya Pradesh or Jaipur appears to be incapable of producing SSP unless it is blended with imported rock. Proportion of the two depends on the strength of rock obtained from different mines. The PDIL conducted the test for those rocks whose strength varied from 05 and 0 5 and opined that blending of rock with 24% should be in proportion of 20% and 80%. The extract from the report runs as under : "The chemical analysis has shown 24.85% P 2 0 5 and 30.03% Silica plus insoluble besides other impurities like high R 2 0 3 compared to 32.4% P 2 0 5, 4.56% Silica plus insoluble and 0.75% R2 03 in standard Jordon variety. Many proportions of blends were tried in laboratory to find out the optimum blend which would produce SSP of specification laid down by F.C.O. and finally it was concluded that a blend of 20% Hirapur rock matrix and 80 Senegal will be a suitable proportion. This was confirmed even in pilot plant trials where for a comparison purpose two blends were tested e.g. 30:70 and 20:80 for Hirapur, Senegal rock phosphates. There 765 was found from analytical results that 20:80 proportion was most suited. Accordingly study was concentrated towards this 20:80 Hirapur:Senegal blend. " We now turn to the various issues that arise in this case. Relying on these reports the subsidy Payable to the manufacturers was withheld and they were required by a letter dated 20th April 1990 to explain as to how they were able to achieve the standard specification. The letter reads as under: "It is generally observed from the quarterly cost date being submitted by your company that you are either using only low grade rock phosphate for manufacture the P2 05 content of which is less than 30%, or in large proportion thereof. Please therefore intimate how you are manufacturing SSP of standard specification i.e. of 16% P2 05 content, SSP as required under the specification laid down on the F. C. 0. " Both the assumptions in the letter were without any foundation. We shall examine it in detail later. It was at this stage that the manufacturers approached the High Court. They claimed that the fertiliser manufactured by them having been checked and verified by the inspectors appointed under the Control Order the opposite parties were not justified either in withholding the subsidy or issuing any notice. In the counter affidavit filed in the High Court the reason for issuing notice was explained as under: "That in reply to Paras 15 and 16 of the Petition, it is submitted that upto 1.4.1992 imported Rock Phosphate was being procured by the SSP units, including the petitioners through the Minerals & Metals reading Corporation (MMTC) which was a canalising agency. Rock Phosphate is also available through the State owned indigenous sources such as Rajasthan State Mineral Development Corporation (RSMDC), Rajasthan State Mines & Minerals Limited (RSMML), Uttar Pradesh State Minerals Development Corporation (UPSMDC), Madhya Pradesh State Mining Corporation (MPSMC) and Hindustan Zinc Limited (HZL), and SSP is manufactured by using rocks of standard grade. The quality of indigenous rock phosphate from the above mentioned State owned sources varies considerably from low grade rock of 14% to 16% P2 05 content to high degree rock of +3 1 % P2 05 content. For producing 766 SSP of 16% W.S. P2 05 the rock phosphate used should contain a minimum of +3 1% P2 05 and the conversion efficiency of the rock should be more than 9 1 %. SSP of 16% W.S. P2 05 can be produced by using low grade rocks only after suitably blending it with standard/high grade rock phosphate to have a feed conforming to the above mentioned minimum specifications of +31% P2 05. That in reply to Para 17 of the Petition it is submitted that indigenous rock phosphate is being procured by the SSP Units from Madhya Pradesh State Mining Corporation, Uttar Pradesh Sate Minerals Development Corporation, Rajasthan State Mining Development Corporation and Rajasthan Mines and Minerals limited. Since detailed technical examination of th e various grades of indigenous rock phosphate available from sources other than RSMML was not available, the SSP Units were informed that pending detailed technical examination, the prices of such indigenous, rock phosphate would be reimbursed at par with RSMML price for rock phosphate (having +3 1 % P2 05) on a provisional basis only. A copy of the circular letter issued by the Office of the FICC dated 29th September 1986 to all manufacturers of SSP is at Annexure 1. Subsequently, Projects and Development India Ltd (PDIL), Sindri, which is a Consultancy and R & D organisation for fertilisers in the public sector, which had conducted an evaluation of MPSMC Rock Phosphate of Hirapur and Jhabua Mines, submitted its report, which indicated that taking into account the P2 05 content and the impurities present in both Jhabua and Hirapur Rock, it is unsuitable to make SSP of 16% W.S. P2 05 content, unless it is blended with minimum of 7O% which grade imported Senegal rock with 30% low grade Jhabua rock and minimum of 80% high grade Senegal rock with 20% low grade Hirapur rock." After considering this a Division Bench of the High Court allowed the writ petition and issued a direction to the appellant to pay the subsidy which was payable to respondents after determining it in accordance with the terms of the scheme under which it was payable within the period specified in the order. The direction was issued as the Bench found that the basis for denying the subsidy was the report submitted by PDIL prepared behind the back of the manufacturers without issuing any notice to them or inviting their participation. After excluding the report the bench held that since the payment of subsidy was dependent on basis of laboratory reports furnished by the manufacturers and these reports had been furnished by 767 them and they had not been questioned at any time by the appropriate authorities it was not open to opposite parties either to withhold the subsidy or to initiate the proceedings by issuing show cause notices. To assail the finding on merits the learned Additional Solicitor General launched a two pronged attack. He urged that subsidy under the scheme of 1982 was payable only if the fertiliser conformed to specification of 16% water soluble phosphoric penta oxide. The learned counsel submitted that under the scheme the Department of Fertilisers was entitled to conduct survey and check the quality and the manufacturers were required to give an undertaking that they were to supply prescribed information along with the monthly claim for subsidy. According to learned counsel claim for subsidy. According to learned counsel under the said scheme a circular was issued on September 29, 1986 to all the manufacturers of SSP wherein it was clarified that the indigenous rock phosphate being obtained by the manufacturers from sources other than Udaipur was pending a detailed technical examination. He urged that the circular further stated that the prices were to be worked out on the basis of rock phosphate having plus 3 1% P2 05. Therefore, pending completion of detailed technical examination the subsidy worked out was provisional. Anti when the technical examination conducted by the PDIL indicated that on the admitted figures famished by the manufacturers in their quarterly invoices the standard specification could not have been achieved the notice were issued, therefore, the High Court was in error in quashing it. According to him it was open to the department to get it ascertained from an authentic source if the manufacturers of fertiliser were using proper material and achieving the specified standard. He urged that the PDIL being independent and reputed body it was not required to issued any show cause notice. We do not consider it necessary to express any opinion if the PDIL report could have been discarded for want of show cause notice or for being ex party as there are certain features about the report which obviate the necessity of considering its validity on this ground. From the counter affidavit filed by Managing Director of M/s Brij Fertilizers Pvt Ltd it appears that the manufacturers of SSP have been using rock phosphate which is of hard quality but in order to encourage use of indigenous rock phosphate and to avoid loss of foreign exchange the Government of Madhya Pradesh directed the PDIL laboratory to undertake laboratory test to find out the grade of phosphate from Hirapur mines to enable the manufacturers to claim disability allowance. The report, therefore, was not concerned with finding out whether any of the manufacturers who were engaged in producing fertilizer were doing so in accordance with standard provided in the Control Order. In the circumstances it may be that it was not necessary to issue any notice to the manufacturers. 768 Yet the question is, could it furnish material for rejecting the claim of respondents and withholding their subsidy? The learned Additional Solicitor General urged that the non release of subsidy was not based, solely, on report of PDIL but on basis of input cost data supplied by the manufacturers which indicated that on basis of analysis of raw material input provided by the respondents the manufacturers could not have produced SSP of 16% water soluble P2 05. This assumption appears to be unfounded for more than one reason. Under the Control Order there is a detailed procedure provided for carrying out test to find out if the fertiliser produced was of specified standard. It is not disputed that no such test as provided was ever carried by any authority. Rather the report submitted by the inspectors appointed under the Control Order, indicates that the fertiliser manufactured by the respondents was standard. We are not willing to accept the submission of the Additional Solicitor General that these reports were incorrect and have been obtained through the connivance of the official machinery. There is no material on record to indicate that the Government at any point of time doubted the correctness of there ports or initiated an proceedings against any inspector or any officer for it is not possible to draw an inference against the authenticity of the reports which have been given by the authority empowered under the order. It is not the claim of department that at any point of time prior to submission of the PDIL report any step was taken or the government ever required the inspectors to find out if the manufacture carried on by respondents was in accordance with law and rules. To discard the certificate issued by the inspector in the circumstances would be arbitrary without any valid reason. With this we may now examine the PDIL report itself. As has been seen earlier the purpose of getting the rock tested was to pay disability allowance. The purpose being entirely different it could not be utilised for a different purpose. How risky it is to embark on such exercise shall be clear when the result of report obtained by the PDIL is applied to the dates of respondents relied by appellant to justify their action of issuing show cause notice. From paragraph two of the conclusions of the PDIL, extracted earlier, it is clear that the study was made at the request of Madhya Pradesh Government with a view to effectively utilise to the extent possible the lower grade indigenous phosphate from Hirapur mines for SSP production. The report concludes, that experiments in PDIL laboratory has shown that this rock phosphate cannot be processed in the conventional route to produce SSP, as such, it is imperative to make blends with any standard rock phosphate. The objection of the department is not that the rock phosphate should not be blended with imported one but that on the proportion shown along with the strength of indigenous rock used the standard as provided could not have been 769 achieved. From the analysis of rock phosphate purchased by the manufacturers as per their invoices and attempt was made to demonstrate that if the figures mentioned therein were taken as correct and they are compared with the calculation given by the PDIL it would be clear that the standard specification could not have been achieved. It is necessary to mention at this stage that the rock phosphate found in Hirapur mines was of three grades. That is clear from the letter of Assistant General Manager, Mines to the Joint Director, Fertiliser Coordination Committee. Relevant part of the letter reads, "We were selling Hirapur Phosphorite for so many Fertiliser S.S.P. manufactures since starting of the mining and were never found any complaint regarding its suitability to manufacture SSP Fertiliser. We have learnt form Fertiliser Manufacturing Units that our Phosphorite is suitable for SSP Fertiliser manufacturing but in case of F0203 contents increases in Phosphorite the Wear and Tear of the plant increases. We had also been directed by Joint Director (F&A) FICC, vide their letter dated 31.8.89 to sale our Phosphorite in category 'A ' to SSP Units. This further certifies the suitability of our Phosphorite for SSP manufacturing of requisite grade. The material supplied to these units are of 32% category 'A ' and not 25% as given in PDIL report hence the question of blending with other Rock Phosphate does not require to Manufacture the requisite grade SSP. The M.P.S.M.C. was selling Hirapur Phosphorite in different percentages P2 05 grades and not in mix condition. Out grades and other specifications indicated as below: Before 5.3 1991 From 6.3. 1991 1.1st (A) 1st (A) P2 05 + 30%, Sio2 P2 05 + 29% 3 1 %, + 15%18% Sio2 + 15% 1 8% F0203 below 4.5% Fo203 below 24% A. +1/2" 2.1/2" Size A)+ 1/2"2. 1/2" size B. R.O.M. B. R.O.M. 2. 1st (B) 1st (B) P205+ 28% 30% PrO5 + 27% 29% Sio2 + 18% 770 Sio2+22% Fo203 F 203 above 4.5% above 4.5% A) 1/2" size A) 1/2" size B) R.0 M. B)R.O.M. C) By Product Dust 3. II Grade P205 + 22% 25% Sio2 and Fo2O3 No grantee. R.O.M." Further no rock phosphate has been or could be purchased by any manufacturer except through corporation of the State. This fact is admitted in the counter affidavit of the appellant extracted earlier. It is also clear from the letter of Assistant General Manager that Brij Fertilisers did not use any rock except Grade 'A '. It is claimed by the respondents that on a technical assessment conducted by Bhabha Research Institute for Lalitpur rocks that the water soluble in rock phosphate with P2 05 with 29 to 32% is more than 16%. Even if this report is ignored the letter of Assistant Mines Inspector establishes that water soluble phosphate in Hirapur mines of grade 'A ' was 16%. Each respondent has filed details of rock phosphate consumed by its unit from various corporations. The average grade mentioned is 3 1 %. Not one has used grade II. Even Avadh Fertiliser has not used rock phosphate below 27%. From the chart appended in respect of Hirapur mines the blending in proportion of 50% indigenous and 50% indicates that even with rock of 30.66% the water soluble actually was 17.57%. These figures could not be disputed in the reply filed on behalf of Union of India. From the PDIL report it is clear that it had undertaken test of rock with 24.85% P2 05 and 30.03% Silica and suggested that most suited blend with such rock was 20% indigenous and 80% imported. It could not furnish any guideline or material to reject the rock phosphate used by the respondents which varies between 27% P2 05 to 3 1 % P2 05. In absence of any reliable data or any material the inference drawn by the appellants in the notice was baseless. The counter affidavit filed in the High Court by the appellant did not explain the basis for concluding that for producing SSP of 16% or P2 05 the rock phosphate should contain a minimum of 3 1 % P2 05. It is contrary to the letter of Assistant General Manager Mines. In any case PDIL could not furnish any basis for it. In absence of any valid justification the entire exercise undertaken by the appellant was vitiated being tainted with arbitrariness. Failing in his effort to assail the order on merits the learned Additional Solicitor General vehemently urged that the department was not precluded form issuing show cause notice and requiring the manufacturers to appear and explain their claim. It was urged that the High Court was not justified in quashing the show 771 cause notice and issuing the directions for paying the subsidy without giving an opportunity to the department to verify if the respondents had in fact complied with Control Order. True, the High Court should normally not interfere at the stage of show cause notice. But where, from the facts it is apparent that there was no material available with the department to doubt the statement on behalf of the respondents and their own officers at every point of time had issued the certificate the correctness of ' which could not be disputed or doubted except by raising unfounded suspicion or drawing on imagination it would be failing to exercise jurisdiction if the Court does not discharge its constitutional obligation of protecting the manufacturers who, as is apparent from the counter affidavit filed in this Court and the various letters issued from different authorities are in perilous condition as they are not able to meet their liabilities to pay to financial institutions and various other authorities and are facing proceedings on various accounts and have virtually closed their unit. We are pained to say that the authorities did not realise either the purpose of granting subsidy or the harassment to which the manufacturers have been exposed. Entire litigation appears to he a sad plight for those who have set up small scale units in the hope that they will stand on their own on the subsidy given by the government as admittedly the price of manufacturing fertilizers is much more than the price fixed by the government for which it assured to pay subsidy. show cause notice issued by the appellants and issuing the directions to pay the subsidy. The appeals fail and are dismissed with costs which is assessed at Rs. 10,000 one set. U. R. Appeal dismissed.

The respondents were small scale manufactures of fertilizers. They were entitled to payment of subsidy on meeting prescribed standard in the manufacture of single super phosphate (SSP). The Government of Madhya Pradesh requested PDIL, a consultancy and R.& D Organisation, to test the rock phosphate at Hirapur mines for determining disability allowance payable to SSP producers. On the basis of this report, the payment of subsidy was withheld, and a show cause notice issued to the respondents. A writ petition filed in the High Court was allowed by a Division Bench which quashed the show cause notice and ordered that the subsidy be paid. It found that the PDIL report had been made without notice to the manufacturers or inviting their participation and that the laboratory report ; furnished by the manufacturers on which the payment (of subsidy was dependent had not been questioned. On appeal before this Court, the questions to be decided were whether the withholding of payment of subsidy to the respondent was justified; whether the High Court committed any error in interfering at the stage of show cause in exercise of its extraordinary jurisdiction; and whether tile report of PDIL, prepared behind the back of the respondents could be used to reject the standard fertilizer of the respondent. It was contended for the appellants that a detailed technical examination was pending and the subsidy worked out had on in been provisional, and that PDIL had carried out the examination. PDIL being independent and reputed, it was not required to here the manufacturers. Further, the non release of 761 subsidy was also on the basis of input cost data. It was urged that the High Court was not justified in quashing the show cause notice and issuing directions for paying the subsidy without giving the department an opportunity to verify if the respondents had in fact compiled with the Control Order. Dismissing the appeal, this Court HELD : 1. PDIL was engaged to rind out the grade of phosphate from Hirapur mines to enable the manufacturers to claim disability allowance, and not whether they were producing fertilizer in accordance with the standard provided in the Control Order. The purpose being entirely different, the report could not be utilised for a different purpose. (767 G) 2. There is no evidence to doubt the authority of the reports submitted by the inspectors appointed under the Control Order that the fertilizer produced was of specified standard. (768 B) 3. On facts, in the absence of any reliable data or any material the inference drawn by the appellants in the notice that the fertiliser was not of a specified standard was baseless. The entire exercise was therefore vitiated being tainted with arbitrariness. (770 F G) 4. The High Court should normally not interfere at the stage of show cause notice. But where, from the facts it is apparent that there was no material available with the department to doubt the statement on behalf of the respondent, it would be failing to exercise jurisdiction if the Court does not discharge its constitutional obligation of protecting the manufacturers who are in perilous condition as they are not able to meet their liabilities to pay to financial institutions and various other authorities and are facing proceedings on various counts and have virtually closed their unit. The authorities did not realise either the purpose of granting subsidy or the harassment to which the manufacturers have been exposed. Entire litigation appears to be a sad plight for those who have set up small scale units in the hope that they will stand on their own on the subsidy given by the Government as admittedly the price of manufacturing fertilisers is much more than the price fixed by the Government for which it assured to pay subsidy. (771 B D) 762

Civil Appeal No. 503 of 1978. Appeal by Special Leave from the Judgment and order dated )76 of the Punjab and Haryana High Court at Chandigarh in L.P.A. No. 484/74. section K. Mehta, J. section Chawla, P. N. Puri and P. Balakrishnan for the Appellant B;shamber Lal (for State) and Hardev Singh for the RR 1 4 and 6. 521 P. N. Lekhi and Girish Chandra for Respondent No. 17. The Judgment of the Court was delivered by CHANDRACHUD, C.J. The appellant, Gurdial Singh Fijji, was selected for the Punjab Civil Service (Executive Branch) in 1953 and was appointed as an Executive Magistrate on June 8, 1954. Respondents 8 to 15 are also members of the same Service, namely, the P.C.S., but they were selected and appointed to that Service after the appellant. They are all governed, in the matter of conditions of their service, by the Punjab Civil Service (Executive Branch) Rules 1930, as amended from time to time by the competent authority. The appellant was confirmed in the cadre on May 8, 1958 while respondents 8 to 15 were confirmed on diverse dates thereafter. In the gradation list circulated by the Government from time to time, respondents 8 to 15 were shown as junior to the appellant. In the year 1966, as a result of the reorganisation of the erst while State of Punjab, the appellant and respondents 8 to 16 were allocated to the State of Punjab. In 1966 67 an adverse entry was made in the confidential record of the appellant while he was working under one Shri Sewa Singh, District and Sessions Judge, Amritsar. That entry was communicated to the appellant whereupon, he made a representation against it but that has still not been disposed of, for one reason or another. The State Government forwarded the representation to Shri Sewa Singh, who declined to express his views upon it unless asked by the High Court to do so. Nothing further has been done in the matter and no decision has yet been taken on the question whether the adverse entry was justified and whether the various contentions raised by the appellant in his representation are well founded. The appellant worked in various capacities after 1966 67, earning good reports all along. He was permitted to cross the first efficiency bar under an order of the State Government dated June 14, 1966 and the second efficiency bar on July 20, 1971. By an order dated July 3, 1971 published in the Punjab Government Gazette on July 23, the Government promoted respondents 8 to 12 to the selection grade of the Punjab Civil Service cadre. Respondent 15 was similarly promoted on December 19, 1970, respondent 16 on January 1, 1971 and respondents 13 and 14 on July 27, 1971. On March 14, 1972, the appellant was also promoted to the selection grade with effect from January 15, 1972. He made a representation to the Government against the orders promoting res 522 pondents to the selection grade prior to him but it was rejected by an order dated June 20, 1973. A Committee consisting of respondents 2 to 7 was constituted under Regulation 3 of the Indian Administrative Service (Appointment by Promotion) Regulations 1955, for selecting persons from the Punjab Civil Service cadre for the purpose of bringing them on the select list of the Indian Administrative Service. The Committee held its meeting at Chandigarh on May 11, 1973 after which it prepared a list under Regulation 5 selecting respondent 9 for being brought on the select list for the purpose of promotion to the Indian Administrative Service. It would appear that the appellant 's name was not put on the select list since respondent 2, the Chief Secretary to the Government of Punjab, had refused to give an 'integrity certificate ' to him. Appellant made a representation against his non inclusion in the select list and that representation having been rejected, he filed a Writ Petition (No. 3315 of 1973) in the High Court of Punjab and Haryana, challenging the promotion of respondent to the selection grade, the refusal of the Chief Secretary to issue an 'integrity certificate ' to him and his non inclusion in the Select List of the Indian Administrative Service. The appellant 's Writ Petition was allowed partly by a learned single Judge of the High Court by his judgment dated August 19, 1974 whereby the order dated July 27, 1971 of the State Government granting seniority to two junior officers over the appellant in the selection grade was quashed. The learned Judge directed the State Government to reconsider the case of the appellant along with that of three other officers regarding the grant of selection grade with effect from June 25, 1971. The appellant filed a Letters Patent Appeal (No. 484 of 1974) against the decision of the learned Single Judge which was disposed of by the High Court on November 19, 1976. It was held in appeal that the requirement of Resolution No. 1.1 as regards the production of the 'integrity certificate ' was in the nature of a mere executive instruction, that it went beyond the scope of the statutory regulations, that the provision requiring the production of the 'integrity certificate ' was unguided and was likely to lead to arbitrariness and unreasonableness and that therefore, Resolution No. 1.1 was ultra vires of Regulations 4 and 5. The entire record of the Selection Committee was placed by the State Government before the High Court in the Letters Patent Appeal, from a perusal of which the High Court came to the conclusion that the decision of the 523 Commttee not to include the appellant 's name in the Select List was not based solely on the ground that he was unable to produce the integrity certificate and that the Committee had given another cogent reason for its decision viz., that the appellant was not suitable for being placed on the Select List otherwise also. Since inclusion in the select list for the purposes of promotion to the Indian Administrative Service was to be made on the basis of merit cum seniority, the Committee, according to the High Court, was justified in not including the name of the appellant in that list if, in its opinion, he was not otherwise suitable. The Letters Patent Appeal was accordingly dismissed by the High Court, against which the appellant has filed this appeal by special leave. We will first deal with the question whether resolution No. 1.1. is ultra vires regulations 4 and 5 of the Indian Administrative Service (Appointment by Promotion) Regulations, 1955. These regulations aree framed by the Central Government in pursuance of sub rule 1 of rule 8 of the Indian Administrative Service (Recruitment) Rules, 1954 in consultation with the State Governments and the Union Public Service Commission. Regulations 3 to 7 provide for bringing members of the State Civil Service on the select list for promotion to the Indian Administrative Service. Regulation 3 deals with the constitution of the committee for making selections. Regulation 4 which deals with conditions of eligibility for promotion provides that each committee shall meet at intervals, ordinarily not exceeding one year, and consider the cases of all substantive members of State Civil Service who on the first day of January of that year had completed not less than eight years of continuous service, whether officiating or substantive, in a post of Deputy Collector or any other post or posts declared equivalent thereto by the Government. By Clause (2) of regulation 4, the committee shall not ordinarily consider the cases of members of the State Civil Service who have attained the age of 52 years on the first day of January of the year in which the meeting of the committee is held, provided that a member of the State Civil Service whose name appears in the select list in force immediately before the date of the meeting of the committee shall be considered for inclusion in the fresh list to be prepared by the committee, even if in the meanwhile he has attained the age of 52 years. Regulation 5 reads thus: "5. Preparation of a list of suitable officers (1) The committee shall prepare a list of such members of the State Civil Service as satisfy the condition 524 specified in regulation 4 and as are held by the committee to be suitable for promotion to the service. The number of members of the State Civil Service included in the list shall not be more than twice the number of substantive vacancies anticipated in the course of the period of twelve months commenceing from the date of the preparation of the list, in the posts available for them under rule 9 of the recruitment rules or 10 per cent of the senior duty posts borne on the cadre of the State or group of States whichever is greater: Provided that in the year ending on the 31st December, 1969, the maxmimum limit, imposed by this sub regulation, may be exceeded to such extent as may be determined by the Central Government in consultation with the State Government concerned. (2) The selection for inclusion in such list shall be based on merit and suitablity in all respects with due regard to seniority. (3) The names of the officers included in the list shall be arranged in order of seniority in the State Civil Service: Provided that any junior officer who in the opinion of the committee is of exceptional merit and suitability may be assigned a place in the list higher than that of officers senior to him. (4) The list so prepared shall be reviewed and revised every year. (5) If in the process of selection, review or revision it is proposed to supersede any member of the State Civil Service, the Committee shall record its reasons for the proposed supersession. " The All India Services Manual, Part II, which is issued under the authority of the Government of India, Cabinet Secretariat, (Department of Personnel and Administrative Reforms), sets out under appropriate regulations the "Government of India 's Decisions" which are, for convenience, referred to by the High Court as "resolutions". 525 Resolution 1.1 which incorporates a decision taken by the Government of India reads thus: "1.1. On the basis of the recommendations of the Committee on the Prevention of Corruption, it has been decided that the following certificate should be recorded by the Chief Secretary to the State Government who is the sponsoring authority in respect of all eligible officers whose cases are placed before the Selection Committee for consideration: "The State Government certify the integrity of Shri with reference to the entries in his annual confidential reports". Resolution 1.2 which is on the same subject says: "1.2. The Selection Committee should also consider the question of suitability of the officers for selection with reference to their integrity and should specifically record in their proceedings that they were satisfied from the remarks in the confidential reports of the officers, selected by them for inclusion in the Select List, that there was nothing against their integrity. " The learned Single Judge of the High Court rejected the appellant 's contention that resolution 1.1 is ultra vires of regulations 4 and 5. The Letters Patent Bench of the High Court different from him and quashed the resolution, observing: "Regulations 3 to 7 are self contained regulations prescribing the whole procedure for the constitution of the selection committee, qualifications for the eligibility, preparation of list of suitable candidates etc. It is evident from the plain reading of these regulations that integrity certificate is not the requirement for eligibility for promotion. Integrity certificate is the requirement of resolution 1.1 which is only an executive instruction. The regulations are quite detailed and the whole mode of selection is given and merit cum seniority is the main basis for bringing the persons on the select list. It is nowhere laid down in the regulations that integrity certificate is also required for eligibility for promotion. Hence this requirement under the executive instruction goes counter to the statutory regulations. It has put restrictions and limitations on the committee in its discretion. Moreover, it is nowhere laid down as to how the integrity certificate is to be issued. No 526 criteria is mentioned in resolution 1.1. No guideline is provided. Hence it can lead to arbitrariness and unreasonableness in certain cases. . I have, therefore, no hesitation in holding that resolution 1.1 contravenes the regulations, which cannot legally be sustained and is struck down as ultra vires of regulations 4 and 5. " We find it impossible to sustain this conclusion and are of the opinion that the learned Single Judge of the High Court was right in upholding the validity of resolution 1.1 on the ground that it is not inconsistent with any of the regulations. Clause (2) of Regulation 5 provides that selection for inclusion in the Select List shall be based on merit and suitability in all respects, with due regard to seniority. In other words, the test for inclusion in the Select List is merit cum seniority. Neither the Indian Administrative Service (Recruitment) Rules, 1954 under which the Regulations are framed nor indeed the provisions of the All India Services Act, 61 of 1951, under which the Rules are made, furnish any guidelines for assessing merit or suitability of a candidate for inclusion in the Select List or provide for the consideration of any particular data before a candidate can be brought on the Select List. Every executive authority is charged with the obligation of organising its services so as to ensure maximum efficiency. The ideal of maximum efficiency cannot be achieved unless persons who are selected for public offices possess integrity in as high a measure as ability. Integrity is indeed the sine qua non of merit and suitability: no person can be considered as possessing merit and suitability if he lacks in character and integrity. If, as provided by Regulation 5, selection for inclusion in the Select List has to be based on merit and suitability in all respects, and the Rules and Regulations do not furnish guidelines for a proper assessment of these requirements, the government would have the power to prescribe the criteria for determining whether the requirements are fulfilled by any particular candidate. The prescription of the Regulation for inclusion in the Select List is merit cum seniority. The executive decision which is contained in resolutions 1.1 and 1.2 effectuates the purpose of that prescription. Undoubtedly the government in the exercise of its executive authority cannot supersede a statutory rule or regulation but it can certainly effectuate the purpose of a rule or regualtion by supplementing it. Resolution 1.2 provides that the Selection Committee should consider the question of suitability of officers with reference to their integrity and should specifically record in its proceedings, that it is satisfied from the remarks in the confidential reports of the officers selected by it for inclusion in the Select List, 527 that there was nothing against their integrity. Resolution 1.1 requires the Chief Secretary of the concerned State Government, who is the sponsoring authority, to record a certificate in respect of all eligible officers, whose cases are placed before the Selection Committee for consideration, that the State Government certifies the integrity of the officers with reference to the entries in their annual confidential reports. These resolutions of the Government of India do not transgress the requirement of the Regulations but are in furtherance thereof. The circumstance that the Chief Secretary has to record a certificate does not confer upon him unguided or unfettered discretion to assess the integrity of the officers by granting or refusing the integrity certificate at his sweet will. The State Government has to certify the integrity of the eligible candidate "with reference to the entries in his annual confidential reports". We are, therefore, quite clear that the Letters Patent Bench of the High Court was in error in striking down resolution 1.1 as being ultra vires of Regulation 5. Both the resolutions 1.1 and 1.2, are in our opinion within the scope of the Regulations and are valid. Though the High Court was of the opinion that Resolution 1.1 is ultra vires of Regulation 5, it did not quash the decision of the Selection Committee because, having perused the record and proceedings of the Selection Committee (which were made available to it during the hearing of the Letters Patent Appeal), it found that the non selection of the appellant was not based solely on the ground that the Chief Secretary had not issued an integrity certificate in his favour. The proceedings of the Selection Committee, according to the High Court, disclosed that the appellant was not selected for the reason also that he was "not found suitable otherwise". The course adopted by the High Court has cause to the appellant an amount of injustice which has to be rectified. It is clear that the Chief Secretary, Punjab, did not grant integrity certificate in favour of the appellant because of the adverse report in his confidential roll for the year 1966 67. One of the reasons which evidently weighed with the Selection Committee in not putting the appellant 's name on the Select List was that the Chief Secretary had not issued the integrity certificate in his favour. Thus, the non inclusion of appellant 's name in the Select List and the non issuance of the integrity certificate are closely linked, whether or not there was another reason also for which the Selection Committee kept him out from the Select List. 528 In so far as the non issuance of the integrity certificate is concerned, it is undisputed that its only justification is the adverse report in the confidential roll of the appellant for the year 1966 67. The circumstances surrounding the adverse entry may therefore bear examination for seeing whether such preponderating importance could, on the facts to which we will immediately advert, be given to the particular entry. The counter affidavit filed on behalf of the Government of Punjab by Shri Phuman Singh, Under Secretary in the services department, shows that after the adverse remarks were communicated to the appellant, he submitted a representation requesting that the remarks be expunged. That representation was referred by the Government to Shri Sewa Singh, retired District and Sessions Judge, who had made the particular remarks. Shri Sewa Singh desired that the reference which was made to him by the Government should be routed through the High Court. The Government then made a reference to the High Court of Punjab and Haryana requesting it to obtain the comments of Shri Sewa Singh. The High Court replied that it was not its practice to call for comments of District and Sessions Judges on the representation of an officer against whom adverse remarks were made. The High Court was once again requested by the Government that the Chief Justice and the Judges may communicate their views to the Government on the representation made by the appellant. As the High Court did not express its view, the Government asked the appellant to submit a detailed representation along with documentary evidence in order to show that the adverse entry was made mala fide as alleged by him. The appellant submitted his representation again on December 19, 1971, as desired by the Government. After a detailed examination of that representation, it was decided by the Government that since the comments of the Reporting Officer of the High Court on the representation made by the appellant were not available, which was necessary for the proper disposal of the representation, a suitable note may be placed on the appellant 's character roll alongwith the confidential report for the year 1966 67. An attested copy of that note is annexed to Shri Phuman Singh 's affidavit as annexure 1. After setting out the facts and circumstances narrated above, that note says that in the absence of necessary comments of the authority concerned, it was not possible for the Government to take any decision on the merits of the representation made by the appellant. The principle is well settled that in accordance with the rules of natural justice, an adverse report in a confidential roll cannot be 529 acted upon to deny promotional opportunities unless it is communicated to the person concerned so that he has an opportunity to improve his work and conduct or to explain the circumstances leading to the report. Such an opportunity is not an empty formality, its object, partially, being to enable the superior authorities to decide on a consideration of the explanation offered by the person concerned, whether the adverse report is justified. Unfortunately, for one reason or another, not arising out of any fault on the part of the appellant, though the adverse report was communicated to him, the Government has not been able to consider his explanation and decide whether the report was justified. In these circumstances, it is difficult to support the non issuance of the integrity certificate to the appellant. The chain of reaction began with the adverse report and the infirmity in the link of causation is that no one has yet decided whether that report was justified. We cannot speculate, in the absence of a proper pleading, whether the appellant was not found suitable otherwise, that is to say, for reasons other than those connected with the non issuance of an integrity certificate to him. We may also indicate, since the High Court saw the file and discovered that the appellant was not brought on the Select List because he was "not found suitable otherwise", that regulation 5 which deals with the preparation of a list of suitable officers provides by clause 7 that "if in the process of selection, review or revision it is proposed to supersede any member of the State Civil Service, the Committee shall record its reasons for the proposed supersession". While dealing with an identical provision in clause 5 of regulation 5 of the same Regulations as they stood then, this Court observed in Union of India vs Mohan Lal Capoor & Others(1) that "rubberstamp" reasons given for the supersession of each officer to the effect that the record of the officer concerned was not such as to justify his appointment "at this stage in preference to those selected", do not amount to "reasons for the proposed supersession" within the meaning of clause 5. "Reasons", according to Beg J. (with whom Mathew J. concurred) "are the links between the materials on which certain conclusions are based and the actual conclusions". The Court accordingly held that the mandatory provisions of regulation 5(5) were not complied with by the Selection Committee. That an officer was "not found suitable" is the conclusion and not a reason in support of the decision to supersede him. True, that it is not expected that the Selection Committee should give anything approaching the judgment of a Court, but it must at least state, as 530 briefly as it may, why it came to the conclusion that the officer concerned was found to be not suitable for inclusion in the Select List. In the absence of any such reason, we are unable to agree with the High Court that the Selection Committee had another "reason" for not bringing the appellant on the Select List. In matters of this nature, particularly when the Select Lists have to be prepared and reviewed from year to year, it becomes difficult to work out the logical consequences of holding that the case of any particular officer ought to be reconsidered. But, inevitably, for reasons mentioned above, the case of the appellant shall have to be considered afresh by the Selection Committee. How best to do it has to be left to its wise discretion in the matter of details, but in order to eliminate, in so far as one may, chance of yet another litigation we ought to indicate the broad frame work within which the Committee should act and the preliminary steps which the Government must take in order to facilitate the Committee 's task. In the first place, the State Government shall consider and dispose of within two months from to day the representations made by the appellant on January 23, 1969 and December 19, 1971 in regard to the adverse report in his confidential roll, for the year 1966 67. We are hopeful that the High Court will co operate with the Government in the disposal of the representations. The Selection Committee will, within three months thereafter, decide whether the appellant should be included in the Select List as of May 11, 1973. That question has to be decided in accordance with the relevant regulations by applying the test of merit and suitability cum seniority. For deciding the question of appellant 's merit and suitability, the Selection Committee will take into consideration the Government 's decision on his representations and his service record up to date. If the Committee decides that he is not suitable for inclusion in the Select List and should therefore be superseded, it shall record its reasons for the proposed supersession. If, on the other hand, the Committee decides to include his name in the Select List, he will be entitled to rank in that list in accordance with his seniority as of May 11, 1973 unless, in the opinion of the Committee, there is a junior officer of exceptional merit and suitability who may be assigned a higher place. The Selection Committee will review the list for 1973 in accordance with these directions. The Union Public Service Commission will thereafter be consulted in accordance with the regulations. The Select List as finally approved by the Commission will form the Select List of the members of the State Civil Service. 531 We may indicate that the Writ Petition filed by the appellant and his appeal to this Court cannot be considered to have become infructuous on the ground that the Union Public Service Commission has already approved of the Select List. The learned Single Judge of the High Court had stayed the final publication of the list by his order dated September 24, 1973 and had directed by his order dated February 11, 1974 in C.M. 994 of 1974 that the publication of the Select List will be subject to the result of the Writ Petition. With these modification, the appeal is allowed but there will be no order as to costs. N.V.K. Appeal allowed.

The Indian Administrative Service (Appointment by Promotion) Regulations, 1955 formulates the procedure for selecting persons from the State Civil Service Cadre for the purpose of bringing them on the select list of the Indian Administrative Service. Regulation 5 which deals with the preparation of the list of suitable officers provides by cl. (2) that the selection for inclusion in such list shall be based on merit and suitability in all respects with due regard to seniority, while cl. (5) provides that if it is proposed to supersede any member of the State Civil Service, the Selection Committee shall record its reasons for the proposed supersession. The "Government of India 's Decisions" under the regulations have been published by the Govt. in the All India Services Manual, Part II. Resolution 1.1 requires the Chief Secretary to the State Government who is the sponsoring authority to record a certificate in respect of every eligible officer whose case is placed before the Selection Committee, that the State Government certifies the integrity of the officer with reference to the entries in his annual confidential reports. Resolution 1.2 provides that the Selection Committee should specifically record in its proceedings that it is satisfied from the remarks in the confidential reports of the officers selected by it for inclusion in the Select List that there was nothing against their integrity. The appellant and respondents 8 to 15 were members of the Punjab Civil Service (Executive Branch), the respondents being junior to the appellant. In 1966 67, an adverse entry was recorded in the confidential report of the appellant by the District and Sessions Judge. No decision was taken by the Government as to whether the adverse entry was justified and whether the contentions raised by the appellant in his representation to the same were well founded. After 1966 67, the appellant worked in various capacities, earned good reports and was allowed to cross the first and second efficiency bars. However, respondents 8 to 15 were promoted to the selection grade of the service prior to the appellant. His representation in this regard was rejected by the Government. Respondents 2 to 7 who constituted the committee for selecting persons from the Punjab Civil Service cadre for the purpose of bringing them on the select list of the Indian Administrative Service, selected respondent No. 9. The 519 Appellent 's name was not put on the select list, since respondent No. 2, the Chief Secretary to the State Govt. had refused to give an 'integrity certificate ' to him. His representation against the non inclusion having been rejected, he approached the High Court. The High Court rejected the appellant 's contention that resolution 1.1 was ultra vires of regulations 4 and 5; but quashed the order of the State Government granting seniority to two junior officers over the appellant in the selection grade. In appeal by the appellant, the High Court held that it is nowhere laid down that integrity certificate is the requirement for eligibility for promotion. Integrity certificate is the requirement of resolution 1.1 which is only an executive instruction. No criteria is mentioned, nor guidelines provided as to how the integrity certificate is to be issued. The executive instruction, therefore, went beyond the scope of the statutory regulation, the provision requiring the production of the integrity certificate was unguided and was likely to lead to arbitrariness and unreasonableness and that therefore resolution 1.1 was ultra vires of regulations 4 and 5. The High Court held further that the records of the Selection Committee reveal that the decision not to include the appellant 's name in the select list was not based solely on the ground of non availability of the integrity certificate and that the Committee had given another cogent reason, that the appellant was not suitable otherwise also Allowing the further appeal to this Court, ^ HELD: 1. (i) The Letters Patent Bench of the High Court was in error in striking down, resolution 1.1 as being ultra vires of regulation 5. Both resolutions 1.1 and 1.2 are within the regulations and are valid. [527 C] (ii) Under cl. (2) of Regulation 5 selection for inclusion in the select list has to be based on merit and suitability in all respects with due regard to seniority. Neither the 1954 Rules nor the 1951 Act furnish any guidelines for assessing merit and suitability. The Government would therefore, have the power to prescribe the criteria for determining whether the requirements of merit and suitability are fulfilled by any particular candidate, The Executive decision which is contained in resolution 1.1 and 1.2 effectuates the purpose of that prescription. [526 C, F, G] (iii) The Government in the exercise of its executive authority cannot supersede a statutory rule or regulation but it can certainly effectuate the purpose of a rule or regulation by supplementing it. These resolutions of the Government of India do not transgress the requirement of the Regulations but are in furtherance thereof. It, therefore, cannot be stated that the Chief Secretary had been conferred with an unguided or unfettered discretion to assess the integrity of the officers by granting or refusing the integrity certificate at his sweet will. [526 H, 527 B] (iv) Every Executive Authority is charged with the obligation of organising its services so as to ensure maximum efficiency. The idea of maximum efficiency cannot be achieved unless persons who are selected for public offices possess integrity in as high a measure as ability. Integrity is, therefore, the sine qua non of merit and suitability. No person can be considered as possessing merit and suitability if he lacks in character and integrity. [526 E] 520 2. One of the reasons which evidently weighed with the Selection Committee in not putting the appellant 's name on the select list was that the Chief Secretary had not issued the integrity certificate in his favour. The non inclusion of appellant 's name in the select list and the non issuance of the integrity certificate are thus closely linked, whether or not there was another reason also for which the Selection Committee kept him out from the select list. [527 G H] 3. An adverse report in a confidential roll cannot be acted upon to deny promotional opportunities unless it is communicated to the person concerned so that he has an opportunity to improve his work and conduct or to explain the circumstances leading to the report. Such an opportunity is not an empty formality, its object, partially, being to enable the supeurior authorities to decide on a consideration of the explanation offered by the person concerned, whether the adverse report is justified. [528 H 529 B] In the instant case for one reson or another not arising out of any fault on the part of the appellant though the adverse report was communicated to him the Government has not been able to consider his explanation and decide whether the report was justified. In such circumstances it is difficult to support the non issuance of the integrity certificate to him. The chain of reaction began with the advese report and the infirmity in the link of causation is that no one has yet decided whether that report was justified. [529 C] 4. In the absence of a proper pleading it cannot be speculated that the appellant was not found suitable for reasons other than those connected with the non issuance of an integrity certificate to him. [529 D] 5. The High Court saw the file and discovered that the appellant was not brought on the select list because he was 'not found suitable otherwise '. Regulation 5(7) provides that the Committee shall record its reasons if it is proposed to supersede any member of the State Civil Service. That an officer was "not found suitable" is the conclusion and not a reason in support of the decision to supersede him. In the absence of any reason, this Court cannot agree with the High Court that the Selection Committee had another "reason" for not bringing the appellant on the select list. [529 E, G, 530 A] [Directed that the case of the appellant be considered afresh by the Selection Committee indicating the broad frame work within which the Committee should act and the preliminary steps the Government should take in order to facilitate the Committee 's task.] Union of India vs Mohan Lal Capoor & Ors., ; referred to.

78 and 79 of 1950. Application under article 32 of the Constitution of India for a writ of mandamus. G.N. Joshi, for the petitioners. S.M. Sikri, for the respondent. November 8. The judgment 0 the Court was delivered by MAHAJAN J. These two applications for enforcement of the fundamental right guaranteed under article 19 (1) (g) of the Constitution of India have been made by a proprietor and an employee respectively of a bidi manufacturing concern of District Sagar (State of Madhya Pradesh). It is contended that the law in force in the State authorizing it to prohib it the manufacture of bidis in certain villages including the one 761 wherein the applicants reside is inconsistent with the provisions of Part III of the Constitution and is conse quently void. The Central Provinces and Berar Regulation of Manufac ture of Bidis (Agricultural Purposes) Act, LXIV of 1948, was passed on 19th October 1948 and was the law in force in the State at the commencement of the Constitution. Sections 3 and 4 of the Act are in these terms; " 3. The Deputy Commissioner may by notification fix a period to be an agricultural season with respect to such villages as may be specified therein. (1) The Deputy Commissioner may, by general order which shall extend to such villages as he may specify, prohibit the manufacture of bidis during the agricultural season. (2) No person residing in a village specified in such order shall during the agricultural season engage himself in the manufacture of bidis, and no manufacturer shall during the said season employ any person for the manufacture of bidis. " On the 13th June 1950 an order was issued by the Deputy Commissioner of Sagar under the provisions of the Act for bidding all persons residing in certain villages from engag ing in the manufacture of bidis. On the 19th June 1950 these two petitions were presented to this Court under article 32 of the Constitution challenging the validity of the order as it prejudicially affected the petitioners ' right of freedom of occupation and business. During the pendency of the petitions the season mentioned in the order of the 13th June ran out. A fresh order for the ensuing agricultural season 8th October to 18th November 1950 was issued on 29th September 1950 in the same terms. This order was also challenged in a supplementary petition. Article 19 (1) (g) runs as follows : "All citizens shall have the right to practise any profession, or to carry on any occupation, trade or busi ness. " 762 The article guarantees freedom of occupation and busi ness. The freedom guaranteed herein is, however, subject to the limitations imposed by clause (6) of article 19. That clause is in these terms : "Nothing in sub clause (g) of the said clause shall affect the operation of any existing law in so far as it imposes, or prevent the State from making any law imposing, in the interests of the general public, reasonable restric tions on the exercise of the right conferred by the said sub clause, and, in particular, nothing in the said sub clause shall affect the operation of any existing law in so far as it prescribes or empowers any authority to prescribe, or prevent the State from making any law prescribing or empowering any authority to prescribe, the professional or technical qualifications necessary for practising any pro fession or carrying on any occupation, trade or business. " The point for consideration in these applications is whether the Central Provinces and Berar Act LXIV of 1948 comes within the ambit of this saving clause or is in excess of its provisions. The learned counsel for the petitioners contends that the impugned Act does not impose reasonable restrictions on the exercise of the fundamental right in the interests of the general public but totally negatives it. In order to judge the validity of this contention it is neces sary to examine the impugned Act and some of its provisions. In the preamble to the Act, it is stated that it has been enacted to provide measures for the supply of adequate labour for agricultural purposes in bidi manufacturing areas. Sections 3 and 4 cited above empower the Deputy Commissioner to prohibit the manufacture of bidis during the agricultural season. The contravention of any of these provisions is made punishable by section 7 of the Act, the penalty being imprisonment for a term which may extend to six months or with fine or with both. It was enacted to help in the grow more food campaign and for the purpose of bring ing under the plough considerable areas of fallow land. The question for decision is whether the statute under the guise of protecting public interests arbitrarily 763 interferes with private business and imposes unreasonable and unnecessarily restrictive regulations upon lawful occupation; in other words, whether the total prohibition of carrying on the business of manufacture of bidis within the agricultural season amounts to a reasonable restriction on the fundamental rights mentioned in article 19 (1) (g) of the Constitution. Unless it is shown that there is a reason able relation of the provisions of the Act to the purpose in view, the right of freedom of occupation and business cannot be curtailed by it. The phrase "reasonable restriction" connotes that the limitation imposed on a person in enjoyment of the right should not be arbitrary or of an excessive nature, beyond what is required in the interests of the public. The word "reasonable" implies intelligent care and deliberation, that is, the choice of a course which reason dictates. Legisla tion which arbitrarily or excessively invades the right cannot be said to contain the quality of reasonableness and unless it strikes a proper balance between the freedom guaranteed in article 19 (1) (g) and the social control permitted by clause (6) of article 19, it must be held to be wanting in that quality. Clause (6) in the concluding paragraph particularizes certain instances of the nature of the restrictions that were in the mind of the constitution makers and which have the quality of reasonableness. They afford a guide to the interpretation of the clause and illustrate the extent and nature of the restrictions which according to the statute could be imposed on the freedom guaranteed in clause (g). The statute in substance and effect suspends altogether the right mentioned in article 19 (1) (g) during the agri cultural seasons and such suspension may lead to such dislocation of the industry as to prove its ultimate ruin. The object of the statute is to provide measures for the supply of adequate labour for agricultural purposes in bidi manufacturing areas of the Province and it could well be achieved by legislation restraining the employment of agri cultural labour in the manufacture 764 of bidis during the agricultural season. Even in point of time a restriction may well have been reasonable if it amounted to a regulation of the hours of work in the busi ness. Such legislation though it would limit the field for recruiting persons for the manufacture of bidis and regulate the hours of the working of the industry, would not have amounted to a complete stoppage of the business of manufac ture and might well have been within the ambit of clause (6). The effect of the provisions of the Act, however, has no reasonable relation to the object in view but is so drastic in scope that it goes much in excess of that object. Not only are the provisions of the statute in excess of the requirements of the case but the language employed prohibits a manufacturer of bidis from employing any person m his business, no matter wherever that person may be residing. In other words, a manufacturer of bidis residing in this area cannot import labour from neighbouring places in the district or province or from outside the province. Such a prohibition on the face of it is of an arbitrary nature inasmuch as it has no relation whatsoever to the object which the legislation seeks to achieve and as such cannot be said to be a reasonable restriction on the exercise of the right. Further the statute seeks to prohibit all persons residing in the notified villages during the agricultural season from engaging themselves in the manufacture of bidis. It cannot be denied that there would be a number of infirm and disabled persons, a number of children, old women and petty shop keepers residing in these villages who are inca pable of being used for agricultural labour. All such persons are prohibited by law from engaging themselves in the manufacture of bidis; and are thus being deprived of earning their livelihood. It is a matter of common knowledge that there are certain classes of persons residing in every village who do not engage in agricultural operations. They and their womenfolk and children in their leisure hours supplement their income by engaging themselves in bidi business. There seems no reason for prohibiting them from carrying on this occupation, The statute as 765 it stands, not only compels those who can be engaged in agricultural work from not taking to other avocations, but it also prohibits persons who have no connection or relation to agricultural operations from engaging in the business of bidi making and thus earning their livelihood. These provi sions of the statute, in our opinion, cannot be said to amount to reasonable restrictions on the right of the appli cants and that being so, the statute is not in conformity with the provisions of Part III of the Constitution. The law even to the extent that it could be said to authorize the imposition of restrictions in regard to agricultural labour cannot be held valid because the language employed is wide enough to cover restrictions both within and without the limits of constitutionally permissible legislative action affecting the right. So long as the possibility of its being applied for purposes not sanctioned by the Consti tution cannot be ruled out, it must be held to be wholly void. Mr. Sikri for the Government of Madhya Pradesh contends that the legislature of Madhya Pradesh was the proper judge of the reasonableness of the restrictions imposed by the statute, that that legislature alone knew the conditions prevailing in the State and it alone could say what kind of legislation could effectively achieve the end in view and would help in the grow more food campaign and would help for bringing in fallow land under the plough and that this Court sitting at this great distance could not judge by its own yardstick of reason whether the restrictions imposed in the circumstances of the case were reasonable or not. This argument runs counter to the clear provisions of the Con stitution. The determination by the legislature of what constitutes a reasonable restriction is not final or conclu sive;it is subject to the supervision by this Court. In the matter of fundamental rights, the Supreme Court watches and guards the rights guaranteed by the Constitution and in exercising its functions it has the power to set aside an Act of the Legislature if it is in violation of the freedoms guaranteed by the Constitution. We are therefore of opinion 98 766 that the impugned statute does not stand the test of reason ableness and is therefore void. The result therefore is that the orders issued by the Deputy Commissioner on 13th June 1950 and 26th September 1950 are void, inoperative and ineffective. We therefore direct the respondents not to enforce the provisions con tained in section 4 of the Act against the petitioners in any manner whatsoever. The petitioners will have their costs of these proceedings in the two petitions. Petitions allowed. Agent for the petitioners in Nos. 78 and 79: Rajinder Narain. Agent for the respondent in Nos. 78 and 79: P.A. Mehta.

The Central Provinces and Berar Regulation of Manufac ture of Bidis (Agricultural Purposes) Act, LXIV of 1948, a law which was in force at the commencement of the Constitu tion of India, provided that" the Deputy Commissioner may by notification fix a period to be an agricultural season with respect to such villages as may be specified therein" and that "the Deputy Commissioner may by general order which shall extend to such villages as he may specify, prohibit the manufacture of bidis during the agricultural season. " The Act provided further that" no person residing in a, village specified in such order shall during the agricultur al season engage himself in the manufacture of bidis, and no manufacturer shall during the said season employ any person for the manufacture of bidis." An order was issued by the Deputy Commissioner under the provisions of the Act forbid ding all persons residing in certain villages from engaging in the manufacture of bidis during a. particular season. A manufacturer of bidis and an employee in a bidi factory residing in one of the said villages applied under article 32 of the Constitution for a writ of mandamus alleging that since the Act prohibited the petitioners from exercising their fundamental right to carry on their trade or business which was guaranteed to them by cl. (1) (g) of article 19 of the Constitution, the Act was void: Held, (i) that the object of the statute, namely, to provide measures for the supply of adequate labour for agricultural purposes in bidi manufacturing areas of the Province could well have been achieved by legislation re straining the employment of agricultural labour in the manufacture of bidis during the agriculrural season without prohibiting altogether the manufacture of bidis. As the provisions of the Act had no reasonable relation 760 to the object in view, the Act was not a law imposing "reasonable restrictions" within the meaning of cl. (6) of Art 19 and was therefore void. (ii) The law even to the extent that it could be said to authorize the imposition of restrictions in regard to agri cultural labour cannot be held to be valid because the language employed was wide enough to cover restrictions both within and without the limits of constitutionally permissi ble legislative action affecting the right, and so long as the possibility of its being applied for purposes not sanc tioned by the Constitution cannot be ruled out, it must be held to be wholly void. The phrase "reasonable restriction" connotes that the limitation imposed on a person in enjoyment of the right should not be arbitrary or of an excessive nature, beyond what is required in the interests of the public. The word "reasonable" implies intelligent care and deliberation, that is, the choice of a course which reason dictates. Legisla tion which arbitrarily or excessively invades the right cannot be said to contain the quality of reasonableness and unless it strikes a proper balance between the freedom guarnteed in article 19 (1) (g) and the social control permit ted by el. (6) of article 19, it must be held to be wanting in that quality. Held also, that the determination by the Legislature of what constitutes a reasonable restriction is not final and conclusive. The Supreme Court has power to consider whether the restrictions imposed by the Legislature are reasonable within the meaning of article 19, cl. (6) and to declare the law void if in its opinion the restrictions are not reasonable.

ivil Appeal No. 855 of 1978. 186 From the Judgment and Order dated 21.3. 1978 of the Rajasthan High Court in S.B. Civil Second Appeal No. 59 of 1978. Tapas Ray, Sushil Kumar Jain, Sudhanshu Atrey and L.C. Agrawalas for the Appellant. G.L. Sanghi, Parmod Dayal, A.D. Sangar, Ajay K. Jain and K.K. Jain for the Respondent. The Judgment of the Court was delivered by NATARAJAN, J. This appeal by special leave is by a tenant and is directed against the judgment of the High Court of Rajasthan in Civil Second Appeal No. 59 of 1978 confirming the judgment of the Appellate Court whereby the appellant was held liable to be evicted from the premises leased to him by the respondent on the ground of having parted with the possession of the premises. C.M.P. No. 906 of 1973 has been filed by the respondent under Order 41 Rule 27 C.P.C. for certain documents being received as additional evidence. In so far as the facts are concerned, there is no con troversy whatever. In January 1963, the appellant took on lease from the respondent a building situate in Rasta Ka Gheewalan in the city of Jaipur. In the Deed of Rent execut ed by the appellant, there was an express provision that he should not sublet the premises to anyone. However, in March 1968, a social club known as the Lokpriya Social Club came to be opened in the premises and the members of the club began using the premises for playing cards, chopar, chess etc. every evening till about midnight or even till 1 a.m. The functioning of the club in the premises led to the respondent filing a suit against the appellant seeking his eviction on two grounds viz. (1) sub letting the premises contrary to the terms of the lease deed and (2) conversion of the user of the premises from residential to non residen tial purposes. As it has been concurrently held by the first two courts that the premises had not been leased for resi dential purposes, no further advertance is called for to the second ground on which the eviction was sought for. As regards the first ground, the appellant did not dispute but on the other hand admitted the factum of the Lokpriya Social Club being opened in the leased premises in March 1968 and the club functioning 187 in the premises since then. He however contened that he had neither sublet for rent nor otherwise parted with the pos session of the premises to the club. His case was that he continued to have possession of the premises for doing business in gold jewellery and cloth on commission basis in a small portion of the building but being the founder of the club, he had provided the club a room to have its office and a hall for the club members to assemble and play games such as cards, chess, chopar etc. In the trial of the suit, the respondent examined him self and an Assistant in the office of the Registrar of Companies as witnesses on his side. The appellant examined himself and three other witnesses on his side to substanti ate his contentions. The Trial Court held that the respondent had failed to prove that the appellant had sublet the premises to the Lokpriya Social Club for rent and that the evidence only warranted an inference that the appellant had allowed the club to use the premises as a licencee and as such, the appellant was not liable to be evicted. The Appellate Court, while concurring with the Trial Court that the evidence did not establish any subletting of the premises for rent, nevertheless held that there were adequate materials to hold that the appellant had parted with the possession of the premises in favour of the club and such parting of posses sion would amount to subletting within the meaning of the Act and as such the appellant was liable to be evicted. Consequently, the Appellate Court passed a decree for evic tion against the appellant. The Second Appeal to the High Court by the appellant did not meet with success and hence he has approached this Court by way of appeal by special leave. Since the first ground on which eviction was sought for was the subletting of the premises to the Lokpriya Social Club, the question whether the appellant was receiving any rent or not from the club had loomed large in the proceed ings before the Trial Court and the Appellate Court. The appellant 's categoric stand that he was not receiving any rent from the Club and his permitting the club to use the premises was not for any monetary return could not be dis lodged by the respondent by specific materials. However, after the appellant had filed this appeal, the respondent has been able to obtain copies of the Managing Committee 's reports, balance sheets and auditor 's reports of the club for the years 1968 to 1976. It is relevant to mention here that the club has been registered as a limited company under the Indian . As a registered company, it had to prepare audited balance 188 sheets every year and present the same together with the Auditor 's Report to the members of the club and have the same approved. The respondent seeks permission of the Court to have the Managing Committee 's reports, the Auditor 's Reports and the balance sheets filed as additional evidence in the appeal and for that purpose he has filed CMP No. 906/79 under Order 41 Rule 27 C.P.C. The learned counsel for the appellant vehemently opposed the filing of additional documents by the respondent as additional evidence on the ground these documents ought to have been filed before the trial court or the Appellate Court and hence they cannot be filed now. It was also contended that if additional docu ments are received in evidence at this stage, the appellant will have no opportunity to adduce contraevidence. We will take up the question whether CMP No. 906/79 should be al lowed or not for consideration later. We will first examine whether even without these documents the order of eviction passed by the Appellate Court and confirmed by the High Court can be sustained or not. It may be recalled that the decree for eviction against the appellant has been passed on the ground that though subletting of the premises for rent has not been proved, yet the appellant must be held to have parted with possession of a portion of the premises to the club and such parting with possession would attract Section 13(1)(e) of the Rajasthan Premises (Control of Rent & Eviction) Act, 1950 (for short the Act). On a reading of sub clause(e) of Section 13(1), it is seen that a tenant will render himself liable for evic tion if he has "assigned, sublet or otherwise parted with the possession of, the whole or any part of the premises without the permission of landlord." Consequently even if a tenant parts with possession of the whole or any part of the premises without assigning or subletting the premises, he would still be liable to be evicted from the premises under the Act. If from this perspective, the user of the premises by the club is examined, it can certainly be held that the appellant had parted with the possession of the premises as envisaged in clause (e) of sub section 1 of Section 13. This conclusion is warranted by several factors. Admittedly, when the club began to function in the leased premises, a name board carrying the name of the Club came to be exhibited in the premises. It is also admitted that the members of the club assemble at the premises everyday and play cards and other indoor games from evening till about midnight. Though the appellant would say that the club members cannot have access to the premises unless he or in his absence his brother or son opens the premises, there is no evidence to show that the appellant had at any time exercised his right to exclusive 189 possession and kept the premises locked and denied the members of the club entry to the premises. That apart there is a significant fact which has escaped the notice of the Appellate Court and the High Court viz that the club has its registered office at the leased premises. Section 146 of the Indian enjoins every company to have a regis tered office to which all communications and notices may be addressed. Once a company has a registered office it is bound to comply with several provisions of the , viz. (a) the register of members is to be kept there (Section 163; (b) the right of inspection has to take place there (Section 163); (c) the register of directions, etc., is also to be kept there (Section 303): (d) the account books are to be maintained there unless the directors decide otherwise (Section 20): (e) the register of mortgages and charges and copies of registered documents are also to be kept there (Section 143); and the right of inspection of them is to be exercised there (Section 144). (f) service of documents should be effected there. These requirements of the Act have to be complied with by the club by virtue of its registered office being situated in the leased premises. The appellant cannot prevent the club from performing its statutory duties so long as the club has its registered office in the premises. Hence this factor also warrants the view that the appellant had parted with possession of the major portion of the premises to the club. In such circum stances we see no merit in the contention of the appellant that the user of a portion of the premises by the club is only of a permissive nature and that there was no parting with possession of the premises to the club. The Appellate Court and the High Court were therefore, right in holding that the user of the premises by the club would amount to the appellant having parted with possession of a portion of the premises" as contemplated under Section 13(1)(e) of the Act. Learned counsel for the appellant referred us to Smt. Rajbir Kaur & Anr. vs M/s. section Chokesiri & Co., JT and argued that even if the appellant had conferred rights of exclusive possession to the club over a portion of the leased premises, the club would not be a sub lessee but only a licencee of the appellant. We are unable to accept this argument because of various factors. In the first place, in Smt. Rajbir Kaur, (supra) it was clearly found that in the documents which had been brought about between the parties. the occupants were inducted into possession only as licencees and not as lessees. Secondly, the case arose under the East Punjab Rent Restriction Act in which Section 13 refers only to a tenant transferring his right under the lease or subletting the entire building or any portion thereof whereas in Section 13(1)(e) of the Rajasthan Premises (Control 190 of Rent and Eviction) Act with which we are concerned, there is reference to a tenant assigning, subletting or otherwise parting with the possession of the whole or any part of the premises without the permission of the landlord. In such circumstances, the judgment in Smt. Rajbir Kaur & Anr., (supra) cannot be of any avail to the appellant. Coming now to C.M.P. No. 906/79 filed by the respondent for receiving certain documents as additional evidence, we have already stated that these documents consist of the reports of the Managing Committee, the balance sheets and the auditor 's reports for the years 1968 to 1976. Though there are as many as 25 documents filed along with the application they really constitute 8 sets of documents pertaining to the period 1963 to 1976 except for the year 1969. The purpose of filing these documents is to show that in each of the years in question it has been stated in the auditor 's report that the rent of the club premises has not been determined and provided for as the matter is under litigation. Mr. Sanghi, learned counsel for the respondent submitted that the explanation given in the auditor 's re ports for provision not having been made in the balance sheet for payment of rent by the club was not because the club had been allowed free user of the premises without payment of rent but because there was litigation regarding the user of the premises by the club. The further argument was that the auditor 's report clearly showed that the club was bound to pay rent to the appellant for the user of the premises but such payment was being deferred in view of the pendency of the eviction suit between the respondent and the appellant. Mr. Sanghi stated that there cannot be any objec tion to the additional documents being received in evidence because they were reports and balance sheets submitted by the club, of which the appellant is a member, to the Regis trar of Companies and hence there is no question of the appellant being taken by surprise by the contents of the documents. On the other hand, the learned counsel for the appellant vehemently contended that the respondent is not entitled under law to file documents by way of additional evidence at this belated stage of matters because the docu ments were in existence even when the parties went to trial before the Trial Court and as such the respondent should have acted diligently and either summoned for the documents from the office of the Registrar of Companies or obtained copies of them and filed them in Court during the trial or atleast when the matter was before the first Appellate Court. On a consideration of the matter we think the objections raised 191 by the appellant 's counsel for the filing of additional evidence by the respondent in the appeal proceedings before us merits acceptance. It is true that the documents sought to be filed by way of additional evidence are indisputably the audited balance sheets and reports submitted by the club but even so the fact remains that all the documents could have been obtained and filed by the respondent before the Trial Court itself since the judgment had been rendered by the Trial Court only on 22.2. Even if the respondent was not able to file the documents before the Trial Court, he could have filed the documents before the Appellate Court and sought its permission to file them as additional evi dence. Even before the High Court there was no attempt in this behalf. No satisfactory explanation has been offered by the respondent for having failed to produce the documents before the Courts below or the High Court. In such circum stances, we see no justification to allow C.M.P. No. 906/79 and permit the respondent to file the documents in question as additional evidence in the proceedings. Accordingly C.M.P. No. 906/79 is dismissed. In spite of the dismissal of C.M.P. No. 906/79, since we have sustained the view taken by the first Appellate Court and the High Court that the appellant had parted with pos session of a major portion of the leased premises in favour of the Lokpriya Social Club and such parting with possession would attract the operation of Section 13( 1 )(e) of the Act, we find no merit in the appeal and accordingly it will stand dismissed. The appellant is, however, given three months time from today to vacate and deliver vacant posses sion of the premises to the respondent subject to his filing an undertaking in the usual terms within a period of four weeks from today. There will be no order as to costs. R.S.S. Appeal & Petition dismissed.

The appellant/tenant took on lease a building from the respondent. In the Deed of Rent there was an express provi sion that the tenant should not sublet the premises to anyone. However, shortly thereafter a social club came to be opened in the premises, where members played cards, chess etc. every evening till about midnight. The respondent thereupon filed. a suit against the tenant seeking his eviction inter alia on the ground of sub letting the prem ises contrary to the terms of the lease deed. The tenant admitted the factum of the opening of the club but contended that he had neither sublet the premises for rent nor other wise parted with its possession to the club. The Trial Court held that the respondent had failed to prove that the appellant had sublet the premises to the Club for rent, and that the evidence only warranted an inference that the appellant had allowed the club to use the premises as a licencee and as such, the appellant was not liable to be evicted. The Appellate Court held that the evidence did not establish any subletting of the premises for rent, but nevertheless there were adequate materials to hold that the appellant had parted with the possession of the premises in favour of the club and such parting of possession would amount to subletting within the meaning of section 13(1)(e) of the Rajasthan Premises (Control of Rent & Eviction) Act, 1950 and as such the appellant was liable to be evicted. Consequently, the Appellate Court passed a decree for evic tion. The High Court dismissed the second appeal of the appellant. After the filing of the appeal in this Court the re spondent filed a civil miscellaneous petition seeking per mission to produce certain documents in the nature of the Auditor 's reports and the Managing Committee 's reports of the club as additional evidence to establish that 185 there existed a stipulation for the payment of rent by the club to the appellant, and the club was bound to pay rent to the appellant for the user of the premises, but such payment was being deferred in view of the pendency of the eviction suit between the respondent and the appellant. Dismissing the appeal and the civil miscellaneous peti tion, the Court, HELD: (1) On a reading of sub clause (e) of Section 13(1) it is seen that a tenant will render himself liable for eviction if he has "assigned, sublet or otherwise parted with the possession of, the whole or any part of the prem ises without the permission of landlord. " Consequently, even if a tenant parts with possession of the whole or any part of the premises without assigning or subletting the prem ises, he would still be liable to be evicted from the prem ises under the Act. If from this perspective the user of the premises by the club is examined, it can certainly be held that the appellant had parted with the possession of the premises as envisaged in clause (e) of sub section (1) of section 13. [188E G] (2) There is no evidence to show that the appellant had at any time exercised his right to exclusive possession and kept the premises locked and denied the members of the club entry to the premises. [188H; 189A] (3) Section 146 of the Companies Act enjoins every company to have a registered office and certain requirements of the Companies Act have to be complied with by the club by virtue of its registered office being situated in the leased premises. The appellant cannot prevent the club from per forming its statutory duties so long as the club has its registered office in the premises. [189B, D] Smt. Rajbir Kaur vs M/s. section Chokesiri & Co., JT 1988(3) SC 593, distinguished. (4) The additional documents could have been obtained and filed before the Trial Court, the Appellate Court or the High Court and no satisfactory explanation has been offered for having failed to do so. Hence there is no justification to allow the civil miscellaneous petition. [191 C]

ivil Appeal No. 1351 of 1976. From the Judgment and Order dated 24.11. 1975 of the Andhra Pradesh High Court in A.S. No. 691 of 1972. T.V.S.N. Chari for the Appellant. A. Subba Rao and A.D.N. Rao for the Respondents. The Judgment of the Court was delivered by K. RAMASWAMY, J. This appeal by special leave arises against the Division Bench judgment dated November 24, 1975 in A.S. No. 691 of 1972 of the A.P. High Court fixing the market value @ Rs. I0 per square yard. The facts lie in a short compass are stated thereunder. By notification under section 4(1) of the Land Acquisition Act 1894 (in short 'the Act ') was published in the State Gazette on November 21, 1963 to acquire 5 acres 589 1/3 sq. yards in T.S. No. 981, Block No. 34 of Waitair Ward, Vishakapatnam for a housing scheme. The Collector 475 awarded at Rs. 1.58 per sq. yard and on reference, the Civil Court enhanced the compensation to Rs. 10 per sq. yard with solatium at 15 per cent and interest at 4 per cent. The respondent claimed @ Rs. 12 per sq. yard. On appeal and cross appeals the High Court confirmed the award and dis missed the appeal as well as cross objections for enhance ment to Rs. 12 per sq. yard. Two contentions have been raised by Shri Narsimahachari, the learned counsel for the appellant. Under exhibit B. 6 dated August 3, 1961; under exhibit B 7 dated Sept. 5, 1961 and exhibit B 8, dated Sept. 8, 1961 the respondent purchased one acre 1936 sq. yards in each docu ments in the same T.S. No. 981 @ 0.42 p. per sq. yard. He sold on January 24, 1963 in an extent of one acre under exhibit B. 10 @ Rs.5 per sq. yard. Therefore, ' the aforesaid sale deeds, exhibit B. 6, B. 7, B. 8 and B. 10 will reflect the prevailing market value of the land in question. The Trial Court and the High Court committed grievous error in placing reliance on a decision of the High Court in A.S. No. 191 of 1967 dated November 11, 1970 awarding @ Rs. 10 per sq. yard in respect of 6,209 sq. yards in T.S. No. 1008, Block No. 39, Waitair Beach Road which was acquired under a notifica tion dated March 19, 1961 for the purpose of Caltex Oil Refinery. The price fixed therein does not reflect the correct market value while the bona fide sale deed of pur chase and sale by the respondents relating to the acquired land are available on records and form correct basis. The courts below committed grave error of law in completely excluding those sale transactions and relying upon that judgment. We find force in the contention, though Shri Subba Rao, learned counsel for the respondent vehemently resisted, it. It is settled law by catena of decisions that the market value postulated in section 23(1) of the Act designed to award just and fair compensation for the lands acquired. The word "market value" would postulate price of the land prevailing on the date of the publication of the notification under section 4(1). This Court repeatedly laid the acid test that in determining the market value of the land, the price which a willing vendor might reasonably expect to obtain from a willing purchaser would form the basis to fix the market value. For ascertaining the market rate, the Court can rely upon such transactions which would offer a reasonable basis to fix the price. The price paid in sale or purchase of the land acquired within a reasonable time from the date of the acquisition of the land in question would be the best piece of evidence. In its absence the price paid for a land pos sessing similar advantages to the land in the neighbourhood of the land acquired in or about the time of the notifica tion would supply the data to assess the market value. It is not necessary to cite all the decisions suffice to state that in a recent judgment in Periya & Pareekanni Rubbers Ltd. vs State of Kerala, [1990] Supp. 1 SCR 476 362 a bench of this Court, to which one of us K.R.S., J., was a member surveyed all the relevant precedents touching the points. In the light of the settled legal position let us consider whether the High Court and the Civil Court are justified in excluding the sale deeds completely and to place reliance on another judgment of the Division Bench of the High Court of A.P. Admittedly, the claimant is a vendee in exhibit B. 6 to B. 8 @ 0.42 paise. In a span of one year and four months, they sold @ Rs.5 per sq. yard; It is common knowledge that proposal for acquisition would be known to everyone in the neighbourhood, in particular, to the owners of the property and it is not uncommon that sale transac tions would be brought into existence before the publication of section 4(1) notification so as to form the basis to lay higher claim for compensation. We do assume that exhibit B. 10 is a genuine and bona fide sale transaction. In respect of one acre of the land in the self same land when sold at Rs.5 per sq. yard, would it fetch in a short period of nine months, double the market value, namely. @ Rs. 10 per sq. yard. We have no doubt that it would not get that price for 5 acres and odd area. It is undoubted that in respect of a notification of 1961 in which another T.S. number in the locality, namely, T.S. No. 1008, ultimately, the High Court awarded @ Rs. 10 per sq. yard. Perhaps had there been no bona fide or genuine sale transaction relating to the self same land, the reliance placed on that judgment may be justified but exclusion of bona fide and genuine sale trans actions in respect of the same land under acquisition and to place reliance on the award of some other land is obviously illegal. When the claimants themselves sold as a willing seller of an acre of land @ Rs.5 per sq. yard large extent of five acres and odd under acquisition, if it is offered to be sold as a block, it would not fetch higher rate but surely be negotiated for a lesser rate if not the same market value @ Rs.5 due to time lag of nine months. No attempt was made by the respondent to explain under what circumstances they came to sell their lands @ Rs.5 per sq. yard when they expect higher value @ Rs. 10 per sq. yard. May be the payment of Rs. 10 per sq. yard, be wind fall to the owner of the land in T.S. No. 1008 Taking the totality of the facts and circumstance, we hold that the High Court committed grave error to completely ignore the sale transac tions of the lands under acquisition. In view of the time lag we have no hesitation to conclude that the prevailing market value of the land as on the date of the notification would be Rs.6 per sq. yard. It is next contended by Shri Narsimahachari that when a large extent of land was acquired for a housing scheme, at least 1/3 of the land should be deducted towards laying the roads, setting up parks, 477 drainage and other amenities. The High Court committed manifest error in omitting to deduct 1/3 of the land. Shri Subba Rao, the learned counsel for the respondent contended that the High Court had noted this contention of the appellant and considered that the market value of the land would be Rs. 12 per sq. yard and after giving the deduction of 1/3 it would come to Rs. 10. The reasoning of the High Court is proper and warrants no interference. In support thereof he placed reliance in Spl. Tehsildar, Visha kapatnam vs Rednam Dharma Rao & Ors., C.A. No 4187 of 1982, dated July 17, 1990 wherein this Court had upheld the deduc tion of 1/5 from the market value towards developmental charges. It is settled law that the High Court and the Reference court when made wrong application of a principle or important points effecting valuation has been over looked or misapplied, this Court would under article 136 correct the same, vide The Spl. Land Acquisition Officer, Bangalore vs T. Adinarayan Setty, [1959] Suppl. 1 S.C.R. 404; Dattatrayaya Shankarbhat Ambalgi and Ors. vs The Collector of Sholapur and Anr., AiR 3 S.C.C. 431; The Dollar Co., Madras vs Collector of Madras, [1975] Supp. SCC 403 and Padma Uppal Etc. vs State of Punjab & Ors. , ; In Tribeni Devi & Ors. vs Collector of Ranchi, ; at 2 13, this Court held that "in order to devel op that area at least the value of 1/3 of the land will have to be deducted for roads, drainage and other amenities". On this basis the value of the land at Rs.2,08,135.70 per acre would, after the deduction of 1/3 come to Rs. 1,38,757 per acre. In Smt. Kaushalya Devi Bogre & Ors. vs The Land Acquisition Officer, Aurangabad; , this Court held that deduction of 1/3 was held to be reasonable. In Vijay Kumar Motilal vs State of Maharashtra, 19 i/3rd was deducted towards developmental charges in undeveloped area. In Vijaysingh Liladhar vs Special Land Acquisition Officer, the deduction of i/4th by the High Court which was not challenged in this court was upehld. In Spl. Land Acquisition Officer, Bangalore vs T. Adinarayan Setty, supra, deduction of 25 per cent was held to be reasonable. It is to be noted that in building Regula tions, setting apart the lands for development of roads, drainage and other amenties like electricity etc. are condi tion precedent to approve lay out for building colonies. Therefore, based upon the situation of the land and the need for development the deduction shall be made. Where acquired land is in the midst of already developed land with ameni ties of roads, drainage, electricity etc. then deduction of 1/3 would not be justified. In the 478 rural areas housing schemes relating to weaker sections deduction 1/4 may be justified. On that basis, this court in R. Dharma Rao 's case upheld deduction of 1/5 because the owner while obtaining the lay out had already set apart lands for road and drainage. Therefore, deduction of 1/3 would be reasonable. In fact in The Tehsildar, Land Acquisi tion, Vishakapatnam vs P. Narasing Rao & Ors., , a Division Bench of the High Court surveyed judgments of the High Court relating to housing schemes of Vishakapatnam upholding deduction of 1/3 to be reasonable. Accordingly we hold that 1/3 of the market value should be deducted for development of the lands. The High Court com mitted greivous error in giving a curious reasoning of valuing at Rs. 12 and upholding Rs. I0 to be the market value after deduction, though *.he market value was deter mined at Rs. 10. Accordingly the appeal is allowed. The market value is determined at Rs.6 per sq. yard and after deducting 1/3 the market value is Rs.4 per sq. yard. The respondents are entitled to 15 per cent Solatium on market value and 4 per cent interest thereon from the date of dispossession. But in the circumstances parties are directed to pay and receive their own costs. N.P.V. Appeal al lowed.

The respondent 's land admeasuring 5 acres 589 1/3 Sq. yards was acquired by the State Government in 1963 for a housing scheme and compensation at Rs.1.58 per Sq. yard was awarded. On reference, the Civil Court enhanced the compen sation to Rs. 10 per Sq. yard with solatium at 15 per cent and interest at 4 per cent. On appeal and cross appeals, the High Court confirmed the award. In the appeal before this Court, on behalf of the De partment, it was contended that the respondent had purchased the land in question in 1961 in three documents at Rs.0.42 p. per sq. yard and sold in 1963 one acre of the land at Rs.5 per sq. yard and, therefore, the deeds under which the transactions took place reflected the prevailing market value of the land in question, and courts below committed grave error in relying on a decision of the High Court awarding Rs. 10 per sq. yard in respect of another land acquired under a Notification of 1961, and that when a large extent of land was acquired for a housing scheme, at least 1/3 of the land should be deducted towards laying the roads, setting up parks, drainage and other amenities. Allowing the appeal, this Court, HELD: 1.1 The market value postulated in Section 23(1) of the Land Acquisition Act, 1894 is designed to award just and fair compensation for the lands acquired. The word "market value" would postulate price of the land prevailing on the date of the publication of the notifica 473 tion under Section 4(1). In determining the market value of the land, the price which a willing vendor might reasonably expect to obtain from a willing purchaser would form the basis. For ascertaining the market rate, the Court can rely upon such transactions which would offer a reasonable basis to fix the price. The price paid in sale or purchase of the land acquired within a reasonable time from the date of the acquisition of the land in question would be the best piece of evidence. In its absence the price paid for a land pos sessing similar advantages to the land in neighbourhood of the land acquired in or about the time of the notification would supply the data to assess the market value. [475E G] Periya & Pareekanni Rubbers Lief. vs State of Kerala, [1990] Supp. 1 SCR 362, referred to. 1.2 In the instant case, admittedly, the claimant pur chased land at Rs.0.42 p. and in a span of one year and four months, sold at Rs.5 per sq yard. When the claimants them selves sold as a willing seller of an acre of land @ Rs.5 per sq. yard, if a large extent of five acres and odd under acquisition is offered to be sold as a block, it would not fetch higher rate but surely be negotiated for a lesser rate, if not the same market value of Rs.5 due to time lag of nine months. May be the payment of Rs. 10 per sq yard to the owner of another land acquired in 1961 was a windfall. Taking the totality of the facts and circumstances, the High Court committed grave error in completely ignoring the sale transactions of the lands under acquisition. In view of the time lag, the prevailing market value of the land as on the date of the notification would be Rs.6 per sq. yard. [476B, E G] 1.3 In Building Regulations, setting apart the lands for development of roads, drainage and other amenities like electricity etc. are condition precedent to approve lay out for building colonies. Therefore, based upon the situation of the land and the need for development, the deduction shall be made. Where acquired land is in the midst of al ready developed land with amenities of roads, drainage, electricity etc. then deduction of 1/3 would not be justi fied. In the rural areas housing schemes relating to weaker sections, deduction of 1/4 may be justified. [477G H, 478A] Spl. Tehsildar, Vishakapatnam vs Rednam Dharma Rao & Ors., CA No. 4187 of 1982 decided on July 17, 1990; Tribeni Devi & Ors. vs Collector of Ranchi, ; at 213; Smt. Kaushalya Devi Bogre & Ors. vs The Land Acquisi tion Officer, Aurangabad; , ; Vijay Kumar Motilal vs State of Maharashtra, ; Vijay singh Liladhar vs Special Land Acquisition Officer, 760; Spl. Land Acquisition Officer, Bangalore vs T. Adinaray an Setty, [1959] Sppl. 1 SCR 404 and The Tehsildar, Land Acquisition, Vishakapatnarn P. Narasing Rao & Ors., , relied on. 1.4 In the instant case, 1/3 of the market value should be deducted for development of the lands. [478B] 1.5 The market value is determined at Rs.6 per sq. yard and after deducting 1/3 for development of lands, it would be Rs.4 per sq. yard. [478C] 2. It is settled law that when wrong application of a principle has been made or important points affecting valua tion have been overlooked or misapplied by the High Court or Reference Court, this Court would, under Article 136 of the Constitution, correct the same. The Spl. Land Acquisition Officer, Bangalore vs T. Adina rayan Setty, [1959] Suppl. 1 SCR 404; Dattatrayaya Shankarb hat Ambalgi and Ors. vs The Collector of Sholapur and Anr., ; The Dollar Co. Madras vs Collector of Madras, and Padma Uppal etc. vs State of Punjab & Ors. , ; , relied on.

Civil Apeal Nos. 2204 47 of 1980. From the Judgment and Order dated 15.10.1979 of the High Court of Karnataka in W.A. No. 1101 to 1144 of 1979. P.R. Ramasesh for the Appellants. T.S. Krishnamurthy, Vineet Kumar and H. Raghavendra Rao for the Respondents. KANIA, J. These appeals arise from the decision of a Division Bench of the High Court of Karnataka in Writ Appeals Nos. 1101 'to 1144 of 1979. It appears that the Government of Karnataka decided to adopt a policy to encourage rapid industrialisation. An Order No. CI 58 FMI 69 dated 30th June, 1969 was issued which recited that the Government, namely, the Government of Karnataka was committed 948 to a policy of rapid industrialisation and that, in pursuance thereof, the Government had on 30th November, 1966, issued directions indicating the incentives that would be given to entrepreneurs starting new industries in the Mysore State. The material part of the said order, for our purpose, runs thus: "Consequently, the Governor of Mysore is pleased to sanction the following incentives and concessions to the entrepreneurs for starting new industries in Mysore State: (1) Sales Tax A cash refund will be allowed on all Sales Tax paid by a new industry on raw materials purchased by it for the first 5 (five) years from the date the industry goes into production, eligibility to the concessions being determined on the basis of a certificate to be issued by the Department of Industries and Commerce . . " By an order dated 11th August, 1975, the procedure was prescribed for obtaining the concessions given under the orders referred to earlier. On 12th January, 1977, the Government of Karnataka issued another order which recited that the reasons for making the said order of 12th January, 1977 were that the scheme of concessions adopted by the Government earlier had given room for many types of misuse and the earlier orders had not prescribed any ceiling limits or restrictions on the quantum of refund of sales tax or concessions to be granted. The said order dated 12th January, 1977, inter alia, provided as under: "(i) The concession of refund of sales tax on raw materials used by new enterprises should be limited to 10 per cent of the cost of fixed assets per year, thus not exceeding the total of 50 per cent over a period of five years for which the concession is available. Where the annual sales tax paid on raw materials is less than 10 per cent of the cost of the fixed assets according to the original value, the concession will be limited to the actual sales tax paid. . " Several persons claimed that they had started new industrial units in the State on the assurances extended or because of the concessions granted to them, inter alia, under the said order dated 30th June, 1969. They filed writ petitions before the High Court of Karnataka claiming that the industrial undertakings started between 30th June, 1969 when the order dated 12th June, 1969 came into effect and before 949 the order dated 12th January, 1977 was issued could not be deprived of the concessions given to them by the former order as the said grant of concessions constituted a promissory estoppel against the Government on the basis of which they had acted by starting new industries requiring investment of considerable funds and the Government was not entitled to go back or that promise as it had sought to do by the order dated 12th January, 1977. A learned Single Judge of the Karnataka High Court, before whom these writ petitions were filed, upheld the aforesaid contention of the petitioners urged before him relying mainly on the rulings of this Court in Union of India vs M/s. Indo Afghan Agencies Limited, ; ; Century Spinning and Manufacturing Company Limited & Anr. vs The Ulhasnagar Municipal Council & Anr., [1970] 3 S.C.R. 854 and the ruling in M/s. Motilal Padampat Sugar Mills Company Pvt. Ltd. vs State of Uttar Pradesh & Ors., ; In the concluding portion of his judgment, the learned Judge clarified that he had not examined the correctness of the individual claims made by the petitioners and that these claims would have to be examined by the competent authorities. He further clarified that the order dated 12th January, 1977 would undoubtedly apply to industries started after that date. The learned Trial Judge allowed the writ petitions and granted relief on the basis set out earlier. An appeal preferred by the Assistant Commissioner of Commercial Taxes, Dharwar, Deputy Commissioner of Commercial Taxes and the Government of Karnataka before a Division Bench of the Karnataka High Court was dismissed by the Court which agreed with the reasoning of the learned Trial Judge. It is from this decision that the present appeals arise. The first contention of the learned counsel for the appellants is that the doctrine of Promissory Estoppel was not applicable in the present case because it was found by the Government of Karnataka that the concessions granted under the said order dated 30th June, 1969 were being misused and undue advantage was being taken of the same. It was submitted by him that in view of this, it would not be proper to hold the Government to the promises or the assurances it had given under the said order dated 30th June, 1969. We are afraid it is not possible to accept this submission. No counter affidavit was filed by the appellants before the Trial Court in the writ petition. Beyond the statement of counsel, there is nothing to show that any misuse was made of these concessions or undue advantage taken of the same. It is true that the preamble to the order dated 12th January, 1977 does recite that the concessions given by the earlier order had given room for many types of misuse but such a recital by itself cannot establish 950 that the concessions were, in fact, misused. If that were so, it was the duty of the Government and the concerned authorites to file a counteraffidavit and place the relevant facts establishing the misuse before the Court. This they have totally failed to do. It is well settled that if the Government wants to resile from a promise or an assurance given by it on the ground that undue advantage was being taken or misuse was being made of the concessions granted the Court may permit the Government to do so but before allowing the Government to resile from the promise or go back on the assurance the Court would have to be satisfied that allegations by the government about misuse being made or undue advantage being taken of the concessions given by it were reasonable well established. In the present case, there is nothing on record to show that any such misuse was being made or undue advantage taken of the said concessions by the newly established industries. The Government had, therefore, failed to establish the requisite ground or the basis of which it might be allowed to go back on its promise. The first submission of the learned counsel for the appellants must, therefore, fail. The next submission of learned counsel for the appellants was that the concessions granted by the said order dated 30th June, 1969 were of no legal effect as there is no statutory provision under which such concessions could be granted and the order of 30th June, 1969 was ultra vires and bad in law. We totally fail to see how an Assistant Commissioner or Deputy Commissioner of Sales Tax who are functionaries of a State can say that a concession granted by the State itself was beyond the powers of the State or how the State can say so either. Moreover, if the said argument of learned counsel is correct, the result would be that even the second order of 12th January, 1977 would be equally invalid as it also grants concessions by way of refunds, although in a more limited manner and that is not even the case of the appellants. Although, we are of the view that the contention set out in the foregoing paragraph is not open to the appellants at all, we propose to examine the merits of that contention because, in our view, even on merits the contention raised must be rejected. The ground on which it was submitted that the said order of 30th June, 1969 was invalid is that there is no provision under the Karnataka Sales Tax Act, 1957 (referred to hereinafter as "the said Act") under which any refund could be granted. The learned counsel for the appellants pointed out that only relevant provision, in this connection, is Section 8A of the said Act and that Section empowers the State Government to notify exemp 951 tions and reductions in the levy of tax on sale or purchase of goods that are made exigible under the provisions contained in Chapter 3 of the said Act. Section 8A expressly empowers the State Government to grant exemptions and reductions. Under the said order dated 30th June, 1969 it has been inter alia provided that a cash refund will be allowed on all sales tax paid by a new industry on raw materials purchased by it for the first five years from the date the industry goes into production as set out in said the Order. The only submission made on behalf of the appellants is that since the benefit given is called a refund, it cannot be said to be an exemption or reduction as permitted by Section 8A. In our view, there is no substance in this submission at all. In order to test the validity of the order dated 30th June, 1969, one has to see the substance of the concession granted under the order and not merely certain words used out of context. Although the benefit regarding sales tax granted to the new industries is by way of refunds of sales tax paid to the extent provided in the Order, it is clear that, in effect, the benefit granted is in the nature of an exemption from the payment of the sales tax or reduction in the sales tax liability to the extent stated in the order. In view of this, there is no substance whatever in the contention that the State Government had no authority to provide for the grant of refunds. Again, the mere fact that the order of 30th June, 1969 did not specify the power under which it was issued will make no difference because such a power is clearly there in Section 8A and where the source of power under which it is issued is not stated in an order but can be found on the examination of the relevant Act, the exercise of the power must be attributed to that source. The second submission of the learned counsel for the appellants must, also, therefore, be rejected. Although at one stage a faint doubt was raised by learned counsel for the appellants as to whether the Doctrine of Promissory Estoppel could be regarded as good law now, he conceded that doctrine must be regarded as good law in view of the recent decision of this Court in State of Bihar and Anr. vs Usha Martin Industries Ltd., [1987] 65 STC, 430 where a Division Bench comprising three learned Judges of this Court upheld and applied that doctrine. In the result, there is no merit in the appeals and they are dismissed with costs. S.L. Appeals dismissed.

The Government of Karnataka issued an order dated the 30th June, 1969, sanctioning in centives and concessions in the matter of sales tax to the entrepreneurs for starting new industries in the Mysore State. On the 12th January, 1977, the Government issued another order, presecribing ceiling limits on the quantum of the sales tax or concession to be granted. Thereupon several persons filed writ petitions before the High Court, claiming that they had started new industries in the State because of the concessions granted to them under the order dated the 30th June, 1969 and they could not be deprived of the concessions given to them by the former order as the said grant of concessions constituted a promissory estoppel against the Government and the Government was not entitled to go back on the promise. The High Court upheld the contention of the petitioners and allowed the writ petitions. Against the decision of the High Court, these appeals were filed in this Court by the Assistant Commissioner of Commercial Taxes and others. Dismissing the appeals, the Court, ^ HELD: The contention of the appellants that the doctrine of Promissory Estoppel was not applicable in this case because the concessions granted under the order dated 30th June, 1969 were being misused, could not be accepted. There was nothing to show that any misuse was made of the concessions. A recital in the order dated 12th January, 1977, regarding misuse of the concessions, could not by itself establish that the concessions were misused. [949F G] There was no substance in the appellants ' contention that the 947 concessions granted by the order dated 30th June, 1969, were of no legal effect of the contention that the said order was ultra vires and bad in law, as there was no provision in the Kranataka Sales Tax Act ("the said Act") under which any refund could be granted, and the State Government had no authority to provide for refunds. Though the benefit regarding sales tax granted to the new industries was by way of refunds of sales tax paid to the extent provided in the order, in effect, the benefit granted was in the nature of an exemption from the payment of the sales tax or reduction in the sales tax liability to the extent stated in the Order. The mere fact that the order of 30th June, 1969 did not specify the power under which it was issued would make no difference because such a power was there in Section 8A of the said Act. Where the source of power under which an order is issued is not stated in the order but can be found on the examination of the relevant Act, the exercise of the power must be attributed to that source. The appeals were dismissed. [951C E] Union of India vs M/s Indo Afghan Agencies Limited, ; ; Century Spinning and Manufacturing Company Limited & Anr. vs The Ulhasnagar Municipal Council and Anr., [1970] 3 S.C.R. 854; M s Motilal Padampat Sugar Mills Company Pvt. Ltd. vs State of Uttar Pradesh and Ors., A.I.R. 1979 S.C.621 and State of Bihar and Anr. vs Usha Martin Industries Ltd., [1987] 65 STC 430, referred to.

Appeal No. 283 of 1960. Appeal from the judgment and decree dated, November 20, 1958, of the Allahabad High Court (Lucknow Bench) in First Civil Appeal No. 3 of 1956. C. B. Agarwala and C. P. Lal, for the appellant. R. Ganapathy Iyer and T. M. Sen, for the respondent. March 16. The Judgment of the Court was delivered by DAs GUPTA, J. The appellant, a clerk in the service of the East Indian Railways was compulsorily ' retired from service with effect from June 30, 1948, on attaining the age of 55 years. His prayer for further retention in service on the ground that he was entitled to be retained under Rule 2046/2 of the Railway Establishment Code having been rejected he brought the suit which has given rise to this appeal in the court of the Civil Judge, Lucknow, alleging that he was entitled to be retained under the above rule, and the order for compulsory retirement on attaining the age of 55 years was. void and inoperative in law. He accordingly prayed for a declaratory decree that the order of his compulsory retirement was illegal and void and for a money decree for, arrears of pay on the basis that he had continued in service. The main defence was a denial of his right to be retained in service under the rules. The Trial Court accepted the plaintiff 's contention ' as regards the effect; of the rule, gave him a declaration as prayed for and ' also decreed the claim for money in part. On appeal the High Court took a different view of Rule 2046 and held that that rule gave the plaintiff no right to continue in service beyond the age of 55 years. The High Court therefore allowed the appeal. and dismissed the plaintiffs suit. Against this decision the 376 plaintiff has preferred the present appeal on a certificate granted by the High Court under article 133(1) (c) of the Constitution. The main question therefore is whether on a proper interpretation of Rule 2046/2 (a) of the Railway Esta blishment Code, which is identical with the fundamental rule 56 (b) (i), the plaintiff had the hight to be retained in service till the age of 60 years. It is necessary to mention that the plaintiff 's case that he continued to be efficient even after attaining the age of 55 years has not been disputed by the respondent, the Union of India. Consequently the question is: assuming the plaintiff so 'continued to be efficient whether he had the right to be retained in service till he attained the age of 60 years. Rule 2046 (1) of the Code deals with the question of retirement of railway servants other than ministerial and provides that such Railway servant, that is, one who is not a ministerial servant, will be compulsorily retired on attaining the age of 55 years; but may be retained in service after that date "with the sanction of the competent authority on public grounds" which must be recorded in writing. A further provision is made that he must not be retained after the age of 60 years except in very special circumstances. Rule 2046/2 deals with cases of ministerial servants. It has two clauses of which ol. (b) deals with (i) ministerial servants who entered Government service on or after April 1, 1938, or (ii) who though in Government service on March 31, 1938, did not hold a lien or a suspended lien on a permanent post on that date. These also, like the Railway servants, who are not ministerial servants have to retire ordinarily at the age of 55 years and cannont be, retained after that age except on public grounds to be recorded in writing and with the sanction of the competent authority; and must not be retained after attaining the age of 60 years except in very special circumstances. Clause (a) deals with railway ministerial servants other than those who entered Government service on or after April 1, 1938, or those in Government service on March 31, 1938, who, did not hold a lien or a 377 suspended lien on a permanent post on that date. The exact words of the rule are: "A ministerial servant who is not governed by sub cl. (b) may be required to retire at the age of 55 years but should ordinarily be retained in service if he continues to be efficient up to the age of 60 years. He must not be retained after that age except in very special circumstances which must be recorded in writing and with 'the sanction of the competent authority. " It is obvious that the rule as regards compulsory retirement is more favourable to ministerial servants who fall within el. (a) of rule 2046/2 than those who fall under el. (b) of the same rule or railway servants who are not ministerial servants. For whereas in the case of these, viz., railway servants Who are not ministerial servants, and ministerial servants under cl. (b) retention after the age of 55 itself is intended to be exceptional to be made on public grounds which must be recorded in writing and with the sanction of the competent authority, in the case of ministerial servants who fall under cl. (a) of Rule 2046/2 their retention after the age of 60 is treated as exceptional and to be made in a similar manner as retention in the case of the other railway servants mentioned above after the age of 55. It is clear therefore that whereas the authority appropriate to make the order of compulsory retirement or of retention is given, no discretion by itself to ' retain a ministerial railway servant under cl. (b) if he attains the age of 55 years, that is not the position as regards the ministerial servants who fall under cl. The appellant 's contention however goes very Much further. He contends that in the case of ministerial servants who come within cl. (a) and after attaining the age of 55 years continue to be efficient it is not even a case of discretion of the appropriate authority to retain him or not but that such ministerial servants have got a right to be retained and the appropriate authority is bound to retain him, if efficient. The first clause of the first sentence of the relevant 48 378 rule taken by itself certainly gives the appropriate authority the right to require a ministerial servant to retire as soon as he attains the age of 55 years. The question is: Whether this right is cut down by the second clause, viz., "but should ordinarily be retained in service if he continues to be efficient up to the age of 60 years". On behalf of the appellant it is urged that the very use of the conjunction "but" is for the definite purpose of the cutting down of the right conferred by the first clause; and that the effect of the second clause is that the right to require the Government servant to retire at 55 is limited only to cases where he does not retain his efficiency; but where he does retain his efficiency the right to retire him is only when he attains the age of 60 years. We are con strained to say that the language used in this rule is unnecessarily involved; but at the same time it is reasonably clear that the defect in the language creates no doubt as regards the intention of the rulemaking authority. That intention, in our opinion, is that the right conferred by the first part is not in any way limited or cut down by the second part of the sentence; but the draftsman has thought fit by inserting the second clause to give to the appropriate authority an option to retain the servant for five years more, subject to the condition that he continues to be efficient. If this condition is not satisfied the appropriate authority has no option to retain the servant; where however the condition is satisfied the appropriate authority has the option to do so but is not bound to exercise the option. If the intention had been to out down the right conferred on the authority to retire a servant at the age of 55 years the proper language to express such intention would have been may be required to retire at the age of 55 years provided however that he shall be retained in service if he continues to be efficient up to the age of 60 years" or some such similar, words. The use of "should ordinarily be retained in service" is sufficient index to the mind of the rule making authority that the right conferred by the first clause of the sentence remained. Leaving out for the present the word "ordinarily" the rule would read thus: 379 "A ministerial servant who is not governed by sub clause (b) may be required to retire at the age of 55 years but should be retained in service if he continues to be efficient up to the age of 60 years. " Reading these words without the word "ordinarily" we find it unreasonable to think that it indicates any intention to cut down at all the right to require the servant to retire at the age of 55 years or to create in the servant any right to continue beyond the age of 55 years if he continues to be efficient. They are much more appropriate to express the intention that as soon as the age of 55 years is reached the appropriate authority has the right to require the servant to retire but that between the age of 55 and 60 the appropriate authority is given the option to retain the servant but is not bound to do so. This intention is made even more clear and beyond, doubt by the use of the word "ordinarily". "Ordinarily" means "in the large majority of cases but not invariably". This itself emphasises the fact that the appropriate authority is not bound to retain the servant after he attains the age of 55 even if he continues: to be efficient. The intention of the second clause 1 therefore clearly is that while under the first clause the appropriate authority has the right to route the ' servant who falls within clause (a) as soon as he attains the age of 55, it will, at that stage, consider whether or not to retain him further. This option to retain for the further Period of five years can only be exercised if the servant continues to be efficient; but in deciding whether or not to exercise this option the authority has to consider circumstances other than the question of efficiency also; in the absence of special circumstances he "should" retain the servant; but, what are special circumstances is loft entirely to the authority 's decision. Thus, after the age of 55 is reached by the servant the authority has to exercise ' its discretion whether or not to retain the servant; and there is no right in the servant to be retained, even if, he continues to be efficient. Reliance was placed by learned counsel on an observation of Mukherjea, J. (as he then was), in Jai 380 Ram vs Union of India (1) when speaking for the Court as regards this rule his Lordship said: "We think it is a possible view to take upon the language of this rule that a ministerial servant coming within the purview has normally the right to be retained in service till he reaches the age of 60. This is conditional undoubtedly upon his continuing to be efficient. We may assume therefore for purposes of this case that the plaintiff had the right to continue in service till 60 and could not be retired before that except on the ground of inefficiency. " It would be wholly unreasonable however to consider this as a decision on the question of what this rule means. Dealing with an argument that as the plaintiff under this rule has the right to continue in service till 60 and could not be retired before that except on the ground of inefficiency certain results follow, the Court assumed for the sake of argument that this interpretation was possible and proceeded to deal with the learned counsel 's argument on that basis. It was not intended to say that this was the correct interpretation that should be put on the words of the rule. The correct interpretation of Rule 2046 (2) (a) of the code, in our opinion, is that a railway ministerial servant falling within this clause may be compulsorily retired on attaining the age of 55 but when the servant is between the age of 55 and 60 the appropriate authority has the option to continue him in service, subject to the condition that the servant continues to be efficient but the authority is not bound to retain him even if a servant continues to be efficient. It may be mentioned that this interpretation of the rule has been adopted by several High Courts in India ' [Basant Kumar Pal vs The Chief Electrical Engineer Kishan Dayal vs General Manager, Northern Railway and Raghunath Narain Mathur vs Union of India (4)]. We therefore hold that the High Court was right in holding that this rule gave the plaintiff no right to continue in service beyond the age of 55. (1) A.I.R. 1954 S.C. 584. (3) A.I.R. 1954 Punj. (2) A.I.R. 1956 Cal. (4) A.I.R. 1953 All. 381 It was next urged by Mr. Aggarwal, though faintly, that the notification of the Railway Board dated October 19, 1948, and the further notification dated April 15, 1952, as a result of which ministerial servants who were retired under rule 2046(2)(a) before attaining the age of 60 after September 8, 1948, have been given special treatment are discriminatory. It appears that on September 8, 1948, the Government of India came to a decision that no ministerial Government servant to whom the fundamental rule 56(b)(i) applied and who has attained the age of 55 years but has not attained the age of 60 years could be required to retire from service unless he has been given a reasonable opportunity to show cause against the proposed retirement and unless any representation that he may desire to make in this connection has been duly considered. This decision was communicated to different departments of the Government of India and it was directed that this should be noted "for future guidance". On October 19, 1948, the Ministry of Railways issued a notification for dealing with cases of retirement of ministerial servants governed by Rule 2046(2)(a) (which corresponded to fundamental rule 56(b)(1) in the manner as directed by the Government of India 's notification dated September 8, 1948. This notification of October 19, 1948, again made it clear that it had been decided not to take any action in respect of ministerial servants who had already been retired. Again, in a notification dated April 15, 1952, the Railway Board communicated a decision that "such of the ministerial servants who had been retired after 8th September, 1948, but before attaining the age of 60 years without complying with article 311 (2) of the Constitution should be taken back to duty" under certain conditions. The appellant 's contention is that the denial of this advantage given to other ministerial servants falling within rule 2046(2)(a) who had been retired after September 8, 1948, is unconstitutional. We do not think that this contention has any substance. What happened was that on September 8,1948, the Government took a decision that ministerial servants should 382 not be retired under the rule in question on attainment of 55 years of age if they were efficient without giving them an opportunity of showing cause against the action and accordingly from that date it changed its procedure as regards the exercise of the option to retire servants between the age of 55 and 60. The decision that nothing should be done as regards those who had already retired on that date cannot be said to have been arbitrarily made. The formation of a different class of those who retired after September 8, 1948, from those who had retired before that date on which the decision was taken is a reasonable classification and does not offend article 14 of the Constitution. This contention is therefore also rejected. The High Court was therefore right in our opinion in holding that there was a reasonable classification of the ministerial servants who had been retired under Rule 2046 (2) (a) on attaining the age of 55 into two classes: one class consisting of those who had been retired after September 8, 1948, and the other consisting of those who retired up to September 8, 1948. There is, therefore, no denial of equal protection of laws guaranteed by article 14 of the Constitution. In the result, the appeal fails and is dismissed. There will be no order as to costs, as the appellant is a pauper. We make no order under Order XIV, rule 9 of the Supreme Court Rules. Appeal dismissed.

The appellant who was a clerk under the East Indian Railways was compulsorily retired from service on attaining the age of 55 years. His prayer for further retention in service having been rejected he filed a suit alleging that he was entitled to be retained in service up to the age of 60 years under Rule 2046 (2)(a) of the Railway Establishment Code, which runs as follows: "Clause (a) A ministerial servant who is not governed by sub cl. (b) may be required to retire at the age of 55 years but should ordinarily be retained in service if he continues to be efficient up to the age of 60 years. He must not be retained after that age except in very special circumstances which must be recorded in writing and with the sanction of the competent authority. " His suit was decreed by the Trial Court but the High Court reversed it holding that the plaintiff appellant had no right to continue in service beyond the age of 55 years. On appeal with the certificate of the High Court. Held, that the correct interpretation of Rule 2046(2)(a) is that a railway ministerial servant falling within this clause may be compulsorily retired on attaining the age of 55 but when the servant is between the age of 55 and 6o years the appropriate authority has the option to continue him in service, subject to the condition that the servant continues to be efficient but the authority is not bound to retain him even if he continues to be efficient. This rule does not give the servant a right to be retained in service beyond the age of 55 years even if he continues to be efficient. jai Ram vs Union of India, A.I.R. 1954 S.C. 584, explained. Basant Kumar Pat vs The Chief Electrical Engineer, A.I.R. , Kishan Dayal vs General Manager, Northern Railway, A.I.R. 1954 Punj. 245 and Raghunath Narain Mathur vs Union of India, A.I.R. 1953 All. 352, approved. 375 The formation by the Railway Board of two classes of ministerial servants, namely, one of, those who retired after September 8, 1948, and the other of those who had already retired before that date was a reasonable classification and (lid not offend article 14 of the Constitution.

iminal Appeals Nos. 161 to 163 of 1970. Appeals by certificate from the. judgment and order dated May 23, 1969 of the Assam and Nagaland High Court at Gauhati in Cr. Rev. Nos. 36, 39 and 46 of 1968. 82 0 D. Mookherjee, Avtar Singh, G. Das, section P. Nayar and R. N. Sachthey, for the appellant. Nuruddin Ahmad and N. N. Keswani, for the respondent. Harbans Singh, for the respondents. V. M. Tarkunade, A. L. Arora and D. D. Sharma, for the respondent. The Judgment of the Court was delivered by ALAGIRISWAMI, J. Two of the appellants, Major Lala and Lt. Col. Khanna are Army officers and the appellant in the 3rd appeal, Gupta, is a businessman of Gauhati. All of them were put up for trial before the Special Judge appointed under the Criminal Law Amendment Act 1952. One charge which was ,common to all the three of them was that between June 1962 and January 1963 all of them agreed to commit or cause to be committed offences under section 5(2) of the Prevention of Corruption Act, and of cheating punishable under section 420 of the Indian Penal Code, and these offences having been committed in pursuance of a conspiracy were punishable under section 120B of the Indian Penal Code read with section 5 (2) of the Prevention of Corruption Act and section 420 I.P.C. Mr. Gupta, the businessman was charged under section 420 I.P.C. as well as section 511 read with section 420 I.P.C. The two Army officers were also charged with offences under section 420 read with section 5 (1) (d) of the Prevention of Corruption Act. The case was filed before the Special Judge on 28 6 1963 and the charge was framed on 13 2 65. After about 18 out of the 52 witnesses cited by the prosecution had been examined the three respondents filed petitions under section 561A read with section 439 of Code of Criminal Procedure before the High Court of Assam & Nagaland on 28 3 68, 1 4 68 and 10 4 68 respectively for quashing the charges. A learned Single Judge allowed these petitions on 23 5 1969 and quashed the charges and the proceedings before the learned Special Judge. He did this on three grounds (1) that the officer who investigated the case was not competent to do so; (2) that the offences that were being tried were noncognizable and the Special Judge could not have taken cognizance of them without sanction under section 196A of the Code of Criminal Procedure, and (3) that in view of the enormous length of time between 2 2 63, the date on which the case was 821 registered and 1 4 68, upto which date some witness had been examined, the last witness having been examined on 15 1 67, it entailed undue harassment to the accused persons and the proceedings have to be quashed to prevent further harassment, abuse of the process of the court and vexation to the accused persons. These three appeals have, therefore, been filed by the Union of India by certificate granted by the High Court. We shall first of all deal with the question whether the officer who investigated into these cases was not properly authorized to do so. The officer was an Inspector of the Delhi Special Police Establishment. Under section 5A of the Prevention of Corruption. Act, before it was amended in 1964, no officer below the rank of the Deputy Superintendent of Police could investigate into offences punishable under sections 161, 165 and 165A of the Indian Penal Code or under section 5 of the Prevention of Corruption Act without the order of a Presidency Magistrate or a Magistrate of the First Class. In this case the Inspector concerned had obtained the order of the First Class Magistrate of Tezpur. The argument before the High Court, which was accepted by the learned Judge, was that as the offences of conspiracy were alleged to have been committed both at Tezpur as well as at Gauhati, the investigation based on the order of the Tezpur Magistrate alone was not a proper one. In other words, the argument was that unless the Inspector had been authorized to investigate not only by the First Class Magistrate of Tezpur but also by the First Class of Gauhati district, he could not have done so. The learned Judge referred to and relied upon the decision in Chinnappa vs State of Mysore(1). It was decided in that case that any First Class Magistrate appointed in a district can issue orders under section 5A of the Prevention of Corruption Act for investigation of a case. From this the learned Single Judge drew the conclusion that in respect of an offence said to have been committed at Gauhati as well as at Tezpur the order of the Tezpur Magistrate was not enough. He also relied upon the decision of the High Court of Assam and Nagaland in Chatterjee vs Delhi Special Police Establishment ( 2 ) . This decision has been upheld by this Court in Union of India vs B. N. Ananthapadmanabhiah(3). But that was a case of a Delhi Magistrate sanctioning an investigation of offences committed in Assam and it was held that such an order was not valid. That decision is. no authority for the proposition that where an offence is committed in more than one place the order of every Magistrate within whose. jurisdiction the offence or part of the offence was committed was necessary in order to (1) A. I. R. (2) I. L. R. 1969 Assam & Nagaland 275. (3) A. I. R. 822 enable the investigation to be carried on. All that is necessary is that the Magistrate who makes the order under section 5A should have territorial jurisdiction over the place where any part of the ingredients of the offence took place. That criterion is amply satisfied in this case. On principle also such a contention seems to be devoid of any substance. The offence of conspiracy or for that matter any other offence might consist of a series of acts and incidents spread over the whole country. Very often one conspirator or one of the offenders might, not have even met the other conspirator or offender. To accept this contention would be to hold that the Police should go to every Magistrate within whose jurisdiction some part of the conspiracy or one of the ingredients of the offence has taken place. We have no hesitation in rejecting it. He also seemed to have had some doubt as to whether the order of the Magistrate of Tezpur produced before him was a genuine one. To say the least, the attitude of the learned Judge is most surprising. To put it in his own words : "It does not appear that any order of a Magistrate form part of the record. But at the time of hearing, such an order was placed before me on behalf of the Prosecution. The application on which the order is said to have been passed by the Magistrate appears to have been addressed to the Court of the Magistrate first class at Tezpur, wherein it was stated that for preoccupation of the Deputy Superintendent of Police, the investigation was sought to be made by an Inspector (A Police. The petition is unnumbered undated. What appears curious is that although the application was made before a Magistrate of the first class, the order passed is supported by a seal of the District Magistrate, Darrang. The order of the Magistrate runs as follows : "Paper and F.I.R. seen. Shri H. B. D. Baijal, Inspector is permitted to investigate the case. " There is an illegible signature with date 4 2 63 and below the signature the official designation has not been stated. It appears that no order sheet of the Magistrate has been produced in this regard and in above circums tances, it cannot be unequivocally said that this document wag obtained in due course of business in compliance with section 5A of the Prevention of Corruption Act. Even assuming that the order is free from doubt, learned counsel appearing for the petitioners has urged before me that since the venue of the offences has been clearly stated in the charge, the permission given by the Magistrate for investigation of the offences at Gauhati is not valid." 8 23 If he had any doubts about the genuineness of the order of sanction it was his duty to have gone into the matter thoroughly and satisfied himself whether the order was genuine, or not. It was his duty to have given a categorical finding regarding the matter. There should have been no room allowed for any doubt or suspicion of any underhand dealing and unfair conduct in a matter of this kind. It was even alleged on behalf of the, respondents that an order was produced for the first time before the learned Judge and it was taken back by the prosecution. If that was so it proves a woeful lack of care on the part of the learned Judge. He should have retained the order on file and called for the necessary records and information in order to find out whether the order was a genuine one or not. We have before us the order of the Superintendent of the Special Police Establishment dated 2 2 63 entrusting the investigation to Inspector Baijal and directing him to obtain the necessary permission from a competent Magistrate for doing so. We have also been shown the papers relating to the prosecution, papers given to the accused under section 173 of the Code of Criminal Procedure. Item 71 of those papers relates to the order of sanction dated 4 2 1963 given by the Magistrate of Tezpur authorizing the Inspector of the S.P.E. to investigate. Thus, there is no doubt at all that Inspecor Baijal had been authorized to investigate into, this case. It only shows rather superficial way the learned Judge chose to deal with this matter. The next question is whether offences under section 161, 165 and 165A of the Indian Penal Code and section 5 (2) of the Prevention of Corruption Act are cognizable or non cognizable offences. This becomes important for the purpose of deciding whether a sanction under section 196A is necessary. The sanction necessary under section 6 of the Prevention of Corruption Act and section 197 of the Code of Criminal Procedure has been accorded by the Government of India. What was contended by the respondents before the, High Court and was accepted by that Court was that these offences being non cognizable offences a sanction under section 196A(2) is necessary and that prosecution without such sanction is bad. Cognizable offence is defined in section 4(1) (f) of the Code of Criminal Procedure as an offence for which a police officer, within or without the presidency towns, may in accordance with the second schedule, or under any law for the time bring in force, arrest without warrant. The argument which appealed to the learned Judge of the High Court was that as under section 5A of the Prevention of Corruption Act no officer below the rank of Deputy Superintendent of Police could investigate or make any arrest without a warrant in respect of offences punishable under section 161, 165 or 165A I.P.C. and section 5 of the Prevention of Corruption Act, they were not offences for which any police officer can arrest without warrant, and therefore, 824 they are not cognizable offences. The same argument was repeated before this Court 'by Mr. Tarkunde, emphasising that "a police officer" means "any police officer" and as any police officer cannot, under section 5A of the Prevention of Corruption Act, arrest without warrant but only officers of and above the rank of Dy. Superintendent, the offences mentioned in that section are noncognizable offences. If we pursue the same line of argument and look at the definition of non cognizable offence in section 4(1) (n) which defines non cognizable offence as an offence for which a police officer, within or without a Presidency town, may not arrest without warrant, it might mean that as these are cases where i police officer of the rank of Dy. Superintendent and above can arrest without warrant these are not non cognizable offences either. How can there be a case which is neither cognizable nor cognizable ? It was sought to be argued that these offences would 'be cognizable offences when they are investigated by the Deputy Superintendents of Police and superior officers and non cognizable when they are investigated by officers below the rank of Deputy Superintendents. We fail to see how an offence would be cognizable in certain circumstances and non cognizable in certain other circumstances. The logical consequences of accepting this argument would be that if the offences are investigated by Deputy Superintendents of Police and superior officers no sanction under section 196A(2) would be necessary but sanction would be necessary if they are investigated by officers below the rank of Deputy Superintendents of Police. One supposes the argument also implies that the fact that an officer below the rank of a Deputy Superintendent is authorized by a Magistrate under the provisions of section 5A would not make any difference, to this situation. We, do not consider that this is a reasonable interpretation to place. Under Schedule It of the Code of Criminal Procedure offences under sections 161 to 165 of the Indian Penal Code are shown as cognizable offences. At the end of that Schedule offences punishable with death, imprisonment for life or imprisonment for 7 years and upwards are also shown as cognizable offences. Under section 5 (2) of the Prevention of Corruption Act the sentence may extend to seven years. Therefore, an offence under section 5 of the Prevention of Corruption Act is according to the provision in Schedule II to the Code of Criminal Procedure a cognizable offence. Therefore, the mere fact that under the Prevention of Corruption Act certain restrictions are placed as to the officers who are competent to investigate into offences mentioned in section 5A would not make those offences any the less cognizable offences. Tile words "notwithstanding anything contained in the Code of Criminal Procedure" found at the beginning of section 5A(1) merely carve out a limited exemption 'from the provisions of the Code of Criminal Procedure in so far as they limit the class of persons who 82 5 are competent to investigate into offences mentioned in the section and to arrest without a warrant. It does not mean that the whole of the Code of Criminal Procedure. including Schedule II thereof, is made inapplicable. Under section 5 of the Code of Criminal Procedure all offences under the Indian Penal Code shall be investigated, inquired into, tried, and otherwise dealt with according to the provisions therein contained. Also, all offences under any other law (which would include the Prevention of Corruption Act) shall be investigated, inquired into, tried, and otherwise dealt with according to the same provisions but subject to any enactment for the time bring in force regulating the manner or place of investigating, inquiring into, trying or otherwise dealing, with such offences. Section 5A of the Prevention of Corruption Act should be related to this provision in section 5 (2) of the Code of Criminal Procedure, which limits the application of the provisions of that Code to be subject to any enactment for the time being in force regulating the manner or place of investigating, inquiring into, trying or otherwise dealing with such offences. The only change which section 5A of the Prevention of Corruption Act makes is with regard to officers competent to investigate and arrest without warrant; in all other respects the Code of Criminal Proce dure applies and, therefore, there is no doubt that all offences mentioned in section 5A of the Prevention of Corruption Act are cognizable offences. The Assam High Court seems to have taken a line of its own in this matter. In G. K. Apte vs Union of India(") curiously enough the Bench, of which the learned Judge who dealt with this case was a member, took the view that though an offence under section 161 is a cognizable offence, if investigations were made under section 156 of the Code of Criminal Procedure there would be no need for a sanction under section 196A of the Code of Criminal Procedure, and there can be a conviction under section 161 of the Indian Penal Code, but if the investigation is made under section 5A of the Prevention of Corruption Act it will be an investigation into a non cognizable offence and there should be a sanction under section 196A for the trial following such investigation. For this conclusion the decision of this Court in H. N. Rishbud & Inder Singh vs The State of Delhi (2) was relied upon. We can see nothing in that case to support this conclusion. Nor are we able to see how if the investigation into an offence of misconduct punishable under section 5(2) is done by a police officer of high rank the offence is cognizable and if investigated by ail officer of a lower rank it is non cognizable. That cannot be a proper criterion for deciding whether an offence is cognizable or non cognizable. Unless there are clear and compelling reasons (1) A.I.R 1980 Assam & nagaladd 43. (2) A. I. R. 5 L797Sup. C. 1./73 826 to hold otherwise the division of offences given in the Code of Criminal Procedure as cognizable and non cognizable should be given effect to. When the same Code makes sanction under section 196A necessary for trial of non cognizable offences it clearly contemplates non cognizable offences as defined in the Code. There is no justification for relying upon extraneous considerations and far fetched reasoning in order to get over the effect of these provisions. We may now refer to certain decisions of various High Courts on this point. In Taj Khan vs The State(") it was held "The fact that the power to investigate or to arrest without warrant has been circumscribed by certain conditions (which conditions were clearly provided for the purpose of safeguarding public servants from harassment at the hands of subordinate police officers) under the proviso. to section 3 of the said Act cannot lead to the conclusion that such offence is non cognizable." In Ram Rijhumal vs The State ( 2) it was held : "The provisions of section 3, Prevention of Corruption Act can only have one meaning, and the meaning is that an offence under section 165A of the Penal Code has to be deemed to be a cognizable offence for the purpose of ,the Code of Criminal Procedure. It is only because the Legislature enacted section 5 A of the Prevention of Corruption Act that, so far as the Presidency town of Bombay was concerned, no police officer below the rank of a Superintendent of Police could in the case of an offence under section 165 A of the Penal Code, investigate it without the order of a Presidency Magistrate. There is nothing in the language of section 5 A which would suggest that an offence under section 165 A of the Penal Code is not to be treated as a cognizable offence." In Gulabsingh vs State() it was held that "offence under section 161, I.P.C. is a cognizable offence. Its nature is not Affected by either section 3 or section 5A of the Prevention of Corruption Act. The requirement that in a cognizable offence, a police officer should be able to arrest without warrant, is without any limita tion and section 5A cannot be split. up to mean that an offence can be cognizable in reference to one officer and not in reference to another." (1) A. I R. (2) A. I R. 1958 Bombay 125. (3) A. I R. 1962 Bombay 263. 8 2 7 The learned Judges specifically dissented from the decision in Union of India vs Mahesh Chandra("). In Public Prosecutor vs Shaik Sheriff (2) it was held that "these offences cannot be treated as non cognizable offences when investigated by an officer below the rank of Deputy Superintendent of Police simply on the ground that such investigation cannot be done without the order of a Presi dency Magistrate or a Magistrate of the First Class. In the same way, offences under section 5 of the Act cannot be treated as non cognizable even when investigated by a low rank officer. Thus, the provision in section 5A is of the nature of a special provision which applies to offences specified therein which are cognizable offences including those under section 5 under all circumstances. " They also referred to the decision in Union of India vs Mahesh Chandra (supra) to the effect that an offence under section 161 I.P.C. and under sub. section 2 of section 5, Prevention of Corruption Act is cogni zable so far as officers of the rank of a Deputy Superintendent of Police and above are concerned, but so far as the officers below the rank of Deputy Superintendent of Police are concerned the said offences are non cognizable in so far as they cannot investigate them without the permission of a Magistrate of ' the First Class, and held that : "the learned Judges only intended to emphasise the provision in S.5 A and chose to refer to it as a non cognizable aspect of the offences comprised in the Act and to describe that aspect also as non cognizable for the limited purpose of the provision in section 5 A." Thus, the preponderance of opinion of the various High Courts is in favour of the view we are taking. We are, therefore, clearly of opinion that the offences under sections 161, 165 and 165A of the Indian Penal Code and section 5 of the Prevention of Corruption Act are cognizable offences and there is no question of their being cognizable if investigated by a Deputy Superintendent of Police and non cognizable when investigated by an Inspector of Police. Nor can there be any question of those offences being cognizable if they are investigated under section 156 of the Cr. P.C. but not when investigated in accordance with the provisions of section 5A of the Prevention of Corruption Act. The question, therefore, of the need for a sanction under section 196A does not arise. Consequently, the need to order re investigation or to begin the trial again after the sanction under section 196A is obtained, and the consequent inordinate delay and harassment of the officers concerned, reasons that weighed with the learned Single Judge for quashing the charges, does not arise. It may incidentally be mentioned that the respondents took nearly three years before they moved the High (1) A. 1. R. 1957 Madhya Bharat 43. (2) A. 1. R. 828 Court for quashing the charges and are, thus, to a considerable extent responsible for the delay. On behalf of Mr. Gupta it was argued that he cannot be tried along with the two Army officers. Under section 6 of the Criminal Law Amendment Act 1952 the Special Judge may try any conspiracy to commit or any attempt to commit or any abetment of any of the offences punishable under section 161, 165 or 165A of the Indian Penal Code or sub section (2) of section 5 of the Prevention of Corruption Act, and under sub section(3) of section 7 of the same Act a special judge, when trying any case, may also try any offence other than an offence specified in section 6 with which the accused may, under the Code of Criminal Procedure, 1898, be charged at the same trial. Under section 235 of the Code of Criminal Procedure if in one series of acts so connected together as to form the same transaction, more offences than one are committed by the same person, he may be charged with, and tried at one trial for, every such offence, and under section 239 persons accused of the same offence committed in the course of the same transaction, as well as persons accused of an offence and persons accused of abetment, or of an attempt to commit such offence, may be charged and tried together. In The State of Andhra Pradesh vs Kandimalla Subbaih & Anr.(1) this Court observed : "No doubt, the offence mentioned in charge No. 1 is alleged to have been committed not by _just one person but by all the accused and the question is whether all these persons can be joint tried in respect of all these offences. To this kind of charge section 239 would apply. This section provides that the following persons may be charged and tried together, namely : (1) persons accused of the same offence committed in the course of the same transaction; (2) persons accused of an offence and persons accused of abetment or an attempt to commit such an offence; (3) persons accused of different offences committed in the course of the same transaction. Clearly, therefore, all the accused persons could be tried together in respect of all the offences now comprised in charge No. 1. " In that case the first accused was a public servant and the other accused were private individuals to whom the first accused was alleged to have sold transport permit books intended to be issued (1) 829 to Central Excise Officers for granting permits to persons applying bona fide for licences to transport tobacco. This Court also pointed out that "sub section (3) of section 7 provides that when trying any case, a special judge may also try any offences other than an offence specified in section 6 with which the accused may under the Code of Criminal Procedure, 1898 be charged at the same trial, and clearly, therefore, accused No. 1 could be tried by the Special Judge for offences under section 120B read with sections 466, 467 and 420 J.P.C., and similarly the other accused who are, said to have abetted these offences could also be tried by the Special Judge. " There is, therefore, no objection to Mr. Gupta being tried along with the two Army officers. Though in the revision petitions filed before the High Court the question as to whether on the evidence produced before the Special Judge the offences with which the respondents had been charged could be said to have been prima facie established, was raised, the learned Single Judge has not dealt with that question apparently because it was not argued before him. We do not, therefore, propose to say anything about the merits of the case. It is not necessary to refer to the, decision in Madan Lal vs state of Punjab(1) and Bhanwar Singh vs Rajasthan(2) which are relied upon on behalf of the appellants in the view that we have taken that all the offences with which the, accused are charged are cognizable offences, and therefore, the question whether charges which require sanction under s, 196A could be tried alongwith charges which did not require such sanction and the entire charges are vitiated for want of sanction, as held by the learned Single Judge, does not arise. The appeals are allowed and the order of the learned Single Judge is set aside. The Special Judge will now proceed to deal with the cases and dispose of them as expeditiously as possible as the matter has been pending for a long time. V.P.S. Appeals allowed.

Two army officers and a businessman were put up for trial before the Special Judge under the Criminal Law Amendment Act, 1952. They were all charged with offences of conspiracy under section 120B, I.P,. C. read with section 5(2) of the Prevention of Corruption Act and section 420 I.,P.C. The businessman was charged under s.420 and sections 420 and 511, I.P.C. The two army officers were also charged with the offences under section 420 I.P.C. read with section 5(1)(d) of the Prevention of Corruption Act. After some witnesses were examined by the prosecution, on a petition by the three accused, the High Court quashed the charges and the proceedings on the grounds, (1) that the officer who investigated the case was not competent to do so; (2) that the offences were non cognizable and hence the Special Judge could not take cognizance of them without sanction under section 196A, Cr. P.C.; and (3) in view of the enormous length of time that elapsed between the date the registration of the case and the examination of the witnesses (about 4 1/2 years), to proceed further with the case would be an abuse of the process of Court causing harassment to the accused. Allowing the appeal to this Court, HELD : (1) (a) Under section 5A of the Prevention of Corruption Act, before it was amended in 1964, no officer below the rank of Deputy Superintendent of Police could investigate into offences punishable under Ss. 161, 165, 165A I.P.C., or under section 5 of the Prevention of Corruption Act, without the orders of a Presidency Magistrate or the Magistrate First Class. Where an offence is committed in more than one place the order of every Magistrate within whose jurisdiction the offence or part of the offence was committed was not necessary to enable the investigation to be carried on. All that is necessary is that the Magistrate who makes the order under section 5A should have territorial jurisdiction over the place where any part of the offence took place. In the present case, the offence of conspiracy was alleged to have been committed both at Tejpur as well as at Gauhati and the Inspector concerned had obtained the order of the First Class Magistrate, Tejpur. [821H; 822A C] Chinnappa vs State of Mysore, A.I.R. , Chatterjea V. Delhi Special Police Establishment I.L.R. 1969 Assam and Nagaland 275 and Union of India vs B. N. Ananthapadmanabbiah, A. I.,R. , referred to. (b) The High Court expressed doubt whether the order of the Magistrate of Tejpur was a genuine one. If he had any such doubt it was the duty of the Judge to have gone into the matter thoroughly and satisfied 819 himself whether the order was genuine or not, and given a categorical finding on the matter. There should have been no room allowed for any doubt, or suspicion of any underhand dealing or unfair conduct, in a matter of this kind. [823A C] (2) Under Schedule 11 of the Criminal Procedure Code offences under Ss. 161 to 165, I.P.C. and offences punishable with imprisonment for life or imprisonment of 7 years and upwards are shown as cognizable offences. Under section 5(2) of the Prevention of Corruption Act the sentence may extend to 7 years. Therefore, an offence under section 5 of the Prevention of Corruption Act is a cognizable offence. The words 'notwithstanding anything contained in the Code of Criminal Procedure, in the section merely carve out a limited exemption from the provisions of Criminal Procedure Code in so far as they limit the class of persons who are competent to investigate, and to arrest without a warrant. The mere fact that under the Act certain restrictions are placed as to the officers who are competent to investigate into the offences mentioned in section 5A would not make those offences any the less cognizable. Therefore, the offences under section 161, 165 and 165A of the I.P.C. and section 5, Prevention of Corruption Act, are cognizable offences and there is no question of their being cognizable if investigated by a Deputy Superintendent of Police and non cognizable when investigated by an Inspector of Police; nor can there be any question of these offences being cognizable if investigated under section 156, Cr. P.C. but not when investigated under section 5A, Prevention of Corruption Act. It is illogical to say that offences would be cognizable in certain circumstances and non cognizable in certain other circumstances. Therefore, the reed for a sanction under section 196A, Cr. P.C. does not arise. [824A H; 825A D; 827] Union of India vs B. N. Ananthapadmanabhiah, A.I.R. , Union of India vs Mahesh Chandra, A.I.R. 1957 Madhya Bharat 3 and Public Prosecutor vs Sheikh Shariff, A.I.R. 1965 A.P. 372, referred to. Taj Khan vs The State, A.I.R. , Ram Bijhumal vs The State, A.I.R. 1958 Bombay 125 and Gulabsingh vs State, A.I.R. 1962 Bombay 263, approved. G. K. Apte vs Union of India, A.I.R. 1970 Assam & Nagaland 43, disapproved. (3)The need to order re investigation or to begin the trial again after the sanction under section 196A is obtained, and the consequent inordinate delay and harassment of the officers concerned, do not arise at all. Hence, there is no question of quashing the charges on that ground. [827G H] (4) Under section 6 and 7(3) of the Criminal Law Amendment Act, 1952, and Ss. 235 and 239, Cr. P.C. the businessman (private individual) and the two army officers, (public servants) could be tried together. [829A C] The State of Andhra Pradesh vs Kandimalla Subbaiah & Anr. , followed.

Appeal No. 2128 of 1969. Appeal by special leave from the Award dated July 19, 1969 of the Ninth Industrial Tribunal, West Bengal, Calcutta in case No. VIII 396 of 1968. C. K. Daphtarv. Santosh Chatterjee and D. N. Mukherjee, for the appellant. section C. Gupta, Manju Gupta and section C. Agarwala, for the respondents. The Judgment of the Court was delivered by Bhargava, J. The appellant, Messrs Alloy Steel Project, is an undertaking owned, controlled and managed by a Government Company, viz., Messrs Hindustan Steel Ltd. Alloy Steel Project was started in the year 1961 and it went into production in the year 1964 65. No profit was earned at least right up to the year '1967 68. The workmen, however, claimed bonus at the minimum rate prescribed under the Payment of Bonus Act No. 21 of 1965 (hereinafter referred to as "the Act") in respect of the year 1965 631 1966 on ' the plea that this Alloy Steel Project was a / part of the Hindustan Steel Ltd. and could not be treated as a new establishment for purposes of section 16 of the Act. Hindustan Steel Ltd. was itself an establishment which had been in existence for a long period and had been even earning profits, so that exemption could not be granted to this Company in respect of payment of bonus under section 16 of the Act. This claim of the workmen was resisted, by the Company on the plea that Alloy Steel Project was a separate establishment in respect of which separate balance sheets and profit and loss accounts were maintained, so that no bonus was payable until either this Project itself earned profits, or from the sixth accounting year following the year 1964 65 when this Project went into production. The dispute between the work men and the Company. could not be resolved amicably and, consequently, a reference was made under the which came up before the Ninth Industrial Tribunal, West Bengal. The Tribunal held that Alloy Steel Project could not be treated as a separate establishment because, under the Act, a Company is itself an establishment, so that all units of a Company like Hindustan Steel Ltd. will constitute one establishment. Since this Project had not been earning any profits the Tribunal directed payment of bonus at the minimum rate of 4 per cent of wages prescribed by the Act. Aggrieved by this award of the Tribunal, the Company has come up in this appeal to this Court by special leave, though the name of the appellant is shown as Alloy Steel Project, because it was under this name that the reference was dealt with by the Tribunal. The main basis of the decision of the Tribunal is that 'the word establishment ' has been used in this Act to indicate a "Company" as called in common parlance. " It was on this view that the Tribunal further Proceeded to consider whether this Alloy Steel Project could be held to be an establishment separate from Hindustan Steel Ltd., or it had to be treated as a part of the parent establishment, viz., Hindustan Steel Ltd. In this approach, it is clear that the Tribunal committed an obvious error, as it ignored the indications which are manifest from the language used in the Act. In section 2, sub section (15) and (16), establishments have been divided into two classes and their meaning has been defined. In clause (16), "establishment in public sector ' is defined as meaning an establishment owned, controlled or managed by (a) a Government company as defined in section 617 of the ; (b) a corporation in which not less than forty per cent of its capital is held (whether singly or taken together) by 632 (i) the Government; or (ii) the Reserve Bank of India; or (iii) a corporation owned by the Government or ' the Reserve Bank of India. In clause (15) of section 2, "establishment in private sector" is defined to mean any establishment other than an establishment in public sector. Thus, between these two clauses, all establishments are covered. If an establishment is in public sector, it is covered by the definition in clause (16). If the establishment is not in public sector, it will be covered by the definition of "establishment in private sector" in clause (15). The significant words are those contained in clause (16) which show that an establishment in a public sector hag to be owned, controlled or managed by a Government company, or by a corporation of the nature described in that clause. Obviously, therefore, an establishment in a private sector would be one which is owned, controlled or managed by a person or body other than a Government company or a corpora tion of the nature described in clause (16). In this view, an establishment cannot be identified with a company. It would be absurd to say that a company is owned, controlled or managed by a Government company or a corporation. Obviously, the word "establishment" is intended to indicate something different from a company as defined in the . This is further clarify by the provisions of sub section (3) of section I which lays down the applicability of the Act. The Act has been made applicable to every factory and every other establishment in which twenty or more persons are employed on any day during an accounting year. Supposing a company has a factory in one premises and has another workshop entirely distinct and separate from that factory, in which the number of persons employed is less than 20. The Act itself will apply to the factory, but will not apply to the other establishment in which the number of employees is less than 20. This applicability of the Act will be independent of the other provisions of the Act. Learned counsel for the respondent workmen relied on section 3 of the Act to urge that even the establishment employing less than 20 persons will be a part of the parent establishment consisting of the factory. Section 3 is as follows : "3. Where an establishment consists of different departments or undertakings or has branches, whether situated in the same place or in different places, all such departments or undertakings or branches shall be treated as parts of the same establishment for the purpose of computation of bonus under this Act 633. Provided that where for any accounting year a separate balance sheet and profit and loss account are prepared and maintained in respect of any such department or undertaking or branch, then, such department or undertaking or branch shall be treated as a separate establishment for the purpose of computation of bonus under this Act for that year, unless such department or undertaking or branch was, immediately before the commencement of that accounting year treated as part of the establishment for the purpose of computation of bonus. " It is to be noted that the principal part of section 3 lays down that different departments or undertakings or branches of an establishment are to be treated as part of the same establishment only for the purpose of computation of bonus under the Act. They cannot be treated as part of one establishment for purposes of subsection (3) of section 1 of the Act. In fact, section 3 cannot be, resorted to at all when the Act itself is inapplicable in view of the provision contained in section 1, sub section It is, thus, quite clear that the Tribunal went entirely wrong in holding that simply because Alloy Steel Project is owned, controlled and managed by Hindustan Steel Ltd., it has to be treated as a part of Hindustan Steel Ltd. which is itself an establishment. Hindustan Steel Ltd. cannot be described as an establishment. The facts appearing on the record show that Hindustan Steel Ltd. has a number of. establishments. These include Alloy Steel Project besides the Head Office, Rourkela Steel Plant, Bhilai Steel Plant, Durgapur Steel Plant, Coal Washeries Project and Bokaro Steel Project. The Company, Hindustan Steel Ltd., cannot be equated with any one of these units. They are all separate undertakings, departments or branches owned, controlled and managed by one single Company and, consequently,. the point raised has to be decided on the basis whether, under the proviso to section 3 the Alloy Steel Project is to be treated as a separate establishment, or is to be treated as part of the main establishment owned by Hindustan Steel Ltd. Learned counsel for the respondent workmen, however, advanced a new argument which was not put forward before the Tribunal. His submission was that, if an establishment of a Company consists of a number of departments, undertakings or branches, the principal part of section 3 will apply and all such departments, undertakings or branches must be treated as parts of one single establishment for purposes of computation of bonus under the Act, but the proviso to section 3 will not apply in such a case. According to him, the proviso to section 3 will apply to establishments consisting of different departments, undertakings or branches which are owned, controlled or managed by persons other 634 than companies. This argument was based on the reasoning that, in order to calculate available surplus for distribution of bonus in the case of a company the Act lays down in section, 6 (d) read with the Third Schedule that the deductions to be made from net _profits will also include dividends payable on , preference share ,capital, and 8.5 per cent of its paid up equity share, capital as at the commencement of the accounting year. This provision cannot be given effect to in respect of separate units of a Company, .because the paid up capital or the preference share capital is not ,allocated between different units. In the case of the present Company, viz., Hindustan Steel Ltd., the entire paid up capital is shown in the accounts of the Head Office. The money needed for working of the various units, including the Alloy Steel Project, is shown as remittance received from the Head Office and not as. paid up capital of the Alloy Steel Project etc. The result is that, if Alloy :Steel Project or other units of the Hindustan Steel Ltd. are treated as separate establishments and available surplus is calculated separately for each unit, there will be no deduction @ 8.5 per cent ,of the paid up equity share capital as envisaged by section, 6(d) ,and the Third Schedule of the Act. We do not think that there is any force in this argument. First, it would be a strange method of construction of language to hold that the establishment referred to in the main part of section 3 will include all different departments, undertakings and "branches of a company, while it will not do so in the proviso to 'the same section. Such different meanings in the same section in respect of the same words or expression cannot be accepted. Secondly, it seems to us that no difficulty of the nature pointed out by learned counsel can arise in calculating available surplus. 'Wherever the Act lays down that certain deductions are to be made, it is obvious that those deductions will only be effective if, in fact, circumstances do exist justifying such deductions. In the 'Third Schedule itself, the first ' deduction envisaged is dividend payable on preference share capital. A number of companies do not have preference share capital. In such cases, clearly, no ,occasion would arise for making such a deduction. Very similar is the position with regard to certain other deductions which are permissible under the Second Schedule which principally lays down the method of calculation of available surplus. There is, therefore, no reason for interpreting the proviso to section 3 in the manner urged by learned counsel simply because, in the case of separate departments, undertakings or branches of the establishment of a company, it may not be possible to make a deduction @ 8.5 per cent of the paid up equity share capital. In the present case, there is very clear evidence that, though the Company, Hindustan Steel Ltd., has a number of undertakings, 635 Separate accounts are kept for each separate undertaking. The annual reports for three years were produced before the Tribunal. They clearly indicate that separate balance sheet was prepared for each unit and separate profit and loss account was worked out for each unit, except that, for the Head Office, though a separate balance sheet was prepared, the profit and loss was worked out on the basis of the consolidated accounts. The Tribunal, in support of its view that Alloy Steel Project is a part of the establishment constituted by the Company, Hindustan Steel Ltd., relied on the circumstance that a consolidated balance sheet is prepared for the Company in respect of all its units and after such consolidation, profit and loss is also worked out for all the establishments together so as to find out the actual profit and loss earned or incurred by the Company itself. From this, the tribunal sought to infer that there were no separate accounts in respect of each unit as are required to be maintained before they can be treated as separate establishments under the proviso to section 3. The Tribunal has obviously gone wrong in ignoring the fact that separate balance sheets and profit and loss accounts are in fact maintained for each separate unit and the consolidated accounts are prepared only for the purpose of complying with the requirements of the companies Act. The does lay down the requirement that a consolidated balance sheet and profit and loss account for all the units of the Company must be prepared and, for, that purpose, quarterly statements of accounts have to be sent by each unit to the Head Office. There is, however, no provision even in the containing a prohibition to maintenance of separate balance sheets and separate profit and loss statements for each unit for purposes of the Act. That accounts are separately maintained for each unit is not only established from the various annual reports filed before the Tribunal and the evidence of, the Company 's witness Umapada Chakraborty, but is also admitted by Suprakash Kanjilal, the only witness examined on behalf of the workmen. The latter also admitted that separate bonus calculation is made in respect of each unit and bonus was declared separately in each unit. No bonus was, however, declared in respect of the Alloy Steel Project. That declaration was not made because of the claim that Alloy Steel Project was exempt from payment of bonus under section 16 of the Act. Section 16 runs as follows: "16. (1) Where an establishment is newly set up, whether before or after the commencement of this Act, ,the employees of such establishment shall be entitled to be paid bonus under this Act only (a) from the accounting year in which the employer derives profit from such establishment; or 918Sup CI/71 636 (b) from the sixth accounting year following the accounting year in which the employer sells the goods produced or manufactured by him or renders services, as the case may be, from such establishment, whichever is earlier Provided that in the case of any such establishment the employees thereof shall not, save as otherwise provided in section 33, be entitled to be paid bonus under this Act in respect of any accounting year prior to the accounting year commencing on any day in the year 1964. Explanation I. For the purpose of this section, an establishment shall not be deemed to be newly set up merely by reason of a change in its location, management, name or ownership. Explanation II. For the purpose of clause (a), an employer shall not be deemed to have derived profit in any accounting year unless (a) he has made provision for that year 's depreciation to which he is entitled under the Income tax Act or, as the case may be, under the agricultural income tax law; and (b) the arrears of such depreciation and losses incurred by him in respect of the establishment for the previous accounting years have been fully set off against his profits. Explanation III. For the purpose of clause (b), sale of the goods produced or manufactured during the course of the trial run of any factory or of the prospecting stage of any mine or an oil field shall not be taken into consideration and where any question arises with regard to such production or manufacture, the decision of the appropriate Government, made after giving the parties a reasonable opportunity of representing the case, shall be final and shall not be called in question by any court or other authority. (2) The provisions of sub section (1) shall, so far as may be, apply to new departments or undertakings or branches set up by existing establishments 6 3 7 Provided that if an employer in relation to an existing establishment consisting of different departments or undertakings or branches (whether or not in the same industry) set up, at different periods has, before the 29th May, 1965, been paying bonus_to the employees of all such departments or undertakings or branches irrespective of the date on which such departments or undertakings or branches were set up, on the basis of the consolidated profits computed in respect of all such departments or undertakings or branches, then, such employer shall be liable to pay bonus in accordance with the provisions of this Act to the employees of all such departments or undertakings or branches (whether set up before or after that date) on the basis of consolidated profits computed as aforesaid. " Sub section (1) of section 16 grants exemption from payment of bonus to establishments newly set up for a period of six years, following the accounting year in which the goods produced or manufactured are sold for the first time and, in the alternative, up, to the year when the new establishment results in profit, whichever is earlier. If the Alloy Steel Project is treated as an establishment newly set up for purposes of section 16(1), the exemption claimed would be fully justified. Section 16(2) of the Act makes it clear that the provisions of sub section (1) are to apply even to new departments, undertakings or branches set up by existing establishments. Consequently, even if Alloy Steel Project is treated as a new undertaking set up by the existing establishments of Hindustan Steel Ltd., the exemption under section 16(1) would be avail able to it. The proviso to sub section (2) of section 16 also does not stand in the way of this claim, because there is no evidence at all that in any year, after Alloy Steel Project was set up bonus was paid to the employees of all the units on the basis of consolidated profits of all such units. The only exception has been in the case, of workmen of the Head Office where no separate profit and loss was worked out and the bonus was paid on the basis of the consolidated Profits of all the units belonging to Hindustan Steel Ltd. That, of course, was fully justified, because the Head Office was working for all the units, though as a separate unit. It was in the accounts of the Head Office that the entire paid up capital was credited and advances were made by the Head Office to the various units out of this capital or out of loans taken by the Head Office. In the case of the Head Office, therefore, the calculation of bonus on the basis of consolidated accounts was Justified; but that does not affect the principle to be applied to the separate units for which separate accounts, separate balance sheets and separate profit and loss statements are maintained. The proviso to sub 638 section (2) of section 16 only comes in the way it bonus is paid in any year to the employees of all the units on the basis of consolidated accounts. That has never been done in the case of the Hindustan Steel Ltd. Consequently, the Alloy Steel Project should have been treated as a separate establishment newly set up in the year 1961. It went into production in 1964 65 and did not, earn any profits at all till 1967 68. Therefore, no bonus was payable, to, the workmen of this undertaking for the year 1965 66 in view ,of the provisions of section 16(1) of the Act. The appeal is allowed, the order of the Tribunal is set aside, and the reference of the dispute is answered accordingly. In the circumstances of this case, we direct parties to bear their own ,costs of the appeal. G.C. Appeal allowed.

The Alloy Steel Project was an undertaking controlled and managed by a government company, namely, the Hindustan Steel Ltd. Alloy Steel was started in 1961 and went into production in 1964 65. No profit was earned up to 1967 68. The workmen claimed bonus at the minimum rate prescribed under the Payment of Bonus Act, 21 of 1965 in respect of the year 1965 66. On behalf of the Alloy Steel Project exemption from payment of bonus was claimed under section 16(1) of the Act on the ground that it was a new establishment and had not made profits. The Industrial Tribunal to which reference was made held that Alloy Steel could not be treated as a separate establishment because under the Act a company is itself an establishment so that all units of a company like Hindustan Steel Ltd. will constitute one establishment. However, since Alloy Steel had not been earning profits the Tribunal directed payment of bonus at the minimum rate of 4% of wages as prescribed by the Act. Aggrieved by this Award of the Tribunal the company appealed. HELD : The Tribunal erred in holding the word 'establishment ' to be synonymous with 'company '. In doing so it ignored the indications which are manifest from the language of the Act. The significant words are those contained in section 2(16) which show that an establishment in a public sector has to be owned, controlled or managed by a Government company or by a corporation of the nature described in the clause. Obviously therefore an 'establishment in private sector ' defined in section 2(15) to mean an establishment not in the public sector would be one which is owned, controlled or managed by a person or body other than a Government company or a corporation of the nature described in section 2(16). In this view an establishment cannot be identified with a company. It would be absurd to say that a company is owned, controlled or managed by a Government company or corporation Obviously, the word 'establishment ' is intended to indicate something different from a company as defined in the Companies Act. [631 F 632 D] (ii) Alloy Steel was a separate establishment by virtue of the proviso to section 3 of the Act because for each of the undertakings of Hindustan Steel Ltd. including Alloy Steel separate accounts were kept though for the purpose of compliance with the provisions of the Companies Act a consolidated balance sheet and profit and loss account were also prepared. There was no substance in the contention that the proviso to section 3 applies only to departments undertaking or branches controlled and managed by persons 630 other than companies. It would be a strange method of construction of language to hold that the establishment referred to in the main part of section 3 will include all different departments undertakings and branches of a company, while it will not do so in the proviso to the same section. There is no reason for interpreting the proviso to section 3 in this manner simply because in the case of separate departments, undertakings or branches of the establishment of a company, it may not be possible to make a deduction @ 8.5% of the paid up equity share capital. [635 C D; 633 G 634 H] (iii) Sub Section (1) of section 16 grants exemption from payment of bonus to establishments newly set up for a period of six years following ,the accounting year in which the goods produced or manufactured are sold for the first time and, in the alternative; upto the year when the new establishment results in profit, whichever is earlier. If the Alloy Steel Project was treated as an establishment newly set up for the purposes of section 16(1) the exemption claimed would be fully justified. Section 16(2) of the Act makes it clear that the provisions of sub section (1) are to apply even to new departments, undertakings, or branches set up by existing establishment. Consequently, even if Alloy Steel Project was treated as a new undertaking set up by the existing establishments of Hindustan Steel Ltd. the exemption under section 16(1) would be available to it. [637 D E] The proviso to Sub section (2) of section 16 only comes in the way if bonus is paid in any year to the employees of all the units on the basis of the consolidated accounts. That had never been done in the case of the Hindustan Steel Ltd. Consequently the Alloy Steel Project should have been treated as a separate establishment newly set up in the year 1961. , It went into production in 1964 65 and did not earn any profits at all till 1967 68. Therefore no bonus was payable to the workmen of this undertaking for the year 1965 66 in view of the provisions of section 16(1) of the Act. [638 A B]

N: Criminal Appeal No. 350 of 1978. (From the Judgment and order dt. 29 5 78 of the Gujarat High Court in Spl. Criminal Appln. No. 20 of 1978) Ram Jethmalani and Mrs. K. Hingorani for the appellant. section K. Mehta and M. N. Shroff for the respondent. The Judgment of the Court was delivered by TULZAPURKAR, J. On September 29, 1978 the detenu herein was directed to be released forthwith on his detention order being set aside and we had stated that we would give our reasons for our order later which we do presently. 217 By a detention order passed on January 4, 1978 under section 3(1) of the (hereinafter referred to as "COFEPOSA") the detenu Gopal Ghermal Mehta was detained by the Additional Chief Secretary to the Government of Gujarat (Respondent No. 1) with a view to preventing him from engaging in transporting smuggled goods. The grounds of detention were served upon him on the same day i.e. On January 4, 1978. Briefly stated the grounds disclosed the following material against the detenu: on receipt of certain information on December 12, 1977 by the Customs officers of Ahmedabad, the said officers had kept a watch for a Fiat Car No. GTI 6020 and the said car with five occupants was intercepted in the early hours of December 13, 1977 near Naroda Railway Crossing and the occupants (the detenu and four others) were taken to the Customs Divisional Office, Paldi, Ahmedabad for examination. The detenu and the other four occupants of the car denied that they were carrying any smuggled gold or prohibited articles, but on search of one of the occupants Sheveram Atmaram Chandwani two cloth bags were recovered D, from him, in one of which there were 27 gold bars of foreign marking weighing 19 tolas valued at Rs. 2,16,00 and in the other there were 18 pieces of gold bearing 'Trishul ' mark valued at Rs. 1,94,400/ . Chandwani in his statement before the Customs officers stated that the two bags which he was carrying on his person belonged to the detenu who was dealing in Silver and Gold in Udaipur and that he was merely a carrier who used to receive remuneration of Rs. 100/ per trip from the detenu. Two statements of the detenu were recorded by the Customs officers on December 13 and 14, 197$, in which he corroborated the version of Chandwani but added that the entire quantity of foreign marked gold and the 'Trishul ' marked gold belonged to one Prem of Chandni Chowk, Delhi, for and on whose behalf he was carrying the gold from Delhi to Udaipur and from Udaipur to Ahmedabad for disposing it of to two persons, Namely, Poonamchand Laxmanji and Bhagubhai in Ahmedabad. The detenu also stated that this had been going on for about six to eight months and that he had made five to six trips in a month and on each such trip he used to carry 2 1/2 to 3 kgs. of gold. He further admitted that the Fiat Car in question had been purchased for this purpose for Rs. 15,000/ which money had been provided by Prem. He further stated that after disposal of the gold belonging to Prem at Ahmedabad he used to carry the sale proceeds to Prem and account for the same at the time of the next transaction between him and Prem. Counsel for the petitioner (being the wife of the detenu) did not dispute that the aforesaid material disclosed in the grounds was 15 817SCI/78 218 prima facie sufficient to show the detenu 's involvement in the racket of smuggling gold, namely, transporting smuggled gold from Delhi to Udaipur and from Udaipur to Ahmedabad but he challenged the detention order on the ground that procedural safeguards had not been followed vitiating the requisite satisfaction on the part of the detaining authority under section 4(1). It appears that when the interrogation of the detenu was going on while he was in custody of the Customs officials, Smt. Devyantiben Shah, an Advocate of the detenu addressed a letter as also a telegram, both dated December 14, 1977, making a grievance about the wrongful restraint and illegal custody of the detenu by the Customs officers beyond 24 hours and expressing apprehension that . the detenu had been so detained with a view to obtain confessional statements against his will. The receipt of the letter was disputed but the Assistant Collector of Customs admitted the receipt of the telegram from the Advocate on December 15, 1977. By his reply dated December 15, 1977 sent to the Advocate, the Assistant Collector denied the allegations made in the telegram. Admittedly on December 14, 1977, the Advocate had gone to the Customs office and had sought permission to remain present at the time of the interrogation of the detenu but her request was not acceded to as the Customs Officers were of the view that there was no provision in law permitting an Advocate to remain present at the time of interrogation. Further on this occasion the Advocate was told that the detenu will be produced before the Magistrate at 5.30 p.m. On that very day and, therefore, she waited in the Magistrate 's Court upto 5.30 p.m. to obtain bail for the detenu but as the detenu was not produced the Magistrate declined to pass any order on the bail application. On December 15, 1977 the detenu was produced before the Magistrate who remanded him to Customs custody for five days in spite of opposition by the Advocate. On December 20, 1977 the detenu was again produced before the Magistrate and even on this occasion bail was refused but the detenu was remanded to judicial custody permitting further interrogation by Customs Officers. On December 22, 1977 while he was in judicial custody the detenu was interrogated by Customs officers and his statement was recorded on that day but the detenu refused to sign the same and instead made an endorsement that his earlier statements dated December 13 and 14, 1977 and the facts stated therein were not correct. In other words, in his statement dated December 22, 1977 the detenu had resiled from his earlier confessional statements and had squarely repudiated the facts stated therein. On January 3, 1978 the Advocate of the detenu made another application for getting him released on bail as the period of remand was to expire on January 1978 and that application was fixed for hearing on January 6, 1978 but on January 4, 1978 itself while the 219 detenu was in judicial custody the Additional Chief Secretary to the Gujarat Government (Respondent No. 1) passed the impugned order under s.3(1) of the "COFEPOSA" and the detenu was detained thereunder. The aforesaid detention was challenged by the appellant (wife of the detenu) before the Gujarat High Court under Article 226 of the Constitution by filing Special Criminal Application No. 20 of 1978 seeking a writ of habeas corpus for the release of the detenu principally on the ground that there was complete non application of mind on the part of the detaining authority (respondent No. 1) to the attendant circumstances in which the confessional statement of the detenu on which the detention order was mainly based were recorded, particularly the vital facts that transpired during the interrogation as also those that followed the recording of those statements. It was contended that apart from the apprehension expressed in the Advocate 's telegram that the detenu was being detained with a view to obtain his confessional statements under duress, the said confessional statements had actually been retracted by the detenu at the first available opportunity when he was in judicial custody on the ground that these had been involuntarily extorted from him and that such retraction of the confessional statements was not intimated to the detaining authority and was not considered by it before passing the impugned detention order and as such for want of considering such vital fact the subjective satisfaction of the detaining authority got vitiated and the impugned order was liable to be set aside. The High Court, however, rejected the said contention as also the other contentions urged on behalf of the appellant (the wife of the detenu) and dismissed the said application on May 29, 1978. Against this dismissal the present appeal has been preferred. Counsel for the petitioner contended before us that the High Court had clearly erred in taking the view that since the contents of the telegram dated December 14, 1977 expressing the apprehension had been made known to the detaining authority it could not be said that this material aspect of the case had been kept back from the detaining authority. It was pointed out that the mere expression of an apprehension that confessional statements might be extorted was different from the actual obtaining of the statements under pressure of which a complaint had been made by the detenu in his statement recorded on December 22, 1977 wherein the earlier statements had been completely retracted and it was urged that the fact that there was such retraction of the confessional statements by the detenu at the first 220 available opportunity was not communicated or placed before the detaining authority when it considered the question of passing the impugned order. Counsel further contended that instead of considering whether these facts were vital enough to require the application of mind by the detaining authority, the High Court went on to record findings of fact, to the effect (i) that it could not be said that the detenu was in illegal custody: (ii) that the confessional statements could not have been extracted under compulsion and (iii) that the said statements were not obtained under duress and in doing so the High Court clearly acted in excess of jurisdiction and contrary to the well established principles applicable to the issue of habeas corpus in preventive detention case. In any case it was for the detaining authority to apply its mind to these aspects before deciding to issue the impugned order. Counsel further contended that it was undisputed that the Advocate was not allowed to be present nor allowed to be consulted during the interrogation in spite of request having been made in that behalf which clearly showed that the detenu was under duress and not a free person. In any event, counsel contended, the satisfaction of the detaining authority must be regarded as vitiated inasmuch as these vital facts, namely, (i) that during interrogation in spite of request neither the presence nor the consultation of the Advocate was permitted; (ii) that in spite of intimation to the Advocate in that behalf the detenu was not produced before the Magistrate at 5.30 p.m. On December 14, 1977 and (iii) that the confessional statements had been squarely retracted by the detenu on December 22, 1977 at the first available opportunity while he was in judicial custody all of which had a material bearing and would have influenced the mind of the detaining authority one way or the other were neither placed before nor considered by the detaining authority before passing the detention order on January 4, 1978 and, therefore, the impugned order was liable to be set aside. We find considerable force in these contentions urged by counsel for the appellant before us. It is well settled that the subjective satisfaction requisite on the part of the detaining authority, the formation of which is a condition precedent to the passing of the detention order will get vitiated if material or vital facts which would have a bearing on the issue and would influence the mind of the detaining authority one way or the other are ignored or not considered by the detaining authority before issuing the detention order. In Sk. Nizamuddin vs State of West Bengal(1) the order o`f detention was made on September 10, 197 under s.3(2) (a) of MISA based on the subjective satisfaction of the District Magistrate that it was necessary to detain the petitioner with (1) ; 221 a view to preventing him from acting in a manner prejudicial to the maintenance of supplies and services essential to the community and his subjective satisfaction, according to the ground of detention furnished to the petitioner, was founded on a solitary incident of theft of aluminium wire alleged to have been committed by the petitioner on April 14, 1973. In respect of this incident of theft a criminal case was filed inter alia against the petitioner in the Court of the Sub Divisional Magistrate Asansol, but the criminal case was ultimately dropped as witnesses were not willing to come forward to give evidence for fear of danger W their life and the petitioner was discharged. It appeared clear on record that the history sheet of the petitioner which was before the District Magistrate when he made the order of detention did not make any reference to the criminal case launched against tho petitioner, much less to the fact that the prosecution had been dropped or the date when the petitioner was discharged from that case. ID connection with this aspect this Court observed as follows: "We should have thought that the fact that a criminal case is pending against the person who is sought to be proceeded against by way of preventive detention is a very material circumstance which ought to be placed before the District Magistrate. That circumstance might quite possibly have an impact on his decision whether or not to make an order of detention. It is not altogether unlikely that the District Magistrate may in a given case take the view that since a criminal case is pending against the person sought to be detained, no order of detention should be made for the present, but the criminal case should be allowed to run its full course and only if it fails to result in conviction, then preventive detention should be resorted to. It would be most unfair to the person sought to be detained not to disclose the pendency of a criminal case against him to the District Magistrate. " It is true that the detention order in that case was ultimately set aside on other grounds but the observations are quite significant. These observations were approved by this Court in Suresh Mahato vs The District Magistrate, Burdwan and others(1). The principle that could be clearly deduced from the above observations is that if material or vital facts which would influence the mind of the detaining authority one way or the other on the question whether or not to make the detention order, are not placed before or are not considered by the detaining authority it would vitiate its subjective satisfaction rendering the detention order illegal. After all the detaining authority must exercise (1) A.I.R. 1975 S.C. 728. 222 Due care and caution and act fairly and justly in exercising the power of detention and if taking into account matters extraneous to the scope and purpose of the statute vitiates the subjective satisfaction and renders the detention order invalid then failure to take into consideration the most material or vital facts likely to influence the mind of the authority one way or the other would equally vitiate the subjective satisfaction and invalidate the detention order. In the instant case admittedly three facts were not communicated to or placed before the detaining authority before it passed the impugned order against the detenu, namely, (i) that during interrogation of the detenu, in spite of request neither the presence nor the consultation of the Advocate was permitted; (ii) that in spite of intimation to the Advocate in that behalf the detenu was not produced before the Magistrate on December 14, 1977 and (iii) that the confessional statements were squarely retracted by the detenu on December 22, 1977 at the first available opportunity while he was in judicial custody; the first two had a bearing on the question whether the confessional statements had been extorted under duress from the detenu or not, while the third obviously was in relation to the confessional statements which formed the main foundation of the impugned order and such were vital facts having & bearing on the main issue before the detaining authority. As regards the first this Court in Nandini Satpathy 's(1) case has observed in para 63 of the judgment thus: "Lawyer 's presence is a constitutional claim in some circumstances in our country also, and, in the context of Article 20(3), is an assurance of awareness and observance of the right to silence. The Miranda decision has insisted that if an accused person asks for lawyer 's assistance, at the stage of interrogation, it shall be granted before commencing or continuing with the questioning. We think that Article 20(3) and Article 22(1) may, in a way, be telescoped by making it prudent for the police to permit the advocate of the accused, if there be one, to be present at the time he is examined. Overreaching Article 20(3) and Section 16(2) will be obviated by this requirement. We do not lay down that the police must secure the services of a lawyer. That will Lead to 'police station lawyer ' system, an abuse which breeds other vices. But all that we mean is that if an accused person expresses the wish to have his lawyer by his side when his examination goes on, this facility shall not be denied, without being exposed to the serious reproof that involuntary self crimination secured in secrecy and by coercing the will, was the project." (1)[978] 2 S.C.C.424. 223 In this case the request to have the presence/consultation of a lawyer was turned down owing to some misconception of the legal position but that apart, the fact that such a request was made and refused ought to have been intimated to the detaining authority. Further, in passing the detention order the detaining authority obviously based its decision on the detenu 's confessional statement of December 13 and 14, 1977 and, therefore, it was obligatory upon the Customs officers to report the retraction of those statements by the detenu on December 22, 1977 to the detaining authority, for, it cannot be disputed that the fact of retraction would have its own impact one way or the other on the detaining authority before making up its mind whether or not to issue the impugned order of detention. Questions whether the confessional statements recorded on December 13 and 14, 1977 were voluntary statements or were statements which were obtained from the detenu under duress or whether the subsequent retraction of those statements by the detenu on December 22, 1977 was in the nature of an after thought, were primarily for the detaining authority to consider before deciding to issue the impugned detention order but since admittedly the aforesaid vital facts which would have influenced the mind of the detaining authority one way or the other were neither placed before nor considered by the detaining authority it must be held that there was non application of mind to the most material and vital facts vitiating the requisite satisfaction of the detaining authority thereby rendering the impugned detention order invalid and illegal. For these reasons we set aside the impugned detention order. P.B.R. Appeal allowed.

A detention order, under section 3(1) of the , was passed by the respondent against the detenu (appellant 's husband) with a view to prevent him from engaging in transporting smuggled gold. When the detenu was in the custody of the Customs officers, his advocate addressed a letter and sent a telegram to them protesting against his detention and illegal custody beyond 24 hours and also expressing an apprehension that he was being detained with a view to obtain confessional statements under duress. It was admitted that the advocate 's request for permission to remain present at the time of interrogation of the detenu was turned down by the Customs officers. The advocate was also told that the detenu would be produced before a Magistrate at 5.30 p.m. On the day of her request. But that was not done. He was produced on the following day and was remanded to judicial custody permitting further interrogation by the Customs officers. During such interrogation while in judicial custody, the detenu refused to sign the further statements and squarely resiled from his earlier confessional statements disowning the facts therein stated. While the detenu 's application for bail was pending before the Magistrate, the respondent passed the impugned order. In her petition under article 226 of the Constitution for the issue of a writ of habeas corpus the appellant contended that the order of the detaining authority was liable to be set aside because full facts of the case were not intimated to it before detention order was passed and, therefore, there was complete non application of mind of the detaining authority to the attendant vital circumstances. The High Court dismissed the petition. Allowing the appeal, ^ HELD: (1) The impugned order was invalid and illegal because there was complete non application of the mind of the detaining authority to the most material and vital facts which would have influenced the mind of The detaining authority one way or the other as these were neither placed before it nor considered by the detaining authority. [223E] (2) It is well settled that if material or vital facts, which would influence the mind of the detaining authority one way or the other on the question whether or not to make the detention order, are not placed before or are not con 216 sidered by the detaining authority it would vitiate its subjective satisfaction rendering the detention order illegal. The detaining authority must exercise due care and caution and act fairly and justly in exercising the power of detention and if taking into account matters extraneous to the scope and purpose of the statute vitiates the subjective satisfaction and renders the detention order invalid then failure to take into consideration the most material or vital facts likely to influence the mind of the authority one way or the other would equally vitiate t the subjective satisfaction and invalidate the detention order. [222A B] In the instant case three facts were not communicated to or placed before the detaining authority before it passed the impugned order against the detenu viz., (i) during the interrogation, in spite of the request, neither the presence nor consultation of the advocate was permitted, (ii) in spite of intimation to the advocate by the Customs officers the detenu was not produced before the Magistrate at the appointed time and (iii) the confessional statements were squarely retracted by the detenu at the first available opportunity while he was in judicial custody. The first two had a bearing on the question whether the confessional statements had been extorted under duress from the detenu or not. while the third was in relation to the confessional statements which formed the foundation of the impugned order and as such were vital facts having a bearing on the main issue before the detaining authority. Nizamuddin vs State of West Bengal ; ; Suresh Mahato vs The District Magistrate, Burdwan & Ors. AIR 1975 SC 728; Nandini Satpathy vs The State of Orissa ; ; applied. (3) The fact that the request to have the presence or consultation of the h lawyer was made and refused ought to have been intimated to the detaining authority. Further in passing the detention order the detaining authority based its decision on the detenu 's confessional statements and, therefore, it was obligatory upon the Customs officers to report to the detaining authority the retraction of those statements by the detenu. In fact of retraction would have its own impact one way or the other on the detaining authority before making up its mind whether or not to issue the impugned order of detention. [223A B]

126 of 1958. Petition under Article 32 of the Constitution of India, for enforcement of Fundamental Rights. N. C. Chatterjee and B. V. section Mani, for the petitioners. B. Sen and R. H. Dhebar, for the respondent. November 20. The Judgment of the Court was delivered by DAS GUPTA J. The petitioners who describe them selves as Road side Station Masters challenge in this petition under article 32 of the Constitution the constitutionality of the channel of promotion for Guards to higher grade Station Masters ' posts as notified in the issue of the Central Railway 'Weekly Gazette No. 3 dated November 23, 1951. Under this Notification Guards have two lines of promotion open to them. One is that by promotion, C grade Guards may become B grade Guards on Rs. 100 185 and thereafter by further promotion A grade Guaids on Rs. 150 225. The second line of promotion open to them is that by an examination described curiously enough as Slip 45 examination C grade Guards are eligible for promotion to posts of Station Masters on RS. 150 225 scale and thereafter to all the further promotions that are open to the Station Masters, viz., higher ,cales of Rs. 200 to Rs. 300, Rs. 260 to Rs. 350, Rs. 300 to Rs. 400 and finally Rs. 360 to Rs. 500; B grade Guards and A grade Guards are also on passing Slip 45 examination eligible for promotion to posts of Station Masters on Rs. 200 300 pay scale and thereafter to further promotions to the higher scales in the Station Masters ' line. The Road side Station Masters on pay scale of Rs. 80 to Rs. 170 313 (the scale was formerly Rs. 64 170) can also reach by promotion the grade of Rs. 150 225 but only after going through an intermediate stage of Rs. 100 185. Similarly Station Masters on Rs. 100 185 scale may also reach the stage of Rs. 200 300 but only after passing through the intermediate stage of Rs. 150 225. Obviously the provisions enabling Guards to become Station Masters on the pay scale of Rs. 150 225 places the Station Masters of Rs. 80 170 scale at a disadvantage as against Guards on that pay scale and also puts the Road side Station Masters on the pay of Rs. 100 185 pay scale at a disadvantage as against Guards on that scale of pay. The petitioners contend that the channel of promotion in so far as it enables Guards to be promoted as Station Masters in addition to the other line of promotion open to them as Guards amounts to a denial of equal opportunity as between Road side Station Masters and Guards in the matter of promotion and thus contravenes the provisions of article 16(1) of the Constitution. It was further alleged in the petition that taking advantage of this channel of promotion, Guards become Station Masters on Rs. 150 225 at a very much younger age than Road side Station Masters and thus block the chances of higher promotion to Road side Station Masters who reach the Rs. 150 225 scale when they are much older. As instances of how the impugned provisions in the channel of promotion are harmful to the Road side Station Masters, the petitioners state: that while the petitioner No. 2 even after completing 32 years of service has remained in the grade of Rs. 100 185 as Station Master, Guards of equal status and standing have reached gazetted rank within the same period of service; that whereas the petitioner No, 3 has come by promotion to the grade of Rs. 150225 after putting in 21 years of service, Guards of his standing have risen to the grade of Rs. 360 500 by virtue of the impugned channel of promotion and several of his juniors who entered the Railway service long after him as Guards have superseded him and are working in the grade of Rs. 360 500; that while the 314 petitioner No. 4 having entered into service as Telegraph Candidate and having passed all the requisite examinations prescribed for the higher grade of Station Master within a period of 2 1/2 years after putting in 6 1/2 years of service is still in the grade of Rs. 80 170, Guards of his length of service and departmental qualification are entitled for promotion as an Assistant Station Master in the grade of Rs. 150 225 within about the same length of service. The respondents the General Manager, Central Railways, Bombay, V.T., the Chairman Railway Board, New Delhi and the Union of India, who contest the application contend that the channel of promotion providing these opportunities to Guards does not in any way contravene the provisions of article 16(1) of the Constitution. They also deny the correctness of the allegation that as a result of these opportunities Guards become Station Masters on Rs. 150 225 pay scale at a Younger age than Road side Station Masters. On the material before us it is not possible to come to a firm conclusion as regards the relative age at which Guards or Road side Station Masters ordinarily reach the pay scale of Rs. 150 225. Assuming, however, the position to be as stated in the petition, that may only evoke some sympathy for the Road side Station Masters, but does not in any way affect the decision of the question whether article 16(1) of the Constitution is contravened by this channel of promotion. article 16(1) of the Constitution is in these words: There shall be equality of opportunity for all citizens in matters relating to employment or appointment to any office under the State '. " The impugned provisions of the channel of promotion are in respect of promotion of persons already employed under the State and not in respect of the first employment under the State. If the "equality of opportunity " guaranteed to all citizens by article 16(1) does not extend to matters of promotion the petitioners ' contention that the provisions are void must fail at once. If, however, matters of promotion are 315 also " matters relating to employment" within the meaning of article 16(1) of the Constitution, the next question we have to consider is whether the impugned provisions amount to denial of equality of opportunity within the meaning of that Article. We propose to consider the second question first, on the assumption that matters of promotion are Cc matters relating to employment ". So multifarious are the activities of the State that employment of men for the purpose of these activities has by the very nature of things to be in different departments of the State and inside each department, in many different classes. For each such class there are separate rules fixing the number of personnel of each class, posts to which the men in that class will be appointed, questions of seniority, pay of different posts, the manner in which promotion will be, effected from the lower grades of pay to the higher grades, e.g., whether on the result of periodical examination or 'by seniority, or by selection or on some other basis and other cognate matters. Each such class can be reasonably considered to be a separate and in many matters independent entity with its own rules of recruitment, pay and prospects and other conditions of service which may vary considerably between one class and another. A member joins a particular class on recruitment; he leaves the class on retirement or death or dismissal, discharge, resignation or other modes of termination of service, or by joining another class of employees whether by promotion thereto or direct recruitment thereto on passing some examination or by selection in some other mode. It is clear that as between the members of the same class the question whether conditions of service are the same or not may well arise. If they are not, the question of denial of equal opportunity will require serious consideration in such cases. Does the concept of equal opportunity in matters of employment apply, however, to variations in provisions as between members of different classes of employees under the State? In our opinion, the answer must be in the 316 negative. The concept of equality can have no existence except with reference to matters which are common as between individuals, between whom equality is predicated. Equality of opportunity in matters of employment can be predicated only as between persons, who are either seeking the same employment, or have obtained the same employment. It will, for example, plainly make no sense to say that because for employment as professors of colleges, a higher University degree is required than for employment as teachers of schools, equality of opportunity is being denied. Similarly it is meaningless to say that unless persons who have obtained employment as school teachers, have the same chances of promotion as persons who have obtained employment as teachers in colleges, equality of opportunity is denied. There is, in our opinion, no escape from the conclusion that equality of opportunity in matters of promotion, must mean equality as between members of the same class of employees, and not equality between members of separate, independent classes. The Petitioners ' Counsel did not seriously challenge the correctness of the above proposition. They contended however that Road side Station Masters and Guards really form one and the same class of employees. In our opinion, there is no substance in this contention. It has to be noticed first that Appendix 11 of the Indian Railway Establishment Code (Vol. 1) which prescribe rules for the recruitment and training of subordinate staff of Indian Railways classify the subordinate staff governed by the rules into 7 branches: (1) Transportation (Traffic); (2) Commercial; (3) Transportation (Power); (4) Civil Engineering ; (5) Store department Staff; (6) Office clerks and (7) Medical. Each branch again has been divided into groups. The first branch, i.e., the Transportation (Traffic) is shown as having 3 groups: (i) Station Masters, (ii) Guards, (iii) Outdoor Clerical Staff. Rule 2, the definition section defines a " group " to mean a series of classes which form a normal channel of promotion. Rule 8 shows the classes of posts 317 included in the Station Masters ' group and the normal channels of their promotion which are as follows: Signaller Assist. Head Signallers Assist. Station Masters (lower grade) Head Signallers Station Masters (lower grade) Telegraph Inspectors Assist. controllers Assist. Yard Foreman Station Masters Controllers Yard Foremen Transportation Inspectors Rule 9 lays down the qualifications necessary for the recruitment to this "group". Rule 10 says that the recruitment will be initially made as students and further provides that the recruits may be (a) persons to be trained in telegraphy in railway telegraph training schools and (b) persons who have completed a training in telegraphy in recognized private telegraph training schools. Note 2 of this Rule provides that recruits in either, category will on the satisfactory completion of their training, be eligible for appointment as signallers and will remain on probation for one year after such appointment. Provisions for training appear in Rule 11. Rule 12 provides for Refresher and Promotion Courses. Rules 13 to 17 are in respect of Guards. Rule 13 states the classes included in this group and the normal channels of their promotion thus: Probationary Guards Goods or passengers guards Assistant Station Masters (higher grades) Assistant controllers Assist. Yard Foremen Station Masters Controllers Yard Foremen Transportation Inspectors Rule 14 lays down the qualifications necessary for recruitment in this line. Rule 15 provides that the 41 318 recruitment will normally be to the lower grade of Guards. Rule 16 provides that during the one year period of probation recruits will undergo training for a period to be fixed by the administration. Rule 17 provides for the periodical refresher courses at stated intervals and promotion courses as necessary may be prescribed. In deciding the question whether Road side Station Masters and Guards belong to one and the same class of employees or not, we must not be misled by the words " groups " or " classes of posts " used in the above rules. The crux of the question is the nature of the differentiation between Road side Station Masters and Guards in recruitment, prospects and promotion. We find that Road side Station Masters and Guards are recruited separately, trained separately and the several classes of posts which are ordinarily open to them are also distinct and separate. The only point of contact between them is provided by the rule that Guards may become Station Masters by passing the Slip 45 examination. If after becoming Station Masters these Guards could continue also as Guards there might be some scope for suggesting that the two classes have coalesced. It is not disputed however that Guards once they become Station Masters cease to be Guards and continue as Station Masters. The fact that the qualifications necessary for recruitment as Guards or Station Masters are approximately or even wholly the same can in no way affect the question whether they form one and the same class, or form different classes. As on the admitted facts the Roadside Station Masters and Guards are, as already stated, recruited separately and trained separately and have separate avenues of promotion, the conclusion is irresistible that they form two distinct and separate classes as between whom there is no scope for predicating equality or inequality of opportunity in matters of promotion. In view of this conclusion it is unnecessary for the purpose of the present case to decide the other question: whether matters of promotion are included in the words " matters relating to employment in 319 Article 16(1) of the Constitution. For even assuming that they are so included, the present application must be rejected on the simple ground that the petitioners belong to a wholly distinct. and separate class from Guards and so there can be no question of equality of opportunity in matters of promotion as between the petitioners and Guards. The learned Counsel for the petitioners stated before us that this channel of promotion for Guards is peculiar to the Central Railways, and is not now to be found in the other Zones of Indian Railways. If that be the position, the matter may well deserve the attention of the Government; but this has nothing to do with the merits of the petition before us. For the reasons mentioned above, we dismiss the application, but in view of all the circumstances, we order that parties will bear their own costs. Petition dismissed.

The Roadside Station Masters of the Central Railway challenged the constitutionality of promotion for guards to higher grade station masters ' posts. The petitioners contended that the channel of promotions amounted to a denial of equal opportunity as between Roadside Station Masters and Guards in the matter of promotion and thus contravened the provisions of article 16(1) of the Constitution, as taking advantage of this channel of promo tions, guards become station masters at a very much younger age than Roadside Station Masters and thus block the chances of higher promotion to Roadside Station Masters who reach the scale when they are much older. The appellant contended that Roadside Station Masters and Guards really formed one and the same class of employees. Held, that the Roadside Station Masters belong to a wholly distinct and separate class from Guards and so there can be no question of equality of opportunity in matter of promotion as between the Roadside Station Masters and Guards. The question of denial of equal opportunity requires serious consideration only as between the members of the same class. The concept of equal opportunity in matters of employment, does not apply to variations in provisions as between members of different classes of employees under the State. Equality of opportunity in matters of employment can be predicated only 312 between persons who are either seeking the same employment, or have obtained the same employment. Equality of opportunity in matters of promotion, must mean equality as between members of the same class of employee and not equality between members of separate, independent classes. The fact that the qualifications necessary for recruitment of one post and another are approximately or even wholly the same can in no way affect the question whether they form one and the same class, or form different classes.