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ivil Appeal No. 1009 of 1980. From the Judgment and Order dated 15.1.80 of the Punjab and Haryana High Court in L.P.A. No. 592 of 1975. P.P. Rao and Jitender Sharma for the appellants. Rajinder Sachhar, Govind Mukhoty, Dr. Shankar Ghosh, S.C. 474 Mohanta, Mahabir Singh, T.C. Sharma, P.P. Singh, S.K. Verma, C.M. Nayyar and C.V.S. Rao for the Respondents. The Judgment of the Court was delivered by SINGH, J. This appeal by special leave is directed against the order of the High Court of Punjab and Haryana dated 15th January, 1980 quashing the Notification dated 3rd May, 1973 issued by the State Government of Haryana promot ing the appellants to the Haryana Service of Engineers Class I post (Public Health Branch). The facts giving rise to this appeal are that the appel lants S/Sh. J.C. Yadav, B.R. Batra, O.P. Juneja, S.L. Cho pra, M.S. Miglani, C.P. Taneja, Surjit Singh and V.P. Gulati and respondents Vyas Dev were members of the Haryana Service of Engineers Class II in the Public Health Branch. Members of the Class II service are eligible for promotion of Class I posts in accordance with the provisions of the Haryana Service of Engineers Class 1 Public Works Department (Public Health Branch) Rules 1961 (hereinafter referred to as 'the Rules '). In 1971 the appellants were promoted to the post of Executive Engineers in the cadre of Class 1 on ad hoc basis while Vyas Dev respondent was not considered for promotion. He made representation but nothing came out in his favour. Later a Committee was constituted under Rule 8 for selecting suitable members of Class 12 service promotion to Class I post. The Committee considered the case of appellants and Vyas Dev respondent, but it did not find the respondent suitable for promotion, his name was not included in the select list prepared by the Committee while the names of the appellants were included therein. The Selection Committee 's recommendation was approved by the Public Service Commission and it was forwarded to the State Government. Since the appellants did not possess the requisite minimum period of service of eight years ' in Class II service as required by Rule 6(b) and as no other suitable candidates were avail able, the Selection Committee made recommendation to the State Government for granting relaxation to the appellants. The Committee 's recommendation was reiterated by the Public Service Commission. The State Government accepted the recom mendations and appointed the appellants to Class I service by the Notification dated May 3, 1973. Vyas Dev, respondent challenged validity of the appel lants ' promotion by means for a writ petition under Article 226 of the Constitution before the High Court of Punjab and Haryana on the ground that the appellants did not possess requisite qualification for promo 475 tion to Class I service, therefore their promotions were contrary to Rules. His further grievance was that he was not considered along with the appellants for promotion and he was not afforded opportunity of hearing before he was super seded. A learned single Judge of the High Court dismissed the petition on the finding that the Selection Committee had considered the case of Vyas Dev along with the appellants for promotion but he was not found suitable. As regards the appellants ' promotions the learned Judge held that since the State Government had relaxed Rule 6(b) in their favour their promotions were sustainable in law. The learned Judge fur ther held that no personal hearing was necessary to be afforded to Ved Vyas before his supersession. On appeal by the respondent a Division Bench of the High Court set aside the order of the single Judge and quashed the appellants promotions on the sole ground that the State Government had no authority in law to grant relaxation to the appellants under Rule 22 in a general manner, as the power of relaxa tion could be exercised only in individual cases to mitigate hardship caused to an individual. On these findings the Division Bench set aside the appellants ' promotions. The appointment and promotion to Class I Engineering Service in the State of Haryana are regulated by the Haryana Service of Engineers Class I PWD (Public Health Branch) Rules 1961. Initially these Rules had been framed by the Governor of Punjab before the formation of the Haryana State. There is no dispute that subsequently the State of Haryana had adopted these Rules and the recruitment to Class I service of Engineers in PWD (Public Health Branch) is regulated by the Haryana Service of Engineers Class I PWD (Public Health Branch) Rules, 1961 as amended from time to time. Rule 5 provides for appointment to Class I service by direct appointment, by transfer of an officer already in service of the State Government or of the Union Government, or by promotion from Class II Service. Rule 6 prescribes qualifications for appointment to Class I service. The relevant provisions of the Rule are as under: "6. Qualifications: No person shall be appointed to the service, unless he: (a) possesses one of the University Degree or other qualifi cations prescribed in Appendix 8 of these rules: Provided that Government may waive this qualification in the case of particular officer belonging to Class II Service: 476 (b) in the case of an appointment by promotion from Class II Service, has eight years completed Class II and has passed the professional examination of the department Rule 8 provides for constitution of the Committee for making selection for appointment to Class I service by promotion. The Committee is required to prepare a list of officers suitable for promotion on the basis of the criteria of merit and suitability with due regard to seniority. Rule 9 lays down, field of eligibility as well as criteria for promotion to the post of Executive Engineer, Superintending Engineer and Chief Engineer. Rule 15 provides for departmental exami nations, according to this Rule the officers appointed to the Service, Unless they have already done so, shall pass such departmental examination and within such period as may be prescribed by the Government. The Rule confers power on the Government to prescribe for any other test in addition to the departmental examination for promotion or appointment to any rank in the service. Rule 22 confers power on the Government to relax any of the Rules as it may consider necessary. There is no dispute that none of the appellants had completed eight years ' service in Class II service as required by Rule 6(b) and as such they were not eligible for promotion to the post of Executive Engineer. On the recom mendation of the Selection Committee and with the approval of the Public Service Commission the State Government re laxed the requirement of eight years ' service so far as the appellants were concerned. Consequently, the appellants were promoted and appointed as Executive Engineers under the Notification dated 3rd May, 1973. The sole question for consideration is whether the relaxation granted by the State Government in favour of the appellants is valid. Rule 22 which confers power on the Government to relax requirement of Rules, is as under: "Rule 22. Power to relax . . Where Government is satisfied that the operation of any of these Rules causes undue hardship to any particular case, it may by order dispense with or relax the requirements of that Rule to such extent, and subject to such conditions, as it may consider necessary for dealing with the case in a just and equitable manner. 477 The Rule confers power on the Government to dispense with or to relax the requirement of any of the Rules to the extent and with such conditions as it may consider necessary for dealing with the case in a just and equitable manner. The object and purpose of conferring this power on the Government is to mitigate undue hardship in any particular case, and to deal with a case in a just and equitable man ner. If the Rules cause undue hardship or Rules operate in an inequitable manner in that event the State Government has power to dispense with or to relax the requirement of Rules. The Rule does not restrict the exercise of power to individ ual cases. The Government may in certain circumstances relax the requirement of Rules to meet a particular situation. The expression "in any particular case" does not mean that the relaxation should be confined only to an individual case. One of the meanings of the expression "particular" means "peculiar or pertaining to a specified person thing time or place not common or general". The meaning of the word particular in relation to law means separate or special, limited or specific. The word 'case ' in ordinary usage means 'event ', 'happening ', 'situation ', 'circumstances '. The expression 'case ' in legal sense means 'a case ', 'suit ' or 'proceeding in Court or Tribunal '. Having regard to these meanings the expression 'in any particular case ' would mean; in a particular or pertaining to an event, situation or circumstance. Rule 22 postulates relaxation of Rules to meet a particular event or situation, if the operation of the Rules causes hardship. The relaxation of the Rules may be to the extent the State Government may consider necessary for dealing with a particular situation in a just and equitable manner. The scope of Rule is wide enough to confer power on the State Government to relax the requirement of Rules in respect of an individual or class of individuals to the extent it may consider necessary for dealing with the case in a just and equitable manner. The power of relaxation is generally contained in the Rules with a view to mitigate undue hardship or to meet a particular situation. Many a times strict application of service rules create a situation where a particular individual or a set of individuals may suffer undue hardship and further there may be a situation where requisite qualified persons may not be available for appointment to the service. In such a situation the Govern ment has power to relax requirement of Rules. The State Government may in exercise of its powers issue a general order relaxing any particular Rule with a view to avail the services of requisite officers. The relaxation even if granted in a general manner would enure to the benefit of individual officers. The State of Haryana was formed in March, 1966 prior to that it was part of the State of Punjab. The service rules relating to Public 478 Works Department as applicable to the State of Punjab were made applicable to Haryana. Rule 6(b) which prescribed qualification for appointment to Class I service lays down that no person shall be appointed to the service by promo tion from Class II service unless he has completed eight years ' service in Class II and has passed departmental examination prescribed under Rule 15. None of the appellants had completed eight years ' service in Class II. In fact no other member of Class II service possessing the requisite qualifications was available for selection to Class I post. The respondent no doubt possessed the requisite qualifica tion with regard to the eight years length of service in Class II but he did not possess requisite educational quali fication. Thus no qualified officer of Class II service was available for promotion to Class I service although a number of vacancies were existing in Class I service. Having regard to these facts the Selection Committee made recommendation for the relaxation of Rule 6(b) in favour of the appellants, who were found otherwise suitable. The Public Service Com mission also agreed with the recommendation made by the Selection Committee. The non availability of suitable Class II officers in Engineering Department possessing the neces sary and prescribed qualifications for promotion to Class I posed a problem for the State Government, as on account of the large scale expansion of Engineering Department a number of posts in Class I service were lying vacant. A similar situation prevailed in the Building and Road Branch of Public Works Department. In the circumstances, the State Government with a view to meet the particular situation decided to relax the qualifying length of service to such officers who had completed four years of service in Class II, it therefore relaxed the requirement of Rule 6(b) to the extent that a member of Class II service having four years ' service was qualified for being considered for promotion to Class I service. These facts would clearly show that the relaxation had been granted to particular individuals with a view to meet the situation, which was in public interest. We find no legal infirmity in the order of relaxation. In B.S. Bansal vs State of Punjab and Ors., a Bench of the Punjab and Haryana High Court held that if the power of relaxation could be exercised in order to meet a general situation, then the whole purpose of the Rule would be frustrated and the Government would be armed with an arbitrary power which could cause great hardship to some officers. We have already referred to the relevant facts which show that in the instant case, power of relaxation was exercised by the State Government to meet a particular situation, it did not result into any injustice or cause hardship to any one. If power of 479 relaxation is exercised on extraneous consideration for oblique purposes or mala fide, the court has power to strike down the same but exercise of power of relaxation to meet a particular situation cannot be held to be arbitrary or illegal. In B.S. Jain vs State of Haryana, the High Court set aside the promotions made in pursuance of the relaxation granted under Rule 22 placing reliance on the decision of the Division Bench in B.S. Bansal 's case. On appeal, this Court in Ashok Gulati vs B.S. Jain, ; observed that the findings of the High Court that the State Government could not have relaxed the condition of passing the departmental professional examination by taking recourse to Rule 22 which conferred power of relaxation on the State Government could hardly be sustained. In Jit Singh & Ors. vs State of Pubjab & Ors. , ; the State Government 's order granting relaxation under Rule 14 of the Punjab Police Service Rules 1959 in respect of the period of service, was questioned. Rule 14 was almost identical in terms as Rule 22 of the instant case. In Jit Singh 's case (supra) promotion of Inspectors to the post of Deputy Superintendent of Police was involved. Under the Police Service Rules 1959 a Police Inspector having six years ' continuous service was eligible for promo tion to the post of Deputy Superintendent of Police. The State Government in exercise of its power under Rule 14 granting relaxation to Inspectors who had been found fit for promotion, as a large number of vacancies had occurred in the cadre of Deputy Superintendent of Police and no suitable persons having the requisite period of service were avail able. Promotions made pursuant to the relaxation were chal lenged before the High Court. The High Court dismissed the writ petition on the ground that the petitioners before it were not qualified for promotion. On appeal before this Court, the High Court 's judgment was upheld. This Court took the view that since the appellants before it were not eligi ble for promotion as their names were not included in the Select List prepared by the Public Service Commission and further as they had not completed six years ' of continuous service prior to the respondents, they were not entitled to any relief. The appeal was accordingly dismissed by this Court. While considering the question of validity of relaxa tion, the Court made observation that Rule 14 did not permit any general relaxation of the nature ordered by the State Government. The Court, however, did not examine the matter in detail as it was of the view that since the appellants in that case were not eligible for promotion they could not question the validity of the appointment of those who had been promoted on the basis of relaxation being granted by the State Government. The Court upheld the promotions in view of the extra 480 ordinary situation in which the State Government made ap pointments iv derogation of requirement of Rules. On a careful scrutiny of the Rules in its various as pects we do not agree with the observations made in Jit Singh 's case (supra). Though Rule 22 is not happily worded, as apparently it gives an impression that no general relaxa tion can be granted by the State Government, out on a close scrutiny of the scope of the power we find that a narrow construction of the Rules would nullify the Government 's power of relaxing Rules to meet a particular situation. Rule 22 is beneficial in nature it must be construed in a liberal manner and it should not be interpreted in a manner to defeat the very object and purpose of such power. Power to grant relaxation may be exercised in case of an individual to remove hardship being caused to him or to a number of individuals who all may be similarly placed. This power may also be exercised to meet a particular situation where on account of the operation of the Rules hardship is being caused to a set of individual officers. In the instant case the appellants were found suitable for promotion by the screening committee, the Commission and the State Govern ment, and the contesting respondent Yvas Dev was not found suitable even otherwise for promotion, the State Government granted relaxation of Rule 6(b) in favour of the appellants. In such a situation, it is beyond comprehension that the power of relaxation under Rule 22 was exercised arbitrarily or that it caused hardship or injustice to any one. On the formation of the new State of Haryana no promotion from Class II officers could be made to Class I service without granting any relaxation since 1966 to 1978. In 1971 72 eleven vacancies in the post of Executive Engineers were filled by promotion from Class II officers although none of them had completed requisite period of service prescribed by the Rules for promotion. In 1976 77 and 1977 78 sixteen and nine vacancies respectively in the post of Executive Engi neers were filled by promotion by granting relaxation as no officer of Class II service possessing requisite number of years of service was available for promotion. In 1978 79 seven officers of Class II service were promoted to the post of Executive Engineer but only one of them possessed the requisite period of service and all others were granted relaxation. These facts clearly show that in the absence of relaxation there could be no promotion to the post of Execu tive Engineer and the officers who were found suitable would have suffered great hardship. In 1973 also the State Govern ment with a view to meet the particular situation exercised its power of relaxation in appellants ' favour. Having regard to these facts and circumstances, we find no illegality in the appellants ' promotions, pursuant to the relaxation granted by the State Government. 481 In Bansal 's case (supra) the High Court, and even in Jit Singh 's case (supra) this Court did not set aside the promo tions made by the Government pursuant to relaxation of Rules on the ground that the petitioner who challenged the promo tions was himself not qualified, and he had no legal right to hold the post in dispute, although in both these cases Government 's order granting general relaxation was held to be outside the scope of Rule 22 and Rule 14 of the Punjab Police Service Rules 1959. In the instant case the High Court has set aside the appellants ' promotions following Bansal 's case interpreting Rule 22 but it failed to notice that in that case the High Court did not set aside the promotions instead it dismissed the petition on the ground that the petitioner therein was not qualified and none of his rights were affected. The High Court failed to notice that Vyas Dev respondent was considered for promotion but he was not found suitable, therefore he was not entitled to any relief. Since no legal right of the respondent was adversely affected the High Court should not have quashed the appel lants ' promotions. On behalf of the appellants an alternative submission was made that since the appellants had already completed eight years ' of service in Class H service during the pend ency of the writ petition their appointment stood regula rised. To support this submission reliance was placed on the decision of this Court in Ram Sarup vs State of Punjab, [1979] 1 SCC 168. In that case appointment to the post of Labour cum Conciliation Officer was made in breach of Rule 4 Clause (I) of the Punjab Labour Service Class I and II Rules 1955 as Ram Sarup did not possess five years ' experience, required by sub clause (I) of Rule 4, In spite of that he had been appointed to the post of Labour cum Conciliation Officer. Subsequently, Ram Sarup was reverted on the ground that he was not qualified to be appointed as a Labour cum Conciliation Officer as he did not possess the minimum qualification of length of service. This Court held that the appointment of Ram Sarup made in breach of Rules was irregu lar, but not wholly void and since Ram Sarup had completed five years of experience of working of labour laws before his reversion, his appointment to the post of Labour cum Conciliation Officer stood regularised with effect from the date he completed five years of service. On these findings order of reversion was set aside by this Court. Undisputa bly, the appellants completed eight years of service before January 15, 1980, the date on which the Division Bench of the High Court set aside their promotions. In view of the principles laid down in Ram Sarup 's case (supra) the appel lants ' appointment, even if irregular, stood regularised on the 482 date they completed eight years of their service and there after their promotions could not be set aside. We accordingly allow the appeal, set aside the judgment and order of the Division Bench dated 15.1.1980 and restore the order of the learned single Judge dismissing the re spondents ' writ petition. There will be no order as to costs. N.P.V. Appeal al lowed.

The appointment and promotion to Class I Engineering Service in the State of Haryana are regulated by the Haryana Service of Engineers Class I PWD (Public Health Branch) Rules, 1961. Rule 5 provides for appointment to Class I Service, inter alia, by promotion from Class II Service. Rule 6(b) prescribed that no person shall be promoted unless he has completed eight years service in Class II and has passed professional examination to the department. Rule 22 confers power on the Government to relax any of the Rules it may consider necessary. The appellants and the contesting respondent were mem bers of the Haryana Service of Engineers Class II in the Public Health Branch. In 1971 the appellants were promoted to the post of Executive Engineers in the cadre of Class I service on ad hoc basis while the respondent was not consid ered for promotion. Later, a Committee constituted under Rule 8 for selecting suitable candidates for promotion to Class I post, considered the names of the appellants and the respondent but did not find the respondent suitable. Hence it included the appellant 's|ant 's names only in the select list. The appellants did not possess the requisite minimum period of service of 8 years in Class II service but since no other suitable candidates were available, the Committee recommended to the Govt. for granting relaxation to the appellants. The State Public Service Commission approved the recommendations. The State Government accepted the recommendations and appointed the appellants to Class I service by a Notification dated May 3, 1973. 471 The contesting respondent filed a Writ Petition before the High Court challenging the validity of the appellants ' promotion on the ground that since the appellants did not possess the requisite qualification for promotion to Class I Service their promotions were contrary to rules. A Single Judge of the High Court dismissed the petition holding that since the Government had relaxed Rule 6(b) in appellants ' favour, their promotions were sustainable in law. On appeal, the Division Bench quashed the appellants ' promotion on the ground that the State Government had no authority in law to grant relaxation to the appellants under Rule 22 in a general manner as the power of relaxation could be exercised only in individual cases to mitigate hardship caused to an individual. Hence the appeal by special leave. Allowing the Appeal, this Court, HELD: 1. Power to grant relaxation may be exercised in case of an individual to remove hardship being caused to him or to a number of individuals who all may be similarly placed. This power may also be exercised to meet a particu lar situation where on account of the operation of the rules hardship is being caused to a set of individual officers. [477G H] 2. I Rule 22 of the Haryana Service of Engineers Class I PWD (Public Health Branch) Rules 1961 confers power on the Government to dispense with or to relax the requirement of any of the Rules to the extent and with such conditions as it may consider necessary for dealing with the case in just and equitable manner. The object and purpose of conferring this power on the Government is to mitigate undue hardship in any particular case. If the Rules cause undue hardship or operate in an inequitable manner, the State Government has power to dispense with or to relax the requirement of Rules. The Rule does not restrict the exercise of power to individ ual cases. The Government may in certain circumstances relax the requirement of Rules to meet a particular situation. [477A B] 2.2. The expression "in any particular case" does not mean that the relaxation should be confined only to an individual case. One of the meanings of the expression "particular" means "peculiar or pertaining to a specified person thing time or place not common or general". The meaning of the word 'particular ' in relation to law means separate or special, limited or specific. The word 'case ' in ordinary usage means 472 'event ', 'happenings ', 'situation ', 'circumstances '. The expression 'case ' in legal sense means 'a case '. 'suit ' or 'proceeding in Court or Tribunal '. Having regard to these meanings the expression 'in any particular case ' would mean in a particular or pertaining to an event, situation or circumstance. [477C D] 2.3. Rule 22 postulates relaxation of Rules to meet a particular event or situation, if the operation of the Rules causes hardship. '[he Scope of the said Rule is wide enough to confer power on the State Government to relax the re quirement of Rules in respect of an individual or class of individuals to the extent it may consider necessary dealing with the case in a just and equitable manner. [477E F] 2.4 The power of relaxation is generally contained in the rules with a view to mitigate undue hardship or to meet a particular situation. Many a time strict application of service rules create a situation where a particular individ ual or a set of individuals may suffer undue hardship and further there may be a situation where requisite qualified persons may not be available for appointment to the service. In such a situation, the Government has power to relax requirement of rules. The state Government may in exercise of its powers issue a general order relaxing any particular rule with a view to avail the service of requisite officers. The relaxation even if granted in a general manner would enure to the benefit of individual officers. [477F G] 2.5 Rule 22 is a beneficial one. It must be construed in a liberal manner and should not be interpreted in a manner to defeat the very object and purpose of such power. A narrow construction would nullify Government 's power of relaxing rules of meet a particular situation. [480C] Jit Singh & Ors. vs State of Punjab & Ors. , ; differed; Ashok Gulati vs B.S. Jain, ; referred to. In the instant case, the non availability of Class II officers in Engineering Department possessing the necessary and prescribed qualifications for promotion to Class I posed a problem for the State Government, as on account of the large scale expansion of Engineering Department a number of posts in Class I service were lying vacant. A similar situa tion prevailed in the Building and Road Branch of Public Works Department. In the circumstances, the State Government with a 473 view to meet the particular situation decided to relax the qualifying length of service to such officers who had com pleted four years of service in Class 1I. It, therefore, relaxed the requirement of Rule (b) to the extent that a member of Class II service having four years service was qualified for being considered for promotion in Class I service. These facts would clearly show that the relaxation had been granted to particular individuals with a view to meet the situation which was in public interest. There is no legal infirmity in the order of ' relaxation. [478D F] 3. I If power of relaxation is exercised on extraneous consideration for oblique purposes or mala fide, the Court has power to strike down the same, but bona fide exercise of power of relaxation to meet a particular situation cannot be held to be arbitrary or illegal. [479A] 3.2 Since the appellants were found suitable for promo tion by the screening committee, the Commission and the State Government, and as the contesting respondent was not found suitable even otherwise for promotion, the State Government granted relaxation of Rule (b) in favour of the appellants. In such a situation, it cannot be said that the power of relaxation under Rule 22 was exercised arbitrarily or that it caused hardship to any one. In the absence of relaxation, there could be no promotion to the post of Executive Engineer and the officers who were found suitable would have suffered great hardship. Therefore, the State Government with a view to meet the particular situation exercised its power of relaxation in appellants ' favour. Having regard to the facts and circumstances of the case, there is no illegality in the appellants ' promotion, pursu ant to the relaxation granted by the State Government. [480D E; G H] Ashok Gulati vs B.S. Jain, AIR 1987 424; Jit Singh & Ors. vs State of Punjab & Ors. , ; and Ram Sarup vs State of Punjab, [1979] 1 SCC 168 referred to.

Appeal No. 310 of 1964. Appeal by special leave from the judgment and order dated December 1 '3, 1961 of the Calcutta High Court in Income tax Reference No. 74 of 1956. N.D. Karkhanis, Gopal Singh and R.N. Sachthey, for the appellant. A.V. Viswanatha Sastrt, section Murthy and B, P. Maheshwari, for the respondent. The Judgment of the Court was delivered by Sikri, J. This is an appeal by special leave directed the judgment of the High Court at Calcutta in a reference under 612 section 66 of the Income Tax Act. The four questions referred to the High Court by the Income Tax Appellate Tribunal are: "(1) Whether on the facts and circumstances of this case the Income tax Officer, Central Circle XIV, Calcutta, was competent to file the appeal before the Tribunal against the order of the Appellate Assistant Commissioner of Income Tax, Range A. Calcutta? (2) Whether on the facts and circumstances of this case the sum of Rs. 2,50,000 represented the surplus on the sale of lands which was the stock in trade of the assessee company or was the value of goodwill alleged to have been transferred? (3) Whether on the facts and circumstances of this case by the sale of the whole business concern it could be held that there was taxable profit in the sum of Rs. 2.50,000? (4) Whether on the facts and circumstances of this case and in view of the findings of the Tribunal that the entire share capital of the vendee company (excepting seven ordinary shares) was taken over by the vendor firm in lieu of the sale price of the business as a whole, there was any profit in the amount of Rs. 2,50,000 the same being taxable under the Indian Income Tax Act? The relevant facts and circumstances are these. The respondent, M/s Mugneeram Bangur & Co. (Land Department) Calcutta (hereinafter referred to as the vendors) were a firm carrying on the business of land development in Calcutta. By an agreement dated July 7, 1948, the partners of the firm agreed to sell all the business of the said firm to the Amalgamated Development Limited, here in after called the vendee, which company was promoted by the partners of the firm. The relevant paragraphs of the said agreement are as follows: "And Whereas the Vendors have agreed to sell and the company has agreed to purchase all the said business on the basis hereinafter set out. Now it is hereby agreed and declared between the parties as follows: 1. The Vendors do hereby agree to sell and the company both hereby agree to purchase All That the said business with effect from the eighth day of July One thousand nine hundred and forty eight. Together with the goodwill of the said business And all stock in trade, fixtures. tools, implements. furniture, fittings and all other articles and things belonging to the said business or in any way used in the same including the benefit and advantages of all contracts. 613 2. The purchase price shall be Rupees thirty four lakhs ninty nine thousand and three hundred paid and satisfied by the Company allotting to the Vendors or their nominees seventeen thousand five hundred Redeemable Preference shares of Rupees one hundred each and seventeen thousand four hundred and ninetythree Ordinary s hares of Rupees one hundred each in the capital of the Company which will be accepted by the Vendors in full satisfaction of the said purchase price. The Company shall undertake and discharge all debts and liabilities of the Vendors including development expenses such as opening out roads, laying out drains and sanitary arrangements providing electricity in the areas and providing a School in Tolly gunge for education of Children for which the Vendors have given an undertaking to the Tollygunge Municipality and also the liability of the Vendors in respect of the deposits made with them by various intending purchasers of lands but excluding the liabilities of the Vendors for Income tax, Super tax or any other tax or duty on income or revenue in respect of the profits of the business". The sum of Rs. 34,99,300 was arrived at in the Schedule thus: (In rupees) 1. Laud . . 12,68,628 7 7 2. Goodwill . . . . 2,50,000 0 0 3. Motor Car & Lorries . . 25,866 8 6 4. Furniture, Fixture etc . . . 5,244 5 6 5. Mortgage secured . . 71,62,367 6 0 6. Deposits for purchase of land . . 53,500 0 0 7. Advance paid to pleaders solicitors, contractors ' staff and other outstanding . . 1,83,622 3 6 8. Cash in Bank . . 71,800 1 8 36,21,029 0 9 Less liabilities . 1,21,729 0 9 34,99,300 0 0 614 The consideration of Rs. 34,99,300 was paid by allotment of 17,500 Redeemable Preference shares of Rs. 100 each and 17,493 Ordinary shares of Rs. 100 each, the allotment being to the vendors partners or their nominees. Thus the vendors received shares of the face value of Rs. 34,99,300 for the assets transferred to the company. The Income Tax Officer held that the sum of Rs. 2,50,000 was actually charged by the vendors as a lump sum amount of profits on sale of valuable stock in trade and not goodwill as alleged. The Appellate Assistant Commissioner, on appeal, held that the said sum of Rs. 2,50,000 was the value of the goodwill. He further held that since the transfer was a transfer of business as a going concern, the profit was the capital gain and therefore not liable to tax. Relying on Doughty vs Commissioner of Taxes,(1) he held that as "the transfer is a transfer of all assets of the firm to a company the transfer is a capital sales". The Income Tax Officer filed an appeal before the Appellate Tribunal. The Appellate Tribunal held that although the sale was the sale of a business as a going concern, the value of the stock could be traced, and, therefore, the profits arising out of the sale was taxable income. Regarding the goodwill, the Tribunal observed: "We do not think that there was much value of the goodwill of the business that was transferred. Mugneeram Bangur & Co. was a firm constituting of several partners and Mugneeram Bangur & Co. Land Department was a separate firm consisting of the same partners with. however. different shares in the firm Mugneerarn Bangur & Co. were also carrying on business in lands and buildings along with its activities in other businesses. Our attention was drawn by the Department Representative to the fact that in the case of transfer of lands and buildings of the assessee firm the conveyances were as a rule executed in the name of Mugneeram Bangur & Co. The assessee 's learned Counsel did not object to this fact. We are therefore accepting it as correct. If so, there was nothing in the name of Mugneerarm Bangur & Co. Land Department. The conversion of the said firm into a Company in an entirely different name would also indicate that not much of importance was attached to the name of Mugneeram Bangur & Co. Land Department. In the circumstances. in our opinion, the price paid by the purchase Core Dany was not on the consideration of the goodwill of the [1927] A.C. 327. 615 vendors but upon taking over the entire going concern and paying the consideration not in money but by allotment of shares. In such circumstances, the surplus was out of the sale of the business as a whole, including the stock in trade of the assessee firm. Since the other assets transferred had definite value which would not increase in value by the process of transfer, the only value that could increase was the value of the stock in hand, that being the land in the present case. In our opinion, therefore, the amount of Rs. 2,50,000 was really the excess value of the lands sold along with the other assets". But the Tribunal dismissed the appeal on the ground that although the vendors were a different entity from the vendee, the first being a partnership and the second being a limited company, the transaction was mere adjustment of the business position of the partners. It further observed that the Income Tax Department was not entitled to take mere book keeping entries as the evidence of any profit in the matter. The High Court first answered question No. 4, thus: "There was no profit in the transaction by which the entire stock in trade and the business of the firm were transferred to the limited company. Again the fact that two outsiders were brought in as directors with seven shares allotted to them out of 39,300 shares ' makes no difference. In Sir Homi Mehta 's case 400 shares out of 6,000 shares were allotted to Sir Homi Mehta 's sons. Nor again can I see any difference in principle between the case of conversion of business into a private limited company and one in which it is converted into a public limited company if in the latter company outsiders are not allotted any sizeable proportion of the shares issued". The High Court felt that this answer was enough to dispose of the matter, but as questions 2 and 3 had been referred, they answered them. Regarding question No. 2, the High Court held that "as the assets of the firm transferred to the company have been itemised and as there can be no question of variation of the figures given in items 3 to 8 in the agreement for sale, it must be held that Rs. 2,50,000 shown as the value of the goodwill must be represented by surplus on the sale of lands which was the stock in trade of the assessee company". Regarding question No. 3, the High Court held that even if the value of the stock in trade taken over by the assessee was greater than the figure shown therefore in the agreement for sale in view of the answer to question 4, there was no profit which could be taxed. 616 We may mention that it is not necessary to deal with question No. 1 because it was given up before the High Court. Mr. Karkhanis, learned counsel for the appellant. urges that the Doughty 's case(1) was wrongly decided in one respect and that the 'vendors and the vendee being different entities. it is not permissible to tear the corporate veil to see whether the partners of the vendors were the same persons as the shareholders of the vendee. He says that if the veil is not torn, then there was a sale by the vendors to the vendee and profits arose out of the sale. Learned counsel for the respondent, Mr. Viswanatha Sastri, says that if the third question is answered in his favour, it would not be necessary to deal with the other questions. As we are inclined to answer the third question in the favour of the vendors, it is not necessary to deal with the other questions and the arguments addressed in respect of them. The Appellate Tribunal held in this case that the sale was a sale of business as a going concern. This is also apparent from clause 1 of the agreement set out above. If this is so Doughty 's case(1) applies. The facts in Doughty 's case may be conveniently taken from the headnote in that case. "In 1920, two partners carrying on business in New Zealand as general merchants and drapers sold the partnership business to a limited company in which they became the only shareholders. The sale was of the entire assets, including goodwill, the consideration being fully paid shares, and an agreement by the company to discharge all the liabilities. The nominal value of the shares being more than the sum to the credit of the capital account of the partnership. in its last balance sheet, a new balance sheet was prepared showing a larger value for the stock in trade. The Commissioner of Taxes treated the increase in value so shown as a profit on the sale of the stock in trade, and assessed the appellant upon it for income tax under the Land and Income Tax Act, 1916, of New Zealand,. which imposes the tax on all profits or gains derived from any business". The Privy Council decided the case in favour of the appellant on two grounds, the first being that "if the transaction is to be treated as a sale, there was no separate sale of the stock. and no valuation of the stock as an item forming part of the aggregate which was sold". In connection with this ground, Lord Phillimore observed that "income tax being a tax upon income, it is well established that the sale of a whole concern which can be shown to be a sale at a profit as compared with the price given for the business, or at which it stands in the books does not give rise to as profit taxable to income tax". He further observed that "where. however, the business consists, as in the present case, entirely in buying and selling, it is more difficult to distinguish between an ordinary and a realization sale the 617 object in either case being to dispose of goods at a higher price than that given for them, and thus to make a profit out of the business. The fact that large blocks of stock are sold does not render the profit obtained anything different in kind from the profit obtained by a series of gradual and smaller saks. This might even be the case if the whole stock was sold out in one sale. Even in the case of a realization sale, if there were an item which could be traced as representing the stock sold, the profit obtained by that sale, though made m conjunction with a sale of the whole concern, might conceivably be treated as taxable income". Lord Phillimore concluded with the following observations: "If a business be one of purely buying and selling. like the present, a profit made by the sale of the whole of the stock, if it stood by itself, might well be assessable to income tax; but their view of the facts (if it be open to them to consider the facts) is the same as that of Stout C.J. that is, that this was a slump transaction". This Court. in Commissioner of Income tax, Kerala vs West Coast Chemicals and Industries Ltd.(1) understood the Doughty 's case(2) thus: "This case shows that where a slump price is paid and no portion is attributable to the stock in trade, it may not be possible to hold that there is a profit other than what results from the appreciation of capital. The essence of the matter, however, is not that an extra amount has been gained by the selling out or the exchange but whether it can fairly be said that there was a trading from which alone profits can arise in business". It follows from the above that once it is accepted that there was a slump transaction in this case. that the business was sold as a going concern. the only question that remains is whether any portion of the slump price is attributable to the stock in trade the learned counsel for the appellant relies on two grounds to support the contention that there is profit attributable to the sale of land which was stock in trade of the vendors. He says first that in the schedule to the agreement the value of land and the value of goodwill and other items is specified. He says that although the amount of Rs. 2,50,000 was shown as price of goodwill, it was really excess value of the land sold along with other assets. Secondly. he says, relying on the passage already cited above from Doghty 's case(" ') that the vendors ' business was a business of purely buying and selling land. In our opinion. on the facts of this case it cannot be said that the vendors were carrying on the business of purely buying and selling land. In (1) (2) [1927] A.C. 327. 618 this case the vendors were engaged in buying land, developing it and then selling it. The agreement itself shows that the vendors had already incurred debts and liabilities for development expenses such as opening out roads, laying out drains and, sanitary arrangements, providing electricity and providing for a school. It seems to us that in the case of a concern carrying on the business of buying land, developing it and then selling it, it is easy to distinguish a realisation sale from an ordinary sale, and it is very difficult to attribute part of the slump price to the cost of land sold in the realisation sale. The mere fact that in the schedule the price of land is stated does not lead to the conclusion that part of the slump price is necessarily attributable to the land sold. there is no evidence that any attempt was made to evaluate the land on the date of sale. As the vendors were transferring the concern to a company, constituted by the vendors themselves, no effort would ordinarily have been made to evaluate the land as on the date of sale. What was put in the schedule was the cost price, as it stood in the books of the vendors. Even if the sum of Rs. 2,50,000 attributed to goodwill is added to the cost of land, it is nobody 's case that this represented the market value of the land. In our view the sale was the sale of the whole concern and no part of the slump price is attributable to the cost of land. If this is so, it is clear from the decision of this Court in Commissioner of Income tax, Kerala vs 14lest Coast Chemicals and Industries Ltd.(1) and Doughty 's case(2) that no part of the slump price is taxable. We, therefore, answer question No. 3 in the negative. As stated before, in view of this answer, it is not necessary to answer questions Nos. 2 and 4. The appeal is accordingly dismissed with costs. Appeal dismissed. (1) 46 I.T.R.135. (2) [1927] A.C. 327.

The business of the assessee firm, carrying on land development business was sold as a going concern to a company promoted by the assessee s partners. The purchase price included sums for the value of land, goodwill, etc. The amount shown as the value of the goodwill v:as sought to be assessed to income tax on the grounds (i) that the assessee 's business was purely one of buying and selling land and (ii) the amount was profit attributable to the sale of land which was the stock in trade of the assessee. In appeal to this Court. HELD: On the facts of this case it could not be said that the assessees were carrying on the business of purely buying and selling land. They were engaged in buying land, developing it and then selling it. The sale was the sale of the whole concern and no part of the slump price was attributable to the cost of the land. If that was so, no part of it was taxable. [617H 618A, E] Commissioner of Income tax, Kerala vs West Coast Chemical and Industries Ltd. and Doughty vs Commissioner of Taxes (1927) A.C. 327, applied. In the case of a concern carrying on the business of buying land, developing it and the selling it is easy to distinguish a realisation sale from an ordinary sale, and it is very difficult to attribute part of the slump price to the cost of land sold in the realisation sale. The mere fact that in the schedule the price of land was stated did not lead to the conclusion that part of the slump price was necessarily attributable to the land sold. There was no evidence that any attempt was made to evaluate the land on the date of sale. As the assessees were transferring the concern to a company. constituted by the assessees themselves, no effort would ordinarily have been made to evaluate the land as on the date of sale. [618B D]

ivil Appeal No. 656 of 1989. From the Judgment and Order dated 27.11. 1987 of the Patna High Court in C.W.J .C. No. 1254 of 1987. Tapas Ray and D.P. Mukharjee for the Appellants. M.K. Ramamurthi, P.P. Singh, A.N. Trehan and Promod Swarup for the Respondents. The Judgment of the Court was delivered by RANGANATH MISRA, J. This appeal by special leave is directed against the decision of the Patna High Court dated 27.11. 1987 quashing the notification dated 18.11.1986 under which in terms of the Subordinate Education Service (Teach ing Branch) Determination of Seniority Rules framed under the proviso to Article 309 of the Constitution, the hitherto single cadre known as Secondary Education Service was bifur cated. On 20th of February, 1975, the State Government pub lished a joint seniority list of teachers of Subordinate Education Service belonging to the Boys school branch and the Higher Secondary Teachers 660 of the Subordinate Education Service. The joint gradation list was challenged before the High Court in Writ Petition No. 2956 of 1975. The High Court dismissed the writ petition as also an application for review of such dismissal. On 30th March, 198 1, this Court dismissed the special leave peti tion carried against the decision of the High Court. When with the dismissal of the special leave petition the posi tion was getting settled, the State Minister of Education came forward with a proposal that the cadre should be sepa rated and the Higher Secondary teachers and Secondary teach ers of the Upper Division of the Subordinate Education Service should have a separate gradation list. Ultimately by the impugned notification the bifurcation was done. The Government took the stand that the demand to bifurcate was taken up in the Legislature and in terms of the decision taken by the Implementation Committee of the Bihar Legisla tive Council, the new scheme of bifurcate came to be done. The High Court considered the matter at great length and with care. The legal position as settled by several deci sions of this Court was noticed. Towards the end of the judgment the High Court has said: "We have referred to the judgment of the Supreme Court in K.S. Vora & Ors. vs State of Gujarat & Ors., only to illustrate that the courts have at no time ignored the interest of the employees and questioned the authority of the State to frame rules in terms of the proviso to Article 309 of the Constitution of India, but the courts have always taken notice of the fact that those who stood together and fell in line to proceed further have to be provided all opportunities in respect of their avenues of promotion alike without breaking that order, so that one who ranks higher in the grade may not go down in due course of service. It is in this context that we have no hesitation in holding that rules in the notification dated 18.11.1986 are ultra vires Articles 16(1) and 14 of the Constitu tion. We do not propose to predicate into what is alleged to be the mala fide of the respondent State inasmuch as after the judg ment of this Court in C '.W.J.C. No. 2956 of 1975, the Minister of State decided to find means to disintegrate the already integrated cadre or the Chairman of the Legislative Council, having no apparent role in the proc ess of making rules in terms of proviso to Article 309 of the Constitution appeared and influenced the process. We 661 refrain from going into this aspect, for we think, with our conclusion as above, the upper division of the Subordinate Education Service shall continue to have the same respect as it got from the judgment of this Court in C.W.J.C. No. 2956 of 1975 and no one in the Government shall in future again attempt to deny to the members of the said service their due rights for promotion to the selection grade and other higher posts. " In course of hearing of the matter, counsel for the State was not able to dislodge the conclusion that bifurca tion was the outcome of an attempt to provide quick promo tional avenues to those who were lower down in the joint cadre and would not have come within the range of considera tion for promotional benefits but by bifurcation became entitled to such benefits. The High Court, in our opinion, rightly found fault with such action. We have considered the matter from different angles keeping the relevant aspects in view but have not been able to satisfy ourselves that the judgment of the High Court suffers from any infirmity to justify its vacation. The appeal is accordingly dismissed but parties are left to bear their respective costs. N.V.K. Appeal dis missed.

On 20th February, 1975, the State Government published a joint seniority list of teachers of subordinate Education Service belonging to the Boys branch, and the Higher Second ary Teachers of the Subordinate Educational Service. This joint gradation list was challenged before the High Court, but the writ petition was dismissed as also an application for review of the dismissal. The Special Leave Petition against the aforesaid decision was dismissed by this Court on 30th March, 1981. The aforesaid single cadre known as Secondary Education Service was difurcated by the State Government by its Noti fication dated 8th November 1986 under which the Subordinate Education Service (Teaching Branch) Determination of Senior ity Rules, were framed under the proviso to Article 309 of the Constitution This bifurcation scheme was challenged in the High Court. The stand of the Government was that the demand for such bifurcation was taken up in the legislature and in terms of the decision of the Implementation Committee of the Bihar Legislative Council, the new scheme for bifurcation had to he implemented. The High Court by its decision dated 27th November, 1987 quashed the Notification dated 18th November, 1986 under which the bifurcation was done. The High Court was of the view that though the authority of the state to frame rules in terms of the proviso to Article 309 was unquestionable, yet notice had to he tam of time fact that those who stood 659 together and fell in line to proceed further in the seniori ty list have to he provided all opportunities in respect of their avenues of promotion alike without breaking that order, so that one who ranks higher in the grade may not go down in due course of service, and held that the rules in the Notification dated 18th November, 1986 were ultra vires Articles 16(1) and 14 of the Constitution. Dismissing the Special Leave Petition to this Court, HELD: The High Court, rightly found fault with the State Government action, and holding that the rules in the Notifi cation dated 18th November, 1986 are ultra vires Articles 16(1) and 14 of the Constitution. [660F] Counsel for the State was not able to dislodge the conclusion that bifurcation was the outcome of an attempt to provide quick promotional avenues to those who were lower down in the joint cadre and would not have come within the range of consideration for promotional benefits but by bifurcation became entitled to such benefits. [661C]

ivil Appeal No. 850 of 1966. 870 Appeal by special leave from the judgment and decree dated March 5, 1965 of the Bombay High Court in First Appeal No. of 1963. section Sorabli, Bhuvanesh Kumari and J.B. Dadachanji, for the appellant. The respondent did not appear. The Judgment of the Court was delivered by Ramaswami, J. This appeal is brought by special leave fro.m the judgment of the. Bombay High Court dated March 5, 1965 in Appeal No. 415 of 1963. Shalkh Hassan Ibrahim (hereinafter referred to as the missing seaman) was employed as a deck hand, a seaman of category II on the ship sections "Dwarka" which is owned by the British India Steam Navigation Company Limited of which the appellant is the Agent. The Medical Log Book of the shop shows that on December 13, 1961 the missing seaman complained of pain in the chest and was, therefore, examined, but nothing abnormal was detected clinically. The Medical Officer on board the ship prescribed some tablets for the missing seaman and he reported fit for work on the next day. On December 15, 1961, however, he complained of insomnia and pain in the chest for which the Medical Officer prescribed sedative tablets. The official Log Book of the ship shows that on December 16, 1961 when the ship was in the Persian Gulf the missing seaman was seen near the bridge of the ship at about 2.30 a.m. He was sent back but at 3 a.m. he was seen on the Tween Deck when he told a seaman on duty that he was going to bed. At 6.15 a.m. he was found missing and a search was undertaken. At 7.35 a.m. a radio message was sent by the Master of the ship. saying: "One seaman missing between Khoramshahr and Ashar STOP May be in river STOP All ships please keep look out". The ship arrived alongside Ashar Jetty at 8 a.m. when a representative of Messrs Gray, Mackenzie & Co. Ltd., who are the agents for the British India Steanm Navigation Co. Ltd., in the Persian Gulf was informed that the said seaman was missing. The representative in turn passed on the information to the local police and the Port authorities. The last entry in the log book shows that at 4 p.m. an inquiry was held on board the ship by the local police and the British Consul General. On a suggestion made by the latter, the personal effects of the missing seaman were checked and sealed by the Consulate authorities for being deposited with the Shipping Master, Bombay. On February 20, 1962 the respondent filed an application under section 3 of the Workmen 's Compensation Act (Central Act 18 of 1923) (hereinafter referred to as the Act) claiming compensation of Rs. 4,810/ for the death of his son, the missing seaman, which 871 according to him, occurred on account of a personal injury caused by an accident arising out of and in the course of his employment. The appellant put in a written statement on April 26, 1962 and disputed the respondent 's claim on the ground that there was nothing to show that the seaman was in fact dead, that the death, if any, was not caused in the course of the employment, that in any event the death could not be said to have been caused by an accident which arose out of employment and that the probabilities were more consistent with a suicidal death than with an accidental death. But the appellant did not lead oral evidence at the trial of the claim. The Additional Commissioner, however, inspected the ship on January 23, 1963. By his judgment dated February 6, 1963 held that there was no evidence to show that the seaman was dead and there was in any event no evidence to justify the inference that the death of the missing seaman was caused by an accident which arose out of employment. In the course of his judgment the Additional Commissioner observed as follows: "Now in the present case what is the evidence before me ? It is argued on behalf of applicant that I must presume that the man fell down accidentally. From which place did he fall down ? How did he fall down ? At what time he fell down ? Why was he at the time at the place from which he fell down ? All these questions, it is impossible to answer. Am I to decide them in favour of the applicant simply because his 'missing ' occurs in the course of his employment ? In my opinion there is absolutely no material before me to come to a conclusion and connect the man 's disappearance with an accident. There are too many missing links. Evidence does not show that it was a stormy night. I had visited the ship, seen the position of the Bridge and deck and there was a bulwark more than 31/2 feet. The man was not on duty. Nobody saw him at the so called place of accident. In these circumstances I am unable to draw any presumption or conclusion that the man is dead or that his death was due to an accident 'arising out of his employment. Such a conclusion, presumption or inference would be only speculative and unwarranted by any principle of judicial assessment of evidence or permissible presumptions. " The Additional Commissioner, however, negatived the contention of appellant that the death, if any, was caused by the seaman 's voluntary act. The respondent preferred an appeal on April 17, 1963 to the High Court from the judgment of the Additional Commissioner dated February 6, 1963. At the hearing of the appeal it was agreed that the appellant would pay to the 872 respondent a sum of Rs. 2,000/ as and by way of compensation in any event and irrespective of the result of the appeal. The respondent agreed to accept the sum of Rs. 2,000/ . But in view of the serious and important nature of the issues. the High Court proceeded to decide the questions of law arising in the appeal. By his judgment dated March 5, 1965 Chandrachud J., allowed the appeal and reversed the judgment of the Additional Commissioner and granted the application for compensation. The view taken by Chandrachud J., was that the death of the seaman in this case must be held to have occurred on account of an accident which arose out of his employment. The principal question that arises in this appeal is whether the accident arose in the course of employment and whether it arose out of employment within the meaning of 'section 3 of the Act which states: "(1) If personal injury is caused to a workman by accident arising out of and in the course of his employment, his employer shall be liable to pay compensation in accordance with the provisions of this Chapter: Provided that the employer shall not be so liable (a) in respect of any injury which does not result in the total or partial disablement of the workman for a period exceeding three days; (b) in respect of any injury, not resulting in death, caused by an accident which is directly attributable (i) the workman having been at the time thereof under the. influence of drink or drugs, or (ii) the willful disobedience of the workman to an order expressly given, or to a rule expressly framed, for the purpose of securing the safety of workmen, or (iii) the willful removal or disregard by the workman of any safety guard or other device which he knew to have been provided for the purpose of securing the safety of workmen. To come within the Act the injury by accident must arise both out of and in the course. of employment. The words "in the course of the employment" mean "in the course of the work which the workman is employed to do and which is incidental to it. " The words "arising out of employment" are understood to mean that "during the course. of the employment, injury has resulted from some risk incidental to the duties of the service, which unless engaged in the duty owing to the master, it is reasonable 873 to believe the workman would not otherwise have suffered." In other words there must be a causal relationship between the accident and the employment. The expression "arising out of employment" is again not confined to the mere nature of the employment. The expression applies to employment as such to its nature, its conditions, its obligations and its incidents. If by reason of any of these factors the workman is brought within the scene of special danger the injury would be one which arises 'out of employment '. To put it differently if the accident had occurred on account of a risk which is an incident of the employment, the claim for compensation must succeed, unless of course the workman has exposed himself to an added peril by his own imprudent act. In Lancashire and Yorkshire Railway Co. vs Highley(1) Lord Sumner laid down the following test for determining whether an accident "arose out of the employment": "There is, however, in my opinion, one test which is always at any rate applicable, because it arises upon the very words of the statute, and it is generally of some real assistance. It is this: Was it part of the injured person 's employment to hazard, to suffer, or to do that which caused his injury ? If yea, the accident arose out of his employment. If nay, it did not, because, what it was not part of the employment to hazard, to suffer, or to do, cannot well be the cause of an accident arising out of the employment. To ask if the cause of the was within the sphere of the employment, or was one of the ordinary risks of the employment, or reasonably incidental to the employment, or conversely, was an added peril and outside the sphere of the employment, are all different ways of asking whether it was a part of his. employment, that the workman should have acted as he was. acting or should have been in the position in which he was, whereby in the course of that employment he sustained injury. " In the case of death caused by accident the burden of proof rests upon the workman to prove that the accident arose out of employment as well as in the course of employment. But this does not mean that a workman who comes to court for relief must necessarily prove: it by direct evidence. Although the onus of proving that the injury by accident arose both out of and in the course of employment rests upon the applicant these essentials may be inferred when the facts proved justify the inference. On the one hand the Commissioner must not surmise, conjecture or guess; on the other hand, he may draw an inference from the proved facts so long as it is a legitimate inference. It is of course impossible to. lay down any rule as to the degree of (1) 874 proof which is sufficient to justify an inference being drawn, but ' the evidence must be such as would induce a reasonable man to draw it. Lord Birkenhead L.C. in Lancaster vs Blackwell Colliery Co. Ltd., ( 1 ) observed: "If the facts which are proved give rise to conflicting inferences of equal degrees of probability so that the choice between them is a mere matter of conjecture, then, of course, the applicant fails to prove his case because it is plain that the onus in these matters is upon the applicant. But where the known facts are not equally consistent, where there is ground for comparing and balancing probabilities as to their respective value, and where a reasonable man might hold that the more probable conclusion is that for which the applicant contends, then the Arbitrator is justified in drawing an inference in his favour." In cases of the unexplained drowning of seamen, the question has often arisen as to whether or not there was evidence to justify the inference drawn by the Arbitrator that the seaman met his death through accident arising out of and in the course of his employment. The question was considered by the House of Lords in Kerr or Lendrum vs Ayr Steam Shipping Co. Ltd.(a) in which the steward of a ship, which was in harbour, was lying in his bunk, when he was told by the captain to prepare tea for the crew. He was shortly afterwards missing, and the next day his dead body, dressed ' in his underclothes only, was found in the sea near the ship. The bulwarks were 3 feet 5 inches above the deck. The steward was a sober man, but was subject to nausea. Murder and suicide were negatived by the Arbitrator, who drew the inference that the deceased left his bunk, went on deck, and accidentally fell overboard and was drowned. He accordingly held that the accident arose out of and in the course of his employment as steward. The Court of Sessions reversed his decision on the ground that there was no evidence to support it. The House of Lords (Earl Lorebum, Lord Shaw of Dunfermline and Lord Parmoor, Lord Dunedin and Lord Atkinson dissenting), however, upheld the decision of the Arbitrator on the ground that, although upon the evidence it was open to him to have taken a different view, his conclusion was such as a reasonable man could reach. "I should state my main proposition thus," said Lord Shaw of Dunfermline, "that we in this House are not considering whether we would have come to the same conclusion upon the facts stated as that at which the (1) 1918 W.C. Rep. 345. (2) [1195] A.C. 217. 875 learned Arbitrator has arrived. Our duty is a very different, a strikingly different one. It is to consider whether the Arbitrator appointed to be the judge of the facts, and having the advantage of hearing and seeing the witnesses, has come to a conclusion which could not have been reached by a reasonable man." Lord Parmoor said: I wish to express no opinion either way on the reasonableness of the finding in itself as long as it is possible finding for a reasonable man," whilst Earl Loreburn observed that they should regard these awards in a very broad way and constantly remember that they were not the tribunal to decide." In the case of unexplained drowning of seamen, the English Court of Appeal have drawn some very fine distinctions. In Bender vs Owners of S.S. "Zent"(1) the chief cook on board a steamship fell overboard and was drowned while the ship was on the high seas. He was seen at 5.25 a.m. looking over the side; 5.30 a.m. was his usual time for turning out; and he was last seen at 5.35 a.m. going aft. The weather was line at the time, it was daylight, the ship was steady, and there was no suggestion that the duties of the deceased would lead him into any danger. There was a 4 ft. rail and bulwark all round the ship and there was no evidence to show how the deceased had fallen overboard. The County Court Judge drew the inference that his death was caused by an accident arising out of and in the course of his employment, but the Court of Appeal held that there was no evidence to warrant such inference, Cozens Hardy, M.R. pointing out that, although it was conceivable that he might have been engaged on some ship 's work, it was equally conceivable that he had been larking or had committed suicide. Bender 's case(1) was followed in Marshall vs Owners of S.S. "Wild Rose(2) where an engineer came on board his vessel, which was laying in a harbour basin, shortly after 10 p.m. Steam had to be got up by midnight. He went below and took off his clothes, except his trousers, shirt and socks. It was a very hot night, and he subsequently came out of his berth, saying that he was going on deck for a breath of fresh air. Next morning his dead body was found at the side of the vessel, just under the place where the men usually sat. It was held by the Court of Appeal, reversing the County Court Judge, that there was no legitimate ground for drawing the inference that the engineer died from an accident ,arising out of his employment. Farwell, L.J. said: "If an ordinary sailor is a member of the watch and is on duty during the night and disappears, the in ference might fairly be drawn that he died from an acci (1) (2) [1909] 2 K.B. 46. 876 dent arising out of his employment. But if, on the other hand, he was not a member of the watch, and was down below and came up on deck when he was not required for the purpose of any duty to be performed on deck, and disappeared without our knowing anything else, it seems to me that there is absolutely nothing from which any Court could draw the inference that he died from an accident arising out of his employment." This decision was upheld by the House of Lords by a majority of one (Lord Loreburn, L.C. and Lord James of Hereford dissenting) Lord Shaw of Dunfermline saying: "The facts in every case may leave here and there a hiatus which only inference can fill. But in the present case, my Lords., the name of inference may be apt to be given to what is pure conjecture. What did the sailor Marshall do when he left his berth and went on deck ? Nobody knows. All is conjecture. Did he jump overboard, walk overboard, or fall overboard ? One can infer nothing, all is conjecture. Was there an accident at all, or how and why did the deceased unhappily meet his fate ?. There can be, in my view, nothing dignified with the name of an inference on this subject, but again only conjecture. " But in Rice vs Owner of Ship "Swansea Vale" (1) where the deceased was a "seaman" in the strict sense of the term that is to say, one whose duty it was to work on deck and not a ship is cook, 'as in Bender 's case, nor an engineer as in Marshall 's case, a different conclusion was arrived at. In that case the chief officer of a vessel, who was on duty on deck, disappeared from the ship in broad daylight. No. one saw him fall overboard, but there was evidence that not long before he had complained of headache and giddiness. It was held, (Buckley, L.J. dissenting) that there was evidence from which the Court might infer that he fell overboard from an accident arising out of and in the course of his employment. The cases of Bender and Marshall were distinguished, as in those cases the men 's duties were below deck and at the time they lost their lives they had certainly no duties which called them on the deck. In the House of Lords, Lord Lorebum, L.C. having discussed the various things that might have happened, said: "The other alternatives were suicide or murder. If you weigh the probabilities one way or the other, the probabilities are distinctly greater that this man perished through an accident arising out of and in the course of his employment. " (1) 877 In Gatton vs Limerick Steamship Co.(1) a night watchman on board a vessel, whose hours of duty were from 7 p.m. to 7 a.m. when he awoke the crew, was last seen on board at 6 a.m. but on that morning he did not awake the crew. His cap was. found on the deck, and his body was found in the harbour some months afterwards. The County Judge held that it was not proved that the accident arose "out of ' his employment and the Court of Appeal on the ground that this was a finding of fact with evidence to support it, refused to interfere. Holmes, L.J., however, stated that the County Court Judge might have arrived at a different conclusion of fact, whilst Cherry, L.J., said that, if he had been the Arbitrator, he would have found that the deceased had met with his death by accident arising out of and in the course ' of his employment. In another similar case Rourke vs Mold & Co. (2) a seaman disappeared during his spell of duty at the wheel in the wheel house in the centre of the flying deck and was not afterwards seen. The night was rough, the sea choppy but the vessel was steady. The flying deck was. protected by a rail. There was no evidence as to how the man met his death and in spite of the presumption against suicide the County Court Judge was unable to draw the inference that the death was due to accident. It was held by the Court of Appeal that in the circumstances the conclusion of the County Court Judge was right. At p. 321 of the Report O 'Brien, L.C. said: "In this case we cannot interfere with the finding of the County Court Judge. The post of duty of the deceased was at the wheel and to steer a certain course until ordered to change it, but nobody knows how the man disappeared, or how he came to leave his post. It is conceivable that he may have fallen overboard in such circumstances as to entitle his widow to claim compensation on the ground that his death was due to an accident arising out of and in the course of the employment; but the onus of proof is on the applicant. That onus is not discharged by asserting that we must assume that the deceased was at his allotted employment when he fell overboard, although the natural inference would be that he was not, and that we should then draw the conclusion that the accident arose out of and in the course of the employment. " In Simpson V.L.M. & section Railway Co.(3) Lord Tomlin reviewed all the previous authorities and stated the principle as follows: " . from these passages to which I have referred I think this rule may be deduced for application to (1) (2) [1917] 2 It. Rep. 318 at 321. (3) 878 that class of case which may be called unexplained accident cases namely, that where me evidence establishes that in the course of his employment the workman properly in a place to which some risk particular thereto attaches and an accident occurs capable of explanation solely by reference to that risk, it is legitimate, notwithstanding the absence of evidence as to the immediate circumstances of the accident, to attribute the accident to that risk, and to hold that the accident arose out of the employment; but the inference as to the origin of the accident may be displaced by evidence tending to show that the accident was due to some action of the workman outside the scope of the employment. Such a rule so stated seems to me to be consistent with all the previous decisions of your Lordships ' House including Marshall vs Owners of S.S. Wild Rose(1) where there was some evidence from Which it could be inferred that the seaman who fell overboard had by action of his own outside his employment added a peril to his position. " In the same case Lord Thankerton expressed the principle in similar language. Lord Thankerton said at p. 371 of the Report: " . the principle to be applied in such cases is that if the accident is shown to have happened while the deceased was in the course of his employment and at a place where he was discharging the duties of his employment, and the accident is capable of being attributed to a risk which is ordinarily inherent in the discharge of such duties, the arbitrator is entitled to infer, in the absence of any evidence tending to an opposite conclusion, that the accident arose out of the employment." In a later case in the House of Lords, Rosen vs S.S. "Querous" :(Owners) Lord Buckmaster explained that in that passage in Lord Thankerton 's speech in Simpson 's case(2) the place referred to was not the exact spot at which the accident may have occurred, but meant, in that case the train on which the workman was traveling and in the later case in the House of Lords the ship on which the workman was employed. The same principle applies in Indian law as the language of section 3 of the Indian Act is identical with section 1 of the English Workmen 's Compensation Act of 1925. What are the facts found in the present case ? Shaikh Hassan Ibrahim was employed as a deck hand, a seaman of category II on the ship. The medical log book of the ship showed that on (1) (2) 879 December 13, 1961 Shaikh Hassan complained of pain in the chest and was, therefore, examined, but nothing abnormal was detected clinically. The Medical Officer on board the ship prescribed some tablets for Shaikh Hassan and he reported fit for work on the next day. On the 15th, however, he complained of insomnia and pain in the chest for which the Medical Officer prescribed sedative tablets. The official log book of the ship shows that on the 16th when the ship was in the Persian Gulf, Shaikh Hassan was seen near the bridge of the ship at about 2.30 a.m. He was sent back but at 3 a.m. he was seen on the Tween Deck when he told a seaman on duty that he was going to bed. At 6.15 a.m. he was found missing and a search was undertaken. The dead body, however, was not found either on that day or later on. The evidence does not show that it was a stormy night. The Commissioner made a local inspection of the ship and saw the position of the bridge and deck and found that there was a bulwark more than 31/2 feet. Nobody saw the missing seaman at the 'so called place of accident. The Additional Commissioner held that there was no material for holding that the death of the seaman took place on account of an accident which arose out of his. employment. In our opinion the Additional Commissioner did not commit any error of law in reaching his finding and the High Court was not justified in reversing it. For these reasons we hold that this appeal must be allowed and the judgment of the Bombay High Court dated March 5, 1965 must set be aside. R.K.P.S. Appeal allowed.

S who was employed as a deck hand on a ship was found missing on board. The respondent filed an application under section 3 of the Workmen 's Compensation Act claiming compensation for the death of S which according to him occurred on account of a personal injury caused by an accident arising out of and in the course of employment. The Additional Commissioner held that there was no evidence to show that the seaman was dead and there was in any event no evidence to justify the inference that the death of the seaman was caused by an accident which arose out of employment. The High Court reversed the judgment of the Additional Commissioner. In appeal to this Court, HELD: The Additional Commissioner did not commit any error of law in reaching his findings and the High Court was not justified in reversing them. To come within the Act the injury by accident must arise both out of and in the course of employment. The words "in the course of employment" mean in the course of work which the workman is employed to do and which is incidental to it. The words "arising out of the employment" are understood to mean that during the course of the employment, injury has resulted from some risk incidental to the duties of the service, which, unless engaged in the duty owing to the master, it is reasonable to believe the workman would not otherwise have suffered. The expression is not confined to the mere nature of the employment but applies to the employment as such to its nature, its conditions, its obligations and its incidents. [872 H] Although the onus of proving that the injury by accident arose both out of and in the course of employment rests upon the applicant these essentials may be inferred when the facts proved justify the inference. On the one hand the Commissioner must not surmise, conjecture or guess; on the other hand he may draw an inference from the proved facts so long as it is a legitimate inference. The evidence must be such as would induce a reasonable man to draw the inference. [873 H] Lancashire and Yorkshire Railway Co. vs Highley, , Lancaster vs Blackwell Colliery Co. Ltd. 1918 W.C. Rep. 345, Kerr or Lendrum vs Ayr Steam Shipping Ca. Ltd. , Bender vs Owners of S.S. "Zeni" [1909] '2 K.B. 41, Marshall vs Owners of S.S. "Wild Rose", , Rice vs Owners of Ship "Swansea Vale", [1912] A.C. 238, Gatton vs Limerick Steamship Co. , Rourke vs Hold & Co. [1917] 2 Ir. Rep. 318 at 321 and Simpson vs L.M. & section Railway Co. , referred

Appeals Nos. 988 and 989 of 1964. Appeals from the judgment and decree dated February 16, 1961 of the Patna High Court in Appeal from Original Decree No. 390 of 1953. D. Goburdhun, for the appellants (in C.A. No. 899 of 1964). section C. Agarwal and R. K. Garg, for the appellants (in C.A. No. 989 of 1964). D. N. Mukherjee and section Mustafi, for respondent No. 1 (in both the appeals). The Judgment of the Court was delivered by Bachawat, J. One Harbans Narain Singh was the proprietor of villages Seha and Dhobaha and other villages. He created several encumbrances over these villages including a mortgage 127 dated February 10, 1886 in favour of Basanti Bibi, two mortgages dated September 9, 1907 and February 5, 1910, in favour of Harprasad Das and a mortgage dated August 2, 1911 in favour of defendant No. I Ramanandan Lal. On June 23, 1915, Harbans Narain sold the villages to Mahabir Missir subject to the above mortgages. Mahabir Missir redeemed the mortgages in favour of Basanti Bibi and Harprasad Das and became subrogated to their rights. Ramanandan Lal instituted a suit to enforce his mortgage, obtained a final decree for sale, put the decree into execution, at the execution sale purchased villages Seha and Dhobaha and obtained possession of the villages in 1919 and 1920. In 1924, Mahabir instituted suit No. 17 of 1924 to enforce his mortgage lien praying for ratable contribution of his dues in respect of villages Seha and Dhobaha from Ramanandan Lal and obtained a final decree on August 22, 1931. Mahabir died leaving his son Kashinath as his legal representative. Kashinath put the decree in suit No. 17 of 1924 into execution. On July 13, 1934, Ramanandan Lal paid the decreetal dues in respect of village Seha. On November 4, 1935, village Dhobaha was sold in execution of the decree in suit No. 17 of 1924 and was purchased by Kashinath. In June, 1934, Ramanandan Lal through his constituted attorney, Munshi Sheobaran Lal granted five leases in respect of the suit lands in the village to defendants 2 to 7. At the time when the leases were created, Ramanandan Lal was the mortgagor in possession of the suit lands over which Kashinath had a mortgage lien. One of the questions in issue in these appeals is whether the leases were binding on Kashinath. It appears that Kashinath obtained a money decree against Ramatahal Pandey, husband of defendant No. 3 and in execution of the money decree attached the suit lands. Defendants 2 to 7 filed claim petitions objecting to the attachment under 0.21, r. 58, CPC. The claim petitions were allowed and the lands were released from attachment by orders of the executing court dated November 20, 1942 and February 26, 1944. The executing court found that the leases were genuine. Kashinath did not file any suit under 0.21, r. 63, CPC. One of the questions in these appeals is whether the orders passed in the claim proceedings under 0.21, r. 58 precluded Kashinath from setting up his claim in the present suit. On June 11, 1946, Kashinath instituted the suit out of which these appeals arise against Ramanandan Lal and the lessees for recovery of possession of the suit lands and mesne profits alleging that the leases were collusive transactions and were otherwise not binding on him. The defendants contested the suit. In the meantime, in other proceedings, it was declared that Mahabir was a benamidar for Shri Thakur Taraknathji and the deity was the real owner of the villages. In view of this adjudication, Kashinath lost 128 all interest in the present suit. By order dated August 25, 1952, the deity was added as a coplaintiff in the suit. The subordinate Judge, Arrah, held that the leases were genuine, were granted by Ramanandan Lal in due course of management and were binding on the plaintiffs. On this finding, he dismissed the suit. The deity preferred an appeal to the High Court of Patna. The High Court allowed the appeal and decreed the suit. It held that the leases were sham transactions were made in contravention of section 65A of the Transfer of Property Act and were not binding upon 'the plaintiffs. Before the High Court, it was contended on behalf of the defendants that the plaintiffs were precluded from challenging the leases in view of the orders passed against Kashinath in the proceedings under 0. 21, r. 58, CPC, but the High Court rejected this contention. Defendants Nos. 2, 6 and 7 and the widow of defendant No. 5 have filed C. A. No. 988 of 1964 and defendants 1 and 4 have filed C. A. No. 989 of 1964 under certificates granted by the High Court, The appellants contend that as Kashinath did not file any suit under O. 21, r. 63, CPC, the adverse orders passed against him in the proceedings under O. 21, r. 58, CPC operated as res judicata, and lie and the deity who now stands in his shoes, were precluded from alleging that the leases were not binding on them. We think that this contention should be rejected. In view of the orders passed against Kashinath in the claim proceedings and his failure to institute suits under O. 21, r. 63, CPC, Kashinath was precluded from claiming that he had the right to attach the suit lands in execution of his money decree, but he was not precluded from claiming that he had the right to sell the lands in execution of his mortgage decree. Rules 58 to 62 of Order 21, CPC, provide for a summary investigation of the claims and objections to the attachment of any property attached in execution of a decree. The issue in the proceeding is whether "such property is liable to such attachment". If the claim is allowed, the property is released from attachment (r. 60). If the claim is disallowed, the attachment continues (r. 61). If the property is subject to mortgage or charge in favour of some person not in possession, the attachment may be continued subject to such mortgage or charge (r. 62). The party against whom an order is made in the claim proceeding may institute a suit to establish the right which he claims to the property in dispute, but subject to the result of such suit, if any the order is conclusive (r. 63). If no suit is brought under r. 63 within the prescribed period of limitation, the order in the claim proceeding is conclusive on the question whether the property was or was not liable to attachment and sale in execution of the particular decree. But the order is not conclusive for all purposes, see Kandai Narasimhachariar vs Raghava Padayachi 129 and others(). A claim proceeding under r. 58 is not a suit or a proceeding analogous to a suit. An order in the claim proceeding does not operate as res judicata. It is because of rule 63 that the order becomes conclusive. The effect of r. 63 is that unless a suit is brought as provided by the rule, the party against whom the order in the claim proceeding is made or any person claiming through him cannot re agitate in any other suit or proceeding against the other party or any person claiming through him the question whether the property was or was no, liable to attachment and sale in execution of the decree out of which the claim proceeding arose, but the bar of rule 63 extends no further. In support of the contention that the orders in the claim proceedings operated as res indicate, counsel for the appellant relied on several decisions. In Subbier vs Moideen Pitchai(2), the decree holder in execution of a money decree attached a debt alleged to be due to the judgment debtor. The garnishee objected to the attachment on the ground that the debt was not due to the judgment debtor, it had been assigned and he had premised to pay to the assignee and the amount of the debt was Rs. 300 and not Rs. 350. The objection was disallowed. The attached debt was sold in execution of the decree and was purchased by the decree holder. The decree holder purchaser then sued to recover the debt. As the garnishee did not file a suit under 0. 21, r. 63, the order passed against him in the claim proceeding became conclusive, and he was precluded from re agitating his objections in the suit. In the course of his judgment, Schwabe, C .J. referred to section 11 of the Code of Civil Procedure and his observations give some support to the contention of the appellants in the present case that the order in the proceeding under r. 58 operates as Yes judicata. But we cannot agree with those observations. The order in the summary proceeding under r. 58 does not operate as res judicata. The reason why the garnishee could not reagitate his objections was that in view of r. 63 he was precluded from asserting that the decree holder was entitled to attach and sell the particular debt on the footing that it was due to the judgment debtor. In Sarju Prasad Missir and others vs Maksudan Choudhuri and others(3), one Lalji Lal obtained a decree for sale of the property mortgaged to him. In execution of the decree Lalji Lal attached 'the property. One Karoal Narian Choudhary filed a petition objecting to the attachment. 'By an order dated September 14, 1886 passed under section 278, CPC of 1992, corresponding to 0. 21 58 CPC of 1908. file executing court directed that the property should not be sold under the decree obtained by Lalji Lal. Sarju Prasad, an assignee of the decree executed the decree, at the execution sale purchased the property and subse (1) I.L.R. (2) A.I.R. 1923 Mad. (3) A.I.R. 1922 P.C. 341. 130 quently instituted a suit against the heir of Kamal Narain for recovery of possession of the property. The Privy Council held that the order dated September 14, 1886 became final and binding upon Lalji Lal and all persons claiming title under him. Sir John Edge observed : "The petition of objection was a petition which the Subordinate Judge had to consider and dispose of and any party to that proceeding who was dissatisfied with the order which the Subordinate Judge might make could have appealed from it. Lalji Lal was a party to that proceeding and he did not appeal, and the order became final and binding upon Lalji Lal and upon those who claim title under him. " The observation that the party dissatisfied with the order made under section 278 of the Code of Civil Procedure, 1882, could have appealed from the order, seems to have been made per incuriam. It seems that no appeal lay from such an order. The reason why Lalji Lal was precluded from contending that the property was liable to be attached and sold in execution of the decree obtained by him was that in the absence of a suit under section 283 of CPC of 1882, he and Sarju Prasad claiming title under him, could not subsequently contend that the property was liable to be sold in execution of the decree. In the two cases discussed above, the adverse orders in the claim proceeding became conclusive on the question whether the property was liable to attachment and sale in execution of the particular decree then sought to be executed. Equally, in the absence of any suit under O. 21, r. 63, CPC, the adverse orders passed against Kashinath conclusively decided that the suit lands were not liable to be sold in execution of the money decree obtained by him against Ramtahal Pandey. But those orders were not conclusive on the question whether the lands were liable to be sold in execution of the mortgage decree obtained by Kashinath against Ramanandan Lal. On the merits, the question is whether the leases granted by Ramanandan La]. while he was the mortgagor, in possession of the suit lands were binding on the mortgagee Kashinath. The High Court held that the leases were in contravention of section 65A of the . Section 65A was inserted in the by section 30 of the Transfer of Property (Amendment) Act, 1929, which came into force on April 1, 1930 Section 63 of the Transfer of Property (Amendment) Act 1929 provided that nothing in the provisions of section 30 of the amending Act would be deemed if any to affect the "terms or incidents of any of property made or effected before the 1st day of April, 1930". Now Kashinath was entitled to the rights of the mortgagees under the mortgages dated February 10, 131 1886, September 9, 1907, February 5, 1910. All these mort gages were executed before April 1, 1930 and nothing in section 65A affected their incidents. The power of the lessor to make leases binding on the mortgagee , was an incident of the mortgages and was not affected by section 65A. The validity of the leases granted by the mortgagor in June 1934 must be determined with reference to the law as it stood before the enactment of section 65A. In Madan Mohan Singh vs Raj Kishori Kumari(1) Mookerjee, J, held that a mortgagor in possession may grant a lease conformable to usage in the ordinary course of management, for instance lie may create a tenancy from year to year in the case of agricultural lands or from month to month in the case of houses. But he is not competent to grant a lease on unusual terms or to alter the character of the land or to authorise its use in a manner or for a purpose different from the mode in which he himself had used before he granted the mortgage. This view of the law as it stood before the enactment of section 65A was approved in Raja Kamakshya Narayan Singh Bahadur vs Chohan Ram and Another(2) and this court held that the question whether the mortgagor in possession has power to lease the mortgaged property must be determined with reference to the authority of the mortgagor as the bailiff or agent for the mortgagee to deal with the property in the usual course of management. In Gobinda Chandra Saha and others vs Sasadhar Mandal(3), B. K. Mukherjea, J., pointed out that normally a permanent lease with rent fixed in perpetuity is not sanctioned by the ordinary course of management. He observed "The mortgagor might be within his rights to create a lease which is from month to month or from year to year as the case might be, but he cannot grant a permanent lease with a rent fixed in perpetuity. This amounts to an alienation of his right to increase the rent in future and is as good as the sale of the property itself. This is not sanctioned by the ordinary course of management as has been mentioned above nor is it warranted by the previous user of this particular property." In the present case, defendants 2 7 were lessees under five leases granted by the mortgagor in June 1934. All 'these defendants claimed to be Permanent lessees with rent fixed in perpetuity. Four of the leases were granted by registered pattas. In respect of four leases the mortgagor received nazrana or premium. All the leases were created after the property was advertised for sale in execution of the mortgage decree. The High Court has found (1) , 92. (2) ,118. (3) A.I.R.1947Cal.73,75. 132 that the leases were created by the mortgagor in bad faith with a view to cause loss to the mortgagee decree holder. The leases were not in the ordinary course of management of the mortgagor as the agent or bailiff of the mortgagee, and were not binding on the mortgagee. On behalf of the appellants it was argued that the leases might not be binding on Kashinath while he was the mortgagee, but after he purchased the property he ceased to be a mortgagee, and he could not thereafter assert that the leases were not binding on him. This novel argument is ingenious but unsound. An auction purchaser at a sale held in execution of a mortgage decree buys not only the interest of the mortgagor but also the interest of the mortgagee. If the lease does not 'bind the mortgagee, it does not equally bind the auction purchaser. It is interesting to notice that in Rust vs Goodale(1), Harman, J. held that the right of the mortgagee to treat a tenant of the mortgagor as a trespasser was a right which passed on sale or foreclosure to his assignee. A lease granted by the mortgagor, out of the ordinary course of management, though not binding on the mortgagee, is binding as between the mortgagor and the lessee. Such a lessee acquires an interest in the right of redemption and is entitled to redeem. If such a lease is created before the institution of a suit relating to the mortgage, the lessee must be joined as a party lo the suit under 0 34, r. 1, CPC; otherwise he will not be bound by the decree passed in the suit and will continue to retain his right of redemption. But in view of section 52 of the , if the mortgagor grants such a lease during the pendency of a suit for sale by the mortgagee, the lessee is bound by the result of the litigation. If the property is sold in execution of the decree passed in the suit, the lessee cannot resist a claim for possession by the auction purchaser. The lessee could apply for being joined as a party to the suit and ask for an opportunity to redeem the property. But if he allows the property to be sold in execution of the mortgage decree and they have now lost the present case, the lessees allowed the suit lands to be sold in execution of the mortgage decree and they have now lost the right of redemption. They cannot resist the claim of the auction purchaser of recovery of possession of the lands. If a mortgagor in possession of the mortgaged property exe cutes a lease of the property in the ordinary course of management as the agent or bailiff of the mortgagee during the pendency of a suit by the mortgagee to enforce the mortgage, a question may arise whether such a lease is in the eye of the law a lease granted by the mortgagee through his agent and therefore binding on him. But in the present case, that question does not arise (1) ,42,43. 133 as the leases were not granted by the mortgagor in the ordinary course of management as the bailiff or agent of the mortgagee. The High Court held that the leases were sham transactions. We do not think it necessary to decide this question. Even assuming that the leases were not sham transactions they were not binding on Kashinath and the deity. The High Court rightly decreed the suit. The appeals are dismissed with costs. There will be one hearing fee. Y. P. Appeals dismissed.

The owner of certain properties over which K had a mortgage granted leases to certain persons. The lands were sold in execution of the mortgage decree of K, and were, purchased by K at the auction The lessees allowed the property to be sold and did not apply for being joined as parties. K obtained a money decree against one of the lessees and in execution attached the lands. The lessees filed claim peti tions objecting to the attachment under 0.21 r. 28 C.P.C. The claim petitions were allowed and the executing court found that the leases were genuine. K did not file any suit under O.21 r. 63 C.P.C. But later, K filed a suit against the mortgagor and the lessees for recovery of possession of the lands alleging that the leases were collusive transactions and were otherwise not binding on him. The trial court dismissed the suit holding that leases were genuine,, but the High Court decreed the suit holding that the leases were sham transactions and made in contravention of section 65A of the Transfer of Property Act. In appeal to this Court, the appellants contended that (i) as K did not file any suit under Order 21 r. 63 C.P.C. the adverse Orders passed against him in the proceedings under 0.21 r. 58 C.P.C. operated as res judicata and he was precluded from alleging that the leases were not binding on him; and (ii) the leases granted by the mortgagor were binding on K. HELD: In view of the orders passed against K in the claim proceedings and his failure to institute suits under 0.21, r. 63 C.P.C., K was precluded from claiming that he had the right to attach the suit lands in execution of his money decree, but he was not precluded from claiming that he had the right to sell the lands in execution of his mortgage decree. [128 E] A claim proceeding tinder 0.21 r. 58 C.P.C. is not a suit or a proceeding analogous to a suit. An order in the claim proceeding does not operate as res judicata. It is because of 0.21 r. 63 that the order becomes conclusive. The effect of r. 63 is that unless a suit is brought provided by the rule, the party against whom the order in the claim proceeding is made or any person claiming through him cannot reagitate in any other suit or proceeding against the other party or any person claiming through him the question whether the property was or no, liable to attachment and sale in execution of the decree out of which the claim proceeding arose but the bar of rule 63 extends no further. [129 A C] Kandadai Narasimhachariar vs Raghava Pedayachi & Ors I.L.R. ; approved. 126 Subbier vs Moideen Pitchai, A.I.R. 1923 Mad. 562, and Sarju Prasad Missir and Ors. vs Maksudan Choudhuri & Ors. A.I.R. ; referred to. (ii) 'The validity of the leases granted by the mortgagor was not affected by section 65A of the Transfer of Property Act as the leases were granted before the enactment of section 65A. [131 A B] The leases were not in the ordinary course of management of the mortgagor as the agent or bailiff of the mortgagee and were not binding of the mortgagee. [132 A B] A lease granted by the mortgagor,, out of the ordinary course of management, though not binding on the mortgagee, is binding as between the mortgagor and the lessee. Such a lessee acquires an interest in the right of redemption and is entitled to redeem. If such a lease is created before the institution of a suit relating to the mortgage, the lessee must be joined as a party to the suit under 0.34, r. 1. C.P.C.; otherwise he will not be bound by the decree passed in the suit and will continue to retain his right of redemption. But in view of section 52 of the Transfer of Property Act, if the mortgagor grants such a lease during the pendency of a suit for sale by the mortgagee, the lessee is bound by the result of the litigation. If the property is sold in execution of the decree passed in the suit, the lessee cannot resist a claim for possession by the auction purchaser. The lessee could apply for being joined as a party to the suit and ask for an opportunity to redeem the property. But if he allows the property to be sold in execution of the decree. , he loses his right of redemption. In the present case, the lessees allowed the suit lands to be sold in execution of the mortgage decree and they have now lost the right of redemption. They can of resist the claim of the auction purchaser for 'recovery of possession of the lands. [132 D G] Raja Kamakshya Narayan Singh Bahadur vs Chohan Ram and Anr. ; ; followed. Madan Mohan Singh vs Raj Kishori Kumari , , 92; Gobinda Chandra Saha & Ors. vs Sasadhar Mandal, A.I.R. 1947 Cal. 73, 75 and Rust vs Goodale, , 42 and 43; referred to.

mpt Petition No. 159 of 1992. IN Special Leave Petition (C) No. 12709 of 1991. From the Judgment and Order dated 26.4.1991 of the Calcutta High Court in Appeal No. 232 of 1990. M.L. Verma, R. Mukhejee, J. Gupta and M.L. Chibber for the Petitioners. Ranjan Dutta, Mrs. N. Dutta, Mrs. Mridula Ray and M.N. Shroff for the Respondents. The Judgment of the Court was delivered by B.P. JEEVAN REDDY, J. In a suit for specific performance certain interlocutory orders were passed by a Single Judge of the Calcutta High Court. On appeal a Division Bench of the said Court modified the said orders. A number of special leave petitions were filed in this Court against the orders of the Division Bench. Though the petitioners in these special leave petitions are different, the contesting respondents in all these cases are common, namely Russel Estate Corporation and its managing partner Sri Hari Narayan Bhan. For the purpose of this petition, it is enough to mention that each of the petitioners in these S.L.Ps. is claiming to be entitled to allotment of one or more of the flats being constructed by the respondents at Calcutta. Their complaint has been that ignoring the agreements in their favour, the 753 respondents have been allotting the constructed flats in favour of third parties thereby seeking to defeat their rights. On 1.8.1991 a Bench of this Court comprising section Ranganathan, M. Fathima Beevi and N.D. Ojha, JJ. passed the following order in I.A. No.2 of 1991 after hearing the respondents. "Counsel accepts notice. in the meantime, till this Special Leave Petition is disposed of, respondents 1 & 2 should not make any further allotment of any other flats in the building in dispute, with effect from today. Counsel for the petitioner contends that the allotment of the flat, originally allotted to him, to some other person violates an oral order of a Division Bench of the High Court. It will be open to the petitioner to move the High Court for appropriate relief in this regard if so advised." This Contempt Petition is filed complaining that the respondents have allotted certain flats in favour of third parties in violation of the said order. So far as the petitioners in this Contempt Petition (Major) Genl. B.M. Bhattacharjee and Smt. section Laha) are concerned, they claim to be interested in the flats on the 8th floor of the said building. At any rate the complaint in this Contempt Petition pertains to the said two flats. The petitioners say that the said flats have been allotted to the third parties in the month of January, 1992. They rely upon the report of a group of investigators (National Bureau of Investigation) in support of the said plea. Notice was issued to the respondents. In their counter (filed by Shri Hari Narayan Bhan) it is stated that the two floors on the 8th floor (described as east and west flats) were allotted on 26th April, 1991 itself i.e., long prior to the order of this Court dated 1.8.1991. It is denied that the allotment of said flats took place in the month of January, 1992. The correctness of the Report of the National Bureau of Investigation is disputed. It is, however, conceded that the possession of the said flats was handed over to the said third parties on 17th August, 1991 which is admittedly a date subsequent to the date on which this Court passed the aforesaid restraint order. It is also not disputed by them that the registered sale deeds in respect of said flats in favour of the said third parties were 754 also executed in March, 1992. The report of the Receiver (Smt. Pratibha Bonnerjea, a retired Judge of the Calcutta High Court who was appointed as such by an order of this Court dated 7.1.1992) also supports the petitioners ' allegations. The relevant portion of the Report reads as follows: "Present condition of these two flats in the floor. The western apartment in the 8th floor is occupied by one Mr. & Mrs. Kamal Thavrani, Ms. Thavrani said that they are in occupation of the flat from December, 1991. Mr. K.K. Thavrani said that he had taken both the eastern and western apartments in the 8th floor. He produced a copy of the agreement executed on 26.4.91 on a stamp paper purchased on 26.4.91 by M/s. Russel Estate Corporation. The agreement relates to both the flats on the 8th floor for a total consideration of Rs. 13,40,000. It is stated that the occupiers have taken possession in December, 1991. Mr. Thavrani submits that the conveyance have been registered in March, 1992 but he is unable to produce the registered conveyance as the same is still lying with the Registrar. We found eastern flat was not complete. Wooden work was going on. Photos Nos. 3 to 5 are attached to this effect. " At the bearing of this Contempt Petition the respondents ' counsel took the stand that the delivery of possession on 17.8.1991 and the execution of the registered sale deed in March, 1992 do not constitute violation of the Order dated 1.8.1991. His submission is that this Court merely restrained the allotment of flats. Allotment, according to the learned Counsel, means entering into the agreement of sale. Inasmuch as the agreement of sale with respect to the said two. flats on the 8th floor was entered into long prior to the said Order of this Court, it is submitted, there is no disobedience to the order of this Court. it is submitted that delivery of possession and the registration of the sale deed(s) is in pursuance of the aforesaid agreement of sale and not in pursuance of any agreement of We entered into on or after 1.8.1991. The counsel further submitted that even on the date when the aforesaid order was passed on 1.8.1991, the second respondent had represented to this Court that agreement of sale in respect 755 of all the flats have already been entered into. In this view, it is submitted, there has been no misrepresentation or suppression of relevant facts on their part. We may mention that when we indicated our disagreement with the above stand during the course of hearing, the counsel for the respondents, Shri Dutta took time till 14th of January, 1993 to file a further affidavit/additional counter and/or documents in continuation of the counter already filed. The second respondent has accordingly filed a further affidavit on 14.1.1993. The counsel for the petitioners ' disputes the correctness, genuineness and validity of the agreement, allegedly entered into on 26.4.1991 in respect of said flats. According to him, it is a fabricated document. He points out that the stamp paper for the said agreement of sale was purchased by the Russel Estate Corporation and not by the purchaser of the flats. It is also pointed out that the agreement is not a registered one and that it could have been fabricated at any time putting a back date. It is not necessary for us to pronounce upon the disputed question whether the agreement dated 26.4.1991 relating to the said two flats on the 8th floor is true and genuine. Assuming that the said agreement is true, we are yet of the opinion that the respondents have committed gross contempt of this Court by their brazen violation of the order dated 18 1991. By the said order this Court directed the respondents 1 and 2 not to make "any further allotment of any other flats in the building in dispute with effect from today. ' Now what does the word "allotment" mean in the context. In our opinion, the said word must be understood reasonably and having regard to the context. The first respondent is not like a Government Department or Public Corporation where an allotment order or allotment letter is issued from the office in pursuance of which other steps are taken. The first respondent is a proprietary concern, according to the petitioners, whereas according to the respondents it is a partnership concern. In either event, there is no such thing as "allotment" in its case. Even now, it is not their case that they have issued any orders or letters of allotment. According to them, there was first an agreement of sale, then delivery of possession and finally a registered sale deed. We are of the opinion that in the context and circumstances, the word "allotment" in the said order means making over of the flats. In other words, it means delivery of possession 756 and registration of the sale deeds. An agreement of sale, that too unregistered, has no significance in the context, difficult as it is to verify its truth and correctness. This court could not be presumed to have interdicted such an uncertain thing. It must be remember that even according to the respondents they had represented to this Court, at the time the said order was passed, that they have already entered into agreements of sale in respect of the flats and yet this Court chose to pass the said order. In the circumstances, it cannot mean anything else than delivery of possession of flats and their sale. It may also mean an agreement of sale but its meaning is certainly not confined to an agreement of sale. To say so, as do the respondent, is to rob the order of any meaning or content. Mr. Dutta, the learned counsel for the respondents contended that the second respondent understood the allotment in a particular manner and that the said misunderstanding, if any, was bona fide. We are not prepared to agree. Firstly, there could not have been any doubt in the mind of Respondent with respect to the meaning of the order. Secondly, assuming that he had any doubt regarding its meaning, the least he could have done was to ask for a clarification of the said Order. He could well have represented that he had already entered into an agreement of sale on 26.4.1991 in restpect of these flats and that he may be permitted to deliver possession and/or execute sale deeds in respect of said flats in favour of third parties. He did nothing of the sort. Having placed a highly restrictive and unwarranted interpretation upon the order of this Court, he went ahead and not only delivered possession of the flats to third parties subsequent to the said order but also registered sale deeds in their favour. He thus rendered the said order nugatory. It was not open to the respondents to place a convenient interpretation upon the order and proceed to act upon it, thereby totally nullifying the order of this Court. In this context, we ought to refer to the conduct of the second respondent as disclosed from the order of this Court dated August 7, 1992 to which one of us (B.P. Jeevan Reddy, J.) was a party. The first two paragraphs of the said order may be quoted in rull. "In these special leave petitions notice was duly served on the respondents and the matters came up for hearing initially before a Bench of this Court comprising of Ranganathan J., Fathima Beevi J. and Ojha J. on 31.7.91 and 757 1.8.91when the parties were heard and certain interim orders were passed. Thereafter it was listed before a Bench of this Court (of which Ranganathan J. and V. Ramaswami J. were members) on a number of occasions at which the respondents were represented and no objection was voiced against the hearing of the matters by the said Bench. However, sometime later an attempt was made on behalf of the respondents to have these matters transferred from this Bench to some other Bench on the allegation that one of the Judges (Ranganathan J.) was biased against the respondents. This request was made before a Bench presided over by the learned Chief Justice by the second respondent who appeared in person and made the request for the transfer of the case. The prayer was rejected by the learned Chief Justice on 11.11.1991. Thereafter the matter was again fisted before a Bench consisting of Ranganathan J., V. Ramaswami J. and Ojha J. On different occasions without any demur from the parties. It was then listed before a Bench comprising of Ramaswamy J., Yogeshwar Dayal J. and Mohan J. on 4.3.92. This Bench directed the cases to be posted before a Bench of which Ranganathan J. is a member. About this time, an application seems to have been presented to the Registrar that this case should be transferred to some other Bench. However, the matters came up before us again some time last week when counsel for the respondents agreed that the matters may be listed this week. The matters were fisted yesterday. A person claiming to be the son of the second respondent made a request that the matter should not be heard by this Bench. We rejected this request and made it clear to him that he should make arrangements for the conduct of the case. The matters did not reach yesterday and when the matters came up today, a letter dated 6.8.92 written by the second respondent to his counsel revoking the counsel 's vakalatnama has been placed before us. But the respondent No. 2 did not appear before us nor did he make other arrangements for the conduct of the case. Sri Chatterjee, his advocate on 758 record, appeared but expressed his inability to conduct the case since his client had withdrawn the vakalatnama. We understand that in one of the matters the respondents are represented by another counsel whose vakalatnama is also seen to have been revoked but she has not appeared or sought permission to withdraw from the case. In these circumstances we have no other option but to proceed against the respondents ex parte. We are unable to accede to the respondents request made on a previous occasion by the son of the second respondent for transfer of case to some other Bench. The circumstances narrated above would show that the respondent has appeared before the Bench on several occasions without protest. The request made for transfer, after the rejection of the earlier petition by the learned Chief Justice, is belated and is just an attempt by the second respondent to circumvent the order already passed by the Chief Justice rejecting a request for transfer and only because the Constitution of the Bench is not to his liking. Such a request, we are clear, cannot be countenanced. " It should be noticed that the said order dated August 7, 1992 was passed not only in the special leave petitions but also in this very Contempt Petition. The attitude adopted by them before the Receiver (Smt. Pratibha Bonnerjea retired Judge of Calcutta High Court, appointed by this Court as a Receiver in this case) also discloses the total disregard and disrespect the Respondents have towards the orders of this Court. The Receiver says: "The next day, by a letter dated 22.8.92, Mr. H.N. Bhan informed me that he would not submit to the order dated 7.8.92 as the Bench was not properly constituted due to the fact that the Hon 'ble Mr. Justice V. Ramaswami was one of the judges and that an application would be moved for recalling the said order. Thereafter, there was complete non cooperation by M/s. Russel Estate Corporation. " The conduct of the second respondent as evidenced from the aforesaid material establishes beyond doubt that the second respondent 759 was trying to play with this Court and was consistently flouting its orders. In the circumstances, the theory of bona fide belief, now put forward before us by his counsel, cannot be accepted. We may at this stage deal with the further affidavit filed by the second respondent on 14.1.1993. In para 3 of the affidavit the second respondent has stated that he has the highest regard for this Court, that he has all along complied with the orders passed by this Court and that he never intended to flout or defy the orders of the Court. He stated further "if in spite of the aforesaid, any order of this Hon 'ble Court has been violated, the same has been so done through mistake, inadvertence and by a misunderstanding of the meaning and purport of that order and surely not intentionally and for which unconditionally apologise for self and on behalf of the Respondent firm and I beg to be excused." Then in paragraphs 4 to 12 he has "without waiving the aforesaid and fully relying thereupon" repeated the contentions which were urged by his counsel before us and which we have dealt with hereinbefore. He stated that he understood this court 's order dated 1.8.1991 as prohibiting only the entering into of agreements of sale and not delivery of possession or registration of the sale deeds. All the said contentions we have dealt with hereinbefore. They need not be reiterated here. So far as the apology contained in para 3 of the second respondent 's further affidavit is concerned, it may firstly be mentioned that it is not really an unconditional apology though it purports to say so. While tendering unconditional apology in para 3, the second respondent has tried to defend his action in the subsequent paragraphs. Secondly, even if we construe paragraph 3 as tendering an unconditional apology, we are not minced to accept the same having regard to the conduct of the respondent which we have adverted to hereinbefore with reference to the order of this court and the report of the Receiver. Accordingly, we reject the apology tendered in para 3 of the further affidavit. For the above reasons, we hold the second respondent guilty of Contempt of this Court. Having regard to the facts and circumstances of this case, we impose a sentence of one month 's imprisonment in addition to a fine of Rs. 2,000 upon the second respondent. The fine shall be paid into this Court within two weeks from today, in default thereof the second 760 respondent shall undergo a further imprisonment of two weeks. The second respondent shall also pay the costs of the respondents in this Contempt case which are assessed at Rs. 5,000 within two weeks from today. In case of failure, the Respondents are free to execute this order as a decree of Court and recover the same from the Respondents. Mr. H.N. Bhan, who is present in the court, be taken into custody forthwith to undergo the sentence of imprisonment. G.N. Petition allowed.

The present Contempt Petition has been filed complaining that the Respondents had allotted certain flats in favour of third parties in violation of this Court 's order dated 1.8.91. The Petitioners ' interest has been in respect of two flats on the 8th floor. They claimed that the said flats had been allotted to third parties in January, 1992, long after this Court 's order dated 1.8.91. It was also contended that the agreement to sell was a fabricated document. The Respondents contended that the said flats were allotted on 26.4.91 itself, though possession of the flats was handed over on 17.8.1991, and sale deeds were executed and registered in March 1992. It was further contended that inasmuch as the agreement for sale was entered into long before the orders of this Court were issued, there was no question of disobedience of the orders of this Court. Finding the Respondent guilty of Contempt of Court, this Court, HELD : 1.1. Even assuming that the agreement of sale dated 26.4.1991 is true, the respondents have committed gross contempt of this Court by their brazen violation of the order dated 1.8.1991. By the said order this Court directed the respondents 1 and 2 not to make "any further allotment of any other flats in the building in dispute with effect 751 from today". The word "allotment" must be understood reasonably and having regard to the context The first respondent is not like a Government Department or Public Corporation where an allotment order or allotment letter is issued from the office in pursuance of which other steps are taken. There is no such thing as "allotment" in this case. According to the Respondents there was first an agreement of sale, then delivery of possession and finally a registered sale deed. In the context and circumstances of the case, the word "allotment in the said order means making over of the flats; it means delivery of possession and registration of the sale deeds. An agreement of sale, that too unregistered, has no significance in the context, difficult as it is to verify its truth and correctness. This court could not be presumed to have interdicted such an uncertain thing. Admittedly the respondents had represented to this Court, at the time the said order was passed, that they have already entered into agreements of sale in respect of the flats and yet this Court chose to pass the said order. In the circumstances, it cannot mean anything else than delivery of possession of flats and their sale. It may also mean an agreement of sale but its meaning is certainly not confined to an agreement of sale. To say so is to rob the order of any meaning or content. There could not have been any doubt in the mind of the Second Respondent with respect to the meaning of the order. In case of any doubt the least he could have done was to ask for a clarification of the said Order. He could well have represented that be had already entered into an agreement of sale on 26.4.1991 in respect of these flats and that he may be permitted to deliver possession and/or execute sale deeds in respect of the said flats in favour of third parties. He did nothing of the sort Having placed a highly restrictive and unwarranted interpretation upon the order of this Court, he went ahead and not only delivered possession of the flats to third parties subsequent to the said order but also registered sale deeds in their favour. He thus rendered the said order nugaptory. [755E H, 756A E] 1.2.The conduct of the second respondent as evidenced from the material on record establishes beyond doubt that he was trying to play with this Court and was consistently flouting its orders. [758H, 759A] 2. So far as the apology tendered by the second respondent is concerned it is not really an unconditional apology. While tendering apology the second respondent has tried to defend his action. Even if it is 752 considered as unconditional apology this Court is not inclined to accept the same having regard to the conduct of the respondent Accordingly, the apology tendered by Respondent No.2 is rejected. [759E G] 3. The second respondent is guilty of Contempt of this Court Having regard to the facts and circumstances of this case, a sentence of one month 's imprisonment in addition to a fine of Rs. 2,000 is imposed upon him. The fine shall be paid into this Court within two weeks and in default thereof the second respondent shall undergo a further imprisonment of two weeks. [760A B]

titions NOS. 2617, 3837, 3973 3981, 3982 3998, 3962 3972,4011 4015,4016 4019,4054 4058, 4136 4143, 4148, 4216, 4217, 4219 4226,4287 4291, 4317 4321, 4408, 4542, 3518 3529, 3739 42, 4365 81,8997 9017 and 9639 50 of 1982 (Under article 32 of the Constitution of India) Mohan Pandey for the Petitioners in WP. 3974 81,3062 72, 4011 15,4016 19, 4136 43, 4287 91, 4365 81, 9639 50,3518 29 and 3739 42/1982. 1011 Shanti Bhushan, Baldev Kapoor and Mohan Pandey with him for the Petitioner in W. P. No. 3973 of 1982. Baldev Kapoor and Mohan Pandey for the Petitioner in WP. No. 3982 98 of 1982. Y. section Chitale and Mohan Pandey for the Petitioner in W.P. No. 2617 of 1982. A. K. Goel for the Petitioner in W. P. No. 3837/82. Arvind Minocha for the Petitioner in W.P. No. 4054 58/82. section K. Bagga for the Petitioner in W.P. No. 3148/82. Vimal Dave for the Petitioner in W.P. No. 4216 & 4217/82. Sarva Mitter for the Petitioner in W.P. 4219 26 & 4317 21/83. R. C. Kohli for the Petitioner in W.P. 4408/82. L. N. Sinha, Attorney General, D. D. Sharma and P. P. Singh with him for the Respondents in all W.Ps. The Judgment of the Court was delivered by VENKATARAMIAH, J. In these writ petitions filed under Article 32 of the Constitution, the petitioners have challenged the constitutional validity of section 3 of the Punjab Motor Vehicles Taxation Act, 1924 (Act No. 4 of 1924) (hereinafter referred to as 'the Act ') as amended by the Punjab Motor Vehicles Taxation (Amendment) Act, 1981 (Punjab Act No. 13 of 1981) and the Notification dated March 19, 1981 issued by the Government of the State of Punjab under section 3(1) of the Act. The petitioners are owners of motor vehicles and are carrying on the business of running stage carriages in the State of Punjab. While the operation of the stage carriage services run by the petitioners is controlled by the provisions of the , which is a Central Act, they are liable to pay taxes on the motor vehicles owned by them under the Act. The Act is a pre Constitutional one. After the Constitution came into force, the 1012 power to levy taxes on goods and passengers carried by road or on Inland waterways and the power to levy taxes on vehicles, whether mechanically propelled or not suitable for use on roads including tramcars, subject to the provisions of Entry 35 of List III of the Seventh Schedule to the Constitution are assigned to the States respectively by Entries 56 and 57 of List II of the Seventh Schedule to the Constitution. While the Act is traceable to Entry 57, the Punjab Passengers and Goods Taxation Act, 1952 is enacted by the State Legislature in exercise of its legislative power granted under Entry 56. Before the commencement of the Constitution, section 3(1) of the Act which is the charging section read as follows: "3. (1) A tax shall be leviable on every motor vehicle in equal instalments for quarterly periods commencing on the first day of April, 1st day of July, first day of October and the first day of January at the rate specified in the schedule to this Act. " The above provision was amended in 1954 by providing that the rates of tax levied under the Act were those specified by the State Government in a Notification to be issued by it, subject however to the maximum limit fixed by the Act, instead of the rates of tax specified by the State Legislature itself in the Schedule to the Act. After that amendment, section 3(4) read thus: "3. (1) A tax shall be leviable on every motor vehicle in equal instalments for quarterly periods commencing on the first day of April, first day of July, first day of October, and the first day of January at such rates not exceeding Rs. 2200 per vehicle for a period of one year as the State Government may by notification direct. '. Emphasis added The maximum limit of Rs. 2200 mentioned in section 3(1) was increased by successive legislative amendments to Rs. 2750 in 1963, to Rs. 4,200 in 1965, to Rs 10,000 in 1970 and to Rs. 20,000 in 1978. In exercise of the power conferred on it, the State Government fixed the rate of tax in the case of stage carriages at Rs. 75 per seat in 1965, at Rs. 100 per seat in 1970 and at Rs. 200 per seat in 1974, subject to the maximum prescribed by the Act. On March 31, 1978, the State Government issued a Notification providing that on and after April 1, 1978, every stage carriage plying in the State of 1013 Punjab should pay tax at Rs. 275 per seat where it operated upto 125 kilometres a day and Rs. 300 per seat where it operated for more than 125 kilometres subject to a maximum of Rs. 20,000 per year in both the cases. Then came the Amending Act in 1981 by which the maximum limit prescribed in section 3(1) of the Act was raised to Rs. 35,000 retrospectively with effect from October 1, 1980. Section 3 of the Amending Act inserted a new section in the Act being section 3 A of the Act which authorised the State Government to issue a Notification under section 3(1) raising the rates of tax retrospectively with effect from October 1, 1980. After the amendment in 1981, section 3(1) of the Act reads thus: "3. (1) A tax shall be leviable on every motor vehicle in equal instalments for quarterly periods commencing on the first day of April, First day of July, first day of October and the First day of January at such rates not exceeding Rs. 35,009 per vehicle for a period of one year, as the State Government may by notification direct. " Pursuant to the above section, as amended in 1981, and the newly inserted section 3 A of the Act which conferred power on it to raise the rates of tax under the Act with effect from October 1, 1980, the State Government issued the following Notification on March 19, 1981: "DEPARTMENT OF TRANSPORT NOTlFICATION The 19th March, 1981 No. S.O. 15/P.A. 4/24/S 3/Amd/81 In exercise of the powers conferred by sub section (1) of section 3 read with section 3 A of the Punjab Motor Vehicles Taxation Act, 1924 (Punjab Act No. 4 1924) and all other powers enabling him in this behalf, the Governor of Punjab is pleased to make the following amendment in the schedule appended to the Punjab Government, Transport Department Notification No. S.O./50/P.A 4/24/S. 3/71 dated 10th November, 1971 with effect from the 1st October, 1980 namely: 1014 AMENDMENT In the said schedule, against serial No. 5 for item (i) and entries relating thereto, the following item and entries shall be substituted, namely: "(1) Stage carriages for hire Rs.500 per seat and used for the transport subject to a of passengers, excluding maximum of the driver and conductor. Rs. 35,000." SADA NAND Secretary to Government, Punjab Department of Transport. " The final position that emerged after the above Notification was that every stage carriage plying for hire and used for the transport of passengers (excluding the driver and conductor) had to pay per year Rs. 500 per seat subject to a maximum of Rs. 35,000 irrespective of the distance over which it operated daily. The petitioners have challenged in these petitions the amendment made in 1981 increasing the maximum limit of the tax to Rs. 35,000 per year and the Notification dated March 19, 1981 raising the tax to Rs. 500 per seat on various grounds. The petitioners inter alia contend that the levy of tax of Rs. 500 per seat imposed by the impugned Notification is violative of Article 14, Article 19(1)(g) and Article 304(b) of the Constitution. They have also pleaded that the tax now levied is outside the scope of Entries 56 and 57 of List II of the Seventh Schedule to the Constitution. The principal point urged by them is that the tax now levied is expropriatory and not compensatory in character and is being collected by the State Government for the purpose of augmenting its general revenues which is forbidden by the Constitution. In support of their case the petitioners have furnished the following figures contained in the budget presented to the State Legislature in the year 1981 82: "Receipts Taxes on vehicles Rs. 13,86,00,000 Taxes on goods and passengers Rs. 35,45,00,000 Total Rs. 49,31,00,000 1015 Expenditure On roads and bridges Rs. 34,03,00,000 Excess of receipts over expenditure: Rs. 15,28,00,000" It is contended by the petitioners that in view of the above figures, furnished by the State Government itself, there was no justification for increasing the rate of tax by the impugned Notification. The petitioners have further pleaded that the impugned levy imposes an unreasonable restriction on the freedom of trade, commerce and intercourse within the State of Punjab. The State Government has justified the impugned levy in the counter affidavit filed in the case, the deponent of which is a Joint Secretary . to the Government of Punjab, Transport Department. It is contended by the State Government inter alia that the plea of the petitioners that the revenue raised by the impugned Notification 'must be used only for the purpose of providing facilities pertaining to roads and bridges and or facilities connected with the transportation of goods and passengers ' was misconceived having regard to the various other responsibilities of the State Government which it has to bear in connection with road transports and if the expenditure incurred on all items of relevant expenditure is taken into consideration, it would become clear that the levy in question is not excessive. It is urged that the levy is compensatory in character and is, therefore, not hit by Article 301 or Article 304 (b) of the Constitution. The State Government has also furnished certain figures relating to the expenditure incurred by it to show that the levy is neither arbitrary nor violative of Article 19 (1) (g) of the Constitution. We shall now proceed to examine the relevant constitutional provisions. Article 301 and Article 304 (b) which are in Part XIII of the Constitution read thus: "301. Subject to the other provisions of this Part, trade, commerce and intercourse throughout the territory of India shall be free. Notwithstanding anything in article 301 or article 303, the Legislature of a State may by law 1016 (a) . . (b) impose such reasonable restrictions on the freedom of trade, commerce or intercourse with or within that State as may be required in the public interest: Provided that no Bill or amendment for the purposes of clause (b) shall be introduced or moved in the Legislature of a State without the previous sanction of the President. " These provisions of the Constitution came up for consideration before a Constitution Bench consisting of five learned Judges of this Court in Atiabari Tea Co. Ltd. vs The State of Assam and Ors.(1) and the main point which arose for decision in that case was whether the taxing provisions in the Seventh Schedule to the Constitution were subject to Articles 301 to 304 and, if so, what would be their effect on taxes levied under Entry 56 of List II of the Seventh Schedule to the Constitution. Gajenderagadkar, J. (as he then was) who pronounced the judgment on behalf of himself, Wanchoo and Das Gupta, JJ. with whom Shah, J. (as he than was) agreed though by assigning a wider meaning to the freedom of trade, commerce and intercourse dealt with by Article 301 of the Constitution, observed at page 861 thus:. "Our conclusion, therefore, is that when article 301 provides that trade shall be free throughout the territory of India it means that the flow of trade shall run smooth and unhampered by any restriction either at the boundaries of the States or at any other points inside the States themselves. It is the free movement or the transport of goods from one part of the country to the other that is intended to be saved, and if any Act imposes any direct restrictions on the very movement of such goods it attracts the provisions of article 301 and its validity can be sustained only if it satisfies the requirements of article 302 or article 304 of Part XIII. At this stage we think it is necessary to repeat that when it is said that the freedom of the movement of trade cannot be 1017 subject to any restrictions in the form of taxes imposed on the carriage of goods or their movement all that is meant is that the said restrictions can be imposed by the State Legislatures only after satisfying the requirements of article 304 (b). It is not as if no restrictions at all can be imposed on the free movement of trade. " The same question arose later on very sharply in The Automobile Transport (Rajasthan) Ltd. vs The State of Rajasthan and Ors.(1) before a bench of seven learned Judges of this Court in which the correctness of the decision in the case of Atiabari Tea Co. Ltd. (supra) was questioned. In this case, the effect of Articles 301 to 304 of the Constitution on the power of the State Legislature to levy tax under Entry 57 of List II of the Seventh schedule to the Constitution arose for determination. There were three judgments in that case. The judgment of Das, Kapur and Sarkar, JJ. was delivered by Das, J. with whom Subba Rao, J. agreed in his concurring judgment. The minority judgment of Hidayatullah, Rajagopala Ayyangar and Mudholkar, JJ. was delivered by Hidayatullah, J. In that case, the contention of the appellant was that the tax levied under section 4 of the Rajasthan Motor Vehicles Taxation Act, 1951 read with its Schedules constituted a direct and immediate restriction on the movement of trade and commerce with and within the State of Rajasthan inasmuch as motor vehicles which carried passengers and goods within or through that State had to pay the tax which imposed a pecuniary burden on a commercial activity and was, therefore, hit by Article 301 of the Constitution and was not saved by Article 304 (b) inasmuch as neither the proviso to Article 304 (b) had been complied with nor was that Act assented to by the President as provided in Article 255 of the Constitution. On behalf of the State of Rajasthan, it was inter alia urged that a fiscal legislation enacted for the purpose of raising revenue for the maintenance of roads etc. was not hit by Article 301 and that the impugned levy which was intended for providing facilities to motor vehicles traffic did not constitute an immediate or direct impediment on the movement of trade and commerce. In the course of the hearing of that case, it was canvassed that the impugned tax being compensatory was outside the purview of Article 301 and Article 304(b). After 1018 examining all the views expressed in the Atiabari Tea Co. 's case (supra) Das, J. Observed at pages 532 533 thus: "We have, therefore, come to the conclusion that neither the widest interpretation nor the narrow interpretations canvassed before us are acceptable. The interpretation which was accepted by the majority in the Atiabari Tea Co. case ; is correct, but subject to this clarification. Regulatory measures or measures imposing compensatory taxes for the use of trading facilities do not come within the purview of the restrictions contemplated by article 301 and such measures need not comply with the requirements of the proviso to article 304(b) of the Constitution. " Subba Rao, J. who agreed with the judgment of Das, J. observed at pages 564 565 thus: "The foregoing discussion may be summarized in the following propositions: (1) article 301 declares a right of free movement of trade without any obstructions by way of barriers? inter State, or intra State or other impediments operating as such barriers. (2) The said freedom is not impeded, but, on the other hand, promoted, by regulations creating conditions for the free movement of trade, such as, police regulations, provision for ser vices, maintenance of roads, provision for aerodromes, wharfs etc.; with or without compensation. (3) Parliament may by law impose restrictions on such freedom in the public interest; and the said law can be made by virtue of any entry with respect where of Parliament has power to make a law. (4) The State also, in exercise of its legislative power, may impose similar restrictions, subject to the two conditions laid down in article 304(b) and subject to the proviso mentioned therein. (5) Neither Parliament nor the State Legislature can make a law giving preference to one State over another or making discrimination between one State and another, by virtue of any entry in the Lists, infringing the said freedom. (6) This ban is lifted in the case of Parliament for the purpose of dealing with situations arising out of scarcity of goods in any part of the territory of India and also 1019 in the case of a State under article 304(b), subject to the conditions mentioned therein. And (7) the State can impose a non discriminatory tax on goods imported from other States or the Union territory to which similar goods manufactured or produced in that State are subject. " It is not necessary to refer here to the views expressed in the minority judgment. The gist of the majority decision in the case of the Automobile Transport (Rajasthan) Ltd. (supra) is that as long as taxes levied under Entries 56 and 57 of List lI of the Seventh Schedule to the Constitution are compensatory, they would fall outside the scope of Article 301 of the Constitution. But if they are not compensatory, then being a restriction on the freedom of trade, commerce or intercourse, they have to satisfy the requirements of clause (b) of Article 304. In all cases falling under Article 304(b) no bill or amendment can be introduced or moved in the Legislature of a State without the previous sanction of the President. If for any reason the requirement is not complied with, in order to be valid such law should receive the assent of the President as provided in Article 255 of the Constitution. The main question which arises for determination now, therefore, is whether on the facts and in the circumstances of the case, the levy in question is for any reason not compensatory. In the case of the Automobile Transport (Rajasthan) Ltd. (supra) the circumstances when a tax on motor vehicles can be characterised as compensatory were discussed. Das, J. Observed at pages 536 537 thus: "The taxes are compensatory taxes which instead of hindering trade, commerce and intercourse facilitate them by providing roads and maintaining the roads in a good state of repairs. Whether a tax is compensatory or not cannot be made to depend on the preamble of the statute imposing it. Nor do we think that it would be right to say that a tax is not compensatory because the precise or specific amount collected is not actually used to providing any facilities . . actual user would often be unknown to tradesmen and such user may at some time be com pensatory and at others not so. It seems to us that a working test for deciding whether a tax is compensatory or not is to enquire whether the trades people are having 1020 the use of certain facilities for the better conduct of their business and paying not patently much more than what is required for providing the facilities. It would be impossible to judge the compensatory nature of a tax by a meticulous test, and in the nature of things that cannot be done. Nor do we think that it will make any difference that the money collected from the tax is not put into a separate fund so long as facilities for the trades people who pay the tax are provided and the expenses incurred in providing them are borne by the State out of whatever source it may be We were addressed at some length on the distinction between a tax, a fee and excise duty. It was also pointed out to us that the taxes raised under the Act were not specially ear marked for the building or maintenance of roads. We do not think that these considerations necessarily determine whether the taxes arc compensatory taxes are not. We must consider the substance of the matter. " The same principle is followed and reiterated in G. K Krishnan etc. v The State of Tamil Nadu & Anr. etc.(1) and in International Tourist Corporation etc. vs State of Haryana & Ors.(2) It is undeniable that there have been vast changes in the road systems of all the States in India during recent years and the State of Punjab is no exception. The roads themselves have very greatly increased in extent. There is also a like increase in road traffic. The number of motor vehicles, both passengers vehicles and goods vehicles which use the road has gone up. The cost of maintenance of roads has gone up correspondingly. The spiralling inflation has added to the mounting costs. Naturally the rates of taxes on motor vehicles have also constantly and inevitably risen in every part of the country. As mentioned earlier the mandate of the provisions in part XIII of the Constitution is not that trade, commerce and intercourse should be 1021 'absolutely free ' i.e. subject to no law and no taxes at all. Trade, commerce and intercourse should pay their way, that is, the price for the facilities provided by the State in the form of roads, bridges, check posts, the departmental organisations intended for regulation of transport, law and order etc. In modern communities the exercise of any trade and the conduct of any business must involve many kinds of fiscal liabilities. Merely because certain taxes are levied on them it cannot be said that trade or commerce has become unfree. Without the repair upkeep, maintenance and provision for depreciation of roads, transportation would itself become impossible. Motor vehicles which stand in direct relation to such roads should as held by this Court earlier, contribute towards the cost incurred for the aforesaid purposes. There is nothing inconsistent with the conception of freedom of trade and commerce if, in truth, what is collected by way of tax is a pecuniary charge which is compensatory in character. What is essential is that the burden should not disproportionately exceed the cost of the facilities provided by the State. It is not at all unreasonable to ask the owners of motor vehicles to contribute towards the cost of maintenance of roads etc. as they happen to belong to a class having a special and direct benefit of the facilities so provided. When they are taxed, they are paying a price for something which makes their movement safer, easier and more convenient. If a road falls into disrepair, the extent of loss they suffer will be very heavy indeed resulting in damage to their vehicles and inconvenience to the passengers and the owners of the goods they carry. There is, however, no doubt that the Courts do have the ultimate power to decide whether what is re covered by way of tax is in truth and substance either a contribution towards the construction and maintenance of the roads, bridges and other facilities that are necessary for providing a smooth transport service or an exaction far in excess of what is needed for providing such facilities. Courts, however, cannot insist upon an exact correlation between the tax recovered and the cost so incurred because such exact correlation is in the very nature of things impossible to attain. There may be in some cases a little excess recovery by way of taxes. That by itself should not result in the nullification of the law imposing the tax if the extent of such excess is marginal having regard to the total cost involved. The petioners have relied on certain figures furnished in the budget estimates for the year 1981 82 in support of their case that 1022 the State of Punjab was raising in all Rs. 49,31,00,000 from taxes on motor vehicles levied under the Act and taxes on passengers and goods levied under the Punjab Passengers and Goods Taxation Act, 1952 while the State was spending only Rs. 34,03,00,000 on roads and bridges. It is apparent that the amount of expenditure referred to above does not include the expenditure incurred by the State Government on other heads connected with road transport such as the Directorate of Transport, the transport authorities, provision of bus stands, lighting, traffic police, cost of maintenance of roads within the jurisdiction of local bodies such as Corporations, Municipalities and Gram Panchayats which are recipients of Government grants for the aforesaid purposes and other incidental items. If these items are also taken into consideration, the gap, if any, between the receipts and the expenditure on the transport would become very insignificant. The State Government has set out in detail the expenditure incurred by it for the aforesaid purposes in the affidavit sworn to by Shri Karl Reddy, I.A.S., Joint Secretary to the Government of Punjab. It has also produced the book containing the budget estimates presented to the State Legislature for the year 1983 84. It shows that the State Government has actually incurred in the year 1981 82 an expenditure of Rs. 23,32,88,000 on the maintenance of roads and bridges and Rs. 10,23,53,000 as capital out lay on roads and bridges. The total sum spent on roads and bridges alone thus came to Rs. 33,56,41,000. The actual receipts from taxes realised during the year 1981 82 both under the Act and under the Punjab Passengers and Goods Taxation Act, 1952 were, according to the State Government, Rs. 48,82,00,000. The budget estimates for the year 1983 84 show that the State Government proposes to spend during the year 1983 84 about 42 crores on roads and bridges alone though there is no expectation of any significant increase in the receipts by way of motor vehicles taxes. Even if the whole of the capital out lay incurred by the State Government incurred during the year in connection with the construction of new roads is not included in the expenditure for the year for the purpose of deter mining the compensatory character of the levy (although there can be no serious objection to doing so as observed in G. K Krishnan 's case (supra) but only a part of it is taken into account alongwith other items of expenditure which can legitimately be taken into consideration, it is obvious that a substantial part of the levy on motor vehicles under the Act as well as under the Punjab Passengers and Goods Taxation Act, 1952 is being spent annually on providing 1023 facilities to motor vehicles operators. Moreover when once the principle of carrying forward to future year or years a part of the capital out lay on roads and bridges during any financial year is adopted in calculating the total expenditure incurred on roads and bridges during that year, it becomes inevitable that a part of the unabsorbed capital out lay on roads and bridges in the previous year or years would have to be added to the expenditure on roads and bridges during the year in question. The arithmetical result in the case before us cannot, therefore, be much different. It may also be stated that a comparison between the total revenue from taxation on motor vehicles and the expenditure incurred on providing facilities such as roads and bridges etc. in a single year may sometimes present a distorted picture. The figures furnished by the State Government in respect of nine years i.e. 1973 74 to 1981 82 (both inclusive) show that the total receipts from the taxes levied under the Act and the taxes levied under the Punjab Passengers and Goods Taxation Act, 1952 is in the order of Rs. 2,52,26,83,000 and the total expenditure during the same period on roads and bridges alone is Rs. 2,35,66,89,000. The other relevant items of expenditure incurred in connection with road traffic are not included in the above expenditure. If they are included, the total expenditure is likely to be more than the receipts. In Kewal Krishan Puri & Anr. vs State of Punjab & Ors.(1) where the question of a fee was involved, this Court said that if at least a good and substantial portion of amount collected on account of fees, (may be in the neighbourhood of two thirds or three fourths) was shown with reasonable certainty to have been spent for rendering services to those from whom the fees were collected, the levy of fees could be upheld. In law there cannot be much difference between the above principle applicable to fees and the principle that ought to govern the levy of motor vehicles tax which is claimed to be of a compensatory character. We are satisfied that the State Government has substantiated its case that the impugned tax is truly compensatory in nature. It has, therefore, to be held that it does not contravene Article 301 and Article 304(b) of the Constitution. 1024 The next submission urged on behalf of the petitioners is based on Article 14 of the Constitution. It is contended by the petitioners that the Act by levying Rs. 35,000 as the annual tax on a motor vehicle used as a stage carriage but only Rs. 1,500 per year on a motor vehicle used as a goods carrier suffers from the vice of hostile discrimination and is, therefore, liable to be struck down. There is no dispute that even a fiscal legislation is subject to Article 14 of the Constitution. But it is well settled that a legislature in order to tax some need not tax all. It can adopt a reasonable classification of persons and things in imposing tax liabilities. A law of taxation cannot be termed as being discriminatory because different rates of taxation are prescribed in respect of different items provided it is impossible to hold that the said items belong to distinct and separate groups and that there is a reasonable nexus between the classification and the object to be achieved by the imposition of different rates of taxation. The mere fact that a tax falls more heavily on certain goods or persons may not result in its invalidity. As observed by this Court in Khandige Sham Bhat and Ors. vs The Agricultural Income Tax officer(1) in respect of taxation laws, the power of legislature to classify goods, things or persons are necessarily wide and flexible so as to enable it do adjust its system of taxation in all proper and reasonable ways. The courts lean more readily in favour of upholding the constitutionality of a taxing law in view of the complexities involved in the social and economic life of the community. It is one of the duties of a modern legislature to utilise the measures of taxation introduced by it for the purpose of achieving maximum social goods and one has to trust the wisdom of the legislature in this regard. Unless the fiscal law in question is manifestly discriminatory the Court should refrain from striking it down on the grounds of discrimination. These are some of the broad principles laid down by this Court in several of its decisions and it is unnecessary to burden this judgment with citations. Applying these principles it is seen that stage carriages which travel on an average about 260 kilometers every day on a specified route or routes with an almost assured quantum of traffic which invariably is over crowded belong to a class distinct and separate from public carriers which carry goods on undefined routes. Moreover the public carriers may not be operating every day in the State. There are also other economic considerations which distinguish stage carriages and public carriers from each 1025 other. The amount of wear and tear caused to the roads by any class of motor vehicles may not always be a determining factor in classifying motor vehicles for purposes of taxation. The reasons given by this Court in G.K.Krishnan 's case (supra) for upholding the classification made between stage carriages and contract carriages both of which are engaged in carrying passengers are not relevant to the case of a classification made between stage carriages which carry passengers and public carriers which transport goods. The petitioners have not placed before the Court sufficient material to hold that the impugned levy suffers from the vice of discrimination on the above ground. It was lastly urged that the levy is almost confiscatory in character and the petitioners would have to close down their business as stage carriage operators. It is stated that the passenger fares were permitted to be raised by about 43 per cent just before the levy was increased in this case and it is even now open to the operators to move the State Government to increase the rates if they feel that there is a case for doing so. But on the facts and in the circumstances of the case, we feel that it is not possible to hold that the impugned levy imposes an unreasonable restriction on the freedom of the petitioners to carry on business. The considerations similar to those which weighed with this Court in upholding the Mustard Oil Price Control Order, 1977 in Prag Ice and Oil Mills and Anr. vs Union of India(1) ought to be applied in this case also. Though patent injustice to the operators of stage carriages in fixing lower returns on the tickets issued to passengers should not be encouraged, a reasonable return on investment or a reasonable rate of profit can not be the sine qua non of the validity of the order of the Government fixing the maximum fares which the operators may collect from their passengers. It cannot also be said that merely because a business becomes uneconomical as a consequence of a new levy, the new levy would amount to an unreasonable restriction on the fundamental right to carry on the said business. It is, however, open to the State Government to make any modifications in the fares if it feels that there is a need to do so. But the impugned levy cannot be struck down on the ground that the operation of the stage carriages has become uneconomical after the 1026 introduction of the impugned levy. Moreover the material placed by the petitioners is not also sufficient to decide whether the business has really become uneconomical or not. We do not, therefore, find any merit in this ground also. In the result these petitions fail and they are dismissed. No costs. P.B.R. Petitions dismissed.

By a notification issued under section 3A of the Punjab Motor Vehicles and Taxation (Amendment) Act, 1981 the State Government Imposed on every stage carriage plying for hire and use for the transport of passengers a sum of Rs. 500 per seat subject to a maximum of Rs. 35,000 irrespective of the distance over which it operated daily. The petitioners, in their petitions under Article 32 of the Constitution, contended that the tax was expropriatory and not compensatory in character and was being collected by the State Government for augmenting its general revenues which is forbidden by the Constitution, and that the levy was an unreasonable restriction on the freedom of trade, commerce and intercourse within the State. Dismissing the petitions, ^ HELD: The impugned tax is compensatory in nature and does not contravene Articles 301 and 304(b) of the Constitution. [1023 H] The mandate of Part XIII of the Constitution is not that trade, commerce and intercourse should be absolutely free, i.e., subject to no law and no taxes at all. Trade, commerce and intercourse should pay their way, that is, the price for the facilities provided by the State in the form of roads, bridges and many other facilities. Therefore, there is nothing inconsistent with the conception of freedom of trade and commerce if in truth what is collected by way of tax is a pecuniary charge which is compensatory in character. What is essential is that the burden should not disproportionately exceed the cost of facilities provided by the State. It is not unreasonable to ask the owners of the motor vehicles to contribute towards the cost of maintenance of roads as they happen to belong to a class having a special and direct benefit of the facilities provided. Courts 1010 have the power to decide whether what is recovered by way of tax is in truth and substance either a contribution towards the construction and maintenance of roads and bridges and other facilities necessary for smooth transport service or an exaction in excess of what is needed for this purpose. They cannot, however, insist upon an exact correlation between the tax recovered and the cost so incurred because such exact correlation is in the very nature of things impossible to attain. In the case of fee if at least a good and substantial portion (two thirds or three fourths) collected is shown with reasonable certainly to have been spent for rendering services to those from whom fees were collected, the Courts have upheld the levy. In law there cannot be much difference between this principle applicable to fees and the principle that ought to govern the levy of motor vehicles tax which is claimed to be of a Compensatory character. [1020H, 1021 A H, 1023 F G] Kewal Krishan Puri & Anr. vs State of Punjab &. , ; ; referred to. The petitioners have not placed before the Court sufficient material to hold that the ievy suffered from the vice of discrimination. It is well settled that a legislature, in order to tax some need not tax all. It can adopt a reasonable qualification of persons and things in imposing tax liabilities. Unless a fiscal law is manifestly discriminatory the Court should refrain from striking it down on the ground of discrimination. [1025 B, 1024 E F] In the instant case stage carriages which travel on an average about 260 Km every day with an almost assured quantum of traffic, belong to a class distinct and separate from public carriers which carry goods on undefined routes. The amount of wear and tear caused to the roads by any class of motor vehicles may not always be a determining factor in classifying motor vehicles for the purposes of taxation. [1024 G H, 1025 A] Merely because a business becomes uneconomical as a consequence of a new levy, it cannot be said that it would amount to an unreasonable restriction on the fundamental right to carry on the business. [1025 H, 1026 A]

minal Appeal No. 107 of 1965. Appeal by special leave from the judgment and order, dated June 22, 1965 of the Bombay High Court in Criminal Applica tion No. 613 of 1965. Niren De, Additional Solicitor General and B. R. G. K. Achar, for the appellant. R. K. Garg, D. P. Singh, M. K. Ramamurthi and section C. Agar wala for respondent No. 1. The Judgment of the Court was delivered by Subba Rao J. Prabbakar Pandurang Sanzgiri, who has been detained by the Government of Maharashtra under section 30(1)(b) of the Defence of India Rules, 1962, in the Bombay District Prison in order to prevent him from acting in a manner pre judicial to the defence of India, public safety and maintenance$ of public order, has written, with the permission of the said Government, a book in Marathi under the title "Anucha Antarangaat" (Inside the Atom). The learned Judges of the High Court, who had gone through the table of contents of the book. expressed their opinion on the book thus : ". . we are satisfied that the manuscript book deals with the theory of elementary particles in in objective way. The manuscript does not purport to be a research work but it purports to be a book written with a view to educate the people and disseminate knowledge regarding quantum theory. " The book is, therefore, purely of scientific interest and it cannot possibly cause any prejudice to the defence of India, public safety or maintenance of public order. In September, 1964, the detenu applied to the Government of Maharashtra seeking permission to send the manuscript out of the jail for publication; but the Government by its letter, dated March 27, 1965, rejected the request. He again applied to the Superintendent, Arthur Road Prison, for permission to send the manuscript out and that too was rejected. Thereafter, he filed a petition under article 226 of the Constitution in the High Court of Maharashtra at Bombay 704 for directing the State of Maharashtra to permit him to send out the manuscript of the book written by him for its eventual publication. The Government of Maharashtra in the counter affidavit did not allege that the publication of the said book would be prejudicial to the objects of the Defence of India Act, but averred that the Government was not required by law to permit the detenu to publish books while in detention. The High Court of Bombay held that the civil rights and liberties of a citizen were in no way curbed by the order of detention and that it was always open to the detenu to carry on his activities within the conditions governing his detention. It further held that there were no rules prohibiting a detenu from sending a book outside the jail with a view to get it published. In that view the High Court directed the Government to allow the manuscript book to be sent by the detenu to his wife for its eventual publication. The State of Maharashtra has preferred the present appeal against the said order of the High Court. The contentions of the learned Additional Solicitor General may be briefly stated thus : When a person is detained he loses his freedom; he is no longer a free man and, therefore, he can exercise only such privileges as are conferred on him by the order of detention. The Bombay Conditions of Detention Order, 1951. which regulates the terms of the first respondent 's detention, does not confer on him any privilege or right to write a book and send it out of the prison for publication. In support of his contention he relies upon the observations of Das, J., as he then was, in A. K. Gopalan vs State of Madras(1) wherein the learned Judge has expressed the view, in the context of fundamental rights, that if a citizen loses the freedom of his person by reason of a lawful detention, he cannot claim the rights under article 19 of the Constitution as the rights enshrined in the said article are only the attributes of a free man. Mr. Garg, learned counsel for the detenu, raised before us the following two points : (1) a restriction of the nature imposed by the Government on the detenu can only be made by an order issued by the appropriate Government under cls. (f) and (h) of sub r. (1) of r. 30 of the Defence of India Rules, 1962, hereinafter called the Rules, and that too in strict compliance with section 44 of the Defence of India Act, 1962, hereinafter called the Act, and that as the impugned restriction was neither made by such an order nor did it comply with section 44 of the Act, it was an illegal restriction on his personal liberty; and (2) neither the detention order nor the (1) ; , 291. 705 conditions of detention which governed the first respondent 's detention enabled the Government to prevent the said respondent from sending his manuscript book out of the prison for publication and, therefore, the order of the Government rejecting the said respondent 's request in that regard was illegal. Article 358 of the Constitution suspends the provisions of article 19 of Part III of the Constitution during the period the proclamation of emergency is in operation; and the order passed by the President under article 3 5 9 suspended the enforcement, inter alia, of article 21 during the period of the said emergency. But the President 's order was a conditional one. In effect it said that the right to move the High Court or the Supreme Court remained suspended if such a person had been deprived of his personal liberty under the Defence of India Act, 1962, or any rule or order made thereunder. If a person was de lived of his personal liberty not under the Act or a rule or order made thereunder but in contravention thereof, his right to move the said Courts in that regard would not be suspended. The question, therefore. in this case is whether the first respondent 's liberty has been restricted in terms of the Defence of India Rules whereunder he was detained. If it was in contravention of the said Rules, he would have the right to approach the High Court under article 226 of the Constitution. In exercise of the Dower conferred on the Central Government by section 3 of the Act, the Central Government made the Defence of India Rules. Under section 30 of the Rules the Central Government or the State Government, if it is satisfied with respect to any person that in order to prevent him from acting in any manner prejudicial to the matters mentioned therein, it is necessary so to do, may make an order directing that he be detained. Under subr. 4 thereof he shall be liable to be detained in such place and under such conditions as to maintenance, discipline and the punishment of the offence and the breaches of discipline as the Central Government or the State Government, as the case may be, may from time to time determine. In exercise of the power con ferred under sub r. (4) of r. 30 of the Rules, the Government of. Maharashtra determined that the conditions as to maintenance, discipline and the punishment of offenses and breaches of discipline governing persons ordered to be detained in any place in the State of Maharashtra, shall be the same as those contained in the Bombay Conditions of Detention Order, 1951. The Bombay Conditions of Detention Order, 1951, does not contain any condition as regards the writing of books by a detenu or sending them out of jail for publication. Briefly stated, the scheme of the said p. C. and I./65 2 706 provisions is that a person can be detained if the appropriate Government is satisfied that in order to prevent him from doing the prejudicial acts mentioned in r. 30 of the Rules it is necessary to detain him in prison subject to the conditions imposed in the manner prescribed in sub r. (4) of r. 30 of the Rules. To put it in a negative form, no restrictions other than those prescribed under sub r. (4) of r. 30 can be imposed on a detenu. If the appropriate authority seeks to impose on a detenu a restriction not so prescribed, the said authority will be interfering with the personal liberty of the detenu in derogation of the law whereunder he is detained. If that happens, the High Court, in terms of Art 226 of the Constitution, can issue an appropriate writ or direction to the authority concerned to act in accordance with law. We have gone through the provisions of the Bombay Conditions of Detention Order, 195 1. There is no provision in that Order dealing with the writing or publication of books by a detenu. There is, therefore, no restriction on the detenu in respect of that activity. Sub rule (iii) of r. 17 of the said Order reads "All letters to and from security prisoners shall be censored by the Commissioner or the Superintendent, a% the case may be. If in the opinion of the Commissioner or the Superintendent, the dispatch or delivery of any letter is likely to be detrimental to the public interest or safety or the discipline of the place of detention, he shall either withhold such letter, or despatch or deliver it after deleting any objectionable portion therefrom. In respect of the censoring of letters of security prisoners, the Commissioner or the Superintendent shall comply with any general or special instructions issued by Government. " The Maharashtra Government has not relied upon this rule. In deed, in the counter affidavit its case was not that it prohibited the sending of the book for publication under the said sub rule, but that it was not required by law to permit the detenu to publish books while in detention; nor was it its case before the High Court that the publication of this book was detrimental to public interest or safety or the discipline of the place of detention. Prima facie the said sub rule applies only to letters to and from security priso ners and does not regulate the sending out of prison books for publication. Indeed, the learned Additional Solicitor General does not rely upon this provision. 707 Let us now consider the validity of the argument of the learned Additional Solicitor General. He relies upon the following observations of Das, J., as he then was, in A. K. Gopalan 's case(1), at p. 29 1. "If a man 's person is free, it is then and then only that he can exercise a variety of other auxiliary rights, that is to say, he can, within certain limits, speak what he likes, assemble where he likes, form any associations or unions, move about freely as his 'own inclination may direct, ' reside and settle anywhere he likes and practise any profession or carry on any occupation, trade or business. These are attributes of the freedom of the per son and are consequently attached to the person." ' Relying upon these observations it is argued that freedom to publish is only a component part of that of speech and expression and that in the light of the said observations, as the detenu ceased ' to be free in view of his detention, he cannot exercise his freedom to publish his book. In other words, as he is no longer a free man, his right to publish his book, which is only an attribute of personal liberty, is lost. The principle accepted by Das, J., as he then was, does not appear to be the basis of the conclusion arrived at by the other learned Judges who agreed with his conclusion. Different reasons are given by the learned Judges fro arriving at the same conclusion. As has been pointed out by this Court in the second Kochunni 's case(2) the views of the learned Judges may be broadly summarized under the following heads : (1) to invoke article 19(1) of the Constitution, a law shall be made directly infringing that right; (2) articles 21 and 22 constitute a self contained code; and (3) the freedoms in article 19 postulate a free man. Therefore, it cannot be said that the said principle was accepted by all the learned Judges who took part in A. K. Gopalan 's case("). The apart, there are five distinct lines of thought in the matter of reconciling article 21 with article 19, namely, (1) if one loses his freedom by detention, he loses all the other attributes of freedom enshrined in article 19; (2) personal liberty in article 21 is the residue of personal liberty after excluding the attributes of that liberty embodied in article 19; (3) the personal liberty included in article 21 is wide enough to include some or all of the freedoms mentioned in article 19, but they are two distinct fundamental rights a law to be valid shall not infringe both the rights; (4) the expression "law" in article 21 means a valid law and, therefore, even if a person 's liberty is deprived by law of detention, the said law (1) ; (2) 708 shall not infringe article 19; and (5) article 21 applies to procedural law, whereas article 19 to substantive law relating to personal liberty. We do not propose to pursue the matter further or to express our opinion one way or other. We have only mentioned the said views to show that the view expressed by Das, J., as he then was, in A. K. Gopalan 's case(1) is not the last word on the subject. In this case, as we have said earlier, we are only concerned with the question whether the restriction imposed on the personal liberty of the first respondent is in terms of the relevant provisions of the Defence of India Rules. Here, the first respondent 's liberty is restricted under the Defence of India Rule 's subject to conditions determined in the manner prescribed in Sub r. (4) of r. 30 thereof. We find it difficult to accept the argument that the Bombay Conditions of Detention Order, 1951, which lays down the conditions regulating the restrictions on the liberty of a detenu, conferred only certain privileges on the detenu. If this argument were to be accepted, it would mean that the detenu could be starved to death, if there was no condition providing for giving food to the detenu. In the matter of liberty of a subject such a construction shall not be given to the said rules and regulations, unless for compelling reasons. We, therefore, hold that the said conditions regulating the restrictions on the personal liberty of a detenu arc not privileges conferred on him, but are the conditions subject to which his liberty can be restricted. As there is no condition in the Bombay Conditions of Detention Order, 1951, prohibiting a detenu from writing a book or sending it for publication, the State of Maharashtra infringed the personal liberty of the first respondent in derogation of the law whereunder he is detained. The appellant, therefore, acted contrary to law in refusing to send the manuscript book of the detenu out of the jail to his wife for eventual publication. In the view we have taken, another argument advanced by Mr. Garg, namely, that the restriction can only be imposed by an order made under section 30 (f) or (h) of the Rules and that too in strict compliance with section 44 of the Act need not be considered. That question may arise if and when an appropriate condition is imposed restricting the liberty of a detenu in the matter of sending his books for publication. We do not express our view on this question one way or other. In the result, the order passed by the High Court is correct. The appeal fails and is dismissed. Appeal dismissed.

The first respondent was detained by the Government of Maharashtra under r. 30(1) (b) of the Defence of India Rules, 1962. The conditions of detention under sub rule 4 of r. 30 of the said rules were prescribed to be the same as those under the Bombay Conditions of Detention Order, 1951. While so detained the first respondent wrote a book of scientific interest and sought permission from The State Government to send it out of jail for publication. The request having been rejected he filed a writ petition under article 226 of the Constitution praying for a direction to the State Government to permit him to send out the manuscript for Publication. The High Court held that The book was in no way prejudicial to the defence of India etc., and allowed the petition. The State Government by special leave appealed to this Court. It was contended on behalf of the, appellant that the first respondent not being a free person could exercise only such privileges a, , were conferred on him by the order of detention, and the Bombay Conditions of Detention Order, 1951 which regulated the terms of the respondent 's detention did not confer on him any privilege or right to write a book and send it out of the prison for publication. HELD : (i) It cannot be said that the Bombay Conditions of Detention Order, 1951 which lays down the conditions regulating the restrictions on the liberty of a detenu, conferred only certain privileges on the detenu. If this argument were to be accepted it would mean that the detenu could be starved to death, if there was no condition providing for giving food to the detenu. In the matter of liberty of a subject such a construction shall not be given to the said rules and regulations unless for compelling reasons. [7O8 C D] (ii) The said conditions regulating the restriction on the personal liberty of a detenu are not privileges conferred on him, but are the conditions subject to which his liberty can be restricted. As there is no condition in the Bombay Conditions of Detention Order, 1951, prohibiting a detenu from writing a book or sending it for publication, the State of Maharashtra in refusing to allow the same infringed the personal liberty of the first Respondent in derogation of the law whereunder he was detained. [708 E] (iii) The effect of the President 's order under article 359 of the Constitution was that the right to move the High Court or the Supreme Court remained suspended during the period of emergency if a person was deprived of his personal liberty under the Defence of India Act, 1962, or any rule or order made thereunder. If a person was deprived of his personal liberty not under the Act or rule or order made thereunder but in contravention thereof his right to move the said courts in that regard would not be suspended. [705 C D] 703 Since the State Government 's refusal to allow publication of the first respondent 's book was in contravention and derogation of the 'law under which he was detained he had the right to move the High Court under article 226 and the said High Court was empowered to issue an appropriate writ or direction to the said Government to act in accordance with law.

vil Appeal No. 41819 of 1989. From the Judgment and Order dated 29.4.1988 of the Gujarat High Court in F.A. Nos. 848 849 of 1986. V.B. Patel, D. Patel, T.H Pandey and R.P. Kapur for the Appellant. Soli J. Sorabjee, Atul Setalwad, N.J. Mehta, P. Shah, S.K. Sharma, section Sharma and P.H. Parekh for the Respondents. The Judgment of the Court was delivered by SABYASACHI MUKHARJI, J. This is an application for leave to appeal under Article 136 of the Constitution from the judgment and order of the High Court of Gujarat dated 29th April, 1988. To appreciate the questions involved herein, few facts have to be emphasized. In 1978, the State Government of Gujarat undertook a scheme known as 'Bhavnagar City Water Supply Scheme '. The 322 Scheme was divided into two parts: (i) Raising Main; and (ii) Gravity Main. Raising Main was divided into two sec tions, namely, 10.1 k.ms. and 7.4 k.ms. steel welded pipe line. On or about 15/16th December, 1978, the State Govern ment issued letter of approval to the bargain between the parties on certain terms. On 12th January, 1979, two contracts were awarded to the respondent No. 1 for Rs. 1,29,39,691 and Rs.94,30,435 which provided the dates of completion as February 1979 and the 3rd week of September, 1980 respectively. On 29th March, 1981 the respondent No. 1 filed the Civil Suit No. 588 of 1981 in the City Civil Court with regard to measurements recorded by the Deputy Engineer and alleged underpayments. On 4th June, 1981, the respondent No. 1 gave notice to the State Government and the petitioner Board requesting for reference of the alleged disputes to the arbitrator under clause 30 of the agreement. On or about 8th July, 198 1 the respondent No. 1 gave notice under Section 8 of the Arbitra tion Act, 1940 (hereinafter called 'the Act ') calling upon the petitioner to concur in the appointment of one Shri G.G. Vaidhya. On 21st July, 1981, he withdrew the Civil Suit No. 588 of 1981. On 6th August, 1981, the respondent No. 1 filed Civil Miscellaneous Application No. 231 of 1981 in the Court of Civil Judge, (SD), Ahmedabad for appointment of the said Shri G.G. Vaidhya as the sole arbitrator. On 7th November 1981, the petitioner filed reply contesting the arbitrabili ty of the various claims made in the application and inter alia contending that the application was not maintainable. On or about 15th December, 1981 the learned Civil Judge appointed Shri G.G. Vaidhya as the sole arbitrator with a direction that he should first decide as to which disputes fell within the purview of clause 30 of the agreement. On 5th May, 1982, Shri Vaidhya gave an interim award holding that the claims at section Nos. 10(g) and 10(1) only were not arbitrable and further that the other claims were arbitra ble. A petition was filed in High Court which was dismissed and then there was an application to this Court under Arti cle 136 of the Constitution which was disposed of by consent on 30th November, 1983. The said order inter alia provided that the parties had agreed to settle the matter amicably and one Shri Mohanbhai D. Patel, Retired Secretary, Public Works Department, Gujarat and at that time Sitting Member of the petitioner Board was appointed as the sole arbitrator in place of Shri Vaidhya to decide all disputes between the parties relating to the following works: "i) providing, fabricating, laying and joint ing 1000 mm dia. 10,000 M long steel welded pipe line under Bhavnagar 323 Emergency Water Supply Scheme based on She trunji Dam Agreement No. 5/2 1 of 1978 79. ii) providing, fabricating laying and jointing 1000 mm dia 7,400 M long steel welded pipe line under Bhavnagar Emergency Water Supply Scheme based on Shetrunji Dam Agreement No. B 2/2 of 1978 79. " It was further provided that all disputes concerning the said two works in question should be referred to the sole arbitrator and the Board could also be entitled to put counter claims before him. The consent terms also provided the following terms: "That the arbitration proceedings shall be started de novo meaning thereby that the earlier appointment and proceedings before the Sole Arbitrator Shit G.G. Vaidhya shall be inoperative and void. That the Board shall have a right to agitate all points both in fact and in law before the Sole Arbitrator as per the terms and condi tions of the contract including the question of arbitrability within the meaning of clause 30 of the contract. Both parties shall have a right to be repre sented by an Advocate and/or their representa tives. The expenses of arbitration shall be borne by .both the parties as per rules of Govern ment in this behalf. That both parties shall agree to extend time as and when necessary for competition of arbitration proceedings. That a formal agreement for arbitration shall be executed between the parties defining the scope of Arbitration. _ That the provisions of the Indian shall apply to the proceedings before this Sole Arbitrator." On 31st March, 1984, Shri M.D. Patel was appointed as the sole arbitrator jointly by the parties, and on 2nd April, 1984 he accepted his appointment and directed the parties to file their claim statements within 15 days. Thereafter, the respondent No. 1 filed claim to the tune of Rs.4,92,20,683 and a counter claim to the extent of 324 Rs.26,87,217.40. On 22nd August, 1984 the parties appeared before the arbitrator after filing of claims and counter claims. On 1st October, 1984 the petitioner filed an application before the arbitrator praying that preliminary issues be raised and decided first as to which of the disputes were arbitrable under clause 30 Of the agreement. On 8th July, 1985, a lumpsum award was made by the arbitrator, and on 19th July, 1985 the parties were informed about the signing of the award. On the same day the award filed by the re spondent No.1 's Advocate which was dated 8.7.1985 was regis tered as Civil Miscellaneous Application No. 144/85. There after, notice was issued on the same day and served on the petitioner also on the same day. The petitioner filed objec tions to the award and the Objection Petition was registered as Civil Miscellaneous Application No. 158/85. Reply to the objections was filed by the respondent No. 1. On 17th June, 1986, however, the learned Civil Judge directed that decree be passed in terms of the award. Two appeals were filed by the petitioner. On the 29th April, 1988 the High Court by a judgment dismissed the petition challenging the award and upheld the award. Aggrieved thereby, the petitioner has moved this Court as mentioned hereinbefore. Various grounds were urged in support of this applica tion. It was contended, firstly, that there was an error apparent on the face of the award and that the award was bad. It was submitted that the arbitrator had committed an error of law in not deciding or disclosing his mind about the arbitrability of claims or counter claims, more so when the Board 's application for deciding the same, was pending before the arbitrator. Before the learned Trial Judge the Board had submitted an application to the arbitrator seeking to raise a preliminary issue regarding arbitrability of the claims. As noted by the learned Trial Judge, it appears that the third meeting specifically mentioned that the claims were placed before the arbitrator and their contentions about the arbitrability were considered. So, these issues were gone into and it appears that the parties had agreed and proceeded on the basis that the claims may be examined and it was not necessary to decide preissue of arbitrability and it was agreed that aH the claims be decided claimwise. So, it cannot be said that the arbitrator had acted arbi trarily in discussing all the questions raised before him without first deciding the question of arbitrability or non arbitrability of an issue as such. The Court in its judgment has discussed the conduct of the parties. It appears that the Court found that the par ties themselves had 325 agreed that the arbitrator should decide claimwise and on merit. The Court so found, and in or opinion, rightly. The arbitrator so proceeded. There was no error committed by the arbitrator in so conducting himself. It was, secondly, contended that out of the numerous claims before the arbi trator, some of which, according to the petitioner, were ex facie not arbitrable and some were withdrawn including the claims for interest of Rs.54,61,073 and compound interest of Rs.82,26,039. and in the award no basis or indication was given as to which claim was rejected and further of the amount which was awarded as claim and what amount towards element of interest. It was, thirdly, contended that there was an error apparent on the face of the award inasmuch as the basis on which interest has been awarded has not been disclosed and whether the interest has been awarded from the date of the institution of the proceedings. It was, fourth ly, contended that granting of interest pendente lite was contrary to the decision of this Court. It was, lastly, contended that non speaking award had resulted in great prejudice inasmuch as against the claim of Rs. 1 lakh, Rs.57 lakhs have been awarded. The scope and extent of examination by the Court of the award made by an arbitrator has been laid down in various decisions. It has to be noted that there is a trend in modern times that reasons should be stated in the award though the question whether the reasons are necessary in ordinary arbitration awards between the parties is pending adjudication by the Constitution bench of this Court. Even, however, if it be held that it is obligatory for the arbi trator to state reasons, it is not obligatory to give any detailed judgment. An award of an arbitrator should be read reasonably as a whole to find out the implication and the meaning thereof. Short intelligible indications of the grounds should be discernible to find out the mind of the arbitrator for his action even if it be enjoined that in all cases of award by any arbitrator reasons have to be stated. The reasons should not only be intelligible but should also deal either expressly or impliedly with the substantial points that have been raised. Even in a case where the arbitrator has to state reasons, the sufficiency of the reasons depends upon the facts and the circumstances of the case. The Court, however, does not sit in appeal over the award and review the reasons. The Court can set aside the award only if it is apparent from the award that there is no evidence to support the conclusion or if the award is based upon any legal proposition which is erroneous. See the observations of this Court in Indian Oil Corporation Ltd. vs Indian Carbon Ltd.; , 326 In the instant case, the arbitrator by virtue of the terms mentioned in the order of this Court had to decide which of the disputes were arbitrable and which were not. It is true that the arbitrator has not specifically stated in the award that he had to decide the question of arbitrabili ty. The arbitrator has rested by stating that he had heard the parties on the point of arbitrability of the claim and the ,counter claim. He has further stated that after 'con sidering all the above aspects ' and 'the question of arbi trability or non arbitrability ' he had made the award on certain aspects. Reading the award along with the preamble, it appears clear that the arbitrator had decided the arbi trability and the amount he has awarded was on the points which were arbitrable. The contention that the arbitrator had not decided the question of arbitrability as a prelimi nary issue cannot also be sustained. A reference to the arbitrator 's proceedings which were discussed in detail by the High Court in the judgment under appeal reveal that the procedure adopted by the arbitrator, i.e., that he will finally decide the matters, indicated that the parties had agreed to and the arbitrator had proceeded with the consent of the parties in deciding the issues before him and in not deciding the question of arbitrability as a separate, dis tinct and preliminary issue. The arbitrator has made his award beating all the aspects including the question of arbitrability in mind. It was contended before us that the arbitrator has made a non speaking award. It was obliged to make a speaking award, it was submitted by terms of the order of this Court. We cannot sustain this submission because it is not obligatory as yet for the arbitrator to give reasons in his decision. The arbitrator, however, has in this case indicated his mind. It appears to us that the point that the non speaking award is per se bad was not agitated before the High Court. We come to that conclusion from the perusal of the judgment under appeal though, howev er, this point has not been taken in the appellant 's appeal. It is one thing to say that an award is unintelligible and is another to say that the award was bad because it was a non speaking award. The point taken was that the award was unintelligible and not that it was non speaking. But there was nothing unintelligible about the award. We were invited to refer the matter to the Constitution Bench and await the disposal of this point by the Constitu tion Bench. The contract in this case was entered into in 1978. The proceedings for initiation of arbitration started in 1981. The matter had come up to this Court before which resulted in the order dated 30th November, 1983. Pursuant thereto, the award has been made and no grounds specifically were urged though they were taken in the appeal in the High 327 Court in the arguments before the High Court about the award being bad because it is non speaking. In those circum stances, it will not be in consonance with justice for us to refer the matter to the Constitution Bench or to await the disposal of the point by the Constitution Bench. It was further submitted before us that the award was unreasonable and that the arbitrator had awarded a large amount to money but the original claim was not so large and as such the award was disproportionate. This contention, as it is, it appears from the judgment of the High Court, was not urged and canvassed before the High Court. The claim and the counter claim together in its totality, in our opinion, does not make the award amount disproportionate. Reasonableness as such of an award unless the award is per se preposterous or absurd is not a matter for the court to consider. Ap praisement of evidence by the arbitrator is ordinarily not a matter for the court. It is difficult to give an exact definition of the word 'reasonable '. Reason varies in its conclusions according to the idiosyncrasy of the individual and the times and the circumstances in which he thinks. The word 'reasonable ' has in law prima facie meaning of reasona ble in regard to those circumstances of which the actor, called upon to act reasonably, knows or ought to know. See the observations on this point in Municipal Corporation of Delhi vs M/s. Jagan Nath Ashok Kumar & Anr., ; Judged by the aforesaid yardstick the award cannot be condemned as unreasonable. There is, however, one infirmity in the award which is apparent on the face of the award which in the interest of justice as the law now stands declared by this Court, we should correct, viz., the question of interest pendente lite. The right to get interest without the intervention of the Court and the powers of the court to grant interest on judgment have been examined by this Court in Executive Engineer (Irrigation) Balimela and Ors. vs Abhaduta Jena & Ors., [1988] 1 SCC 418 which observations were also followed by this Court in State of Orissa & Ors. vs Construction India, [1987] Supp. SCC 709. In accordance with the princi ples stated therein and the facts in this case, it appears that the principal amount awarded is Rs.57,65,273. This is confirmed. In this case, 2nd April, 1984 is the date of the reference to arbitration, on 22nd August, 1984 the arbitra tor entered upon the reference. 8th July, 1985 is the date of the award and 19th July, 1985, is the date of the publi cation of the award. The interest awarded, in the instant case, covers three periods: (i) 6th August, 1981 to 21st August, 1984 prior to the commencement of the arbitration proceedings; (ii) 22nd August, 1984 to 19th July, 328 1985 pendente lite; and (iii) 19th July, 1985 to 17th June, 1986 (date of award to date of decree). Having regard to the position in law emerging from the decision of this Court in Executive Engineer (Irrigation) Balimela & Ors. (supra) and section 29 of the and section 34 of the Code of Civil Procedure, we would modify the grant of interest in this case. The arbi trator has directed interest to be paid at 17% per annum from 6.8.1981 upto the date of decree viz., 17.6.1986. Since in this case the reference to arbitration was made after the commencement of the , the arbitrator under section 3(1)(a) of the said Act was entitled to award inter est from 6.8.1981 till 21.8.1984 in view of this Court 's decision in Abhaduta Jena 's case (supra). In the light of the same decision, he could not have awarded interest for the period from 22.8.1984 till the date of the publication of the award viz. 19.7. So far as interest for the period from the date of the award (19.7.1985) till the date of the decree is concerned, the question was not specifical ly considered in Abhaduta Jena 's case (supra) but special leave had been refused against the order in so far as it allowed interest for this period. We think interest should be allowed for this period, on the principle that this Court can, once proceedings under sections 15 to 17 are initiated, grant interest pending the litigation before it, i.e., from the date of the award to the date of the decree. It may be doubtful whether this can be done in cases arising before the in view of the restricted scope of section 29 of the . But there can be no doubt about the court 's power to grant this interest in cases governed by the as section 3(1)(a) which was applied by Abhaduta Jena to arbitrators will equally apply to enable this Court to do this in these proceedings. In this connection, it is necessary to consider whether the date of commencement of the arbitration proceedings should be taken as the date of the reference or the date on which the arbitrator entered upon the reference as the date of the calculation of interest. In this case, the proceed ings commenced on 2nd April, 1984 and the arbitrator entered upon the reference on 22nd August, 1984. Having regard to the facts and the circumstances of the case, it is neces sary, in our opinion, to take 22nd August, 1984 as the date. It is also necessary to consider whether the date of award should be taken as the date of its making or its publica tion. The award was made on 8th July, 1985 and it was pub lished on 19th July, 1985, and, therefore, the latter date would be taken as the date of the award. 329 We would, however, delete the interest awarded by the arbitrator for the period from 22.8.1984 till the date of the award and confine the interest on the principal sum of Rs.57,65,273 to interest at 9 per cent from 6.8.1981 till 21.8.1984 (which has been worked out at Rs.29,82,443). However, in exercise of our powers under section 3 of the and section 29 of the , we direct that the above principal sum or the unpaid part thereof should carry interest at the same rate from the date of the award (19.7.1985) till the date of actual pay ment. The appeals are disposed of in the above terms. N.V.K. Appeals disposed of.

In 1978 the State Government undertook the construction of the 'Bhavnagar City Water Supply Scheme ', and on 12th January, 1979, two contracts in respect thereof were awarded to respondent No. 1. On 29th March, 1981, respondent No. 1 filed a civil suit with regard to measurements recorded by the Deputy Engineer and alleged underpayments. On 14th June, 1981, he gave notice to the State Government and the peti tioner Board requesting for reference of the disputes to an arbitrator as provided for under clause 30 of the Agreement, and gave notice under section 8 of the calling upon the petitioner to concur in the appointment of one Shri G.G. Vaidhya. On 6th August, 1981 respondent No. 1 filed a civil miscellaneous application for appointment of the said Shri G.G. Vaidhya as the sole arbitrator after withdrawing the civil suit. The petitioner contended that the application was not maintainable. The Civil Judge howev er appointed the said Shri G.G. Vaidhya as sole arbitrator. The arbitrator gave an interim award holding that only two claims were not arbitrable and that the other claims were arbitrable. The High Court having dismissed the appeal, a further appeal was filed in this Court. This appeal was, however, disposed of by con 319 sent on 30th November, 1983 to the effect that a retired Secretary, Public Department who was at that time sitting member of the petitioner Board be appointed as the sole arbitrator to decide all the disputes between the parties. On 8th July, 1985, this sole arbitrator made a lump sum award. The Civil Judge directed that the decree be passed in terms of the award, rejecting the objections of the peti tioner. The High Court by a common judgment dismissed the two appeals of the petitioner challenging the award. In the appeals to this Court by special leave, it was contended: (1) that the arbitrator had committed an error of law in not deciding or disclosing his mind about the arbi trability of the claim or counterclaims, (2) in the award no basis or indication was given as to which claim was reject ed, and further what amount was awarded as claim and what amount towards element of interest, (3) there was an error apparent on the face of the award inasmuch as the basis on which interest had been awarded had not been disclosed and whether the interest has been awarded from the date of the institution of the proceedings, (4) that the granting of interest pendente lite was contrary to the decision of this Court and (5) that the non speaking award had resulted in great prejudice to the petitioner inasmuch as against the claim of Rs.1 lakh, Rs.57 lakhs had been awarded. Disposing of the appeals, the Court, HELD: 1(a) There is a trend in modern times that reasons should be stated in the award though the question whether the reasons are necessary in ordinary arbitration awards is pending adjudication by the Constitution Bench of this Court. Even if it be held that it is obligatory for the arbitrator to state reasons, it is not obligatory to give any detailed judgment. [325E] 1(b) An award Of an arbitrator should be read reasonably as a whole to find out the implication and the meaning thereof. Short intelligible indications of the grounds shall be discernible to find out the mind of the arbitrator for his action. [325F] l(c) The Court does not sit in appeal over the award and review the reasons. The Court can set aside the award only if it is apparent from the award that there is no evidence to support the conclusion or if the award is based upon any legal proposition which is erroneous. [325G H] 320 Indian Oil Corporation Ltd. vs Indian Corbon Ltd., ; , referred to. l(d) It is one thing to say that an award is unintelli gible and it is another thing to say that the award was bad because it was a nonspeaking award. [326F] In the instant case, the arbitrator, in pursuance to the order of this Court had to decide which of the disputes were arbitrable and which were not. Reading the award along with the preamble, it appears clear that the arbitrator had decided the arbitrability and the amount which he has award ed was on the points which were arbitrable. In such circum stances it will not be in consonance with justice to refer the matter to the Constitution Bench or to await the dispos al of the point by the Constitution Bench. [326B, G] 2. Reasonableness as such of an award unless per se preposterous or absurd is not a matter for the Court to consider. Appraisement of evidence by the arbitrator is ordinarily not a matter for the Court. It is difficult to give an exact definition of the word 'reasonable '. The word 'reasonable ' has in law, prima facie meaning of reasonable in regard to those circumstances of which the actor, called upon to act reasonably, knows or ought to know. The award in the instant case cannot be condemned as unreasonable. [327C D] Municipal Corporation of Delhi vs M/s. Jagan Nath Ashok Kumar & Anr., ; referred to. The grant of interest pendente lite is however one infirmity in. the award which is apparent on the face of the award which in the interest of justice should be corrected. [327E] Executive Engineer (Irrigation) Balimela and Ors. vs Abhaduta Jena & Ors., [1988] 1 SCC 418 and State of Orissa & Ors. vs Construction India, [1987] Supp. SCC 709 referred to. In the instant case, April 2, 1984 is the date of the reference to arbitration, on August 22, 1984 the arbitrator entered upon the reference. July 8, 1985 is the date of the award and July 19, 1985 the date of publication of the award. The latter date should be taken as the date of the award. Since the reference to arbitration was made after the commencement of the the arbitrator under section 3(1)(a) of the said Act was entitled to award inter est from August 6, 321 1981 till August 21, 1984. He could not have awarded inter est for the period from August 22, 1984 till the date of publication of the award viz. July 19, 1985. [327G H; 328A] 4. So far as interest for the period from the date of the award (July 19, 1985) till the date of the decree is concerned, interest should be allowed for this period, on the principle that this Court can, once proceeding under sections 15 to 17 are initiated, grant interest pending the litigation before it, i.e. from the date of the award to the date of the decree. It may be doubtful whether this can be done ln cases arising before the in view of the restricted scope of section 29 of the . [328D E] 5. The interest awarded by the arbitrator for the period from August 22, 1984 till the date of award is deleted; and the interest on the principal sum is confined to 9% from August 6, 1981 till August 21, 1984. However, exercising powers under section 3 of the and section 29 of the , the Court directed that the principal sum or unpaid part thereof should carry interest at the same rate from the date of the award (July 19, 1985) till the date of actual payment. [329A B]

Appeals nos. 317 to 320 of 1957. Appeal from the judgment and order dated March 5, 1954, of the Madras High Court, in Writ Petitions Nos. 613 and 629 of 1952 and 201 and 202 of 1953. A. V. Viswanatha Sastri and B. K. B. Naidu, for the appellants. 191 A. N. Kripal, R. H. Dhebar and D. Gupta, for respondent No. 1. 1958. October 15. The Judgment of the Court was delivered by GAJENDRAGADKAR, J. These four appeals arise from four petitions filed against the Income tax Officer , Nellore Circle, Nellore, respondent 1, in respect of the proceedings taken by him against three firms under section 34 of the Indian Income tax Act (hereinafter called the Act). The firm M/s. Bellapu Audeyya and Chilla Pitchayya was formed on April 20, 1936, and it was dissolved on March 31, 1948. It consisted of two partners, Chilla Pitchayya and Bellapu Audeyya. Chilla Pitchayya had started another firm in the name and style of G. Pitchayya & Co. with another partner R. Subba Rao. This firm was formed on July 30, 1941, and it was dissolved on March 31, 1949. Bellapu Audeyya and. Chilla Pitchayya had also formed another firm along with five other partners which carried on its business in the name and style of Prabbat Textiles. This firm was formed on December 1, 1941, and it " as dissolved by a decree of the civil court Passed oil December 22, 1949, the dissolution having taken effect from January 1, 1949. All the three firms were carrying on business in yarn and cloth and all of them were registered under section 26A of the Act. It appears that for the purpose of assessing the income of these firms for the years 1943 44 and 1944 45, respondent 1 was satisfied on making enquiries that each of the three firms was a separate entity and so separate assessment orders were passed in respect of the income of each one of them for the said two years. Subsequently on August 14, 1951, respondent I issued notice against the firm of Prabliat Textiles under s.34 of the Act. In the proceedings thus commenced, respondent I hold that the firm of Prabhat Textiles was a fictitious tirm and that the real partners ",ere C. Pitchayya and B. Audeyya. As a result of this finding, respondent I cancelled the registration of the said firm under r. 6B of the Income tax Rules and passed fresh orders of assessment against the said firm on the 192 basis that it was an unregistered firm for the assessment years 1943 44 and 1944 45 on August 14, 1952, and February 25, 1953, respectively. Similar action was taken by respondent I in respect of the two other firms on the same dates. Thereupon Y. Narayana Chetty, one of the partners of the Prabhat Textiles filed a writ petition in the High Court of Madras, No. 613 of 1952, against respondent I under article 226 of the Constitution and prayed that the High Court, should issue a writ of prohibition or any other appropriate writ, order or direction prohibiting the first respondent from continuing the proceedings as per his notice of August 14, 1951, and from enforcing the order of fresh assessment passed in the said proceedings oil August 14, 1952, in regard to the assessment year 1943 1944. In respect of the same firm Chilla Pitchayya sought for a similar relief by Writ Petition No. 201 of 1953 in regard to the proceedings and assessment order for the assessment year 1944 45. The same Chilla Pitchayya also filed Writ Petitions Nos. 629 of 1952 and 202 of 1953 in respect of the proceedings taken and fresh assessment orders passed against the two remaining firms for the assessment years 1943 44 and 1944 45 respectively. The four petitions were heard together by the High Court and were dismissed on March 5, 1954. The petitioners then applied for and obtained from the High Court a certificate under article 133 read with 0. XLV, r. 1, 2, 3 and 8 that the value of the subject matter in the peti tions before the High Court as well as of the appeals before this Court was more than Rs. 20,000. It is with this certificate that the four appeals have come before this Court. Y. Narayana Chetty is the appellant in Civil Appeal No. 317 of 1957 whereas Chilia Pitchayya is the appellant in Civil Appeals Nos. 318, 319 and 320 of 1957. In the High Court it was urged by the appellants that the proceedings taken under section 34 against each of the said firms were without jurisdiction and void. It was also contended that the cancellation of the registration of each of the firms was similarly void and without jurisdiction inasmuch as r. 6B under which the said order of cancellation was passed was ultra vires the Central Board of Revenue which promulgated the rules under the powers conferred on it by the Act. Besides the appellants attacked the validity of the orders passed against them under section 31 on the ground that it was illegal to assess escaped income under section 34 on the basis that the firms were unregistered firms while maintaining the original assessment for the said firms on the basis that they had been duty registered under section 26A of the Act. The High Court has held against the appellants on all these points. Besides the high Court has stated in its judgment that it was admitted by the appellants before it that appeals had been filed against each one of the orders challenged in the writ proceedings and the High Court thought that that itself would suffice to justify its refusal to exercise its jurisdiction under article 226 of the Constitution. However, since the primary relief asked for by the appellants in their respective petitions was the issue of writ of prohibition the If High Court felt that it may as well deal with the merits of the contentions raised by the appellants. That is why the High Court examined the merits of the said contentions. On behalf of the appellants, Mr. Viswanatha Sastri has raised the same three points before us. The first point raised by Mr. Sastri is that the proceedings taken by respondent I under section 34 of the Act are invalid because the notice required to be issued under the said section has not been issued against the assessees contemplated therein. In the, present case the Income tax Officer has purported to act under section 34(I)(a) against the three firms. The said sub section provides inter alia that " if the Income tax Officer has reason to believe that by reason of the omission or failure on the part of the assessee to make a return of his income under section 22 for any year or to disclose fully and truly all material facts necessary for his assessment for that year, income, profits or gains chargeable to income tax has been under .assessed", he may, within the nine prescribed, " serve on the assessee a notice containing all or any of the requirements which may 194 be included in the notice under sub section (2) of section 22 and may proceed to reassess such income, profits or gains. " The argument is that the service of the requisite notice on the assessee is a condition precedent to the validity Of any reassessment made under section 34; and if a valid notice is not issued as required, proceedings taken by the Income tax Officer in pursuance of an invalid notice and consequent orders of reassessment passed 'by him would be void and inoperative. In our opinion, this contention is well founded. The notice prescribed by section 34 cannot be regarded as a more procedural requirement; it is only if the said notice is served on the assessee as required that the lncome tax Officer would be justified in taking proceedings against him. If no notice is issued or if the notice issued is shown to be invalid then the validity of the proceedings taken by the Income tax Officer without a notice or in pursuance of an invalid notice would be illegal and void. That is the view taken by the Bombay and Calcutta High Courts in the Commissioner of Incometax, Bombay City vs Ramsukh Motilal (1) and B. K. Das & Co. vs Commissioner of Income tax, West Bengal (2) and we think that that view is right. Let us then consider the nature of the notice issued by the Income tax Officer in the present proceedings. It is conceded by Mr. Sastri that the notice issued by the Income tax Officer was served on the appellant C. Pitchayya on behalf of the firms in question and that in each case the notice specifically averred that the Income tax Officer had reason to believe that the income of the assessee had been under assersed in the relevant years of assessment. The notice further required the assessee to deliver to the officer within thirty five days of the receipt of the notice a return in the attached form of the total income and total world income of the assessee assessable for the relevant period. In pursuance of this notice the appellant Pitchayya in fact appeared before the officer during the course of the proceedings commenced under s.34. Mr. Sastri contends that this notice is defective be cause it purports to be issued Against the firm and no (1) [1955] '27 I.T.R. 54. (2) 195 notice has been issued against the respective partners of the firm. According to Mr. Sastri the assessee who is entitled to a notice under section 34(1)(a) is not the firm but each individual partner of the firm. He also suggests that each individual partner should have been called upon to make a return of his total income assessable for the relevant year; inasmuch as the notice is issued against the firm and not against individual partners it is invalid. In support of this argument Mr. Sastri has referred us to the definition of the word " assessee" under section 2, cl. (2) as it stood prior to the amendment of 1953. Under the said clause, assessee meant " person by whom income tax is clearly payable". In the case of a registered firm income tax is clearly payable by the individual partners of the firm under section 23(5) of the Act, savs Mr. Sastri; and so, if the Income tax Officer intended to take action under section 34 it was his duty to issue the requisite notice against individual partners in respect of their respective incomes for which they were liable to pay the tax. This argument purports to derive support from the provisions of section 23(5) as they stood before the amendment introduced in 1956. The effect of the said provisions was that "the sum payable by the firm itself shall not be determined but the total income of each partner of the firm including therein his share of its income, profits and gains in the previous year shall be assessed and the sum payable by him on the basis of such assessment shall be determined "; so that what the Income tax Officer had to do in assessment proceedings against a registered firm was to determine the total income of each partner of the firm and not to determine the sum payable by the firm itself. The argument is that this provision shows that the person liable to pay the tax was each individual partner of the firm and so it is the individual partners of the firm who are entitled to the statutory notice under section 34(1)(a). In our opinion, this argument is not well founded. Section 3 of the Act which is the charging section provides inter alia that "where any Central Act enacts that income tax can be charged for any year at any rate or rates, tax at that rate or those rates shall be 196 charged for that year in accordance with and subject to the provisions of this Act in respect of the total income of the previous year of every firm ; " in other words, a firm is specifically treated as an assessee by section 3. Besides, the word "person" used by section 2, sub section (2) of the Act while defining the assessee, would obviously include a firm under section 3(42) of the General Clauses Act since it provides that a person includes "any company or association or body of individuals whether incorporated. or not ". Therefore, it would not be correct to say that an assessee under section 2, sub section (2) of the Act necessarily means an individual partner and does not include a firm. The argument based upon the relevant provisions of section 23(5) is also not valid be. cause it is obvious that for the purposes of assessment at all relevant and material stages under sections 22 and 23 it is the firm that is treated as an assessee. When a return of the income is made for the relevant year, it is a return with regard to the total income of the firm that has to be submitted under section 22; and when assessment is levied under section 23, the Income tax Officer determines and can determine the total income of each partner of the firm only after ascertaining the total income of the firm itself It is true that section 23(5) as it then stood required the Income tax Officer to determine the total income of each partner of the firm including his share of the firm 's income and to assess each partner in respect of such income, and in that sense individual partners of the firm undoubtedly became liable to pay income tax ; but it is clear that in determining the total income of each partner his share in the firm 's income has to be included and so the firm does not cease to be an assessee for the purpose of section 23(5). This position is now clarified by the provisions of section 23(5)(a)(i) and (ii) as amended in 1956. The present section 23(5)(a)(i) and (ii) provides: section 23(5)(a)(i) and (ii): (5) Notwithstanding anything contained in the foregoing sub sections, when the assessee is a firm and the total income of the firm has been assessed under subsection (1), sub section (3) or sub section (4), as the case may be 197 (a) in the case of a registered firm (1) the income tax payable by the firm itself shall be determined; and (ii) the total, income of each. partner of the firm, including therein his share of its income, profits and gains of the previous year, shall be assessed and the sum payable by him on the basis of such assessment shall be determined: and so it is clear that the registered firm does not at all cease to be an assessee under this provision. In this connection it would be relevant to refer to section 23(4). This subsection provides: " If any person fails to make the return required by any notice given under subsection (2) of section 22 and has not made a. return or a revised return under sub section (3) of the same section or fails to comply with all the terms of a notice issued under sub section (4) of the same section or, having made a return, fails to comply with all the terms of a notice issued under subsection (2) of this section, the Income tax Officer shall make the assessment to the best of his judgment and determine the sum payable by the assessee on the basis of such assessment and, in the case of a firm, may refuse to register it or may cancel its registration if it is already registered: Provided that the registration of a firm shall not be cancelled until fourteen days have elapsed from the issue of a, notice by the Income tax Officer.to the firm intimatiiig his intention to cancel its registration" This provision clearly shows that the person to whom the first part of the provision refers includes a firm and it lays down that if a firm commits a default as indicated the Income tax Officer may refuse to register it or may cancel its registration if it is already registered. Thus there can be no doubt that section 23(4) treats the fit in as an assessee and provides for the imposition of penalty against the firm in case the firm commits any of the defaults indicated in the sub section. The effect of the relevant provisions of section 23 therefore is that for the assessment of the total taxable income it is the affairs of the assessee firm that are investigated and 198 examined and when the total income of the firm is ascertained, it is allocated to its individual partners in proportion to their respective shares. The result of such allocation undoubtedly is to make the partners liable to pay tax in respect of their taxable income thus allocated ; but that cannot justify the inference that the firm is not an assessee in the relevant proceedings. Even when the notice is issued under section 34(1)(a) the Income tax Officer proceeds to act on the ground that the income, profits and gains of the firm which are chargeable to an income tax have been under assessed; it is the income of the firm which is initially ascertained in the assessment proceedings under section 23 and it is in respect of the said income of the firm that the Income tax Officer finds that a part of it has escaped assessment. We do not, therefore, think that the appellant 's argument that the notice issued against the firm and served on the appellant was invalid under section 34(1)(a) can be accepted. It is then urged that the Income tax Officer was bound to issue notices to individual partners of the firms because at the material time all the firms had been dissolved. Mr. Sastri concedes that under section 63 (2) a notice or requisition under the Act may in the case of a firm be addressed to any member of the firm but his contention is that this applies to a firm in existence and not to a firm dissolved. If the, appellants ' case is that as a result of dissolution of the firms the firms had discontinued their business as from the respective dates of dissolution they ought to have given notices of such discontinuance of their business under section 25(2) of the Act. Besides, in the present case, the main appellant has in fact been served personally and the other partners who may not have been served have made no grievance in the matter. We are, therefore, satisfied that it is not open to the appellants to contend that the proceedings taken by the Income tax Officer under section 34(1)(a) are invalid in that notices of these proceedings have not been served on the other alleged partners of the firms. Incidentally it may be pointed out that the finding of 199 the Income tax Officer in respect of all the three firms is that the only persons who had interest in the business carried on by the said firms were B. Audeyya and C. Pitchayya. It is remarkable that B. Audeyya has not cared to challenge the proceedings or to question the validity of the fresh assessment orders passed by the Income tax Officer in the present proceedings. Mr. Sastri then challenges the validity of the cancellation of the registration of the three firms on the ground that r. 6B under which the Income tax Officer purported to act is ultra vires. Rule 6B provides that in the event of the Income tax Officer being satisfied that the certificate granted under r. 4 or under r. 6A has been obtained without there being a genuine firm in existence he may cancel the certificate so granted. The material rules of which r. 6B is a part have been framed by the Central Board of Revenue under the authority conferred by section 59 of the Act. This section empowers the Central Board of Revenue, subject to the control of the Central Government, to make rules inter alia for carrying out the purposes of the Act. Section 59 (2)(e) lays down that such rules may provide for any matter which by this Act is to be prescribed and the rules preceding r. 6B deal with the procedure to be followed, and prescribe the application to be made, for the registration of firms under section 26A of the Act. Section 59(5) provides that the rules made under the said section shall be published in the official gazette and shall thereupon have effect as if enacted in this Act. Thus there is no doubt that the rules are statutory rules and once they are published in the official gazette they are operative as if they were a part of the Act. Mr. Sastri concedes this position; but he argues that r. 6B is inconsistent with the material provisions in the Act and is therefore ultra vires the Central Board of Revenue. This argument is based substantially on the provisions of section 23(4). We have already referred to the provisions of this subsection. Mr. Sastri contends that it is only where the requirements of section 23(4) are satisfied that the registration of a firm can be cancelled. The procedure for registration of firms is laid down in section 26A of 200 the Act. An application has to be made to the Incometax Officer on behalf of any firm constituted Linder the instrument of partnership specifying the individual shares of the partners for registration for the purposes of the Act and of any other enactment for the time being in force and relating, to income tax and supertax. Sub section (2) requires that the said application ,,hall be made by such person or persons and, at such times and shall contain such particulars and shall be in such form and be verified in such manner as may be prescribed and it shall be dealt with by the Incometax Officer in such manner as may be prescribed. It is in pursuance of the requirements of section 26(2) that the relevant rules for the registration of the firms have been made. The question which arises for our decision in this connection is: if a firm has been registered Linder section 26A, when can such registration be cancelled ? The appellant suggests that the only cases in which such registration can be cancelled are those prescribed in section 23(4). We have no doubt that this argument is fallacious. The cancellation of registration under section 23(4) is in the nature of a penalty and the penalty can be imposed against a firm if it is guilty of any of the defaults mentioned in the said subsection. It would be noticed that where registration is cancelled under section 23(4), there is no doubt that the application for registration had been properly granted. The basis of an order under section 23(4) is not that the firm which had been registered was a fictitious one, but that, though the registered firm was geniuine, by its failure to comply with the requirements of law it had incurred the penalty of having its registration cancelled. That is the effect of the provisions of section 23(4). On the other hand, r. 6B deals with cases where the Income tax Officer is satisfied that a certificate of registration has been granted under r. 4 or under r. 6A without there being a genuine firm in existence ; that is to gay an application for registration had been made in the name of a firm which really did not exist; and on that ground the Income tax Officer proposes to set right the matter by cancelling the certificate which should never have been granted to the 201 alleged firm. That being the effect of r. 6B it is im possible to accede to the argument that the provisions of this rule are inconsistent with the provisions of section 23(4) of the Act. If the Income tax Officer is empowered under section 26A read with the relevant rules to grant or refuse the request of the firm for registration, it would normally be open to him to cancel such registration if he discovers that registration had been erroneously granted to a firm which did not exist. Rule 6B has been made to clarify this position and to confer on the Income tax Officer in express and specific terms such authority to review his own decision in the matter of the registration of the firm when he dis covers that his earlier decision proceeded on a wrong assumption about the existence of the firm. In our opinion, there is no difficulty in holding that r. 6B is obviously intended to carry out the purpose of the Act and since it is not inconsistent with any of the provisions of the Act its validity is not open to doubt. It is, however, urged that whereas the firm aggrieved by the order passed by the Income tax Officer under section 23(4) can challenge the correctness or propriety of the order in an appeal against the final assessment order passed under section 23, no such remedy is available to the firm whose registration is cancelled under r. 6B. We are not impressed by this argument. The validity of the rule cannot, in our opinion, be challenged merely on the ground that no appeal has been provided against the order passed under the impugned rule. It is also true that whereas before taking action under section 23(4) the Income tax Officer is required to issue a notice to the firm, no such provision is made under r. 6B. Mr. Sastri has, however, conceded that the appellant before us had notice and was given an opportunity to satisfy the Income tax Officer that the respective firms were genuine and not fictitious. Thai being so we do not think that it would be open to the appellant to contend that the order passed against him under r. 6B is invalid on the purely academic ground that r. 6 B does not require notice to be issued before the registration of a firm is cancelled. If the power 26 202 under r. 6B is exercised by the Income tax Officer against a firm without giving it a notice in that behalf and without affording it an opportunity to satisfy the officer that it is a genuine firm, it may be open to the firm to question the validity of the order on that ground. We are, however, not called upon to deal with such a case in the present appeals. In this connection we may incidentally refer to the decision of this Court in Ravula Subba Rao vs Commissioner of 1. T., Madras (1) where this Court has held that rules (2) and (6) of the rules framed under section 59 of the Indian Income tax Act are not ultra vires the rule making authority. The last argument which Mr. Sastri sought to raise before us was that the revised assessment is completely illogical, and therefore illegal, in each case inasmuch as the original assessment for the two assessment years still remains as on the basis that the firms in question are registered and the fresh assessment in respect of the escaped income for the same years is made on the basis that the said firms are not registered. Mr. Sastri says that it is not open to the Income tax Officer to adopt such a course. If registration has been cancelled the whole of the assessment should be made on that footing; the department cannot treat the firm as registered for part of the income, and unregistered for the balance, during the same assessment years; that is Mr. Sastri 's grievance. We do not propose to deal with the merits of this contention. There can be no doubt that it would be open to the appellants to raise this contention in the appeals which they have filed against the fresh orders of assessment. We understand that applications have been made by the appellants in respect of the said orders of assessment under section 27 of the Act. If that be so, the appellants may, if it is open to them to do so, ventilate their grievance in the said proceedings also. We hold that this contention cannot be urged in petitions for writs of prohibition under article 226 of the Constitution, since they do not raise any question of jurisdiction. All that the appellants would be able to argue on this ground (1) [1956] S.C.R. 577. 203 would be that the course adopted by the Income tax Officer in making orders of fresh assessment is irregular and illogical and should be corrected. That is a matter concerning the merits of the orders of assessment and by no stretch of imagination can it be said to raise any question of jurisdiction under article 226. That is why we express no opinion ' on this point. Before we part with this case we would like to, observe that Mr. Kripal for the respondent sought to raise three preliminary objections. He urged that the issue of a writ is a discretionary matter and since the High Court has refused to exercise its discretion in favour of the appellants the appeals would be virtually incompetent inasmuch as this Court would be slow to interfere with the exercise of discretion by the High Court. He also argued that the original petitions to the High Court are incompetent under article 226 since under the Act the appellants had an alternative effective remedy available to them in the form of appeals against the impugned orders and in fact they had filed such appeals and had also made applications under section 27 of the Act. Mr. Kripal also contended that the High Court would have no jurisdiction to issue a writ of prohibition against the tax authorities. We do not propose to consider these objections because, as we have already indicated, we are satisfied that the view taken by the High Court on the points raised before it is right. These objections may have to be considered in future on a suitable occasion. The result is the appeals fail and must be dismissed with costs. Appeals dismissed.

Two persons, B and C, formed a partnership firm on April 20, 1936, and the firm was dissolved on March 31, 1948. I and C along with R formed a second firm on July 30, 1941, and it was dissolved on March 31, 1949. B and C along with five others formed a third firm on December 1, 1941, and it was dissolved on January 1, 1949. All the three firms were carrying on business in yarn and cloth and all of them were registered under section 26 A of the Income tax Act. For the years 1943 44 and 1944 45 tile said firms were treated as separate entities and separate assessment orders were passed in respect of the income of each one of them for the said years. Subsequently, the Income tax Officer served notices under section 34 Of the Act on C on behalf of the firms and after hearing the parties he held that the firms were fictitious and so cancelled their registration under r. 6B of the Income tax Rules and passed fresh orders of assessment against them on the basis that they were unregistered firms. One Y who was a partner in the third firm and C filed four writ petitions under article 226 of the Constitution in the High Court challenging the validity of the orders passed. The High Court dismissed the petitions but granted certificates of fitness to appeal 190 under article 133. The appellants contended that r. 6B was inconsistent with section 23(4) of the Act and was ultra vires, that consequently the cancellation of registration of the firms was without jurisdiction and was void and that the proceedings taken under section 34 Of the Act were invalid as the required notice was not issued against the individual partners who were the assesses. Held, that r. 6B of the Income tax Rules was not inconsis tent with section 23(4) Of the Act and was not ultra vires. Rule 6B dealt with cancellation of registration in cases where the certificate of registration had been granted without there being a genuine firm in existence, while section 23(4) dealt with cancellation of registration on account of failure to comply with the requirements of law, though the registered firm was genuine. Rule 6B was obviously intended to carry out the purpose of the Act and was valid. The fact that no appeal had been provided against an order made under r. 6B was no ground for challenging its validity. It was also not open to the appellants to contend that the orders passed under section 6B were invalid on the ground that the rule did not require the giving of any notice before the can cellation of registration as in the present case notice had actually been given and the appellants had been afforded an opportunity of being heard. Held, further, that in the cases of registered firms, the firms themselves were the assessees and as such the notices issued under section 34 against the firms and served upon C were valid and proper notices, :and it was not necessary to serve notices upon the individual partners of the firms. The notice prescribed by section 34 was not a mere procedural requirement. If no notice was issued or if the notice issued was shown to be invalid then the proceedings taken by the Income tax Officer would be illegal and void. Commissioner of Income tax, Bombay City vs Ramsukh Motilal, and R. K. Das & Co. vs Commissioncy of Income tax, West Bengal, , approved. The contention that the assessments were completely illogical and therefore illegal could not be urged in a petition under article 226 of the Constitution since it did not raise any question of jurisdiction.

ON: Criminal Appeal No. 133 of 1955. Appeal by special leave from the judgment and order dated the 10th January 1955 of the High Court of Judicature at Jodhpur in Criminal Appeals Nos. 57 & 83 of 1953 arising out of the judgment and order dated the 26th May 1953 of the Court of 289 Sessions Judge at Merta in Criminal Original Case No. 1 of 1952. Jai Gopal Sethi, K. R. Krishnaswami and K. R. Chaudhry for the appellants. Porus A. Mehta and P. G. Gokhale, for the respondent. April 5. The Judgment of the Court was delivered by BOSE J. Four persons were killed about 11 p.m. on the night of the 21st July 1951 and a number of others injured. This was said to be the result of a riot that occurred in the village Dhankoli. Thirty six persons were committed for trial. Of these, two died during the course of the proceedings. The remainder were all charged under section 325/149 of the Indian Penal Code and eleven were also charged under section 302/149. The learned Sessions Judge acquitted twenty five of the charge under section 325/149 and convicted nine. He acquitted all the eleven who were charged under section 302/149 but convicted nine of them under section 325/149. The State did not appeal against the acquittals of the twenty five under section 325/149 nor did it appeal against the acquittals of two of the eleven who were charged under section 302/149 but it appealed against the acquittals of the remaining nine who had been convicted under section 325/149. These nine convicts also appealed. The High Court therefore had two appeals before it, one against the acquittals of nine persons under section 302/149 and the other by the same persons against their convictions under section 325/149. The High Court dismissed the appeal of the convicts and allowed that of the State. The convictions of these nine persons were accordingly altered to ones under section 302/149 of the Indian Penal Code and the lesser sentence of transportation was given to each. It is admitted on both sides that there was bad 290 blood in the village Dhankoli between a caste known as Baories on one side and three other castes of the village namely, Jats, Dhobis and Khaties on the other. The case for the prosecution is that this was due to a dispute over a field that belonged to some of the Jats. There were some court proceedings about the field in which Parsia (one of the Baories who was killed) had appeared against the Jats. The accused Sukha, Gumana, Begla and Govinda were in particular interested in this field and so bore a grudge against Parsia. The defence also allege enmity. Their case is that the enmity is due to the fact that the villagers decided not to employ the Baories for watch and ward work in the village as they suspected that the Baories were responsible for certain thefts that had occurred there. The other castes in the village therefore did this work themselves by turns. This was resented by the Baories and the allegation is that the Baories were responsible for the fight and attacked some of the others in the village and that led to a fight; but none of the appellants was concerned with it. From this point it will be convenient to divide the narrative into a series of numbered steps. 1.On the day in question, two of the Baories, Chhotiya and Parsia, bad been to a neighbouring village to bid at an auction where the field, which according to the prosecution engendered the dispute, was being sold. They returned to their village about 11 p.m. and ran into the accused Sukha and Gumana (both Jats). They were challenged and when they disclosed who they were, Sukha and Gumana cried out "kill them. They had gone for the auction of the field. " On that Sukha fired a gun which he had with him and hit Parsia on the legs. Parsia fell down and Gumana bit him over the head with a sword. He also hit Chhotiya over the head with a sword and Chhotiya also fell down. 2.Parsia and Chhotiya at once cried out for help and their cries, coupled with the sound of the gun fire, brought a number of persons to the scene. The 291 number varies widely. Chhotia (P.W. 8) says 30 to 35, Ruga (P.W. 1) says 50 or 60, Bedu (P.W. 2) puts it at 30 or 40 and so does Lachhuri (P.W. 10), while Ladia (P.W. 11) thinks there were as many as 100 to 150. There are other estimates too, mostly in the neighbourhood of 30 to 40, but the exact number does not matter because it is evident that a crowd assembled. Those who did the attacking are said to have been about 30 or 40 but it is clearly proved that several Baories were there and that some of them were assaulted. The point of stressing these facts is to bring out the fact that most of the persons there did not assemble for an unlawful purpose and so did not form an unlawful assembly. The problem is to sort out those who formed an unlawful assembly from those who did not. Mr. Sethi argued that there is no evidence to support a finding that there was an unlawful assembly because it is impossible to determine who came to attack and who did not. But we will deal with this later. For the present, we will continue our narrative outlining the prosecution case. 3.After the gun was fired and Parsia and Chhotiya struck down, a large number of persons rushed to the scene and, among them, some 30 or 40 were armed with various kinds of weapons. Of these, Kamla, Balia, Todia and Bhawana (all Jats) had pharsies, Gumana, Govinda and Jodbiya (also Jats) had swords and the rest (Jats, Dhobis and Khaties) had lathis. These persons also attacked Chhotiya and Parsia. 4.The cries of Chhotiya and Parsia attracted Mana, Govinda, Pemla, Rambuxa and Gangli and some others. These persons are Baories. This crowd of 30 or 40 turned on Mana and Govinda and attacked them. Sukha then fired his gun a second time and hit Mana on his left hand. 5.In the meanwhile, Ganesh and his wife Seruri (Baories) arrived and said "don 't beat, don 't beat". Sukha and Gumana said that they should also be beaten and thereupon these 30 or 40 persons started to beat them too and they fell down. After this, Parsia 's wife Lacbhuri came there 292 and some 10 or 1 1 persons out of the original 30 or 40 started to chase her. But she ran away and managed to escape with only a slight beating. 7.While this was happening, the five Baories who had been felled to the ground (Parsia, Ganesh, Mana, Govinda and Seruri) started to cry out. The ten or eleven who had chased Lachhuri came back and on hearing the cries of these five on the ground, Sukha and Gumana said that they were crying and should be killed outright. On that these eleven persons divided into three groups and attacked the five on the ground as follows: Parsia was beaten by Sukha (with a pharsi), Jeewana (dangri) and Chokla (dangri). Mana and Govinda were beaten by Gumana (sword), Balia (pharsi) and Jankiya and Naraina (lathis). Ganesh was beaten by Bhawana (dangri), Govinda (sword), Kumla (pharsi) and Begla (dangri). All four died on the spot. The accused were charged as follows. One group consisting of 25 persons were charged under section 325/149 of the Indian Penal Code for intentionally beating, along with the other accused, 1. Chhotiya 2. Seruri 3. Parsia 4. Mana 5. Govinda and 6. Ganesh. At a later stage, the following sentence was added to the charge: "which you inflicted as a member of an unlawful assembly in prosecution of its common intention". These twenty five were acquitted and we are not concerned with them except to note that they were not concerned with that part of the occurrence which we have set out as steps 6 and 7 above. The charge against the remaining eleven can be divided into two parts. Under the first, each, except Sukha, is charged with beating the Baories Parsia, Mana, Govinda, Ganesh, Chhotiya, Seruri, etc. "along with other accused". Five of the eleven are said to 293 have beaten them with "swords and lathis"; another five "with lathis, etc." while the eleventh, Sukha, is said to have fired at Parsia and Mana "as a result of which they fell down". Then each charge continues "and when all had fallen down as a result of these injuries". After that the charges divide off into three groups: One group charges (1) Gumana, (2) Naraina, (3) Balia and (4) Jankiya with beating Govinda and Mana, "who were groaning, with lathis with intent to kill them till they were actually killed". The next group charges (1) Jeewana, (2) Sukha and (3) Chokhla with hitting Parsia with lathi blows "with intent to murder him till he died". The third group charges (1) Begla, (2) Govinda, (3) Kumla and (4) Bhawana with as saulting Ganesh with lathis with intent to murder till he died. The following sentence was also added in the end of each of these charges: "And you did this as a member of an unlawful assembly in prosecution of its common intention". There has been some confusion in both the Sessions Court and the High Court between "common intention" and "common object". It is true the two sometimes overlap but they are used in different senses in law and should be kept distinct. In a case of unlawful assembly or riot we are concerned with a common object. However, we are satisfied that has not caused any prejudice. But the reason why we have set out these charges at some length is because counsel for the appellants argued that the prosecution case is that there were two separate assemblies, one of twenty five persons to beat six specific persons and another of eleven to kill them in three groups. He argued that the twenty five who constituted the first assembly have all been acquitted; that the only material from which an unlawful assembly can be inferred in the other case is the instigation of Sukha and Gumana for a second time after they bad returned from chasing Lachhuri. That story, he said, has been disbelieved, so all must be acquitted. It will be necessary at this stage to set out the 294 findings of the two lower courts. The learned Sessions Judge starts by rejecting the evidence of Ruga (P.W. 1), Bodu (P.W. 2) and Bhagwatia (P.W. 3) on the question of identification of any of the accused and the evidence of Arjun (P.W. 4) about the conspiracy to beat up the Baories. But he finds that the evidence of the Baori witnesses, Chhotiya (P.W. 8), Lachhuri (P.W. 10), Ladia (P.W. 11), Seruri (P.W. 12), Gangli (P.W. 13) and Pemla (P.W. 14) is consistent "so far as these II accused are concerned regard ing their beating 4 persons to death and causing injuries to Lachhuri, Ganesh 's wife, Seruri and Chhotiya " Later, he states "From the evidence of these Baori witnesses. . . . it is found that these eleven accused were involved in the beating of the injured persons. Whether they formed part of a bigger assembly is not now material because I have already discussed the cases of other accused and given them benefit of doubt. These eleven accused even amongst themselves being more than five in number could be regarded as members of an unlawful assembly". But the learned Judge only accepted this story in part. He believed Chhotiya (P.W. 8), Seruri (P.W. 12), Gangli (P.W. 13) and Pemla (P.W. 14) in so far as they stated that Sukha had a gun and that Sukha used it against Parsia and Mana, but he did not accept the evidence of Chhotiya (P.W. 8) in so far as he said that Gumana hit Chhotiya with a sword. He also rejected the prosecution version that the incidents occurred in two parts, first with a bigger assembly that beat all the accused and next with a smaller one that ran after Lachhuri and beat her and then returned to beat the others to death at the instigation of Sukha and Gumana. On this part of the case, the learned Sessions Judge found that " whatever beating was done was done immediately after the scuffle between Chhotiya and Parsia and Sukha and Gumana and Gumana and Naraina, and those accused who had arrived on the spot. Nobody instigated anybody". (Para 103). It was argued on behalf of the defence that the learned Sessions Judge discarded the evidence about 295 instigation in toto. Counsel for the State, however, contended that this passage refers to the second instigation which is said to have been given after the eleven had chased and beaten Lacbhuri and returned to finish off the others who were lying on the ground. We think that is right. In paragraph 101 of his judgment the learned Sessions Judge set out the fact that the prosecution witnesses divide the incidents into two parts: one in which a larger assembly beat all the injured persons and the other in which eleven killed the four deceased persons at the instigation of Sukha and Gumana. In paragraph 102 be set out reasons why he was not able to believe this story. The first was because "Ladia (P.W. 11) did not state in his statement before the police that after beating Lachhuri, when ten or eleven persons had returned then at the instigation of Sukha and Gumana the injured were again beaten to death". Then, after setting out four more reasons, the learned Judge reached the conclusion just enumerated in paragraph 103. In paragraph 117 he said "Leaving Begla and Govinda, I am fully convinced that Sukha, Gumana, Naraina, Kumla, Balia, Jeewana, Chokhla, Bhawana Khati and Jankiya did commit rioting with the common object of beating the Baories". In paragraph 118 he said "I am not convinced that the intention of all these accused was to murder the whole lot of Baories. . . " In para 119 "The accused did give sound beating to the injured". He concluded that no common object to kill could be deduced but held that a common object to beat was clear. As he was unable to determine which accused gave the fatal blows be convicted all under section 302 read with section 149 of the Indian Penal Code. We think it is clear from this judgment, read as a whole, that the learned Sessions Judge disbelieved 296 the story of instigation at any stage because if he had believed even the first instigation, a common object to kill would have emerged. We are unfortunately not able to obtain much assistance from the judgment of the learned High Court Judges. They have not analysed the evidence and have not reached clear findings about a common object due in some measure to the fact that they do not appear to have appreciated the difference between a common object and a common intention. They hold that six witnesses can be relied on to the extent that "the villagers were armed with guns, swords, farsies and lathis". They do not believe all that these witnesses say because they hold "Though, therefore, we do not believe that these eleven persons deliberately murdered the four injured Baories who were lying there saying that they should be killed, there is no doubt in our minds that these eleven persons who have all been mentioned by these six witnesses were certainly seen taking more active part in this incident". Then they hold "We are, therefore, satisfied on the statements of these witnesses that the incident took place in the main as stated by them and that the prosecution has given the right version of the affair". Next, they hold that the fact that a large number of villagers, including the nine appellants, turned up armed with various weapons immediately they beard the quarrel between Chhotiya and Parsia on the one side and Gumana on the other "shows that there must have been some consultation from before and that these persons arrived in prosecution of the common object. . . " And they add this reason: "There is also the evidence of the prosecution witnesses that as the Baories came, some one or the other of these accused incited the rest of the villagers to beat up the Baories". From this they conclude that there was an unlawful assembly with the common object of beating up the Baories. 297 This is very unsatisfactory. The learned Judges were dealing with an appeal against an acquittal and though they have allowed the appeal they have not been specific about which part of the evidence they rely on in support of their findings nor do their conclusions follow logically from the premises on which they are based. Take, for example, the finding about prior consultation. In the first place, no prior consultation is required when a common object is in question. The essence of the distinction between common object and common intention lies there. In the next place, the six witnesses, who are relied on, say that a crowd of 30 or 40 persons assembled. Among that crowd were Baories because three Baories (other than Parsia and Chhotiya) were killed and others injured. It is also evident that some of these Baories must have had some sort of weapons because three of the accused had slight injuries on their person and one a fracture. The evidence discloses that there had been thefts in t the village. The uproar occurred at 11 in the night. In those circumstances, it would be natural for the villagers to rush to the scene and arm themselves with whatever came to band. Some may have been motivated by an unlawful motive but many would not, and to deduce a common intention with prior concert in such circumstances is impossible. A common object is different and courts of fact are entitled to conclude on the evidence that has been accepted that some of those who rushed to the scene went there with the object of beating up persons whom they thought to be thieves and not merely to apprehend them or defend their properties; in other words, that some of those persons individually had an unlawful object in view. If each bad the same object, then their object would be common and if there were five or more with this object, then they would form an unlawful assembly without any prior concert among themselves. Next, take the High Court 's finding about incitement. They have rejected the version given by the prosecution witnesses because they hold that the 298 story about the second beating is an improvement and also because they disbelieve the evidence that indicates that these eleven persons deliberately murdered the four injured Baories. But the only evidence about incitement is that Sukha and Gumana called on the others to kill Barsia, and later to kill the others. The incitement was quite clearly to kill and not merely to beat. If this is rejected, then there is no evidence about incitement, so we are left in the dark to know what the learned Judges based their conclusion on. That has left us with the task of finding whether there is, or could be, any proper basis for these convictions. Now, as we understand the learned Sessions Judge, he has believed the first part of the story which we have set out as step No. I except the portion that speaks about an incitement to kill. He finds that there was the meeting between Sukha and Gumana on the one side and Parsia and Chhotiya on the other. He says "It can safely be deduced from the incidents as related by the witnesses in this case that in the beginning the fighting was between a couple of persons only and on hearing their cries their relatives, friends and relations and other villagers reached the spot and some of the villagers did beat the Baories". Pausing there, it is evident that there was no unlawful assembly when the beating started; nor can it be deduced that all the persons who rushed to the scene, whether the number was 30 or 150, formed an unlawful assembly. We therefore have to scan the evidence carefully to see what happened after that. The finding is that the eleven accused who were charged for the murder were all involved in the beating of the injured persons. That satisfies one of the ingredients of rioting, namely the presence of five or more persons. But that of course is not enough. There must in addition, be an "assembly" and that assembly must have a "common object" and the object must be "unlawful". But a common object is different from a common intention in that it does not require prior concert and 299 a common meeting of minds before the attack, and an unlawful object can develop after the people get there. It is not for us to re assess the evidence in special leave. All we can say is that there are circumstances from which courts of fact could deduce that an unlawful object developed with more than five to share it once the marpit bad started; and as two courts of fact are satisfied that it did, there is no reason for us to interfere. Persons who had come there quite lawfully, in the first instance, thinking there were thieves could well have developed an intention to beat up the "thieves" instead of helping to apprehend them or defend their properties; and if five or more shared the object and joined in the beating, then the object of each would become the common object. This is not to say that all those present were members of that assembly. The presumption of innocence would preclude such a conclusion. Those who rushed to the scene in the circumstances disclosed must be presumed to have gone there for a lawful purpose even if they were armed. The apprehension of marauders who prowl the town at night and the defence of person and property are lawful objects. But when that object is exceeded and persons begin to beat up the suspects the act of beating becomes unlawful, for private persons are no more entitled to beat and illtreat thieves than are the police, especially at a time when there is nothing beyond suspicion against them. But if five or more exceed the original lawful object and each has the same unlawful intention in mind and they act together and join in the beating, then they in themselves form an unlawful assembly. There is no difference in principle between this and a case in which the original object was unlawful. The only difference is that a case like this is more difficult to establish and must be scrutinised with greater care. But that scrutiny is here and we are satisfied that there is evidence in this case on which courts of fact could base the conclusion that they have reached. Now, did these eleven persons constitute an assembly or were they there individually without any 300 common factor to link them together? That, we think, is easily answered. It is clear that each (barring Sukha and Gumana who were already there) assembled at the spot because of the cries of Parsia and Chhotiya and because of the noise of the fight. That imports a common factor into their meeting and links them together as an assembly. Their object in assembling may have been innocent but the fact that a common factor like this induced them to come together constitutes them into an "assembly" though not, on that evidence alone, into an unlawful assembly. We next have to see whether any of them had an unlawful object in view. The object of Sukha and Gumana was clearly unlawful. Now the evidence which has been believed shows that the other nine actually joined in the beating and that they did this after Sukha had fired his gun at Parsia and Parsia had fallen to the ground. It also shows that these others turned on Parsia 's relations and friends when they came to their support. Therefore, whatever the original object of each may have been, it achieved a unity of purpose the moment the others joined in and continued to assist Sukha and Gumana and helped them to beat up the other Baories who came to Parsia 's help. It is not a case of stray sporadic acts but indicates a certain continuity of purpose, each striving to achieve the same end, namely either to help Sukha and Gumana in beating up Parsia and Chhotiya and those who came to help them or to join in the beating for ends of their own. But the commonness of purpose is an inference of fact which courts of fact would be entitled to make. It does not matter whether the others joined in because of an initial instigation or whether, seeing the assault in progress, they joined in on their own account, because so long as each bad the object of beating up Parsia and Chhotiya and those who came to their assistance, that would make their object common. The distinction between the common intention required by section 34 of the Indian Penal Code and the common object set out in section 149 lies just 301 there. In a case under section 149 there need not be a prior meeting of minds. It is enough that each has the same object in view and that their number is five or more and that they act as an assembly to achieve that object. All these features are to be found in that part of the evidence which has been believed. Therefore, on these findings which the courts of fact are entitled to reach, the object of the assembly was unlawful, but up to this point the highest common denominator was merely to beat and not to kill. Up to that point, the convictions of the learned Sessions Judge under section 325/149, Indian Penal Code, are unassailable. The next question is whether, that being the case, the convictions by the High Court under section 302/149 can be upheld. Neither the Sessions Judge nor the High Court believe that there was any common intention to kill, therefore the convictions for the more serious offence can only be sustained under section 149 if it can be shown (1) that an actual killing of some of the persons attacked was likely to result from the beating which formed the common object and (2) that each person so convicted knew that might be a likely result. Now so far as Sukha and Gumana are concerned, there can be no doubt. They started the fight with deadly weapons. Sukha fired at least twice and bit two persons. He himself may not have had an intention to kill and indeed the fact that the wounds are on non vital parts must be used as a factor in his favour, but any person who carries a fire arm at that hour of the night and uses it and then continues a fight after an excited crowd has assembled and when at least nine of them rush in to join in the beating after his first shot must know either that somebody is likely to deal a fatal blow or at least that the cumulative effect of blows inflicted by a number of persons armed with lathis is likely to cause death from shock. Riots of this kind are common and death frequently results, therefore, not only was a killing a likely consequence of such an assault conducted in this fashion but Sukha and Gumana as men of ordinary intelligence must have known that. 302 Much the same considerations apply in the case of the other appellants. They rushed in to hit persons who had already been fired on and who had been felled to the ground. They were in the midst of a crowd which could hardly have been calm and impassive and they joined in with several others to beat them up. Any man of reasonable intelligence would have known that somebody would be likely to be killed in a melee like that. Therefore, the requisite knowledge can be imputed to them also. Two questions remain. One was directed against the reliability of that part of the evidence that has been believed. The argument, for all its repetition, length and eloquence, was the hackneyed one that when one part of a witness ' evidence is disbelieved, it is unsafe to act on the rest of his testimony. The answer is equally hackneyed, namely that judges of fact have the right to do this and that this is not a court of appeal when it acts under article 136. The findings about this are concurrent, so, following our usual practice, we decline to review the evidence. The other is that the absence of this in the charge occasioned prejudice. We have recently decided that we will be slow to entertain question of prejudice when details are not furnished; also the fact that the objection is not taken at an early stage will be taken into account. There is not a hint of prejudice in the petition filed by the appellants here in the High Court for leave to appeal to this Court; nor was this considered a ground for complaint in the very lengthy and argumentative petition for special leave filed in this Court. The only complaint about prejudice was on the score that there was no proper examination under section 342 of the Criminal Procedure Code. We decline to allow this matter to be raised. The appeal fails and is dismissed.

Common intention required by section 34 of the Indian Penal Code and common object set out under section 149, though they sometimes overlap, are used in different senses and should be kept distinct. In a case under section 149 there need not be a prior concert and meeting of minds, it is enough that each has the same object in view and their number is five or more and they act as an assembly to achieve that object. When a crowd assembles and there is an uproar and people are killed and injured, it is only natural for others to rush to the scene with whatever arms they can snatch. Some may have an unlawful motive but others may not, and in such circumstances it is impossible to say that they were all motivated by a common intention with prior concert. What a court of fact should do in such a case is to find from the evidence which of them individually had an unlawful object in view, or having originally a lawful object in view deve loped it later on into an unlawful one and if it finds that there were five or more such persons who acted together there would be an unlawful assembly. Consequently, in a case where there were circumstances from which the courts of fact could deduce that an unlawful object developed with more than five to share it after the fighting started and they were satisfied that it did, there was no reason why their concurrent decisions should be set aside. This court will be slow to entertain a question of prejudice when details are not furnished; also, the fact that the objection was not taken at an early stage will be taken into account.

Appeal No. 195 of 1955. Appeal from the judgment and order dated the 30th day of December 1953 of the Nagpur High Court in Miscellaneous Civil Case No. 35 of 1952. Kirpa Ram Bajaj, Hardyal Hardy, with him) for the appellant. C. K. Daphtary, Solicitor General of India (G. N. Jo8hi and R. H. Dhebar, with him) for the respondent. February 17. The Judgment of the Court was delivered by DAS C.J. This is an appeal from the judgment and order passed by a Bench of the Nagpur High Court on the 30th December, 1953 in Miscellaneous Civil Case No. 35 of 1952, whereby the Bench answered in the negative the question that had been referred to them by the Income Tax Appellate Tribunal, Bombay under section 66(1) of the Indian Income Tax Act, 1922 (hereinafter referred to as the Act). In connection with the assessment for the assessment year 1949/1950 of Dulichand Laxminarayan, an unregistered firm, an application was made under section 26 A of the Act before the Income Tax Officer, Raigarh for its registration as a firm constituted under a Deed of Partnership dated the 17th February 1947. In the opening paragraph of that deed the names and descriptions of the parties thereto were set out in the following words: "We, Dulichand Laxminarayan Firm, through Malik (partner) Laxmi Narayan son of Laljimal, Laxmi Narayan Chandulal Firm through Malik (partner) Chandulal son of Nanakchand, Mulkhram Bholaram Firm through Malik (partner) Tekchand son of Bholaram, Jeramdas Hiralal Firm through 157 Malik (partner) Beharilal son of Asharam and Mangatrai Ganpatram through Malik (partner) Ganpatram son of Mangatrai, Agarwar Bani, aged 50, 40, 28, 25, 45 residing at Raigarh are partners in equal shares with effect from 5 1 1946 in the firm Dulichand Laxminarayan in whose name Importers ' Licence of cloth is issued for Raigarh State group Raigarh, Jaipur Saraigarh, Udeypur and Sakti State, on the following terms and conditions. . . . Then follow 15 clauses containing the terms on which the partnership business was agreed to be done. At the foot of the deed signatures were appended in the following order one below the other: Laxminarayan for Dulichand Laxmi Narayan. Beharilal for Jairam Das Hiralal. Ganpatram for Mangatrai Ganpatram. Tekchand for Mukhram Bholaram. Chandulal for Laxminarayan Chandulal. It is common ground that out of the five constituent parties Dulichand Laxminarayan, Jairamdas Hiralal and Laxminarayan Chandulal are separate firms constituted under three separate deeds of partnership and that Laxminarayan, Beharilal and Chandulal, who signed the deed on behalf of those firms are partners in their respective firms. There is also no dispute that Mukbram Bholaram is the name of a business carried on by a Hindu undivided family of which Tekchand, who has signed for it, is the Karta. It is also conceded that Mangatrai Ganpatrai is an individual. The application for registration was signed by the same five individuals who bad signed the deed of partnership. Finding that Dulichand Laxminarayan constituted under the aforesaid Deed of Partnership dated the 17th February 1947 consisted of three firms, one Hindu undivided family business and one individual and taking the view that a firm or a Hindu undivided family could not as such enter into a partnership with other firms or individuals, the Income Tax Officer held that the said Dulichand Laxminarayan could not be registered as a firm under section 26 A and 21 158 accordingly on the 26th February 1950 he rejected the application. On appeal the Appellate Assistant Commissioner held that when a firm entered into a partnership with another firm the result in law was that all the partners of each of the smaller firms became partners of the bigger firm and, therefore, there was no legal flaw in the constitution of the bigger firm of Dulichand Laxminarayan. He, however, took the view that, as the application for registration had not also been signed personally by all the partners of those three smaller firms as required by section 26 A of the Act and rule 2 of the Rules framed under section 59 of the Act, there was no valid application for registration and consequently the firm could not be registered. The result was that on the 5th August 1950 the Appellate Assistant Commissioner dismissed the appeal. The assessee appealed to the Income Tax Appellate Tribunal. The Tribunal agreed with the Appellate Assistant Commissioner that a valid partnership had been brought into existence but reversed the decision of the Appellate Assistant Commissioner on the ground that as all the five executants of the deed had signed the application for registration, the requirements of law had been satisfied. Accordingly on the 12th June 1951 the Tribunal directed registration of the firm. On the application of the Commissioner of Income Tax, Madhya Pradesh the Tribunal under section 66(1) of the Act drew up a Statement of Case and submitted to the High Court of Nagpur the following question of law, namely: Whether on the facts of the Case the assessee is entitled to registration under section 26 A of the Income Tax Act? The reference came up for hearing before a Bench of the Nagpur High Court on the 30th December 1953. Following their own judgment delivered earlier in the day in Miscellaneous Civil Case No. 189 of 1951, Jabalpur Ice Manufacturing Association vs Commissioner of Income Tax, Madhya Pradesh and Bhopal(1), (1) 159 the High Court answered the referred question in the negative. In view, however, of the importance of the question involved in the reference the High Court, under section 66 A(2) of the Act, gave a certificate of fitness for appeal to this Court. Hence the present appeal. Section 26 A of the Act under which the application for registration was made provides as follows: (1) Application may be made to the Income tax Officer on behalf of any firm, constituted under an instrument of partnership specifying the individual shares of the partners, for registration for the purposes of this Act and of any other enactment for the time being in force relating to income tax or supertax. (2) The application shall be made by such person or persons, and at such times and shall contain such particulars and shall be in such form, and be varied in such manner, as may be prescribed; and it shall be dealt with by the Income tax Officer in such manner as may be prescribed. The relevant portion of rule 2 of the Rules made under section 59 of 'the Act runs thus: "Any firm constituted under an Instrument of Partnership specifying the individual shares of the partners may, under the provisions of section 26 A of the Indian Income tax Act, 1922 (hereinafter in these rules referred to as the Act), register with the Income tax Officer, the particulars contained in the said Instrument on application made in this behalf. Such application shall be signed by all the partners (not being minors) personally, or. . . At the hearing before us it was at one time suggested that the partners of the firm consisted of the five individuals who had signed the deed and each of them had an ' equal share as specified therein and that as all the said five partners had signed the application for registration the requirements of section 26 A of the Act and rule 2 had been fully complied with and the assessee should have been registered as a firm for the purposes of the Act. A perusal of the deed and par 160 ticularly the portions hereinbefore set out indicate beyond any doubt that the intention of the parties quite clearly was that each of the three constituent firms and not the particular member of each of the said three firms who had signed the deed for his respective firm was to be the partner in the bigger firm constituted under this deed. The contention that only the five individual executants of the deed were the partners of the newly created firm runs counter to the apparent tenor of the deed and cannot be entertained. Indeed learned counsel appearing in support of this appeal did not press this point. The main argument before us has centred round the larger question as to whether a firm as such can be a partner in another firm. Section 26 A of the Act quoted above postulates the existence of a firm, for otherwise no question of its registration can possibly arise. The Act, however, does not indicate what a firm signifies or how it is to be constituted. Indeed section 2(6B) of the Act clearly provides,inter alia, that "firm" and "partnership" have the same meanings respectively as they have in the . We have, therefore,, to go to the last mentioned Act to ascertain what a firm is and how it can be created. Turning, then, to the we come to section 4 which defines 'partnership", "partner", "firm" and "firm name" in the words following: 4. Definition of "Partnership", "Partner", "firm" and "firm name: "Partnersbip" is the relation between persons who have agreed to share the profits of a business carried on by all or any of them acting for all. Persons who have entered into partnership with one another are called individually "partners" and collectively "a firm", and the name under which their business is carried on is called the "firm name". This section clearly requires the presence of three elements, namely (1) that there must be an agreement entered into by two or more persons; (2) that the agreement must be to share the profits of a business; 161 and (3) that the business must be carried on by all or any of those persons acting for all. According to this definition "persons" who have entered into partnership with one another are collectively called a "firm" and the name under which their business is carried on is called the "firm name". The first question that arises is as to whether a firm as such can enter into an agreement with another firm or individual. The answer to the question would depend on whether a firm can be called a "person". There is no definition of the word "person" in the Partnership Act. The , however, by section 3 (42) provides that "person shall include any company or association or body of individuals whether incorporated or not". The firm is not a company but is certainly an association or body of individuals. The argument is that applying that definition to the word "persons" occurring in section 4, one can at once say that an unincorporated association or body of persons, like a firm, can enter into a partnership just as by the application of that definition to section 4 of the a company can become a partner in a firm. The definitions given in section 3 of the , however, apply when there is nothing repugnant in the subject or context. It is difficult to say that there is anything repugnant in the context of section 4 itself which will exclude the application of that definition to the word "Persons" occurring in section 4. Is there, however, anything repugnant in the subject of partnership law, which will exclude the application of that definition to section 4? As pointed out in Lindley on Partnership, llth Edition, at page 153, merchants and lawyers have different notions respecting the nature of a firm. Commercial men and accountants are apt to look upon a firm in the light in which lawyers look upon a corporation, i.e., as a body distinct from the members composing it. In other words merchants are used to regard a firm, for purposes of business, as having a separate and independent existence apart from its partners. In some systems of law this separate per 162 sonality of a firm apart from its members has received full and formal recognition, as, for instance, in Scotland. That is, however, not the English Common Law conception of a firm. English Lawyers do not recognize a firm as an entity, distinct from the members composing it. Our partnership law is based on English Law and we have also adopted the notions of English lawyers as regards a partnership firm. Some of the mercantile usages relating to a firm have, however, found their way into the law of partnership. Thus in keeping accounts, merchants habitually show a firm as a debtor to each partner for what he brings into the common stock and each partner is shown as a debtor to the firm for all that he takes out of that stock. But under the English Common Law, a firm, not being a legal entity, could not sue or be sued in the firm name or sue or be sued by its own partner, for one cannot sue oneself. Later on this rigid law of procedure, however, gave way to considerations of commercial convenience and permitted a firm to sue or be sued in the firm name, as if it were a corporate body (see Code of Civil Procedure, Order XXX corresponding to rules of the English Supreme Court Order XLVIII A). The law of procedure has gone to the length of allowing a firm to sue or be sued by another firm having some common partners or even to sue or be sued by one or more of its own partners (see Order XXX, rule 9 of the Code of Civil Procedure), as if the firm is an entity distinct from its partners. Again in taking partnership accounts and in administering partnership assets, the law has, to some extent, adopted the mercantile view and the liabilities of the firm are regarded as the liabilities of the partners only in case they cannot be met and discharged by the firm out of its assets. The creditors of the firm are, in the first place, paid out of the partnership assets and if there is any surplus then the share of each partner in such surplus is applied in payment of his separate debts, if any, or paid to him. Conversely, separate property of a partner is applied first in the payment of his separate debts and the surplus, if any is utilised in meeting the 163 debts of the firm (see section 49 of the ). In the Indian Income Tax Act itself a firm is, by section 3, which is the charging section, made a unit of assessment. It is clear from the foregoing discussion that the law, English as well as Indian, has, for some specific purposes, some of which are referred to above, relaxed its rigid notions and extended a limited per,personality of a firm. Nvertheless, the general concept of partnership, firmly established in both systems of Law, still is that a firm is not an entity or "person" in law but is merely an association of individuals and a firm name is only a collective name of those individuals who constitute the firm. In other words, a firm name is merely an expression, only a compendious mode of designating the persons who have agreed to carry on business in partnership. According to the principles of English jurisprudence, which we have adopted for the purposes of determining legal rights "there is no such thing as a firm known to the law" as was said by James, L. J. in Ex parte Corbett, In re Shand(1) In these circumstances to import the definition of the word "person" occurring in section 3(42) of the into section 4 of the will, according to lawyers, English or Indian,, be totally repugnant to the subject of partnership law as they know and understand it to be. It is in this view of the matter that it has been consistently held in this country that a firm as such is not entitled to enter into partnership with another firm or individuals. It is not necessary to refer in detail to those decisions many of which will be found cited in Jabalpur Ice Manufacturing Association vs Commissioner of Income tax, Madhya Pradesh(2) to which a reference has already been made. We need only refer to the case of Bhagwanji Morarji Goculdas vs Alembic Chemical Works Co. Ltd and others(3), where it has been laid down by the Privy Council that Indian Law has not given legal personality to a firm apart from the partners. This (1) , 126. (2) (3) 164 view finds support from and is implicit in the observations made by this Court in the Commissioner of Income Tax, West Bengal vs A. W. Figgies & Co. and others(1). In Jai Dayal Madan Gopal(2), Sulaiman C. J. followed the Calcutta decisions and was not prepared to dissent from the view that the word "person" in section 239 of the should not be interpreted so as to include a firm. The learned Chief Justice, however, expressed the view that it was difficult to say that there was anything in section 239 itself which made the application to that section of the definition of "person" as given in in any way repugnant. The learned Chief Justice, however, does not appear to have con sidered whether there was anything repugnant in the subject of partnership law, as it prevails in this country, which operates to exclude the application of that deanition to the word "person" occurring in section 239 of the . In our opinion, the word "Persons" in section 4 of the , which has replaced section 239 of the , contemplates only natural or artificial, i.e., legal persons and for the reasons stated above, a firm is not a "person" and as such is not entitled to enter into a partnership with another firm or Hindu undivided family or individual. In this view of the matter there can arise no question of registration of a partnership purporting to be one between three firms, a Hindu undivided family business and an individual as a firm under section 26 A of the Act. The learned Advocate for the appellant then urges that at any rate the partnership was not illegal, for there was no legal impediment in the way of all the members of all the three constituent firms and the karta of the Hindu undivided family and the individual entering into an agreement and that, therefore, a valid partnership was constituted by the deed of partnership under consideration. Assuming that this contention is possible in view of the language which (1) ; ; (2) 165 has been used in this deed for describing the parties, the position of the appellant will not improve, for in order to be entitled to the benefit of registration under the Act, it will have to be shown that the shares of all individual partners are specified in the deed and that all the partners have personally signed the application for registration as required by section 26 A of the Act read with Rule 2. The deed specifies that each of the five constituent parties is entitled to an equal, i.e., 1/5 share but it does not specify the individual shares of each of the partners of each of the three smaller constituent firms. Further all the members of those three firms have not signed the application for registration personally. It is said that each of the three persons who executed the deed for the three smaller firms must be regarded as having the authority of their co partners in their respective firms to sign the application for registration just as they had their authority to execute the deed itself for them. Even if they had such authority as to which there is no evidence at all on the record the section and rule 2 require that each partner (not being minors) must sign personally. That admittedly has not been done, and., therefore, the application was not in proper form. In our judgment the answer given by the High Court to the question is correct. This appeal must, therefore, be dismissed with costs.

In connection with the assessment for the assessment year 1949 1950 of Dulichand Lakshminarayan an unregistered firm, an application was made under section 26 A of the Indian Income Tax Act, 1922 before Income Tax Officer, Raigarh, for its registration as a firm constituted under a Deed of Partnership dated 17th February, 1947. In the opening paragraph of the deed the names and descriptions of the five parties thereto were set out. The signatures of five per sons were appended on behalf of five parties respectively at the foot of the deed. It was common ground that out of the five constituent parties, D.L., J.H., and L.C., were separate firms constituted under three separate deeds of partnership. The three different persons who signed the deed on behalf of those three firms respectively were partners in their respective firms. The fourth party M.B. was the name of a business carried on by a Hindu undivided family of which the person who signed it was the karta. The fifth party M.G. was an individual. The Income Tax Officer rejected the application on the ground that Dulichand Lakshminarayan, constituted under the deed dated 17th February 1947, consisted of three firms, one Hindu undivided family business and one individual and that a firm or a Hindu undivided family could not as such enter into a partnership with other firms or individual, 155 The assessee 's appeal to the Appellate Assistant Commissioner was dismissed but it succeeded before the Income Tax Appellate Tribunal who directed registration of the firm. On the application of the Commissioner of Income Tax under section 66(1) of the Income Tax Act the High Court held that on the facts of the case the assessee was not entitled to registration under section 26 A of the Income Tax Act. On appeal to the Supreme Court: Held that a perusal of the deed would indicate beyond any doubt that the intention of the parties quite clearly was that each of the three constituent firms and not the particular member of each of the said three firms who had signed the deed for his respective firm was to be the partner in the bigger firm constituted under this deed. The contention that only the five individual executant of the deed were the partners of the newly created firm was against the tenor of the deed and was therefore without force. Section 26 A of the Indian Income Tax Act postulates the existence of a firm. The Act, however, does not indicate what a firm signifies or how it is to be constituted. Section 2(6 B) of the Act clearly provides, inter alia, that "firm" and "partnership" have the same meaning respectively as they have in the . Section 4 of the (which gives the definitions of "partnership", "partner", "firm" and "firm name") clearly requires the presence of three elements namely (1) that there must be an agreement entered into by two or more persons: (2) that the agreement must be to share the profits of a business; and (3) that the business must be carried on by all or any of those persons acting for all. The general concept of partnership according to both systems of law, English as well as Indian, is that a firm is not an entity or "person" in law but is merely an association of individuals and a firm name is only a collective name of those individuals who constitute the firm. In other words a firm name is merely an expression, only a compendious mode of designating the persons who have agreed to carry on business in partnership. The word "persons" in section 4 of the , which has replaced section 239 of the Indian Contract Act, contemplates only natural or artificial, i.e., legal persons and therefore a firm is not a person and as such is not entitled to enter into a partnership with another firm or Hindu undivided family or individual and there is no question of registration of a partnership purporting to be one between three firms, a Hindu undivided family business and an individual as a firm unders. 26 A of the Act, as in the present case. Jabalpur Ice Manufacturing Association vs Commissioner of Income Tax, Madhya Pradesh and Bhopal ([1965] , Exparte Oorbett, In re Shad, ([1880] ; , 126), Bhag 156 wanji Morarji Goculdas vs Alembic Chemical Works Co. Ltd. and others , Commissioner of Income Tax, West Bengal vs A. W. Figgies & Co. and others ([1954] S.C.R. 171), and In re Jai Dayal Madan Gopal, ([1933] I.T.R. 186), referred to.

Civil Appeal Nos. 2012 2013 of 1974. From the Judgement and Order dated 2.2.1973 of the Calcutta High Court in Appeal No. 211 of 1966. B. Sen, Mrs. Geetanjali Mohan and Bishan Lal for the Appellant. Dr. Shanker Ghosh, Darshan Singh, Praveen Kumar, I.B. Gaur and Ms. Shaifali Khanna (NP) for the Respondents. The Judgement of the Court was delivered by KASLIWAL, J. These appeals by special leave are directed against the order of the Calcutta High Court dated February 2, 1973. Brief facts necessary for the determination of these appeals are that Shri Gouri Sankar Sarda (hereinafter referred to as Respondent No. 1) filed a Suit No. 1783 of 1965 in the Calcutta High Court against R. McDill and Company Pvt. Ltd. (in short Appellant No. 1), Mirilal Dharamchand (Pvt. ) Ltd. (in short Appellant No.2 ) and Shri Misrilal Jain for the recovery of some amounts as well as for some other reliefs. On or about 15th December, 1965 both the appellant Nos. 1 and 2 who were also defendants in the suit submitted a joint application in the High Court for staying proceedings of the aforesaid suit, under Section 34 of the (hereinafter referred to as 'the Act '). In view of some formal defect in the application the High Court by order dated 25th February 1966 gave permission to withdraw the said application with liberty to file a fresh application. As the entire case hinges on the above order dated 25th Feb. 1966, relevant portion of the said order is reproduced as under: 812 :Application withdrawn with liberty to make a fresh application. Cost to be paid by the applicant. " Though the above order does not make a mention of the formal defect, but according to the appellants the permission to withdraw was sought as no copy of the plaint was annexed with such application. Thereafter, on March 21, 1966 the appellant Nos. 1 and 2 instead of making a joint application submitted two separate applications for staying the suit against the respective appellants and in the alternative for stay of the suit as a whole. These applications were resisted by the plaintiff respondent No. 1 on the ground that separate applications were not in terms of the order dated 25.2.1966 and hence no stay should be granted. Learned Single judge upheld the objection raised by the plaintiff and refused to stay the suit. On appeal the Division bench of the Calcutta High Court by order dated 2nd February, 1973 dismissed the appeal. The Division Bench took the view that liberty was granted to make a fresh application and as such under the provision of Order XXIII of the Code of Civil Procedure, the appellants had no right to move two separate applications for staying the suit. Aggrieved against the aforesaid Order of the High Court dated 2nd February, 1973 the appellants have filed these appeals by the grant of special leave. order XXIII C.P.C. as it existed at the relevant time is reproduced as under: ORDER XIII: WITHDRAWAL AND ADJUSTMENT OF SUITS 1. Withdrawal of suit or abandonment of part of claim: (1) At any time after the institution of a suit, the plaintiff may as against all or any of the defendants abandon his suit or abandon a part of his claim. (2) Where the Court is satisfied (a) That a suit must fail by reason for some formal defect or (b) That there are other sufficient grounds for allowing the plaintiff to institute a fresh suit for the subject matter of a suit or part of claim. 813 It may, on such terms as it thinks fit, grant the plaintiff permission to withdraw from such suit or abandon such part of a claim with liberty to institute a fresh suit in respect of the subject matter of such suit or such part of claim. (3) Where the plaintiff withdraws from a suit, or abandon part of a claim, without the permission referred to in sub rule he shall be liable for such costs as the Court may award and shall be precluded from instituting any fresh suit in respect of such subject matter or such part of the claim. (4) Nothing in this rule shall be deemed to authorise the Court to permit one of several plaintiffs to withdraw the consent of the others". It was contended on behalf of the appellants that the provisions or Order XXIII were not applicable in the matter of applications filed under Section 34 of the . It was contended that the provisions of Order XXIII could only apply to the proceedings of a suit and not in respect of any applications filed under the Act. It was submitted that the High Court committed an error in taking a highly technical view of the matter that initially a joint application was submitted for stating the suit and liberty was given to withdraw the same and to make a fresh application and as such the appellants were not entitled to submit two separate applications though for the same purpose. It was contended in this regard that there were two separate agreements between the plaintiffs and appellants Nos. 1 or 2 containing an arbitration clause and as such the appellants were given a legal advice to submit two separate applications for staying the suit and the High Court should not have dismissed the applications on the ground that liberty to file fresh application was given in respect of one application only. Learned counsel for the appellants in support of this contention placed reliance on Nawab Usmanli Khan vs Sagarmal, On the other hand it was argued on behalf of the respondent No. 1 that provisions or Order XXIII C.P.C. were applicable in respect of an application under the Act. It was contended that basically the proceeding had arisen on account of a suit filed by the plaintiff respondent and in that suit an application was submitted for staying the suit and referring the matter to Arbitrator under Section 34 of the Act. The Order as such passed by the High Court on 25th February, 1966 would be governed by the provisions of order XXIII of the Code of Civil 814 Procedure and fresh application could only lie in accordance with the terms and conditions imposed at the time of permitting the withdrawal of the first application. It was contended that it was an admitted position that a joint application was filed for staying the suit and the permission was granted to withdraw the same with liberty to make a fresh application and the defendants appellants had no right to submit two separate applications in violation of the order of the Court dated 25th February, 1966. Reliance in support of the above contention was placed on Munshi Ram vs Banwari Lal, [1962] Supp. (2) SCR 477 and Hakam Singh vs M/s Gammon (India) Ltd.; , We would first deal with the question whether the provisions of Order XXIII C.P.C. apply or not to an application for stay of suit filed under Section 34 of the Act. Section 41 of the Act reads as under: 41 Procedure and powers of Court. "Subject to the provisions of this Act and of rules made thereunder (a) The provisions of the Code of Civil Procedure, 1908, shall apply to all proceedings before the Court, and to all appeals, under this Act, and (b) The Court shall have, for the purpose of, and in relation to, arbitration proceeding before the Court. Provided that nothing in clause (b) shall be taken to prejudice any power which may be vested in an arbitrator or umpire for making orders with respect to any of such matters". According to the above provision the provisions of the Code of Civil Procedure, 1908 shall apply to all proceedings before the Court subject course to the provisions of The and of any rules made thereunder. it has been laid down in various decisions from time to time that the following provisions of the Code of Civil Procedure shall apply to proceedings under the Act. In the 'Law of Arbitration ' by R.S. Bachawat (2nd 1987 Ed., 585) under the Heading 'Applicability of Code of Civil Procedure to court proceeding ' it has been mentioned as under: 815 Subject to the provisions of the Act and the Rules made thereunder the provisions of the code of civil procedure aplply to all proceddings before the Court and to all appeals under the Act, Section 41(a). The following provisions of the Code of Civil Procedure have been held to apply to certain proceedings under the Act: (1) Section 20 Hakam Singh vs Gammon (India) ltd.; , (2) Section 96(3) Union of India vs Mohinder Singh & Co., AIR 1971 JK 10. (3) Section 24 Union of India vs Rup Kishore, AIR 1957 All 504. (4) Section 114 read with Order 47 Executive Engineer vs Thingom Iboyaima Singh, AIR 1970 Manipur 76. (5) Order 1 Rule 8 Abdul Gani vs Reception Committee, AIR 1936 Bom. 250: ILR (6) Order 3 Rule 5 Ram Bharosey vs Peary Lal, AIR 1957 All 265. (7) Order 5 Shrinath Bros. vs Century Spinning & Wvg. Co., AIr (8) Order 6 Rule 17 Indian Minerals Co. vs Northern India Uime Marketing Association, (9) Order 9 Rule 13 Ganeshmal vs Keshoram Cotton Mills, AIR 1952 Cal 10: ILR (10) Order 23 Rule, 3 Munshi Ram vs Banwari Lal, ; (11) Order 30 Rule 3 Governor General in Council vs Associated Live Stock Farm (India) Ltd., AIR 1948 Cal. 230: 52 CWN 288. (12) Order 30 Rule 4 Soorajmull Nagarmull vs Sagar Mal, AIR 1978 Cal. A proceeding under Section 14 Section 17 under the Act is not a suit and the provisions of Section 86(1) C.P.C. read with Section 87 C.P.C. does not apply to such a proceeding (Usman Ali Khan) vs (Sagar Mal,) ; Nor does the provision of Section 80 C.P.C. apply to a proceeding under Section 20 (Ramchand) vs (Governor General in Council,) AIR 1947 sind 147. The following provisions of the Code Civil Procedure apply to appeals under the Act: 816 (1) Section 96(3) (Union of India) vs (Mohinder Singh & Co.,) AIR 1971 JK 10; (2) Order 41 Rule 5 (Scottish Union of National Insurance Co.) vs (Saraswati Sajnani,) AIR 1960 Cal. 22:63 CWN 800. Apart from the above cases Section 41 of the Act itself provides that the provisions of the Code of Civil Procedure shall apply to all proceedings before the Court. We do not find any provision in the Act so as to take away the provisions or Order XXIII C.P.C. from being applied to applications filed under Section 34 of the Act, in a suit. That apart the case before us has started on a plaint filed by the plaintiff and in such a suit if any application is filed under the Act, the same ought to be governed by the provisions of the Code of Civil Procedure. In (Munshi Ram) vs (Banwari Lal,) (supra) the facts were that the Arbitrator gave an award. The award was filed in the court by the Arbitrator. The appellants made application for setting aside the award and the respondents filed their replies to the application. Thereafter, the parties came to terms and asked for a decree to be passed in accordance therewith. The court passed a decree on the award modified by the compromise. In execution, the appellant contended that the decree was nullity as the Court had no jurisdiction to modify the award by compromise. It was argued that after a dispute is referred to arbitration and an award has been obtained and filed in Court, it is not open to the Court to record the compromise under Order XXIII Rule 3 of the Code of Civil Procedure, because an award can be set aside or modified as laid down in the , there is no provision in the for recording the compromise, the above contention was not accepted and it was held as under: "When an award is given, the parties cannot, under the Act challenge it except as laid down there. The powers of the Court are indicated by the Act. They are limited to accepting the award, if there be no objection and passing a decree in accordance therewith, or superseding the reference or revoking or modifying the award or remitting it for further consideration, as laid down in the Act. But, the Act does not disable the parties from terminating their dispute in a different way, and if they do it could not be intended by law that a dispute, which had been successfully terminated, should again become the subject of litigation. If the parties are dissatisfied with the award and want to substitute it by a compromise involving matters alien to the original dispute 817 which are inseparable, the Court may supersede the submission, and leave the parties to work out their agreement in accordance with the law outside the ". In (Nawab Usmanali Khan) vs (Sagarmal,) (supra) on which reliance has been placed by learned counsel for the appellant it was held that a proceeding under Section 14 read with Section 17 of the Act for the passing of a Judgement and decree on an award does not commence with a plaint or a petition in the nature of a plaint, and cannot be regarded as a suit and the parties to whom the notice of the filing of the award is given under Section 14(2) cannot be regarded as "suit in any Court otherwise competent to try the suit" within the meaning of Section 86(1) read with section 87B, Civil Procedure Code. In the above case the appellant was the Ruler, or the former Indian State of Jaora. The had money dealing with the respondent. The respondent after obtaining a decree in terms of the award started execution proceedings against the appellant. The Central Government gave a certificate under Section 86(3) read with Section 87B of the Code Civil Procedure, 1908 consenting to the execution of the decree against the properties of the appellant. The Executing Court passed the prohibitory order under Order XXI Rule 46 of the Code of Civil Procedure in respect of sums payable to the appellant on account of the privy purse. On an objection raised by the appellant by order dated March 15, 1958, the Court recalled the decree and cancelled the certificate as prayed for, on the ground that the amount receivable by the appellant on account of his privy purse was not attachable. The respondent preferred appeal before the High Court. The High Court allowed the Appeal No. 33 of 1958. Usmanali Khan (appellant) filed an appeal before this Court. This Court held as under: "Section 86(1) read with section 87B confers upon the Rulers of former Indian State substantive rights of immunity from suits. Section 141 makes applicable to other proceedings only those provisions of the Code which deal with procedure and not those which deal with substantive rights. Nor does section 41(a) of the Indian carry the matter any further. By that section, the provisions of the Code of Civil Procedure, 1908 are made applicable to all proceedings before the Court under the Act. Now, by its own language section 86(1) applies to suits only, and section 141, Code of Civil procedure does not attract the provisions of section 86(1) to proceedings other than suits. Accordingly, by the conjoint application of section 41(a) of the Indian Arbitration 818 Act and sections 86(1) and 141 of the Code of Civil Procedure, the provisions of section 8691) are not attracted to a proceeding under s.14 of the Indian . It follows that the Court was competent to entertain the proceedings under section 14 of the Indian and to pass a decree against the appellant in those proceedings, though no consent to the institution of those proceedings had been given by the Central Government". The following observations in (Hansraj Gupta) vs (Official Liquidator, Dehra Dun Mussorrie Electric Tramway Co.) [1932] L.R. 60 I.A. 13, 19 made by Lord Russell of Killowen were quoted. "The word 'suit ' ordinarily means, and apart from some context must be taken to mean a civil proceeding instituted by the presentation of a plaint". The following observations made by Shah, J. in (Bhagwat Singh) vs (State of Rajasthan,) ; were also quoted with approval: "The appellant is recognised under article 366(22) of the Constitution as a Rule of an Indian State, but section 86 in terms protects a Ruler from being 'sued ' and not against the institution of any other proceeding which is not in the nature of a suit. A proceeding which does not commence with a plaint or petition in the nature of plaint, or where the claim is not in respect of dispute ordinarily triable in a Civil Court, would prima facie not be regarded as falling within section 86 Code of Civil Procedure". The above observation made by Lord Russell of Killowen and Shah, J. go to show that for a suit the civil proceedings is instituted by the presentation of a plaint. In the aforesaid background it was held that a proceeding which does not commence with a plaint or petition in the nature of plaint, or where the claim is not in respect of dispute ordinarily triable in a civil court, would prima facie not be regarded as falling with Section 86, Code of Civil procedure. In the case before us as already mentioned above a suit by presenting a plaint was instituted by the respondent No. 1 and thereafter it was sought to be stayed by submitting application under section 34 of the Act. Thus we are clearly of the view that the above case of (Usmanali Khan) vs (Sagarmal,) (supra) is clearly distinguishable and does not help the appellants in the case before us. It may be noted that Bachawat, J. who delivered the Judgment in (Usmanali Khan) vs (Sagarmal,) (supra) has himself in his 819 book on the 'law of Arbitration ' under the heading 'Applicability of Code of Civil Procedure to Court Proceeding ' has mentioned a number of decisions wherein the provisions of Code of Civil Procedure have been held to apply to proceedings under the Act. We have already extracted the above passage from the book of Bachawat, j. In (Hakam Singh) v (M/s Gammon (India) Ltd.,) (supra) it was held that the Code of Civil Procedure in its entirety applies to proceedings under the by Virtue of Section 41 of the later Act. The jurisdiction of the Courts under the to entertain a proceeding for filing an award is accordingly governed by the provisions of the Code of Civil Procedure read with Explanation (II) thereto, the respondent company which had its principal place of business at Bombay, was liable to be sued at Bombay. Thus in the above case dispute arose between the parties and the appellant submitted a petition to the Court of the Subordinate Judge at Varanasi for an order under Section 20 of the Indian , 10 of 1940 that the agreement be filed and an order of reference be made to an Arbitrator or Arbitrators appointed by the Court to settle the dispute between the parties in respect of the construction works done by him. In order to determine the place of suing, it was held that Section 20 of the Code of Civil Procedure would govern the case. Thus we do not find any force in the submission made by learned counsel for the appellants before us that the provisions or Order XXIII of the Code of Civil Procedure will not apply to the Order passed by the High Court on 25th February, 1966. We would, now, consider the scope and effect of the order dated 25th February, 1966 considering that the said order would be governed by the provisions of Order XXIII of the Code of Civil Procedure. Admittedly, appellant Nos. 1 and 2 were defendants in the suit filed by respondent No. 1. A joint application was submitted on their behalf for staying the proceedings of the suit, under Section 34 of the Act, Though the order dated 25th February, 1966 does not make a mention of the formal defect on account of which the said application was withdrawn, but the appellants have categorically stated that the same was withdrawn on account of the fact that copy of the plaint was not annexed with such application and in the absence of any counter made by the respondent, we take that the reason for withdrawing the application was that copy of the plaint was not annexed with such application. The said application was allowed to be withdrawn with liberty to 820 make a fresh application. To our mind, the term 'a fresh application ' used in singular had no more significance than the fact that as both the appellants had submitted one joint application as such the liberty was given to make a fresh application. The main purpose of moving the application by the appellant was to stay the proceedings of the suit under Section 34 of the Act the intention and the purpose of moving two separate applications is also to stay the proceedings of the suit under Section 34 of the Act. The explanation given by the appellants for moving two separate applications is that they were given a legal advice to move two seperate applications as there were two different agreements between the appellant Nos. 1 and 2 and the respondent No. 1. There was no element of mala fide in doing so and the two applications were also submitted on March 21, 1966 i.e. within 30 days of the order dated 25.2.66. Learned counsel for the respondent No. 1 submitted that there was no merit in the applications submitted by the appellants under Section 34 of the Act and the proceedings of the suit have already remained stayed for nearly 15 years in this Court and now there is no justification for further staying the suit. So far as the pendency of this appeal in this Court is concerned, no party is at fault and it would have been proper if the respondent had been advised not to take such objection of non maintainability of two applications before the High Court and would have contested the applications on merits. We are not deciding the question of maintainability of the applications under Section 34 of the Act on merits and we make it clear that respondent No. 1 would be free to take all objections as he likes against the grant of such application and the same would be decided by the High Court on merits in accordance with law. We are, however, clearly of the view that the High Court was not correct in dismissing the applications on the ground that two applications were not maintainable as the same were not covered within the order passed by the High Court dated 25th February, 1966. In view of the fact that it is an old matter, we request the High Court to dispose of the applications filed by the appellants Nos. 1 and 2 under Section 34 of the Act. At the earliest. In the result, these appeals are allowed, the order of the High Court dated 2nd February, 1973 is set aside and the case would now be decided by the High court in the manner indicated above. The parties are left to bear their own costs. R.P. Appeals Allowed.

In a suit filed by plaintiff respondent no.1 before the High Court defendant appellants filed a joint application under section 34 of the for staying proceedings of the suit and referring the matter to arbitration. In view of some formal defects in the said application, the High Court on 25.2.1966 without mentioning the defects ordered. "Application withdrawn with liberty to make a fresh application". on 21.3.1966 the appellants submitted two separate applications for staying the suit in so far as it related to them or in the alternative for stay of the entire suit. The plaintiff respondent resisted the applications as not being in terms of the order dated 25.2.1966. Upholding the objection, Learned Single Judge refused to stay the suit. On appeal, the Division bench of the High Court held that the liberty was granted to 'make a fresh application ' and as such, under the provisions or Order XXIII, C.P.C., the appellants had no right to move two separate applications to stay the suit. In appeal by special leave to this Court it was contended that provisions or Order XXIII, C.P.C. were not applicable to applications filed under section 34 of the ; and that the High Court committed an error in taking a technical view that as liberty was given to withdraw the application in order to make a fresh application, the appellants were not entitled to make separate stay applications. Respondent No. 1 supported the impugned judgment. Allowing the appeals, this Court, 810 HELD: 1. In view of section 41 of the , subject to provisions of the Act, Code of Civil Procedure, 1908 apply to all proceedings before the Court No. provision in the takes away the provisions of Order XIII, C.P.C. from being applied to applications filed under section 34 of the in a suit. [814F, 816B] Hakam Singh vs M/S Gammon (India) Ltd, ; relied on. Nawab Usman Ali Khan vs Sagarmal, ; , held inapplicable. Munshi Ram vs Banwari Lal [1962] Supp; (2) SCR 477; Hansraj Gupta vs Officlal Liquidator Dehradun Musoorie Electric Tramway Co, [1932] L.R. 60 I.A. 13; Union of India vs Mohinder Singh & Co., AIR 1971 JK 10; Union of India vs Rup Kishore, [1957] All. 504; Executive Engineer vs Thingom Iboyaima Singh, AIR 1970 Bom. 250; Ram bharosey vs Peary Lal, AIR 1957 All. 265; Shrinath Bros. vs Century Spinning & Wvg. Co. AIR 1968 Bom 443; India Minerals Co. vs Northern India Lime Making Association, ; Ganeshmal vs Keshoram Cotton Mills, AIR 1952 Cal. 10; Governor General in Council vs Associated Live Stock Farm (India) Ltd., AIr ; Soorajmull Nagarmull vs Sagar Mal, AIR 1978 Cal. 239; Ramchand vs Governor General in Council, AIR 9147 Sind. 147 and Scotish Union of National Insurance Co. vs Saraswati Sajnani, Air 1960 Cal. 22, referred to. 2. In the instant case, apart from section 41 of the providing for application of Code of Civil Procedure and there being no provision taking away provisions of order XXIII, C.P.C. from being applied to the applications for stay filed under section 34 of the , the proceeding started on a plaint filed by the plaintiff and in such a suit if any application was filed under the , the same ought to be governed by the provisions of the Code of Civil Procedure. [816A c] 3.1 The High Court was not right in dismissing the applications on the ground that two applications were not maintainable as the same were not covered within its order dated 25.2.1966. [820E F] 3.2 The term 'a fresh application ' in the order dated 25.2.1966 used in singular had no more significance than the fact that as both the 811 appellants had submitted one joint application, liberty was given to make a fresh application, The main purpose of moving the applications under section 34 of the was to stay the suit proceeding. The intention and purpose of moving two such separate applications was also the same. The explanation given by the appellants was that they were given a legal advice to move two separate applications as there were two different agreements between appellants No. 1 and 2 and the respondent No. 1 There being no element of mala fide in the two applications having been submitted within 30 days of the order dated 25.2.1966, the same were maintainable . [820A c]

ION: Criminal Appeal No. 49 of 1954. Appeal by special leave from the judgment and order dated the 7th October, 1953 of the Orissa High Court at Cuttack in Criminal Appeal No. 108 of 1952 arising out of the judgment and order dated the 14th November 1952 of the Court of Assistant Sessions Judge at Sambalpur Sundergarh in Sessions Trial No. 7/4 (5) of 1922. section C. Isaacs, R. Patnaik and R. C. Prasad, for the appellant. Porus A. Mehta and P. G. Gokhale, for the respondent. March 13. The Judgment of the Court was delivered by SINHA J. The main question canvassed in this appeal by special leave is whether the ruling of this Court in the case of Topan Das vs The State of Bombay(1) governs this case also, in view of the fact that the appellant is the only person out of the accused persons placed on trial, who has been convicted for the offence of conspiracy under section 120 B, Indian Penal Code. The point arises in the following way: The appellant and four others were placed on their trial before the Assistant Sessions Judge of Sambalpur for offences under sections 120 B, 409,477 A and 109, Indian Penal Code with having committed the offences of criminal conspiracy, criminal breach of trust in respect of Government property, and falsification of accounts with a view to defraud the Government. The appellant was the District Food Production Officer in Sambalpur and the other four accused persons were agricultural sub overseers in charge of their respective areas under the appellant. Another such agricultural sub overseer was Pitabas Sahu at Bargarh centre. He was examined at the trial as P.W. 25 and (1) 209 shall hereinafter be referred to as the approver. The prosecution case is that in furtherance of the Grow More Food Scheme initiated by Government it was decided to subsidize the supply of oil cake to agriculturists with a view to augmenting the production of food crops. Cultivators were to be supplied this variety of manure at Rs. 4 4 0 per maund, though the Government had to spend Rs. 7 12 0 per maund. The appellant entered into a conspiracy with his subordinate staff including the agricultural sub overseers aforesaid to misappropriate the funds thus placed at their disposal for the procurement and supply of oil cake to cultivators. To bolster up the quantity of oil cakes to be procured, they showed false transactions of purchase and distribution thereof and falsified accounts, vouchers, etc. Thus they were alleged to have misappropriated the sum of Rs. 4,943 4 0 of Government money. A large volume of oral and documentary evidence was adduced on behalf of the prosecution. The three assessors who assisted at the trial were of the opinion that none of the accused was guilty. The learned Assistant Sessions Judge in agreement with the assessors acquitted the four agricultural sub overseers aforesaid of all charges, giving them the benefit of the doubt. But in disagreement with the assessors he convicted the appellant under all the charges and sentenced him to rigorous imprisonment for four and a half years and a fine of Rs. 2,000 under section 409, Indian Penal Code, and to rigorous imprisonment for two years each under sections 120 B and 477 A of the Code, the sentences of imprisonment to run concurrently. The learned trial Judge observed in the course of his judgment as follows: "Hence on a consideration of all the evidence as discussed above, I find that the prosecution have fully proved their case that the accused Bimbadhar Pradhan, the D.F.P.O. has conspired to embezzle the Government money. They have also proved that he has got an active hand and in assistance of Pitabas 210 Sahu has embezzled Government money amounting to Rs. 4,943 4 0 and in that act he has also actively helped Pitabas Sahu in falsifying the Government records by making false entries. Hence all these three charges have been conclusively proved against him. So far as regards the other accused persons, I have already stated that they are considerably inexperienced and the doubtful nature of evidence against these accused persons and considering the position between the first accused and the other accused persons, I give these four accused persons the benefit of doubt though I do not approve their conduct in this affair. As per my findings given above, I may state here that this is a case in which we find a person in charge of the entire administration of agricultural and G.M.F. development of a district has not only soiled his own hands by embezzling Government money by corrupt means but has also introduced corruption into the entire administration of that department by spoiling the career of young men who are entrusted with this work and employed under him". The appellant went up in appeal to the High Court of Orissa. A Division Bench of that Court allowed his appeal and set aside his convictions and sentences under sections 409 and 477 A, Indian Penal Code, but upheld his conviction and sentence in respect of the charge of conspiracy under section 120 B of the Code. We need not enter into the correctness of the findings of the trial court in respect of the acquittal of the other four accused, or of the High Court with regard to the acquittal of the appellant in respect of the charges under sections 409 and 477 A, Indian Penal Code. The High Court held that though the appellant had withdrawn the sum of Rs. 27,000 from the Government treasury with a view to subsidizing the procurement of oil cake, it had not been proved that there was an entrustment to the appellant. Hence the charge against him under section 409 failed. As regards the charge under section 477 A, the High 211 Court acquitted him on the ground that the documents said to have been falsified, which were large in number, had not been mentioned in the charge and a vague statement that "accounts, cash books, stock books, petty cash sale register, cash memos, applications from cultivators, receipts, bills, vouchers, papers, documents, letters, correspondence, etc. had been falsified" was made. As regards the charge of conspiracy under section 120 B, the High Court observed that the most important witness to prove the charge was the approver aforesaid (P.W. 25) who had given a full description of the conspiracy on the 23rd or 25th September 1947 between the appellant and other sub overseers including himself for the purpose of showing bogus purchases and bogus distribution of large quantities of oil cake. It also observed that "Most of the witnesses examined by the prosecution to corroborate the evidence of Pitabas are themselves accomplices in the conspiracy". The High Court found that in respect of that conspiracy the evidence given by the approver got adequate corroboration from other independent witnesses. After setting out the evidence the High Court recorded the following finding: "This would be strongest corroboration of the evidence of the approver about the appellant being the prime mover and the brain behind the entire fraud. It was he who wanted to misuse his official position and persuade his subordinates to join with him in showing false procurement and distribution figures of oilcakes". And finally the High Court came to the following conclusion: "I am therefore of the opinion that the approver 's version about the leading part in the conspiracy played by the appellant in persuading all his subordinates to join with him for the purpose of committing criminal breach of trust of the sums withdrawn from the treasury by showing false procurement and distribution of oilcake is true. There is independent corro 212 boration of his evidence which is inconsistent with the appellant being a mere negligent superior officer who was deceived and defrauded by his dishonest subordinates. It was then urged that in the charge under section 120 B of the Indian Penal Code, the date of the commission of the offence was stated to be the month of October 1947, whereas according to the evidence of P.W. 5, the conspiracy took place at Bargarh between the 23rd and 25th September 1947. This discrepancy in the date is immaterial and has not prejudiced the appellant in any way". From the concurrent orders of conviction and sentence of the appellant under section 120 B, Indian Penal Code, he was granted special leave to appeal to this Court. The learned counsel for the appellant has raised the following points in support of the appeal: 1. That all the persons charged with the offence of conspiracy except the appellant having been acquitted, his conviction and sentence in respect of that charge could not in law be maintained; 2. That the appellant himself having been acquitted of the substantive charges under sections 409 and 477 A of the Code, he could not be convicted for conspiracy to commit those very offences; 3. That the evidence of the prosecution witnesses having been disbelieved as against the other accused, the same evidence should not have been relied upon for convicting the appellant of the charge of conspiracy; 4. That the provisions of section 342, Code of Criminal Procedure, had not been fully complied with in so far as important circumstances in the prosecution evidence had not been put to the appellant in his examination by the court under that section. In our opinion, there is no substance in any one of these contentions and we proceed to give our reasons for our conclusions. In support of the first contention raised on behalf of the appellant strong reliance was placed on the 213 recent decision of this Court in Topan Das vs State of Bombay(1) and the rulings relied upon in that case. The cases, The Queen vs Manning(2), The Queen vs Thompson(3) and The King vs Plummer(4) were cited in support of the contention that where all the accused persons except one are acquitted on a charge of conspiracy, the conviction of one only on that charge cannot be sustained. In this connection the recent decision of the Judicial Committee of the Privy Council in the case of Kannangara Aratchige Dharmasena vs The King(5) may also be referred to, though it was not cited at the Bar. In that case the Judicial Committee held that where only two persons are involved in a charge of conspiracy, if a new trial has to be directed in respect of one it should be ordered in respect of both, because the only possible conclusion in such a case was either that both were guilty or that neither was guilty of the offence. The recent decision of this Court so strongly relied upon by the appellant lays down a similar rule, but is clearly distinguishable from the case in hand inasmuch as in that case the only persons alleged to have been guilty of the offence of conspiracy were the persons placed on trial. There was no allegation nor any evidence forthcoming that any other persons were, though not placed on trial, concerned with the crime. In those circumstances this Court laid it down that it was essential to bring the charge of conspiracy home to the accused person or persons to prove that there was an agreement to commit an offence between two or more persons. On the findings in that case only one person, after the acquittal of the rest of the accused was concerned with the crime and stood convicted of the charge of conspiracy. As a person cannot be convicted of conspiring with himself to commit an offence, this Court gave effect to the contention that on the findings and on the evidence, (1)[1955] 2 S.C.R. 881. (2) (3) ; (4) (5) 28 214 as also on the charge in that case the conviction could not be sustained. But in the instant case, as already indicated, on the findings of the courts below, apart from the persons placed on trial, there was the approver who implicated himself equally with the other accused persons and a number of other prosecution witnesses as having been privy to the conspiracy. The evidence of the approver has been found by the courts below to have been materially corroborated both as to the unlawful agreement and as to the persons concerned with the conspiracy. In the first information report lodged on the 28th June 1948 the approver Pitabas Sabu, one of the agricultural sub overseers, was named along with the other five accused as the persons concerned with the conspiracy. Subsequently Pitabas Sahu aforesaid was granted pardon on condition of his making a full and true statement of the facts of the case and was examined as an approver, on whose evidence mainly rested the case against the accused. His evidence, as indicated above, was supported by the dealers in oilcake who supplied the commodity which was the subject matter of the conspiracy. It cannot therefore be said that this case is on all fours with the recent decision of this Court referred to above. But it was argued on behalf of the appellant that be was charged only with a conspiracy with the other accused persons and not with any conspiracy with the approver along with those others. The charge under section 120 B is in these terms: "First, that you, on or about the month of October, 1947 in the district of Sambalpur agreed with Hemchandra Acharya and other accused persons to do or caused to be done an illegal act by illegal means and that you did some acts in pursuance of the said agreement to wit, the offence of criminal breach of trust under section 409, I.P.C. and falsification of accounts under section 477 A punishable with R. I. for more than two years and thereby committed an offence punish 215 able under section 120 B, I.P.C. , and within the cognizance of court of Sessions". It will thus appear from the words of the charge that the approver was not specifically named as having been one of the conspirators, unless he could be brought within the category of "other accused persons". Something will have to be said as to what those words denote, whether the approver was also included within that description. Counsel for the appellant contended that they did not. Counsel for the State Government contended to the contrary. In England an indictment consists of three parts: (1) the commencement, (2) the statement of the offence, and (3) the particulars of the offence. The English law of indictment from very early times has been based on very technical rules. Those rules have now been codified by the Indictments Act, 1915 (5 & 6 George 5, Chapter 90). In Rule 2 (Schedule 1) of the Act as amended by the Administration of Justice (Miscellaneous Provisions) Act of 1933, the form of "the commencement of the indictment" has been prescribed. The form of "Statement of the offence" has been prescribed by Rule 4 of the Act and below that has to follow "Particulars of offence" as re quired by Rule 5. Those rules more or less correspond to the rules laid down in Chapter XIX of the Code of Criminal Procedure. Section 221, Code of Criminal Procedure, requires that the charge shall state the offence with which the accused is charged, giving the specific name of the offence, if such a name has been given by the law which creates the offence, which in this case means the offence of criminal conspiracy, defined by section 120 A, Indian Penal Code. The naming of the section is, under sub section (5) of section 221 , Code of Criminal Procedure, equivalent to a statement that every legal condition required by law to constitute the offence of criminal conspiracy charged against the appellant was fulfilled. Section 222 of the Code requires that the particulars as to the time and place of the alleged offence, and 216 the person (if any) against whom, or the thing (if any) in respect of which, the offence was committed, shall be stated. It is noteworthy that section which requires the particulars of the offence to be stated does not in terms further require that in an offence,like conspiracy the names of the co conspirators should also be mentioned. Hence in England it is enough if the indictment states that the accused along with other persons unknown had committed the offence of criminal conspiracy. Though the statute law in India does not make it obligatory that the persons concerned in the crime of criminal conspiracy should be specifically named along with the person or persons charged in a particular trial, it is always advisable to give those particulars also in order to give a reasonable notice to the accused that he has been charged with having conspired with so and so (persons named), as also persons unnamed, to commit a certain offence. In this case the charge against the five accused persons with reference to section 120 B, Indian Penal Code, named only those five persons as the conspirators and omitted to name the approver also as having been privy to the conspiracy. This is clearly brought out with reference to the charge framed against the other four accused (who have been acquitted by the trial court as aforesaid). It states: "That you, on or about the month of October 1947 in the district of Sambalpur, agreed with Bimbadhar Pradhan to do or caused to be done an illegal act by illegal means. . . . . We find with reference to the records of the trial court that the trial has not been characterised by thoroughness or circumspection. The date of the offence as given in the charge is different from the date as disclosed in the evidence, as pointed out by the High Court, which found that mistake bad not caused any prejudice to the accused. Similarly, the charge under section 477 A had not, as held by the High Court, been framed with sufficient parti 217 cularity as a result of which the appellant had to be acquitted of that charge on appeal. If the charge under section 120 B had added the words "and other persons, known or unknown", there would have been no ground for a grievance on the part of the appellant. But even so, in our opinion, the provisions of section 225, Code of Criminal Procedure, are clearly applicable to the facts and circumstances of the present case. It has not been shown to us how the omission to mention the name of the approver in the charge under section 120 B, Indian Penal Code, has misled the appellant or has occasioned a failure of justice. The prosecution case throughout has been, as is clear with reference to the petition of complaint, that the appellant with his subordinates in the Food Department had conspired to misappropriate the funds allocated to the procurement of oil cake with a view to helping agriculturists with manure to raise more food crops. The approver has been very much in the picture all the time and, as a matter of fact, as found by the courts below, his evidence is the main plank in the prosecution case. Of course, there is the other corroborative evidence, as pointed out in the judgments of the courts below. The provisions of section 537 are equally attracted to this case. With reference to the provisions of that section it is pertinent to note that though the other accused had been acquitted by the trial court and though he was the only appellant in the High Court, he did not raise the points with reference to the alleged illegality or irregularity in the charge, before that court. Hence applying the Explanation to that section to this case, it cannot be urged that the omission in the charge has occasioned a failure of justice. But the learned counsel for the appellant has invited our pointed attention to the observations of Mr. Justice Mathew at p. 243 of Queen vs Manning(1) that it is "an imperative rule of law" that "in a (1) 218 charge for conspiracy in a case like this where there are two defendants, the issue raised is whether or not both the men are guilty, and if the jury are not satisfied as to the guilt of either, then both must be acquitted". But Lord Coleridge, C. J., whose direction to the jury in that case was the subject matter of the judgment does not put it as high as Mr. Justice Mathew, but understood it "to be the established rule of practice". Reliance was placed by the learned counsel for the appellant on the case of The King vs Plummer(1), in which it has been observed that with the acquittal of the only alleged conspirators no verdict of guilty against the appellant could be passed because the verdict would be regarded as repugnant, in so far as it would amount to saying that there was a criminal agreement between the appellant and the others and none between them and him. Hence it was contended that in a situation such as the present case presents, the conviction of the appellant would amount to a similar repugnancy. This aspect of the matter has been well discussed in a judgment of the Calcutta High Court delivered by Mr. Justice Mukerji in the case of I. G. Singleton vs The King Emperor(2). The learned Judge has there pointed out the difference between the position as it obtains in India and that in England. The rule of English law as to the acquittal of an alleged conspirator following from the acquittal of the other when the conspiracy was said to be only between the two and in a joint trial of both is based upon a rule of practice and procedure, namely, that repugnancy or contradiction on the face of the record is a ground for annulling a conviction. But such a repugnancy is not by itself a sufficient ground for quashing a conviction in India where the matter is governed by statutory law both as to the offence and the procedure for bringing the offender to justice. In India there is no provision in the statutory law justifying an interference with a conviction on the (1) (2) 219 ground of repugnancy in the record. That is not to say that the court is to shut its eyes to the inconsistency in convicting one person of the offence of conspiracy on the same evidence on which the other alleged conspirator had been acquitted. If the matter is as simple as that, ordinarily the courts will have no difficulty in setting aside the conviction, when there was absolutely nothing on the record to distinguish the case against the one from that against the other. Such was the case which was decided by this Court in Topan Das vs State of Bombay(1). Learned counsel for the appellant pressed upon us the consideration that notwithstanding the state of affairs as disclosed in the evidence, the appellant was entitled to an acquittal because in the charge as framed against him there was no reference to the approver. He contended that the rule upon which the accused was entitled to an acquittal was not a matter of practice but of principle. In the instant case we are not sure that the acquittal of the co accused by the trial court was well founded in law or justified by the evidence in the case. The trial court has not disbelieved the evidence led on behalf of the prosecution. It has only given the benefit of the doubt to the accused whom it acquitted on grounds which may not bear scrutiny. But as the case against those acquitted persons is not before us, we need not go any further into the matter. It has further been contended by the learned counsel for the appellant that the High Court having acquitted him in respect of the two substantive charges of criminal breach of trust and of falsification of documents he should not have been convicted of the offence of criminal conspiracy because the conspiracy was alleged to have been for those very pur poses. It is a sufficient answer to this contention to say that the offence of criminal conspiracy consists in the very agreement between two or more persons to commit a criminal offence irrespective of the (1) 220 further consideration whether or not those offences have actually been committed. The very fact of the conspiracy constitutes the offence and it is immaterial whether anything has been done in pursuance of the unlawful agreement. But in this case the finding is not that Government money had not been misappropriated or that the accounts had not been falsified. The charge under section 477 A relating to the falsification of the documents has failed because the High Court found that particular charge was wanting in sufficient particulars, thus causing prejudice to the accused. The charge under section 409, Indian Penal Code, was set aside by the High Court on the ground that there was "practically no evidence of entrustment with the appellant of the price of 1500 maunds of oil cakes, a substantial portion of which he was said to have misappropriated". How far this observation of the High Court is well founded in law with reference to the official position of the appellant who had the spending of the Government money in his hands is not a matter on which we need pronounce. It is enough to point out that it has not been found by the courts below that the object of the criminal conspiracy had not been achieved. On the other hand, there is enough indication in those judgments that the object of the conspiracy had been to a large extent fulfilled. Hence it must be held that there is no substance in this contention also. Another contention raised on behalf of the appellant was that the other accused having been acquitted by the trial court the appellant should not have been convicted because the evidence against all of them was the same. There would have been a great deal of force in this argument, not as a question of principle but as a matter of prudence, if we were satisfied that the acquittal of the other four accused persons was entirely correct. In this connection the observations of this Court in the case of Dalip Singh vs State of Punjab(1), and of the Federal Court in (1) ; , 156. 221 Kapildeo Singh vs The King(1) are relevant. It is not essential that more than one person should be convicted of the offence of criminal conspiracy. It is enough if the court is in a position to find that two or more persons were actually concerned in the criminal conspiracy. If the courts below had come to the distinct finding that the evidence led on behalf of the prosecution was unreliable, then certainly no conviction could have been based on such evidence and all the accused would have been equally entitled to acquittal. But that is not the position in this case as we read the judgments of the courts below. Lastly, it was contended that the examination of the appellant by the learned trial Judge was not in full compliance with the requirements of section 342, Code of Criminal Procedure. Two points have been sought to be made in this connection. Firstly, it has been contended that though the other accused who have been acquitted by the trial court were questioned with reference to the conspiracy with the approver Pitabas Sahu, no such question was put to the appellant. It is true that the court questioned him about his "conspiracy with the other accused persons". Counsel for the parties before us did not agree as to the significance of the words "in conspiracy with the other accused persons". The contention on behalf of the appellant was that they referred only to the persons actually standing trial before the court, whereas counsel for the State con tended that they had reference to all the accused persons named in the petition of complaint including the approver. A number of rulings of the different High Courts as to what is the position of an approver, whether he continues to be an accused person even after the grant of pardon or whether he is only in the position of a witness on behalf of the prosecution, were cited before us. But we do not think it necessary in this case to pronounce upon that because we have, as already indicated, come to our conclusions (1) , 837, 838. 29 222 on the assumption that there is an omission in the charge in so far as the approver has not been specifically named in the charge under section 120 B, Indian Penal Code. Secondly, it was contended that the evidence of P.W. 27 who had been chiefly relied upon in the courts below as corroborating the approver had not been specifically put to the appellant though the evidence of the approver Pitabas Sahu was pointedly put to him. In our opinion, it is not ordinarily necessary to put the evidence of each individual witness to the accused in his examination under section 342, Code of Criminal Procedure. The appellant was put the question "Have you got anything to say on the evidence of the witnesses?" That, in our opinion, is sufficient in the circumstances of this case to show that the attention of the accused was called to the prosecution evidence. As to what is or is not a full compliance with the provisions of that section of the Code must depend upon the facts and circum stances of each case. In our opinion, it cannot be said that the accused has been in any way prejudiced by the way he has been questioned under that section. As all the contentions raised on behalf of the appellant fail, the appeal must stand dismissed.

The appellant and four others were placed on their trial before the Assistant Sessions Judge of Sambalpur for offences under sections 120 B, 409, 477 A and 109, I.P.C. with having committed the offences of criminal conspiracy, criminal breach of trust in respect of Government property and falsification of accounts with a view to defraud the Government. The appellant was the District Food Production Officer and the other four accused persons were agricultural sub overseers under the appellant and another agricultural sub overseer namely P. was examined at the trial as an approver. The Assistant Sessions Judge convicted the appellant under all the three charges but acquitted the four sub overseers giving them the benefit of doubt. The High Court in appeal allowed the appeal of the appellant in respect of charges under sections 409 and 477 A, I.P.C. but upheld his conviction and sentence in respect of the charge of conspiracy under section 120 B, I.P.C. observing that in respect of that charge the evidence given by the approver got corroboration from other independent evidence. On appeal by special leave to the Supreme Court the main question for consideration was whether the ruling of the Supreme Court in the case of Topan Das vs The State of Bombay ([1955] 2 S.C.R. 881), governed the present case in view of the fact that the appellant was the only person out of the accused persons on trial who had been convicted of the offence of conspiracy under section 120 B, I.P.C. Held (i) that the case of Topan Das vs State of Bombay was, clearly distinguishable from the present case as in that case the only persons alleged to have been guilty of the offence of conspiracy 'Were the persons placed on trial. There was no allegation nor any 207 evidence forthcoming that any other persons though not placed on trial, were concerned with the crime. On the findings in that case, only one person, after the acquittal of the rest of the accused, was concerned with the crime and stood convicted of the charge of conspiracy. As a person cannot be convicted of conspiring with himself to commit an offence, the Supreme Court gave effect to the. contention that on the findings and on the evidence, as also on the charge in that case, the conviction could not be sustained. But in the instant case on the findings of the courts below, apart from the persons placed on the trial, there was the approver who implicated himself equally with the other accused persons and a number of other prosecution witnesses as having been privy to the conspiracy. And therefore the present case was not on all fours with the case of Topan Das vs State of Bombay. (ii) The provisions of section 225, Cr. P.C. were clearly applicable to the facts and circumstances of the present case. It had not been shown how the omission to mention the name of the approver in the charge under section 120 B, I.P.C. had misled the appellant or had occasioned a failure of justice. (iii) The provisions of section 537 of the Code of Criminal Procedure were equally applicable to the facts of the case. As the appellant did not raise the point with reference to the alleged illegality or irregularity in the charge before the High Court it must be held, applying the Explanation to that section, that the omission in the charge bad not occasioned a failure of justice. The contention that with the acquittal of the alleged conspirators no verdict of guilty against the appellant could be given, because the verdict would be regarded as repugnant in so far as it would amount to saying that there was a criminal agreement between the appellant and the others and none between them and him, the conviction of the appellant would amount to a similar repugnancy was without substance because the rule of English law as to the acquittal of an alleged conspirator when the conspiracy was said to be only between the two is based upon a rule of practice and procedure, namely that repugnancy or contradiction on the face of the record is a ground for annulling a conviction. But such a repugnancy is not by itself a sufficient ground for quashing a conviction in India where the matter is governed by statutory law both as to the offence and the procedure for bringing the offender to justice. In India there is no provision in the statutory law justifying an interference with a conviction on the ground of repugnancy in the record. Topan Das vs State of Bombay ([1955] 2 S.C.R. 881), The Queen vs Manning ([1883] , The Queen vs Thompson ([1851] 16 Q.B. 832), The King vs Plummer ([1902] 2 K.B. 339), Kannangara Aratchige Dharmasena vs The King ([1951] A.C. 1), I. G. Singleton vs The King Emperor ([1924] , Dalip Singh vs State of Punjab ([1954] S.C.R. 145) and Kapildeo Singh v, The King ([1949 50] F.C.R. 834), referred to. 208

Appeal No. 24 of 1962. Appeal by special leave from the award dated November 23, 1960, of. the Central Government Industrial Tribunal, Dhanbad in reference No. 31 of 1960. M. C. Setalvad, Nonicoomar Chakravarty and B. P. Maheshwari, for the appellant. M. K. Ramamurthi, for Dipat Datta Choudhri, for respondents Nos. 1 to 13. January 23. The judgment of the Court was delivered by WANCHOO, J. This is an appeal by special leave against the order of the Central Government Industrial Tribunal, Dhanbad. The brief facts necessary for present purposes are these. A dispute was referred by the Central Government under s, 10 of the Industrial Disputes Act, No. 14 of 1947, (hereinafter referred to as the Act) with reference to the thirteen workmen involved in this appeal in the following terms "Whether the dismissal of the following thirteen workmen of Bhatdee Colliery, swa 711 justified ? If not, to what relief are they entitled and from which date ?" It appears that the thirteen workmen had physically obstructed the surface trammers working in the colliery on different dates, namely October 20, October 27, and November 3,1959 .some of them had also incited the other workmen to join in this act of obstructing the loyal and willing trammers so that they may be prevented from working. This happened during a strike which was begun on October 20, 1959 by the Colliery Mazdoor sangh to which the thirteen workmen in question belonged. In consequence the appellant served charge sheets on the thirteen workmen on November 9, 1959 charging that "they physically obstructed the surface trammers on duty at No. 1 and 2 Inclines from performing their duties and controlling the movement of the tubs by sitting in between tramline track and inciting" on various dates, thus violating regulation 38 (1) (b) of the Coal Mines Regulations. They were asked to explain within 48 hours why disciplinary action should not be taken against them under r. 27 (19) and r. 27 (20) of the Coal Mines Standing Order. The workmen submitted their explanations and an inquiry was held by the Welfare Officer of the appellant. The Welfare Officer found all the thirteen workmen guilty of the charges framed against them and recommended their dismissal. As another reference was pending before this very tribunal in November 1959, the appellant made thirteen applications to the tribunal under section 33 (2) (b) of the Act for approval of the action taken. Though the workmen submitted their replies in those proceedings they did not contest them thereafter, and the tribunal approved of the action taken. Thereafter the present reference was made under S.10 of the Act. The case put forward by the workmen in the present reference was that there was no proper 712 enquiry as the workmen were not given a chance to defend themselves. It was further submitted that the dismissals were nothing but victimisation pure and simple for trade union activities. The tribunal apparently held that the inquiry was proper, though it has not said so in so many words in its award. It may be added that it could hardly do otherwise, for it had already approved of the action taken on applications made under section 33 (2)(b) of the Act. If the inquiry had not been proper,the tribunal would not have approved of the dismissals. But the tribunal held that this was a case of victimisation. It therefore set aside the order of dismissal and ordered the reinstatement of the thirteen workmen within one month of its order becoming operative and ordered that they should be treated as on leave without pay during the period of forced unemployment. It did not grant back wages as the workmen had also contributed to their forced unemployment to some extent. In the present appeal, the appellant contends that there was no evidence to justify the conclusion of the tribunal that the dismissals were an act of unfair labour practice or victimisation. We are of opinion that this contention of the appellant must prevail. The tribunal was. not unaware of the fact that where a domestic inquiry is held properly. the tribunal does not sit in appeal on the findings of the domestic tribunal and it can only interfere with the punishment inflicted as a result of the domestic inquiry where there is want of good faith or basic error or violation of the principles of natural justice, or where the findings are perverse or baseless or the case is one of victimisation or unfair labour practice. We have already indicated that the tribunal did not find that there was any basic error or violation of the principles of natural justice in the holding of the inquiry; nor did it find that the findings of the inquiry 713 officer were perverse or baseless. It could hardly do so in the face of its own approval of the action taken on applications made to it under section 33 (2) (b) of the Act, for if it had found that the inquiry was not proper, it would not have approved of the action taken against the workmen by the appellant when it was approached under section 33 (2) (b). We must therefore proceed on the assumption that the inquiry was held properly and the inquiry officer who held the inquiry was justified on the evidence before him in coming to the conclusion which he did, namely, that the charges had been proved. The tribunal however posed a further question as to victimisation in this way : "But even if assume that these men were guilty of the offence complained of, let me pause and consider if there is victimisation." .It then proceeded to point out that the workmen concerned had put in ten years service or more and their previous record of service was good. They were important office bearers of the union and some of them were also protected workmen. It then referred to previous disputes between the appellant and the union of which these workmen were members and was of the view that the union and its leaders were "eye sore to the appellant. " The tribunal was, however, conscious that merely because certain workmen were protected workmen they were not thereby given complete immunity for anything that they might do even, though it might be misconduct meriting dismissal. But it, pointed out that the misconduct complained in this case entailed fine, suspension or dismissal of the workmen, and the appellant chose dismissal, which was the extreme penalty. It referred to a decision of the Calcutta High Court in National Tobacco Company of India Ltd. vs Fourth Industrial Tribunal (1), where it was held that in a case where the punishment meted out was unconscionable or grossly out of proportion to the nature of the offence that may itself be a ground for holding that the 714 dismissal was an act of victimisation. It seems to have held that the punishment of dismissal in this case was unconscionable or at any rate grossly out of proportion to the nature of the offence and therefore came to the conclusion that this was a case of victimisation. Now there is no doubt that though in a case of proved misconduct, normally the imposition of a penalty may be within the discretion of the management there may be cases where the punishment of dismissal for the misconduct proved may be so unconscionable or so grossly out of proportion to the nature of the offence that the tribunal may be able to draw an inference of victimisation merely from the punishment inflicted. But we are of opinion that the present is not such a case and no inference of victimisation can be made merely from the fact that punishment of dismissal was imposed in this case and not either fine or suspension. It is not in dispute that a strike was going on during those days when the misconduct was committed. It was the case of the appellant that the strike was unsatisfied and illegal La it appears that the Regional Labour Commissioner, Central, Dhanbad, agreed with this view of the appellant. It was during such a strike that the misconduct in question took place and the misconduct was that these ' thirteen workmen physically obstructed other workmen who were willing to work from doing their work by sitting down between the tramlines. This was in our opinion serious misconduct on the part of the ' thirteen workmen and if it is found as it has been found proved punishment of dismissal would be perfectly justified. It cannot therefore be said looking at the nature of the offence that the punishment inflicted in this case was grossly out of, proportion or was unconscionable, and the tribunal was not justified in coming to the conclusion that this was a case of victimisation because the appellant decided to dismiss these workmen and was not prepared to let them off with fine or suspension. 715 There is practically no other evidence in support of the finding of the tribunal. It is true that the relations between the appellant and the union to which these workmen belonged were not happy. It is also proved that there was another union in existence in this concern. Perhaps the fact that there were two unions would in itself explain why the relations of the appellant with one of the unions to which these workmen belonged were not happy. But the fact that the relations between an employer and the union were not happy and the workmen concerned. were office bearers or active workers of the union would by itself be no evidence to prove victimisation, for if that were so, it would mean that the office bearers and active workers of a union with which the employer is not on good terms would have a carte blanche to commit any misconduct and get away with it on the ground that relations between the employer and the union were not happy. We are therefore of opinion that the finding of victimisation in this case is based, merely on conjectures and surmises. We have already considered the main reason given by the tribunal, namely, the nature of the punishment, and have held that that cannot be said to be unconscionable or grossly out of proportion to the nature of the offence. Another reason given by the tribunal in support of the finding of victimisation is also patently wrong. The tribunal says that in reports made to the police certain persons were mentioned as having taken part in the misconduct of October 27, 1959; but in the written statement filed by the appellant two other persons, namely Ratan Gope and Sohan Gope who were not mentioned in the police report, were also mentioned as having taken part in the incident of October 27. The tribunal thereby concluded that Sohan Gope and Ratan Gope were falsely implicated in the incident of October 27. Curiously, however, it went on to say that this might be a mistake 716 but added that it meant dismissal of these people and the finding in this respect was not only wrong but perverse. It does appear 'that by mistake in para. 5 of the appellant 's written statement before the tribunal names of Ratan Gope and Sohan Gope are mentioned as having taken part in the incident of October 27. But the charge sheets which were given to them were only about the incident of October 20. The finding of the domestic inquiry also was with respect to the incident of October 20. So it seems that there was no justification for the tribunal to hold that the finding was perverse, because there was no finding that these two persons had taken part in the incident of October 27. There can be little doubt that there was a mistake in the written statement of the appellant for there was no charge against these two people about the incident of October 27 and no finding about it by the Welfare Officer. The tribunal therefore was patently wrong in using this mistake as evidence of victimisation. We are therefore of opinion that there is no evidence worth the name in the present case to support the tribunal 's finding as to victimisation and consequent want of good faith. In the circumstances the tribunal 's award must be set aside. We therefore allow the appeal. set aside the award of the tribunal and uphold the dismissal of the thirteen workmen concerned. In the circumstances there will be no order as to costs. Appeal allowed.

The respondents were the employees of the appellant and while a strike was going on in the concern of the appellant they physically obstructed the loyal and willing trammers from working in the colliery and insisted on other workmen to join them in the obstruction. A charge sheet was served on the respondents and they were asked to show cause why disciplinary action should not be taken against them. The respondents submitted their explanation and on an inquiry held by the welfare officer they were found guilty and the welfare officer recommended their dismissal. The appellant filed an application before the Industrial Tribunal under section 33 (2) (b) of the Industrial Disputes Act and the tribunal approved of the dismissal. Thereafter reference was made under section 10 of the Act and the present appeal is by way of special leave against the order of the Industrial Tribunal made in that reference. The Tribunal has held that the enquiry by the management was proper but it further held that the dismissal amounted to victimisation. The main question in the appeal was whether there was victimisation. Hold, where a domestic inquiry is held properly the tribunal cannot sit in appeal on the findings of the domestic tribunal and it can only interfere with the punishment inflicted as a result of the domestic inquiry where there is want of good faith or basic error or the violation of the principles of natural justice or where the findings are perverse or baseless or the case is one of victimisation. 710 Though in a case of proved misconduct normally the imposition of a penalty may be within the discretion of the management there may by cases where the punishment of dismissal for misconduct proved may be unconscionable or so grossly out of proportion to the nature of the offence that the tribunal may be able to draw an inference of victimisation merely from the punishment inflicted. Such was not the case here. National Tobacco Co. of India Ltd. vs Fourth Industrial Tribunal, , referred to.

Appeal No. 120 of 1963. Appeal by special leave from the judgment and decree dated December 13, 1960, of the Allahabad High Court in Special Appeal No. 204 of 1957. H. N. Sanyal, Solicitor General of India and C. P. Lal, for the appellants. M. C. Setalvad and J. P. Goyal, for the respondents. March 9, 1964. The Judgment of the Court was delivered by SHAH, J. Audh Narain Singh hereinafter called 'Singh ' was appointed in 1949 a Tahvildar in the District of Azamgarh in the State of U.P. and worked in the Cash Department of the Government treasury of that District. The appointment of Singh was made by Dhanpat Singh Tandon, Government Treasurer, with the approval of the District Magistrate. By order dated April 20, 1956, Singh who was then working as a Tahvildar in the sub treasury at tahsil Lalganj in the District of Azaimarli was informed that he was, under instructions from the Collector, removed from service. Against the order of removal, Singh preferred an appeal to the Collector but the same was rejected, and a representation made to the Commissioner of the Banaras Division was unsuccessful. Singh then preferred a petition under article 226 of the Constitution in the High Court of Judicature at Allahabad for a writ of certiorari quashing the order of removal passed against him and for a writ of mandamus or an order directing the Collector of Azamgarh and the State of Uttar Pradesh, Dhanpat Singh Tandon, Government Treasurer, and the Commissioner of Banaras Division to treat him as Tahvildar in the sub treasury at Lalganj in the District of Azamgarh. Singh claimed that be was a member of the civil service of the State of Uttar Pradesh or 91 held a civil post under the State, and was not liable to be removed from service without being afforded a reasonable opportunity of showing cause against the action proposed to be taken in regard to him under article 311(2) of the Constitu tion. Mehrotra J., who heard the petition held that the Government Treasurer being an employee of the State, a Tahvildar employed by the Government Treasurer to carry out the work entrusted by the State, subject to the control of the State Government, was an employee of the State Government, and the impugned order of removal was invalid because Singh was not afforded a reasonable opportunity of showing cause against the action proposed to be taken in regard to him. The order of Mehrotra J., was confirmed in appeal by the High Court of Allahabad. In the view of the High Court, no direct relationship of master and servant between Singh and the State was established because Singh was appointed by the Treasurer, but the Treasurer having authority to employ him in order to carry out the work of the State, Singh was as much under the control of the State as he was under the con trol of the Treasurer and therefore he could claim to hold a civil post under the State and to have the benefit of article 311 of the Constitution. Against the order passed by the High Court, this appeal is preferred with special leave. The question which falls to be determined is whether a Tahvildar appointed in the Cash Department in the State of Uttar Pradesh is a civil servant of the State of Uttar Pradesh or holds a civil post in the State. In the State of Uttar Pradesh, contracts for administering the Cash Department of the District treasuries are given to persons who are called Government Treasurer. The Treasurer holds a post specifically created in the District Treasury: he is appointed by the Collector subject to the approval of the Finance Secretary. On being appointed, the Treasurer enters into an engagement for the due performance of his duties, and executes a bond in favour of the State. The tenure of a Government Treasurer is temporary and he is not entitled to privileges of leave and pension, but he performs various duties connected with the executive functions of the State. His appointment is made by the Collector subject to the approval of the Finance Secretary. He has to maintain a true and faithful account of the property entrusted to him and his dealings therewith and to submit returns as prescribed. He is also bound by the conditions, rules and regulations of the Government and also departmental rules and orders as may be in force, especially with reference to his relations and dealings with and the right of his subordinates. He has to attend the Government Treasury for the purpose of discharging his duties, and to show to his superior officers whenever called upon the property entrusted to him. A Government Treasurer is not in 92 the position of an independent contractor; he does not merely undertake to produce a given result, without being in the actual execution under the control of the person for whom he does the work. He is in the execution of his duties, and in the manner, method and mode of his work under the control of the State Government. A Government Treasurer is entitled to appoint Tahvildars to assist him in the discharge of his duties, but the appoint ment is made 'with the approval of the District Collector. Originally Tahvildars were directly appointed by the Govern ment of the Province to specific posts for performing duties in the District Treasuries. In 1927, however, Government Order dated July 25, 1927, was issued by the Secretary to Government Uttar Pradesh, Finance Department, reciting that Tahvildars in sub treasuries were appointed on the nomination of the Treasurer of the District Treasury, who was responsible for their work and honesty, the intention of the Government being that a Treasurer might dispense with the services of a Tahvildar as soon as he had lost confidence in him, but it had not been possible to put this intention into practice, because the Tahvildars were paid from the general revenue and were whole time Government servants and entitled to the protection given to all Government servants by the Classification Rules, and it was difficult to hold the usual enquiry for the removal of a Tahvildar for he must be removed from service as soon as he lost the confidence of the Treasurer, otherwise the responsibility of the Treasurer to the Government would be impaired. In the circumstances, the best solution was to abolish the post of Tahvildars, to increase the remuneration of the Treasurer by an amount equal to the pay given to Tahvildars and to make 'him responsible for carrying on the work at sub treasuries through his own servants. A reservation, however was made that the Treasurer must not employ any person in the treasury or sub treasury without the approval of the District Officer and the Treasurer shall, when required by such District Officer remove without delay any person so employed. Pursuant to this Government Order, in the Manual of Orders the following paragraph 1561 was incorporated: "Tahvildars at sub treasuries are no longer Government servants. They are employed by the Treasurer who receives an allowance from Government to cover their pay and leave salary. The Treasurer however, shall not employ any person as a Tahvildar without the approval of the District Officer. The Treasurer shall remove a Tahvildar or transfer him from one Tahsil to another if required by the District Officer to do so on any ground which in the latter 's opinion would justify such a step. " 93 Even after the posts of Tahvildar were abolished the Government of Uttar Pradesh did not adopt a consistent atti tude and from time to time issued orders which indicate that a ,considerable degree of control was maintained by the District Officers upon the Tahvildars in the matter of appointment, removal from service, suspension and transfers and in the matter of payment of remuneration, dearness allowance and making available certain medical benefits, Tahvildars were treated on a par with other civil servants of the State. On December 9, 1939, a Government Order was issued for payment of remuneration to the Tahvildars directly from the ,Government Treasury. It had come to the notice of the Government that the Treasurers paid to the cashier staff of the treasuries less than what they received on their account from the Government, after obtaining receipts for full amount. It was therefore directed that the Treasurer should prepare a statement showing in detail the emoluments of the staff, but payment of emoluments was to be made to the persons concerned by the Treasury Officer personally and their acknowledgment taken. In 1945 the Government of Uttar Pradesh raised with effect from April 1, 1945, the allowance to be paid to Government Treasurers for the pay of "the cashier staff of treasuries. " By para 3(a) a scheme for payment of gratuity on retirement was also devised for the benefit of permanent Tahvildars. It was provided that when a permanent Tahvildar retired, a gratuity of one month 's pay will be given to him for ,each completed year of service, subject to a maximum of 25 years ' completed service, the gratuity being admissible to permanent incumbents of posts and also to future entrants when appointed permanently, but not if the service of a Tahvildar was found either unsatisfactory, or if he resigned or was removed or dismissed from service. Gratuity was to be paid in the same manner as salaries were paid to the Tahvildars, and provisions on account of the increase due to the pay of Government Treasurers and allowances payable for the pay of the cashier staff of treasuries and for the grant of gratuity to the cashier staff were made under the Heads "25 General Administration B District Administration (a) General Establishment, Pay of Establishment Contract and Extra Contract Establishment" and "55 Superannuation Allowances and Pensions and Gratuities Voted" respectively in the budget. By ,a letter dated June 17, 1953, addressed by the Joint Secretary to the Government, it was brought to the notice of the Collectors of Districts that the Government Treasurers had frequently dispensed with the services of Tahvildars working under them without sufficient reasons justifying such a course of action and attempts had been made to harass such staff and that as a result of such arbitrary action on the part of the Government Treasurers, hardship had been caused to those employees. The Government therefore informed the Collectors to bring to the 94 notice of the Treasure that adverse notice of such action is likely to be taken by the Government in future in case it was established that the Government Treasurers had indulged in high handedness in their dealings with their staff. It was also recorded by the Collector of Azamgarh that instances had come to his notice in which the services of the employees in the Cash Department of the treasuries had been dispensed with arbitrarily without framing specific charges against them or obtaining explanations, and it was ordered that in future when services of the employees in the Cash Department were to be dispensed with, a report for their suspension should be made and specific charges framed against them and they should be given time to explain the charges and their services should not be dispensed with as a result of arbitrary action of the subordinate staff or the Treasurer. Orders have also been lately issued in 1959, by which the scale of dearness allowance of the Tahvildars was revised and certain facilities for free medical attendance were also provided. It also appears that in some cases in which the Tahvildars who had been dismissed or suspended were reinstated by order of the Collector. For instance, under Treasury Officer, Azamgarh 's order dated August 14, 1948, it was recorded that under the Collector 's order Naunidh Prasad, Tahvildar, Phulpur (under suspension), was reinstated with effect from the date of taking over charge. There is also an order passed by the District Magistrate, Allahabad, in 1952 deputing one Ganesh Prasad working as Tahvildar in Handia sub treasury for Kumbha Mela duty. There is also the record of the disciplinary proceeding held by the District Magistrate on April 12, 1948, against Tahvildar Ganesh Prasad for improper conduct. It is therefore clear from the record that Tahvildars were appointed to perform the duties of cashiers in Government Treasuries. Their appointment was made by the Government Treasurer with the approval of the District Collector, but it was made for performance of public duties, and remuneration was paid to them by the State directly. Tahvildars were liable to be transferred under orders of the Collector and to be suspended or removed from service under his orders. An instance already referred to shows that a Tahvildar who had, been suspended by the Treasurer was ordered to be reinstated by the Collector. It is from these circumstances that the relationship between the Government of Uttar Pradesh and Tahvildars has to be ascertained. Whether in a given case the relationship of master and servant exists is a question of fact, which must be determined on a consideration of all material and relevant circumstances having a bearing on that question. In general selection by the employer, coupled with payment by him of remuneration or wages, the right to control the method of work, and a power 95 to suspend or remove from employment are indicative of the relation of master and servant. But co existence of all these indicia is not predicated in every case to make the relation one of master and servant. In special classes of employment, a contract of service may exist, even in the absence of one or more of these indicia. But ordinarily the right of an employer to control the method of doing the work, and the power of superintendence and control may be treated as strongly indicative of the relation of master and servant, for that relation imports the power not only to direct the doing of some work, but also the power to direct the manner in which the work is to be done. If the employer has the power, prima facie, the relation is that of master and servant. The work of the Government Treasurers has to be conducted according to the Rules and Regulations framed by the Government, and directions issued from time to time. The Government Treasurer holds a post in a public employment and he is assisted by Tahvildars in the performance of his duties. The Tahvildar acts not on behalf of the Treasurer in performing his duties, but on behalf of the State. Undoubtedly the Treasurer undertakes responsibility for the loss which may be occasioned by the Tahvildar, but solely on that account it cannot be held that the Tahvildar is merely an appointee of the Treasurer and is not a servant of the State. The selection of Tahvildar though made by the Treasurer is controlled by the Collector; the Tahvildar is remunerated by the State, method of his work is controlled by the State, and the State exercises the power to suspend, dismiss and reinstate him. In Shivanandan Sharma vs The Punjab National Bank Ltd.(1) it was held that a head cashier in one of the branches of the Punjab National Bank Ltd., who was appointed by the Treasurer in charge of the Cash Department under an agreement with the Bank, was an employee of the Bank. In the view of the Court, the direction and control of the cashier and of the ministerial staff in charge of the Cash Department the Bank being entirely vested in the Bank, the cashier must be deemed to be an employee of the Bank. Sinha J., observed at p. 1442: "If a master employs a servant and authorizes him to employ a number of persons to do a particular job and to guarantee their fidelity and efficiency for a cash consideration, the employees thus appointed by the servant would be equally with the employer, servants of the master." Similarly in Dharangadhara Chemical Works Ltd. vs State of Saurashtra(2) it was held that "the prima facie test of" the (1) ; (2) ; 96 relationship of master and servant "is the existence of the right in the employer not merely to direct what work is to be done but also to control the manner in which it is to be done, the nature or extent of such control varying in different industries and being by its nature incapable of being precisely defined. " In M/s Piyare Lal Adishwar Lal vs The Commissioner of Income tax, Delhi(1) it was held that the Treasurer appointed by the Bank who was to carry out the duties as directed by the Bank was a servant of the Bank, and not an independent contractor. The Government Treasurer is a civil servant of the State holding a specific post, and he is authorised by the terms of his, employment to employ Tahvildars to assist him in discharging his duties. Payment of remuneration to the Tahvildars is for services rendered in the "cashier department of the District treasury" of the State. The Tahvildars receive their remuneration directly from the State, and are subject to the control of the District Officers in the matter of transfer, removal and disciplinary action. Employment of Tahvildars being for the purpose of carrying out the work of the State, even though a degree of control is exercised by the Government Treasurer and the appointment is in the first instance made by the Treasurer subject to the approval of the District Officers, it must be held that the Tahvildar is entitled to the protection of ' article 311 of the Constitution. The order removing Singh from service was made at the instance of the Collector, and did not conform to the requirements of article 311(2) of the Constitution and was on that: account invalid. We therefore agree with the High Court, that the impugned order must be declared invalid. The appeal fails and is dismissed with costs. Appeal dismissed.

The respondent was appointed in 1949 a Tahvildar in the District of Azamgarh in the State of Uttar Pradesh and he worked, in the Cash Department of the Government Treasury of that District. His appointment was made by Government Treasurer with the approval of Collector of the District. In 1956, he was removed from service under instructions from the Collector. He filed a writ petition in the High Court in which he challenged the legality of the order removing him from service on the ground that he was a member of the civil service of the State of Uttar Pradesh or held a civil post under the State and hence was not liable to be removed from service without being afforded a reasonable opportunity of showing cause against the action proposed to be taken in regard to him under article 311(2) of the Constitution. The High Court held that the respondent was an employee of the State Government and as the provisions of article 311(2) had not been observed, the order terminating his services was illegal. The appellant has come to this Court by special leave. The only question raised before this Court was, whether a Tahvildar appointed in the Cash Department in the State of Uttar Pradesh is a civil servant of the State of Uttar Pradesh or holds a civil post in the State. Dismissing the appeal, Held:The respondent was a civil servant of the State of Uttar Pradesh and as the requirements of article 311(2) were not conformed to, the order terminating his services was invalid. The Government Treasurer is a civil servant of the State holding a specific post and he is authorised by the terms of his employment to employ Tahvildars to assist him in discharging his duties. Payment of remuneration to Tahvildars is for services rendered in the Cash Department of the District Treasury of the State. The Tahvildars receive their remuneration directly from the State and are subject to the control of the District Officers in the matter of transfer, removal and disciplinary action. Employment of Tahvildars being for the purpose of carrying out the work of the State, even though a degree of control is exercised by the Government Treasurer and the appointment is in the first instance made by the Treasurer subject to the approval of the District Officers, the Tahvildar is entitled to the protection of article 311. Whether in a given case, the relationship of master and ser vant exists is a question of fact which must be determined on a consideration of all material and relevant circumstances having a bearing on that question. In general, selection by the employer,. coupled with payment by him of remuneration or wages, the, 90 right to control the method of work and a power to suspend or remove from employment are indicative of the relation of master and servant. However, co existence of all these indicia is not predicted in every case to make the relation one of master and ,servant. In special classes of employment, the contract of service may exist, even in the absence of one or more of these indicia. But ordinarily, the right of an employer to control the method of doing the work and the power of superintendence and control may be treated as strongly indicative of the relation of master and servant, for that relation imports the power not only to direct the doing of some work, but also to direct the manner in which work is to be done. If the employer has such power, prima facie, the relation is one of master and servant. Shivanandan Sharma vs The Punjab National Bank Ltd. ; , Dharangadhara Chemical Works Ltd. vs State of Saurashtra ; and M/s Piyare Lal Adisivar Lal vs Commissioner of Income tax, Delhi ; , referred to.

Civil Appeal No. 747 of 1975. Appeal by Special Leave from the Judgment and order dated the 5 12 74 of the Punjab and Haryana High Court in Civil Writ Petition No. 6344/74. M. K. Ramamurthi, J. Ramamurthi and Ramesh C. Pathak for the appellants. 681 J. L. Gupta, Janendra Lal and B. R. Agarwala for Respondents Nos. 5 to 22/75. The Judgment of the Court was delivered by KRISHNA IYER, J. This Civil Appeal, by special leave under article 136, raises a common question of great moment, the decision of which may have a wider litigative fall out than may appear on the surface. The first question expressed, manu brevi, is as to whether a writ may issue, under article 226, against a Society registered under the Punjab Cooperative Societies Act (Act XXV of 1961) setting aside a selection list at the instance of the aggrieved appellants who were not included therein. The High Court (both the learned Single Judge and the Division Bench) following an earlier judgment of that Court in Dharam Pal vs State of Punjab held the writ petition to be incompetent, directed as it was against a Cooperative Society. Shri M.K. Ramamurthy challenges the holding of the High Court on the score that the Punjab State Cooperative Land Mortgage Bank Ltd., (State Bank, for short) is 'other authority ' within the meaning of article 12 of the Constitution and, therefore, falls within the definition of State. Consequently, a writ may issue against it. Secondly, he contends that the State Bank is a public authority and, therefore, falls within the writ jurisdiction of the High Court. His third plea is much wider in its sweep, for he urges that Cooperative Societies registered under the Cooperative Societies Act are subject to the jurisdiction of High Courts under article 226 of the Constitution, since this provision is widely worded and writs may be issued for any purpose against any person. Foremost among his three points is the first one which he expressed with force, backed by decisions of this Court spanning a period ending with the recent decision in Sukhdev Singh vs Bhagatram. According to his submission, the State Bank is more than a cere Cooperative Society, but has statutory powers and duties, exercises sovereign functions and must be assessed in its status with reference to the Punjab Land Mortgage Bank Act, 1957 (for short, the Mortgage Bank Act). Chronologically we may mention that there was a Cooperative Societies Act, 1954 in the Punjab under which the present Society was registered, but that Act was repealed by the Punjab Cooperative Societies Act of 1961 (hereinafter referred to as the Cooperative Societies Act). The present Society, though registered under the 1954 Act continues as a Society under the Cooperative Societies Act, 1961 and is a State Bank, as defined in section 2(h) of the Mortgage Bank Act. A study of the two statutes, the trappings attaching to the Society, the other features of and powers vested in the Society, have all to be studied in their totality before testing the contention of the appellant in the light of the ruling of the Court. Although great argument has been addressed in the special circumstances of the case, there is no need to investigate these questions apart from briefey adverting to them. Maybe, in a different case, 682 where these issues directly and inescapably arise, this Court may have to pronounce on them, but where as here, the lis lends itself to disposal on a short point, to launch on a long debate about other arguments of importance may not be appropriate. Of course, 'if you were to make little fishes talks, they would talk like whales ', as Dr. Johnson put it. The whales of legal dispute do not challenge us here since the appellant is seeking relief which, on the face of it, cannot be granted for a different 'little fish ' reason. A finger nail sketch of the facts is enough to bring out the crucial issues and the broad point on which we propose to dispose of this appeal. The appellant is a permanent servant of the Punjab State Cooperative Land Mortgage Bank hereinafter referred as the Cooperative Bank) since 1964 and promoted in 1968 as an Assistant. According to him, the Cooperative Bank is a statutory body established in pursuance of the Land Mortgage Bank Act, 1957, with power to frame subordinate legislation and thereby enjoying sovereign power. Sections 11, 12, 15, 22 and 40 have been invoked to substantiate this thesis. The purpose of this branch of the appellant 's submission is to make out that the Cooperative Bank is 'State ' within the meaning of article 12 of the Constitution and, therefore, subject to article 16 of the Constitution and the writ jurisdiction under article 226. A further argument has been built on the edifice of the statutory provisions contained in the Punjab Cooperative Societies, Act, 1961. Section 84A of this Act empowers apex societies under certain circumstances, to frame rules for their employees and such rules, it is contended, have been framed, having the force of law. The Cooperative Bank is therefore a public authority which, in any view, is vulnerable to the writ of the High Court under its extra ordinary constitutional power. Of course, Shri M. K. Ramamurthy has contended that even apart from all these considerations, any cooperative society, in view of its constitution under statutory provisions, may be amenable to the writ jurisdiction of the High Court. His specific grievance in the present case is that promotions to three categories of higher posts, viz., Assistant Inspecting Officers, Junior Accountants and Accountants were made by direct recruitment contrary to what he contends are service rules but, in substance, are the result of collective bargaining with the management, as the writ petition itself reveals. These triple categories of new posts have been filled, admittedly, without reference to the quota set apart for promotees, the defence of the respondent being that these new cadres are not covered by the agreement referred to in the writ petition. The High Court was approached when a real apprehension of direct recruitment arose, praying for a writ, order or direction in the nature of mandamus requiring the respondent not to proceed with the processes resulting in filling up the posts of Accountants, Junior Accountants and Assistant Inspecting Officers in violation of the quota of 75% claimed by the appellant, under the agreement alleged to be binding on the Cooperative Bank and the employees. Of Course, the recruitment went on and the new appointees are also arrayed as respondents in the writ petition. However, the High Court dismissed 683 the writ petition on the preliminary ground that the writ was, in fact, directed against a Cooperative Bank registered under the Cooperative Societies Act and no writ would lie against such a body in the circumstances set out in the writ petition. Indeed, the distinction between a body with a personality created by and owing its existence solely to a statute and an entity which is recognised by and is registered under a statute is real, dramatic and makes for a world of difference in jural impact. Considerable argument was addressed before us based on the rulings reported as Mohanlal; Tewary, Sukhdev; and Praga Tools, apart from the ruling of this Court in Lakshmi Narain. The question as to whether a Cooperative Society is a public authority has fallen for judicial notice and Amir Jamia contains an elaborate discussion of the controversal topic covering decisions, English and Indian. It is also true that at least Madhya Pradesh (Dukhooram 1961 vs M. P. 269) and Calcutta (Madan Mohan have considered whether a writ will issue against a Cooperative Society, simpliciter, Kumkum Khanna deals with a private college governed by a University Ordinance. Many other rulings have also been brought to our notice, but we do not think it necessary elaborately to investigate these issues notwithstanding the fact that Shri Gupta, appearing for the contesting respondent, challenged each one of the grounds stabilising his submissions on rulings of the Court, of the High Courts and the English Courts. The reason why we are not inclined to add to the enormous erudition on the point already accumulated in case law is that a close perusal of the writ petition will disclose that essentially the appellant is seeking merely to enforce an agreement entered into between the employees and the Cooperative Bank. There is no doubt that some of the legal problems argued by Sri Ramamurthy deserve in an appropriate case jurisprudential study in depth, although much of it is covered by authority. But assuming, for argument 's sake, that what he urges has validity, the present case meets with its instant funeral from one fatal circumstance. The writ petition, stripped of embroidery and legalistics, stands naked as a simple contract between the staff and the Society, agreeing upon a certain percentage of promotions to various posts or an omnibus, all embracing promise to give a quota to the existing employees. At its best, the writ petition seeks enforcement of a binding contract but the neat and necessary repellant is that the remedy of article 226 is unavailable to enforce a contract qua contract. We fail to see how a supplier of chalk to a government school or cheese to a government hospital can ask for a constitutional remedy under article 226 in the event of a breach of a contract, bypassing the normal channels 684 of civil litigation. We are not convinced that a mere contract agreeing to a quota of promotions can be exalted into a service rule or statutory duty. What is immediately relevant is not whether the respondent is State or public authority but whether what is enforced is a statutory duty or sovereign obligation or public function of a public authority. Private law may involve a State, a statutory body, or a public body in contractual or tortious actions. But they cannot be siphoned off into the writ jurisdiction. The controversy before us in substance will turn on the construction and scope of the agreement when the claim to a quota as founded cannot be decided in writ jurisdiction without going back on well settled guidelines and even subverting the normal processual law except perhaps in extreme cases which shock the conscience of the Court or other extra ordinary situation, an aspect we are not called upon to explore here. We are aware of the wide amplitude of article 226 and its potent use to correct manifest injustice but cannot agree that contractual obligations in the ordinary course, without even statutory complexion, can be enforced by this short, though, wrong cut. On this short ground the appeal must fail and be dismissed. We do so, but without costs. P.H.P. Appeal dismissed.

The appellants are permanent servants of the Punjab State Co operative Land Mortgage Bank and were working as Assistants since the year 1968. The grievance of the appellants is that the contesting respondents were directly recruited to the higher post of Inspecting officers, Junior Accountants and Accountants in violation of Service Rules. What the appellants call Service Rules is nothing but a contract arrived at as a result of the collective bargaining with the management. The writ petition filed by the appellants was dismissed by the learned single Judge as well as the Division Bench of High Court on the ground that no writ petition was maintainable against a Cooperative Society under Article 226 of the Constitution. On appeal by special leave the appellants contended: (1) The co operative Bank in question is "other authority" within the meaning of Article 12 of the Constitution and, therefore, falls with in the definition of State. (2) The Co operative Bank is a public authority. (3) Co operative Societies registered under the Co operative Societies Act are subject to the jurisdiction of High Courts under Article 226 of the Constitution, since this provision is widely worded writs may be issued for any purpose against any person. Respondents contended: (1) that the Co operative Bank is not other authority or a public authority and no writ can lie against it. (2) The appellants are trying to enforce the contractual obligation for which no writ can lie. Dismissing the appeal, ^ HELD: (1) The Court did not decide the question whether a Co operative Society is other authority or public authority because it is clear from a close perusal of the writ petition that essentially the appellants are seeking merely to ensure an agreement entered into between the employees and the Co operative Bank. At its best, the writ petition seeks enforcement of a binding contract but the neat and necessary repellant is that the remedy of article 226 is unavailable to enforce a contract qua contract. We are aware of the wide amplitude of Article 226 and its potent use to correct manifest injustice but cannot agree that contractual obligations in the ordinary course without even statutory complexion can be enforced under Article 226. [683F H, 684 D]

Civil Appeal No. 5274 (NL) of 1983. 160 Appeal by Special leave from the Judgment and Order dated the 4th March, 1982 of the Industrial Tribunal Haryana at Faridabad in Reference No. 79/80 published in Haryana Govt. Gazette dated the 6th June, 1982. AND Civil Appeal No. 5275 of 1983 Appeal by Special leave from the Judgment and Order dated the 16th day of August, 1982 of the Punjab and Haryana High Court in Writ Petition No. 3475 of 1983. Ms. Chander Malhotra & Mrs. Indra Sawhney for the Appellant in both the Appeals. K.B. Rohtagi for the Respondent in both the appeals. The Judgment of the Court was delivered by CHINNAPPA REDDY, J. Shri Phulel Singh had a savings account with the Naraingarh branch of the Ambala Central Co operative Bank Limited. A cheque for Rs. 4200 purporting to have been signed by Shri Phulel Singh, drawn on the Ambala Central Co operative Bank was presented through the Punjab & Sind Bank Limited, Dhulkot and the proceeds were duly remitted to the latter bank. The account of Shri Phulel Singh was debited with that amount. Later when Shri Phulel Singh presented his pass book, appropriate entries were made. Shri Phulel Singh objected to the entry relating to the debit of Rs. 4200. He alleged that he had never issued the cheque for Rs. 4200 said to have been issued by him. A complaint was also lodged with the police. The present appellant, who was clerk cum cashier of the Naraingarh Branch of the bank, and who was apparently suspected in connection with the presentation of the bogus cheque, was interrogated by the police and his statement was also recorded. A First Information Report was registered against him, but the case ended in discharge. In the meanwhile, the Managing Committee of the bank placed the appellant under suspension. Shri Hans Raj, an Assistant Manager was appointed to enquire into the matter in order to ascertain the genuineness of the complaint made by the customer. The appellant was advised to be present at the Naraingarh branch of the bank on 161 July 29, 1974 in connection with the enquiry. No chargesheet was ever issued to the appellant. The statement of the appellant was however recorded by the enquiry officer on July 29, 1974 along with the statements of several other persons. The enquiry officer submitted his report on August 21, 1974. The finding of the enquiry officer may be extracted here. It was as follows: "As a result of enquiry and on the basis of the points given in the report, there lies the possibility that the complaint of the applicant may be genuine. " The enquiry officer thus indicated that there might be truth in the complaint of the customer that a bogus cheque was presented and his account debited with the amount. There was, however, no indication in the report that the appellant, Jai Bhagwan was guilty or had anything to do with the presentation of the bogus cheque. Thereafter, on January 31, 1975, the appellant was informed that his services had been terminated with immediate effect. No reason was mentioned in the order terminating the services of the appellant. We have no information nor was his learned counsel in a position to tell us as to any immediate steps taken by the appellant to question the order of termination of his services. But he did ultimately raise an industrial dispute and by an order dated December 15, 1980 the Governor of Haryana referred the following dispute for adjudication to the Industrial Tribunal, Haryana at Faridabad: "Whether the termination of services of Shri Jai Bhagwan was justified and in order ? If not, to what relief is he entitled ?" Even from the brief narration of facts, it is obvious that there was a total breach of the principles of natural justice. The appellant was never asked to answer any charges, there was no enquiry against him, no notice was issued to him to show cause why his services should not be terminated and even the order terminating his services failed to mention any reason. The order terminating the services of the appellant was wholly unsustainable. If, therefore, the bank wanted to sustain the order terminating the services of the appellant, it was up to the bank to lead necessary evidence to prove such charges as it desired to establish against the appellant. The bank made an effort by adducing the evidence of three witness MW I, the Establishment Officer, MW II, Assistant 162 Manager, Karnal and MW III, the Enquiry Officer, none of whom could either prove that the cheque was a forgery or that it had been presented by the appellant. Shri Phulel Singh, who would have been the most crucial witness, was not examined. In the absence of the evidence of Shri Phulel Singh, no case could possibly be said to have been made out against the appellant. Yet by a very curious process of reasoning, the Industrial Tribunal upheld the order of termination of the appellant 's services. He dismissed the contention that principles of natural justice had not been observed with the observation that strict rules of evidence were not applicable to domestic enquiries and "not too much legalism was expected in such matters from the enquiry Officer. " We are unable to understand what the Industrial Tribunal meant. There was not the slightest semblance of observance of the principles of natural justice. The enquiry made by the enquiry officer was not directed against the appellant, but was held with a view to find out whether there was any truth in the complaint of the customer that somebody had presented a bogus cheque and drawn Rs. 4200 from his account. The report of the enquiry officer also contained no finding against the appellant. At no time was the appellant informed of any charges against him or his explanation sought. Commenting on the report of the enquiry officer, the Industrial Tribunal stated: "I have gone through the documents produced by the management and found that the enquiry officer took great pain in finding out the facts of the case as was evident from his report exhibit M 8 which was dated 21st August, 1974. The report gives minute details and is logical. The enquiry officer reached the conclusion by going through the records of the bank and also of the drawee branch of Punjab & Sind Bank, Dhulkot and ascertaining the person in whose account the sum of Rs. 4200 was deposited and also the connection of Shri Jai Bhagwan concerned workman with that person. I am convinced by reading the enquiry report that the concerned workman was involved into withdrawal and, therefore, he was found guilty by the Enquiry Officer. " This shows a total non application of the mind by the Industrial Tribunal since the appellant was never found guilty by the enquiry officer. The Industrial Tribunal also stated that a final show cause notice had been issued to the workman on September 17, 1974 in 163 which the findings of the enquiry officer were briefly given. This is another indication that the Industrial Tribunal never applied his mind to the issues before him. The letter dated September 17, 1974 had nothing whatever to do with the presentation of the cheque or the withdrawal of the money. It was concerned with the absence of the appellant from duty on August 13 and 14, 1974 and the signatures said to have been found in the attendance register against the dates August 13 and 14, 1974. Thus, the Industrial Tribunal, apparently without applying his mind to the facts of the case and without bothering even to peruse the records, gave a finding that the termination of the services of the workman were justified and in order. We are constrained to reject the findings and the conclusion of the Industrial Tribunal as entirely worthless. The appellant filed a writ petition in the High Court of Punjab & Haryana, but the writ petition was unfortunately summarily rejected. The workman has filed these two appeals under article 136 of the Constitution, one against the decision of the Industrial Tribunal and the other against the summary dismissal of the writ petition by the High Court. Both the appeals have to be allowed in the circumstances mentioned by us. Shri Rohatgi, learned counsel for the Respondent Bank, was unable to contend that there was even a remote compliance with the principles of natural justice. He was also unable to urge that the Industrial Tribunal had truly applied his mind to the case. He, however, argued that the appellant had a remedy against the order of termination of services by way of an appeal to the Board of Management and that his failure to pursue that remedy barred him from raising any Industrial dispute. He also attempted to connect the order of termination of services with the absence of the workman from the bank on August 13 and 14, 1974, on days when his signature was found in the attendance register. We see no substance in either of the submissions. Raising an industrial dispute is a well recognised and legitimate mode of redress available to a workman, which has achieved statutory recognition under the Industrial Disputes Act and we fail to see why the statute recognised mode of redress should be denied to a workman because of the existence or availability of another remedy. Nor are we able to understand how an Industrial Tribunal to whom a dispute has been referred for adjudication can refuse to adjudicate upon it and surrender jurisdiction which it undoubtedly has to some other authority. While the Government may exercise their discretion in 164 deciding whether to refer or not to refer a dispute for adjudication, the Tribunal to whom the dispute has been referred has no discretion to decide whether to adjudicate or not. Once a reference has been properly made to an Industrial Tribunal, the dispute has to be duly resolved by the Industrial Tribunal. Resolution of the dispute cannot be avoided by the Tribunal on the ground that the workman had failed to pursue some other remedy. The attempt of Shri Rohatgi to connect the order terminating the appellant 's services with his absence from the bank on August 13 and 14, 1974 is an attempt made before us for the first time. At no earlier stage was the order of termination of services sought to be sustained on the basis of the absence of the workman from the bank on August 13 and 14, 1974. It cannot be done now. The appellant is, therefore, entitled to be reinstated in service with continuity of service from the date on which his services were terminated. Having regard to the circumstance that the workman raised an Industrial dispute after considerable delay without doing anything in the meanwhile to question the termination of his services, we do not think that we will be justified in awarding full back wages. We think that award of half the back wages from the date of termination of service until to day and full wages from this day until reinstatement will meet the ends of justice. The appellant will be entitled to his costs which we quantified at Rs. 5,000. P.B.R. Appeal allowed.

There was a complaint from an account holder of the respondent bank that his account was wrongly debited with a big sum of money even though he had never issued a cheque for that sum. The appellant, a clerk cum cashier, was apparently suspected to be responsible for the presentation of the cheque. The bank lodged a complaint with the police but the appellant was eventually, discharged. In the meanwhile, the bank placed him under suspension. An enquiry as to the genuineness of the customer 's complaint was ordered. The appellant was advised to be present at the enquiry but no charge sheet was ever served on him. In his report, the enquiry officer stated that "there lies the possibility that the complaint of the applicant may be genuine. " But there was no indication in the report that the appellant had anything to do with the presentation of the cheque. Yet, on basis of this report the appellant 's services were terminated. Thereafter the appellant raised an industrial dispute. The Industrial Tribunal, rejecting the appellant 's contention that principles of natural justice had not been observed upheld the order of termination of his services. In the workman 's appeal to this Court it was contended on behalf of the respondent that the appellant ought to have pursued the remedy of appealing to the Board of Management against the order of termination and his failure to do so disentitled him from raising any industrial dispute. Allowing the appeal, HELD: The order terminating the services of the appellant was wholly unsustainable. The appellant is entitled to be reinstated with continuity of service from the date of termination of his services. There was total non application of the mind by the Tribunal. [161 G; 164 D; 162 H] There was a total breach of the principles of natural justice: the appellant was never asked to answer any charge; there was no enquiry against him; no 159 notice was issued to him to show cause why his services should not be terminated and even the order terminating his services failed to mention any reason. The Bank should have led necessary evidence to prove the charge against the appellant. None of the three witnesses examined by the Bank could either prove that the cheque was a forgery or that it had been presented by the appellant. The enquiry was not directed against the appellant but was held with a view to find out whether there was any truth in the customer 's complaint. The enquiry officer did not say that the appellant was guilty or had anything to do with the presentation of the bogus cheque. The complainant, who would have been the most crucial witness, was not examined. [161 F; H; 162 A; C E] Notwithstanding all this, by a curious process of reasoning the Industrial Tribunal upheld the order of termination, dismissing the appellant 's contention that principles of natural justice had not been observed. The Tribunal 's observation that strict rules of evidence were not applicable to domestic enquiries and that "not too much legalism was expected in such matters from the enquiry officer" was far from correct. In short, the Tribunal, without applying its mind to the facts of the case and without bothering to peruse the records, gave a findings that the termination of his services was justified. The Tribunal 's findings and conclusion were therefore worthless. [162 B C; H; 163 B C] Raising an industrial dispute is a well recognised and legitimate mode of redress available to a workman, which has achieved statutory recognition under the Act and there is no reason why a statute recognised mode of redress should be denied to a workman because of the existence or availability of another remedy. Nor has an industrial tribunal, to which a dispute had been referred for adjudication, the power to refuse to adjudicate upon it and surrender its jurisdiction to some other authority. While the Government may exercise its discretion to refer or not to refer a dispute for adjudication, once a dispute is referred to it, the Tribunal has no discretion to decide whether to adjudicate or not. The Tribunal has to resolve the dispute. The Tribunal cannot avoid it on the ground that the workman had failed to pursue some other remedy. [163 G H; 164 A B] The attempt to connect the order terminating the appellant 's services with his absence from the bank on two days was an attempt made for the first time before this Court. It cannot be allowed to be raised now. The letter dated 17th September, 1974 addressed to the appellant had nothing to do with the presentation of the cheque or withdrawal of money, but related to his absence from duty on two days in August 1974 and his signature said to have been found in the attendance register on those days. [164 B C;163 A B] The workman has awarded half back wages from the date of termination of service to the date of judgment and full wages thereafter to the date of reinstatement on the ground that he raised the dispute after a considerable delay without doing anything in the meanwhile. [164 E]

ON: Criminal Appeal No. 152 of 1954. Appeal by Special Leave from the Judgment and Order dated the 20th October 1953 of the Bombay High Court in Criminal Appeal No. 652 of 1953 arising out of the Judgment and Order dated the 9th April 1953 of the Court of Presidency Magistrate. 19th Court, Bombay in Criminal Case No. 12164/P of 1949. H.J. Umrigar and R. A. Govind for the appellant. Porus A. Mehta and R. H. Dhebar for P. G. Gokhale for the respondent. May 4. The Judgment of the Court was delivered by SINHA J. This is an appeal by special leave directed against the concurrent orders and judgments of the courts below convicting the appellant, under section 409, Indian Penal Code and sentencing him to rigorous imprisonment for three months and a fine of Rs. 201 or in default, further six weeks rigorous imprisonment. , As the appellant had been convicted and sentenced for a similar offence in another case tried by the same Presidency Magistrate, 19th Court, Esplanade, Bombay, he directed the sentence in this case to run concurrently with the sentence in the other case. The charge against the accused in the, trial court is in these terms: "The Accused is charged under section 409 of the Indian Penal Code for committing criminal breach of trust in respect of property to wit 3% Government Promissory Loan Notes 1966 68 of the face value of Rs. 50,000 and 2 1/4% Government Promissory Notes 1961 of the face value of Rs. 25,000 in or about February to May 1949 entrusted to him in his capacity as Managing Director of the Exchange Bank of 486 India and Africa Ltd, and belonging to the Cambay Hindu Merchants Co operative Bank. (Detailed charge is separately framed)". The appellant at all material times was the Managing Director of the Exchange Bank of India and Africa Ltd., with its head office at Bombay, which hereinafter will be referred to as the Exchange Bank. He held a power of attorney to act as the Managing Director on behalf of the Directors of the Company. By that power the accused was invested with the authority to borrow money on behalf of the Bank. In 1944 the Cambay Hindu Merchants Co operative Bank at Cambay, which hereinafter will be referred to as the Co operative Bank., had opened a current account with the Exchange Bank. On instructions from the Co operative Bank, the Exchange Bank purchased in August 1946 securities worth Rs. 25,000 in its own name with money belonging to the Co operative Bank and the securities were kept with the Exchange Bank as a cover for overdraft. In March 1948 two further lots of Government security of Rs. 25,000 each of the value of Rs. 50,000 were purchased likewise and left with the Exchange Bank for the same purpose. On the 14th May 1948 the two banks entered into a contract evidenced by three documents to be noticed in detail hereinafter. Shortly stated, the Exchange Bank agreed to grant the Co operative Bank credit for overdraft up to a limit of Rs. 66,150 and as a security for the overdraft the Government securities of the value of Rs. 75,000 already in the custody of the Exchange Bank was pledged to the latter. These securities of the face value of Rs. 75,000 will hereinafter be referred to as "the securities". But it appears that the Co operative Bank had no occasion to operate on the overdraft account until the 28th February 1949 when the crucial event happened, namely the Exchange Bank finding itself in an embarrassed financial position took a loan from the Canara Bank of one lakh of rupees by pledging the securities as also other securities with which we are not concerned in this case. On the 24th April 1949 the Exchange Bank paid off the dues of the 487 Canara Bank by taking a fresh loan of the same amount of one lakh from Messrs Merwanji Dalal & Co. and pledging the same securities as ' had been pledged to the Canara Bank. On the 28th April 1949 Messrs Merwanji Dalal & Co. demanded back their money by the forenoon of the day following. As the Exchange Bank could not pay the amount as demanded, the pledgees aforesaid sold those securities including the securities belonging to the Co operative Bank, for realising their dues, on the 3rd May 1949. In the meantime, in answer to a letter from the Co operative Bank to the Exchange Bank asking for a certificate for the securities held by the latter on behalf of the former in the overdraft account, the Exchange Bank issued the certificate dated the 1st April 1949 to the effect that at the close of business on the 31st March 1949 it held Government of India securities of the total value of Rs. 75,000 as security against the overdraft facilities granted to the Co operative Bank and that there was no overdraft against the said securities on that date. Subsequently, on the 29th April 1949 the Co operative Bank wrote to the Exchange Bank asking the latter to hand over securities of the face value of ' Rs. 50,000 to the Central Bank. The Central Bank also on behalf of the Co operative Bank made a similar demand and as the Exchange Bank did not comply with that requisition, the Central Bank informed the Co operative Bank by a letter dated the 3rd May 1949 that the securities had not been banded over to the Central Bank as directed by the Co operative Bank. The Co operative Bank then wrote to the Reserve Bank for stoppage of the securities of the value of Rs. 25,000. It became clear by then that the Exchange Bank was not in a position to return the securities to the owners, that is to say, the Co operative Bank. In spite of the best efforts of the appellant as the Managing Director of the Exchange Bank, to stave off the crisis by borrowing money from different sources, the run on the bank became so great that the directors applied for and obtained from the Com 488 pany Judge of the Bombay High Court a moratorium of 15 days. On the 18th May 1949 a provisional liquidator was appointed in respect of the Exchange Bank on a creditor 's application and on the ' 24th June 1949 the Official Liquidator was appointed to wind up the bank. On the 25th June 1949 one M. N. Raijee as agent of the Official Liquidator lodged information with the police charging the appellant with breach of trust in respect of a number of securities including the securities belonging. to the Co operative Bank. On the 31st October 1949 a charge sheet was submitted by the police under section 409, Indian Penal Code against the appellant in respect of the securities of the face value of Rs. 75,000 belonging to the Cooperative Bank. On the 4th April 1952 the charge as quoted above was framed against the appellant. The delay of about two and a half years in placing the appellant on trial is attributable to the fact that at the request of the accused the trial in respect of this charge was stayed pending the disposal of the other case against him. At the trial the prosecution examined the Manager of the Co operative Bank as P.W. 1. He proved the transactions between that Bank and the Exchange Bank. The second witness for the prosecution was a partner in the firm of Messrs Merwanji Bomanji Dalal during the material time. He proved the transaction of the loan by his firm to the Exchange Bank of one lakh of rupees on the pledge of the securities belonging to the Co operative Bank, as also other securities. He deposed to the fact that it was the appellant who finalised the transaction on behalf of the Exchange Bank. He also proved that in default of payment by the Exchange Bank on demand by his firm, it sold the securities including the securities in question and realised the dues from the Bank from the sale proceeds of securities of the value of one lakh of rupees. The third witness for the prosecution was ' the Chief Accountant of the Exchange Bank who functioned as such till the 2nd May 1949 when the Bank closed down. He also had a power of attorney from the Bank to act jointly with another person 489 with a similar power of attorney. According to this witness, the appellant as the Managing Director exercised the powers of borrowing, raising money, purchasing, selling and pledging of bonds. , scrips and other forms of securities on behalf of the Bank and its constituents during the relevant period. and that no one else exercised those powers. He also testified to the fact that there was a crisis in the affairs of the Bank from about the middle of February 1949 and that there was a rush on the Bank which continued till it closed down. He also proved the fact that during the material time the Co operative Bank had a credit balance in its favour and that there was no overdraft by that Bank from the Exchange Bank. He proved Exhibits E, F and G which are the documents evidencing the contract between the two banks in respect of the pledge of the security. He corroborated the previous witness that it was the appellant who negotiated and finalised the loan of one lakh of rupees from the Canara Bank and that the securities in question along with others had been pledged to the Canara Bank. It was he who had endorsed the securities to the Canara Bank. He stated that the Exchange Bank had submitted to the Canara Bank a declaration to the effect that the said securities belonged absolutely to the Exchange Bank. As there was a heavy rush of depositors on the bank,the loan from the Canara Bank was taken to satisfy the demand of the depositors. The most important witness examined on behalf of the prosecution is P.W. 4, Ganpati Venkatrao Kini. He was an accountant in the Exchange Bank during the relevant period. He was also working with the Official Liquidator of the Bank after its liquidation was ordered by court. Like the previous witness, he also had a power of attorney to act only in conjunction with another per son holding a similar power. He supports the previous witness in saying that the power of borrowing money or of purchasing, selling or pledging or repledging securities was exercised by the appellant and by no other person on all material dates. He also corroborates the previous witness and ' states that 490 there was a crisis in the bank from about the middle of February 1949 and that there was a heavy rush on the bank from that time till it closed down. He also proves Exs. E, F and G and states that from the 14th May 1948 when these documents were executed between the two banks till the 2nd May 1949 when the Exchange Bank closed its doors there was no overdraft by the Co operative Bank which always had a credit balance. He also gives the details of the transaction of the loan of one lakh between the Exchange Bank and the Canara Bank and the details of the securities pledged by way of security for that loan. He makes the following very significant statement: "I had handed over the two securities belonging to the Cambay Co operative Bank to the accused for being handed over to the Canara Bank against the loan. The accused actually asked me for these securities and I handed them to the accused". To a court question as to why he did not bring it to the notice of the appellant that the securities in question belonged to the Co operative Bank and not to the Exchange Bank, his answer is in these words. "In fact, the accused himself told me to bring securities pleged by the Cambay Co operative Bank with the Exchanage Bank". He also proves exhibit L, which is a very important document in this case and proves that it was signed by the accused. He further states that the declaration in that document that the securities rep I resented the Exchange Bank 's investments was not correct. He also makes detailed statements as to the different kinds of interest which the appellant had in the Exchange Bank. He was drawing Rs. 2,500 as monthly salary as the Managing Director. He was also drawing a salary of Rs. 1,000 from the Union Life Assurance Co. Ltd., is its Managing Director. The Insurance Company and its branches had a current account with the Exchange Bank and had advanced to the latter six to seven lakhs of rupees as "call deposits". The appellant was also connected with Messrs L. A, 491 Stronach Ltd., Advertising Agents, which had been given overdraft facilities by the Exchange Bank. The appellant was also getting Rs. 2,000 per month as salary from the aforesaid Advertising Agents. The appellant and his wife were the principal shareholders in Akhaney & Sons Ltd., who were the Secretaries and Treasurers of the Indian Overseas Airlines. The Exchange Bank had advanced to the aforesaid Indian Overseas Airlines a loan of one crore and ten lakhs of rupees and Messrs Akhaney & Sons Ltd. aforesaid were getting a remuneration of Rs. 2,500 per month from the Indian Overseas Airlines Ltd. It would thus appear that the appellant along with his wife in one way or another was getting about Rs. 8,000 per mensem as remuneration from the different companies referred to above which were closely associated with one another from the financial point of view and that the, appellant was the chief person concerned with them and the connecting link between them. It was naturally his interest to see that the Exchange Bank continued its existence as long as could be arranged even by borrowing large sums of money when there was already a run on the bank. It is in the background of all these facts and circumstances that the appellant 'sacts of commission and omission had to be judged. The other four witnesses, P.Ws. 5 to 8 are more or less formal witnesses in the sense that they have proved certain documents and letters which need not be noticed. The evidence of P.W. 2 had to be set aside as he was not available for cross examination after charge, being out of the country. The appellant 's defence is disclosed in a long written statement running into twenty paragraphs and seven closely typed pages submitted on the 3rd October 1952. Shortly stated, it is to the effect that the charge framed against him is bad in law and extremely vague; that the vagueness of the charge had "considerably handicapped" his defence, that the prosecution had not been fair in that it had not exa mined the first informant, M. N. Raiji, that if he had been examined 'by the prosecution, the appellant would have shown from the records in his possession 64 492 that the Co operative Bank had not suffered any loss and that the Bank in the hands of the Liquidator had more than sufficient funds to pay the dues of the former; that the prosecution bad not been launched with the sanction of the Company Judge who was in seisin of the liquidation proceedings in respect of the Exchange Bank and that therefore the provisions of sections 179 and 237 of the Indian Companies Act had not been complied with; that the securities in question had not been entrusted to the appellant but to the Exchange Bank, ' if at all there was any entrustment, and that as a matter of fact and law, the Ex change Bank had not been entrusted with the securities, that the Exchange Bank "Court legally deal with the securities in any manner it liked", as provided in the documents, Exs. E, F and G, between the two banks; that the sub pledging of the securities with the Canara Bank or with Messrs Merwanji Bomanji Dalal was "perfectly. within the four corners of the law", and that the essential ingredients of an offence under section 409, Indian Penal Code had not been made out. Grievance was also sought to be made of the fact that Inspector Milburn who had investigated the case had not been called as a. prosecution witness, with the result that the appellant had been deprived of the right of challenging the prosecution evidence with reference to the police diary. The learned Magistrate after a very fair and full examination of the evidence in the case and the points raised by the appellant in his defence came to the conclusion that the appellant was guilty of the offence of criminal breach of trust under section 409, Indian Penal Code and passed a lenient sentence, as stated above, *in view of the, consideration that "not a pie went to the pocket of the accused", and that "the accused had not taken up any dishonest defence". The learned Magistrate held that the charge as framed was not vague in view of the provisions of section 222, Criminal Procedure Code, with special reference to the terms of sub section (2) of that section. On the question of the non examination of the first informant, M. N. Raiji, and of the investigating police officer, 493 the learned Magistrate observed that they were formal witnesses inasmuch as the facts of the case were not in dispute. Furthermore, the court observed that if the accused or his lawyer who defended him at the later stage of the prosecution, had applied to the ' court for their being examined, they could have been called as witnesses and subjected to cross examination by the accused. But no such, application had been made. As regards want of sanction of the Company Judge, he held that section 179 of the lndian Companies Act had no application to the facts of the present case, as it was not a prosecution under the Companies Act and that therefore no such sanction as is contemplated by that section was necessary. Dealing with the appellant 's contention that there was no entrustment within the meaning of section 405, Indian Penal Code the learned Magistrate observed that the accused held delegated powers from the Board of Directors and he held the property in trust on behalf of the Directors of the Exchange Bank. He further held that the contract of pledge dated the 14th May 1948 between the two banks did not vest any right in the Exchange Bank absolutely to deal with the securities and that at any rate, the Exchange Bank could not deal with the securities so long as the Cooperative Bank had not taken an overdraft from the former. In dealing with the question whether the appellant had dealt with the securities dishonestly, he held that in all the circumstances of the case there was no doubt that wrongful loss was caused to the Co operative Bank and wrongful gain not to the accused personally but to the Exchange Bank which he represented during the transactions in question. On appeal to the Bombay High Court, a Division Bench of that court dismissed the appeal. substantially agreeing with the findings of the trial court. Dealing with a new point raised before the appeal court, namely, that the appellant was under a mistake of fact or law as to the indebtedness of the Cooperative Bank to the Exchange Bank or as to its powers to deal with the security, the High Court held 494 that there was no possibility of the appellant having made any mistake of fact in good faith. The court also pointed out that the appellant himself had not raised this plea of mistake either about the facts of the case or about any doubtful question of law. The court also pointed out the declarations made by the appellant on behalf of the Exchange Bank that the securities belonged absolutely to the bank and represented its investments statements which he knew were false. While dealing with the appeal on the question of sentence, the High Court pointed out that there was good evidence to support the inference that the appellant had been actuated by motives of personal benefit also. In that view of the matter the High Court maintained the conviction and the sentence passed by the trial Magistrate. The appellant then moved the High Court for a certificate that the case was a fit one for appeal to this Court. The cer tificate was refused by that court. Thereafter the. appellant moved this Court and obtained special leave to appeal. In support of the appeal the learned counsel for the appellant has raised a number of questions of law and at the forefront of his argument contended that both in law and on a proper construction of the contract between the two banks the appellant was fully entitled to pledge the securities as long as the overdraft agreement subsisted, irrespective of whether or not there was an actual overdraft by the Co operative Bank on the date of the pledge, that is to say, on the 28th February 1949. Examining the position with reference to the contract between the two banks, we find that Exhibits E, F and G, all dated the 14th May 1948, are parts of the same transaction and evidence the terms of the contract between them. exhibit E is a promissory note executed by the Co operative Bank in favour of the Exchange Bank for the sum of Rs. 66,150 with interest at three per cent. per annum with half yearly rests. exhibit F is a letter addressed by the Cooperative Bank to the Exchange Bank enclosing exhibit E, and exhibit G is the bond pledging all marketable 495 securities and goods to the Exchange Bank in consideration of its promise to grant credit for overdraft limited to the amount aforesaid in favour of the Cooperative Bank from time to time with interest at three per cent. per annum as aforesaid. The significant portion of the bond is in these terms: ". . . . . and we agree and undertake that in the event of our failure to maintain the margin on the said movable property marketable securities and goods in the manner hereinafter provided or failing repayment on demand to you by us of the amount of such advance or credit with interest cost charges and expenses as aforesaid you shall be entitled, but not bound, to sell or otherwise dispose of all or any of the said movable property marketable securities and goods by public auction or private contract in such manner and upon such terms and subject to such conditions as you may think fit without any reference to us or obtaining our consent, and the proceeds of such sale or disposal shall be applied first in payment of all costs charges and expenses of and incident to such sale or disposal and the enforcement of the pledge and charge in your favour hereby created, secondly in repaying the amount of such advance or credit with interest as aforesaid and all costs charges and expenses incurred by you in relation thereto not otherwise met including loss in exchange (if any) and all other debts and monies however due to you by us and lastly in payment to us of the surplus if any thereafter remaining, declaring as it is hereby expressly provided agreed and declared that this shall be continuing security to cover the amount of any advance or credit which you have allowed to us Or may from time to time allow us with interest costs, charges and expenses and all other debts and monies due as aforesaid. . . . " Reading Exhibits E, F and G together, it is clear that the securities of the face value of Rs. 75,000 were pledged to the Exchange Bank as security for overdraft up to the limit of Rs. 66,150 for which the Cooperative Bank had given the promissory note to the Exchange Bank. It was further stipulated that in 496 the event of the pledgor making a default in payment on demand of the amount advanced by way of overdraft with outstanding interest it may be realised by the Exchange Bank by sale of those securities and after satisfying the pledgee 's dues against the pledgor, if there was any outstanding amount the surplus of the sale proceeds shall be paid back to the pledgor. Thus it is clear that according to the terms of the contract the Exchange Bank was not entitled, as contended on behalf of the appellant, to sell the securities even though there may not have been any outstanding dues from the Co operative Bank. The securities were to be kept by the Exchange Bank charged with the payment of such amount as may from time to time have been advanced or be advanced under the overdraft arrangement. But that charge was not an absolute one without reference to the state of accounts between the two banks; in other words, there would be a charge only when there was an adverse balance against the Co operative Bank. We know that at all material times the Co operative Bank had not drawn any sum from the Exchange Bank in pursuance of the agreement referred to above. The right of the Exchange Bank to deal with the securities under the agreement would arise only on the happening of certain events, namely, that the pledgor either had failed to maintain the proper margin or had made a default in repayment of the outstanding amount on demand by the Exchange Bank. So long as those contingencies did not arise, and it is nobody 's case that any of those contingencies had arisen, the pledgee bank had no right to deal with the securities by way of pledge, sub pledge or assignment. In this connection our attention was invited to the provisions of section 179 of the Indian Contract Act in support of the contention that as the securities had been agreed between the two banks to be a cover for overdraft not exceeding Rs. 66,150, up to that amount the pledgee bank bad an interest in those securities which it could have dealt with. It was further argued that as there was nothing to show that the appellant had dealt with the securities for 497 a larger amount than that, he could not be said to have contravened the terms of the contract. In our opinion, there is no substance in this contention. Section 179 predicates that the pledgor has a limited interest which he can deal with and his transaction to that extent would be valid. If the Co operative Bank had as a matter of fact operated upon the overdraft account and bad drawn any sum with in the limit aforesaid, the Exchange Bank would have an interest pro tanto in those securities and might then have been entitled to pledge or sub pledge the securities with a third party. But so long as there was no overdraft by the pledgor, the pledgee bad no such interest as it could in its turn pledge or sub pledge to a third party. Furthermore, it is clear from the narrative of events given above that the appellant dealt with the securities with third parties on the footing, after an express declaration had been made by him, that those securities were the absolute property of the Exchange Bank. We are not here concerned with the question of the extent of interest acquired by such third party. We are only concerned with determining the legal position as between the two banks the Exchange Bank being represented by its Managing Director, the appellant. Hence there is no difficulty in holding that on the terms of the contract between the two banks the appellant was not entitled to transfer any interest in those securities and if be did so he did it in contravention of the terms of the contract. We will now deal with the legal position, apart from the terms of the contract. On the facts stated above the Exchange Bank had become the bailee in respect of the securities. The securities had been delivered by the Co operative Bank to the Exchange Bank for the express purpose, as disclosed in the contract set out above, that they shall be disposed of in ,accordance with the terms contained in Exhibit G set out above. By the very fact of the delivery of the securities to the bailee the latter became a trustee in terms of the contract, not for all purposes, but only for the, limited purpose indicated by the agreement 498 between the parties. The pledgor has in the present case only transferred his possession of the property to the pledgee who has a special interest in the property of enforcing his charge for payment of an overdraft, if any, whereas the property continues to be owned by the pledgor. The special interest of the pledgee comes to an end as soon as the debt for which it was pledged is discharged. It is open to the pledgor to redeem the pledge by full payment of the amount for which the pledge had been made at any time if there is no fixed period for redemption, or at any time after the date fixed and such a right of redemption continues until the thing pledged is lawfully sold. Hence the Co operative Bank in this case could have asked for a return of the securities at any time, because there never was any overdraft. As the pledge had been terminated neither by redemption,, nor by a lawful sale on the happening of such contingencies as the parties contemplated in their agreement or the law allowed, the securities continued to be the property of the Co operative Bank and the Exchange Bank, or the appellant as its Managing Director., bad no right to deal with them. It was next contended, alternatively, that assuming that the Exchange Bank had dealt with the securities in contravention of the terms of the agreement, the appellant had, as representing the bank, only committed a breach of contract, the remedy for which was a suit for damages and not a criminal prosecution. This argument assumes that the same set of facts cannot give rise both to a civil liability and a criminal prosecution. It is manifest that such an argument in its bald form cannot be acceptable. If there is no mens rea, or if the other essential ingredients of an offence are lacking, the same facts may not sustain a criminal prosecution, though a civil action may lie. We have therefore to examine whether or not there was mens rea in this case or whether the necessary element of a criminal. offence have been made out. It has been contended that no offence under section 409, Indian Penal Code has been brought home to the appellant for the reasons, (1) that there 499 was no entrustment, (2) that there was no mens rea, and (3) that there was no dishonesty on the part of the appellant. For an offence under section 409, Indian Penal Code, the first essential ingredient to be proved is that. the property was entrusted. It has been argued that in this case there was no such entrustment as is contemplated by that section; and that the securities were pledged with the Exchange Bank by the Co operative Bank which was in the position of a debtor to the former. 'The contention is that the parties never contemplated the creation of a trust in the strict sense of the term. But when section 405 which defines "criminal breach of trust" speaks of a person being in any manner entrusted with property, it does not contemplate the creation of a trust with all the technicalities of the law of trust. It contemplates the creation of a relationship whereby the owner of property makes it over to another person to be retained by him until a certain contingency arises or to be disposed of by him on the happening of a certain event. The person who transfers,, possession of the property to the second party still remains the legal owner of the property and the person in whose favour possession is so transferred has only the custody of the property to be kept or disposed of by him for the benefit of the other party, the person so put in possession only obtaining a special interest by way of a claim for money advanced or spent upon the safe keeping of the thing or such other incidental expenses as may have been incurred by him. In the present case the Co operative Bank entrusted the Exchange Bank with the securities for the purpose of keeping them as a security for the overdrafts if and when taken by the former. In law those securities continued to be the property of the Co operative Bank and as it never borrowed any money from the Exchange Bank, the latter had no interest in those,securities which it could transfer in any way to a third party so far as the two banks are concerned. The entrustment was to the Exchange Bank itself But it being a non natural person, its business had to be transacted by someone who was authorised 500 to do so on its behalf The appellant held the power of attorney on behalf of the directors of the bank to transact business on behalf of the bank. In that capacity the appellant had dominion over the securities. Hence the appellant can be said either to have been entrusted with the property in a derivative 'sense or to have dominion over the securities as a banker , and thus in either case, the first essential condition for the application of section 409, Indian Penal Code is fulfilled. On the question of mens rea, it has to be determined whether or not the appellant dishonestly disposed of those securities in violation of any of the terms of the agreement aforesaid. As already indicated, the appellant did dispose of these securities in violation of the terms of the contract between the two banks. But still the question remains whether he did so dishonestly; in other words, whether when disposing of those securities the appellant had the intention of causing wrongful gain to the Exchange Bank or wrongful loss to the Co operative Bank. In our opinion, he intended both and, as. a matter of fact, he caused wrongful loss to the pledgor bank and wrongful gain to the pledgee bank. 'The Exchange Bank raised money on those securities which it was not entitled to do and the Co operative Bank was deprived of those securities, even though not for all times. It is settled law that a deprivation even for a, short period is within the meaning of the expression. If he disposed of those securities with the intention of causing wrongful loss to the one and wrongful gain to the other, there can be no question but that the ap pellant had the necessary mens rea. It was next argued that assuming that the essential ingredients of an offence under section 409, Indian Penal Code had been made out, the appellant may have made a mistake of fact in assuming that the Co operative Bank was indebted to the Exchange Bank or may have made a mistake of law in mistakenly believing that the Exchange Bank had the right as the pledgee to sub pledge those securities for raising money for its own purposes. We know as a fact that 501 the Co operative Bank had not taken any overdraft from the Exchange Bank. But it was argued that it had not been proved that the appellant had that knowledge. The appellant in his long written statement has not tried to take shelter behind any such mistake. He was in full control of the bank accounts and as pointed out by the courts below, it is impossible to believe that in the circumstances in which the bank had found itself and when the appellant was hard put to it to collect all the bank 's resources to stave off the severe crisis through which it was passing, the appellant would not have known the fact that the Co operative Bank did not owe his bank any money by way of overdraft. Hence, in our opinion, there is no room for the supposition that the appellant was not aware of the true state of accounts bet ween the two banks. But then it was argued that the appellant may have made a mistake of law in thinking that he was justified by law in dealing with those securities. The attempt is to bring the case within one of the general exceptions contained in Chapter IV of the Indian Penal Code and set out in section 79 in these terms "Nothing is an offence which is done by any person who is justified by law, or who by reason of a mistake of fact and not by reason of a mistake of law in good faith, believes himself to be justified by law, in doing it". In considering a matter of this kind the attitude of the accused is an important consideration. We note that here the appellant made no attempt in the trial court to set up such a defence. If he had ever said that he made a mistake of fact after exercising due care and caution that there was an overdraft against the Co operative Bank in favour of the Exchange Bank, he may have been able to take advantage of the exception. But as in this case there was no mistake of fact and as the court was in a position to find that the appellant must have known that there was no such overdraft, there is no room for the application of section 79 quoted above. The appellant cannot avail himself of the exception of section 79 simply by 502 saying that he believed that in law he was entitled to deal with the securities as the property of the Exchange Bank, as he attempted to do in his written statement. If he had further proved that he believed in good faith that the Co operative Bank was indebted to his bank, his belief that he was justified by law in dealing with the securities as the property of the bank may have helped to bring him within the exception. But as there was no mistake about the basic fact, the provisions of section 79, Indian Penal Code are not attracted to this case. It now remains to deal with certain objections relating to the illegality or irregularity in the procedure followed in the trial of this case. It was argued that this prosecution was incompetent for the reason that no sanction of the Company Judge had been obtained under section 179 of the Indian Companies Act. The relevant portion of section 179 is as follows: "The official liquidator shall have power, with the sanction of the Court to do the following things: (a) to institute or defend any suit or prosecution, or other legal proceeding, civil or criminal, in the name and on behalf of the company;. . . . " In terms the section lays down the powers of the official liquidator. Such a liquidator has to function under the directions of the court which is in charge of the liquidation proceedings. One of his, powers is to institute prosecutions in the name and on behalf of the company under liquidation with the sanction of the court. This section does not purport to impose any limitations on the powers of a criminal court to entertain a criminal prosecution launched in the ordinary course under the provisions of the Code of Criminal Procedure. Where a prosecution has to be launched in the name of, or on behalf of, the company, it naturally becomes the concern of the Judge to see whether or not it was worthwhile to incur expenses on behalf of the company and therefore, the section requires the sanction of the Judge before the liquidator can undertake the prosecution or defence in the name of and on behalf of the company. The 503 present case is not a prosecution in the name or on behalf of the company; nor is the official liquidator interested in prosecuting the case. The prosecution was started on a charge sheet submitted by the police, though the first information report had been lodged by an official under the official liquidator. This was not a prosecution initiated or instituted by the official liquidator. This is not a case which can come even by analogy within the rule laid down by the Federal Court in the case of Basdeo Agarwalla vs King Emperor(1), that a prosecution launched without the previous sanction of the Government within the meaning of clause 16 of the Drugs Control Order, 1943, was completely null and void. In that case their Lordships of the Federal Court had to consider the effect of the following words of clause 16 aforesaid: "No prosecution for any contravention of the provisions of this Order shall be instituted without the previous sanction of the Provincial Government. .". It will be noticed that section 179 of the Companies Act does not contain any words similar in effect to those quoted above. Where the legislature intended to place a limitation on the powers of the court to take cognisance of an offence unless certain conditions were fulfilled, like the provisions of sections 196 and 197, Criminal Procedure Code, it has used words such as these: "No court shall take cognisance There is nothing in section 179 of the Companies Act which can be construed as restricting the powers of the court to take cognisance of an offence or the powers of the police to initiate prosecution or even of a private citizen to move the machinery of the criminal courts to bring an offender like the appellant to justice. For a prosecution for breach of trust even by a director of a company no such condition precedent as the previous sanction of any authority is contemplated by law, unless it is a prosecution in the name and on behalf of the company by the official liquidator who has to incur expenses out of the funds of the company. Section 179 is an (1) 504 enabling provision to enable the liquidator to do certain things with the sanction of the court. It does not control the general law of the land. It was next contended that the charge as framed by the trial court was illegal and vague and had caused material prejudice to the appellant. The charge as framed has already been set out. The learned trial magistrate had stated at the end that a detailed charge was to be separately framed. But no such charge is before us and the appeal has proceeded on the assumption that no such detailed charge was as a matter of fact framed by the trial court. The question therefore is whether the charge, such as it is, complies with the requirements of the law. It has been argued on behalf of the appellant that the charge is materially defective in so far as the nature of the breach of trust, the facts constituting the breach, the exact date and manner of the breach have not been set out. The charge as framed fulfils the requirements of section 221, Criminal Procedure Code, because it has mentioned the name of the offence, namely, criminal breach of trust and specified section 409, Indian Penal Code, which impliedly gives notice to the accused of every legal condition required by law to be fulfilled in order to constitute the offence of criminal breach of trust. It has also fulfilled the requirements of section 222(1) of the Code in so far as it has specified the securities in respect of which and the Co operative Bank against which a criminal breach of trust had been committed. Those particulars, in our opinion, were sufficient to give the accused notice of the matter with which he was charged. The trial court has made reference to the provisions of sub section (2) of section 222. But it was in error in relying upon those provisions which relate to the offence of criminal breach of trust or dishonest misappropriation of money, which was not the present case. It is true that the manner of the commission of the offence as required by section 223 of the Code has not been set out. But that has to be set out only when the nature of the case is such that the particulars required by sections 221 and 222 had not given the accused suffi 505 cient notice of the matter with which he is charged. In our opinion, though the charge could have been more detailed as was intended by the learned Magistrate, as framed, it gives the accused sufficient notice of the nature of the offence alleged against him. Even assuming that there were certain omissions in the charge, they cannot be regarded as material unless in terms of section 225 of the Code it is shown by the accused that he had in fact been misled by such omission or that there had been a failure of justice as a result of such error or omission. 'The illustrations under that section show that each case has got to be judged on its own particular facts and there cannot be any general presumption that every error or omission in a charge has materially affected a trial or occasioned a failure of justice. In this case from the long written statement filed on behalf of the appellant it is clear that he was aware of the gravamen of the charge against him and that he tried to meet it in all its bearings. We are not therefore impressed by, the argument advanced on his behalf that the omissions in the charge are material and that the case should be tried over again on a fresh charge. The learned Judges of the High Court constituting the Division Bench which heard the appeal have written separate but concurring judgments, but they did not notice any argument, having been advanced before them on the question of the illegality or irregularity in the charge. That also would show that the appellant did not make it a grievance at the time of the argument of the appeal, though a ground had been taken in the memorandum of appeal that the charge as framed was vague and defective and as such bad in law. In our opinion, this is not a case in which it can be said that the omission in the charge has materially affected the trial of the case or prejudiced the appellant in his defence or has occasioned a failure of justice. As all the grounds raised in support of the appeal fail, it is accordingly dismissed.

The appellant was the Managing Director of a bank and held a power of attorney to act on behalf of its Directors and authorising him to borrow money on behalf of the bank. Certain Government Promissory Notes were pledged with the bank by another bank to cover an overdraft account up to a specified amount. There was, however, no overdraft by the pledgor. The pledgee bank was in a precarious financial condition. The appellant pledged the securities with a third party to get a loan for the bank 's use and on its failure 484 to repay the same on demand, the creditors sold the securities for realising their dues. The pledgee bank was thus no longer in a position to return the securities on demand made by the pledgor. Information. was lodged with the police at the instance of the Official Liquidator appointed to wind up the bank and the appellant was put up for trial under section 409 of the Indian Penal Code. Held, that the appellant was guilty of the offence charged and the appeal must be dismissed. Held further, that in the absence of any overdraft by the pledgor, the pledgee bank acquired no interest in the securities which it could deal with and section 179 of the Contract Act had no application. That the delivery of the securities by the pledgor made the pledgee a trustee for him and he remained the owner subject to any especial interest created in favour of the pledgee by the agreement and in a case, such as the present, where there was no question of redeeming the securities by the pledgor, there having been no overdraft, or sale by the pledgee in enforcement of any especial interest, as none had accrued to it, the pledgee bank had no right to deal with the securities. That the question whether the remedy of the pledgor was by way of a suit for damages for breach of contract or by way of a criminal prosecution would depend on whether or not there was mens rea and. other elements constituting the offence. That although the offence of criminal breach of trust presupposes an entrustment, such entrustment need not conform to all the technicalities of the law of trust, and, consequently, in a case such as the present where the accused had the necessary power and exercised dominion over the securities and caused wrongful loss to the pledgor and wrongful gain to the pledgee by dealing with the securities, he was guilty of the offence. That the provisions of section 79 of the Indian Penal Code were of no avail to him as it was never pleaded in his written statement nor found by the courts below that he Was unaware of the fact that there had been no overdraft at all. That no sanction under section 179 of the Companies Act was re quired for the prosecution. The provisions of that section were of a permissive character enabling the court Liquidator to do certain things with the permission of the court and did not in any way control the general law so as to restrict the power of the court to take cognisance of an offence or of the Police to initiate a prosecution or even of a private citizen to move the machinery of the criminal courts to bring an offender to justice. Basdeo Agarwalla vs King Emperor, ([1946] F.C.R. 93), distinguished and held inapplicable. That the charge framed against the accused fulfilled the requirements of sections 221 and 222(1) of the Code of Criminal Procedure and 485 as the particulars mentioned in the charge were sufficient to give him notice of the matter he was being charged with it was not necessary to set out also the manner of the commission of the offence as required by section 223 of the Code.

ivil Appeal No. 26 of 1955. Appeal under Article 136 of the Constitution of India from the Judgment and Order dated the 28th February, 1953, of the Election Tribunal, Vellore, in Election Petition No. 84 of 1954. N.C. Chatterjee, (R. Ganapathy Iyer, with him), for the appellant. Naunit Lal, for respondent No. 1. 1955. September, 15. The Judgment of the Court was delivered by VENKATARAMA AYYAR J. This is an appeal by special leave against the order of the Election Tribunal, Vellore, declaring the election of the appellant to the Legislative Assembly void on the ground that there had been a violation of section 123(7) of the Representation of the People Act No. XLIII of 1951. Under that section, it, is a major corrupt practice for a candidate or his agent to incur or authorise the incurring of expenditure in contravention of the Act or any rule made thereunder. Rule 117 provides that: "No expense shall be incurred or authorised by a 471 candidate or his election agent on account of or in respect of the conduct and management of an election in any one constituency in a State in excess of the maximum amount specified in respect of that Constituency in Schedule V". Under Schedule V, the maximum expense specified for election to the Madras State Legislature from a single member constituency, such as Ranipet, is Rs. 8,000. The return of the expenses lodged by the appellant showed that he had spent in all Rs. 7,063 for the election, and that was within the limit allowed. The charge against him in the petition was that he had failed to disclose in his return two sums of Rs. 500 each, spent for election purposes, and that with the addition of those amounts, the maximum speci fied had been exceeded. As regards the first amount, the facts found are that on 12 9 1951 the appellant applied to the Tamil Nad Congress Committee for permission to contest the election as a Congress candidate, and along with his application he paid Rs. 500 out of which Rs. 100 was subscription for membership and Rs. 400 deposit, which was liable to be returned under the rules, in case the applicant was not adopted as the candidate, but not otherwise. In fact, the appellant was adopted as the Congress candidate, and it was on that ticket that he fought and won the election. The second payment of Rs. 500 was on 23 9 1951 to the North Arcot District Congress Committee, which was in charge of the Ranipet Constituency. The Tribunal held that both these sums were paid for purposes of election and should have been included in the return made by the appellant, that if they were so included, the maximum prescribed was exceeded, and that therefore section 123(7) had been contravened, and accordingly declared the election void under section 100(2) (b) of the Act. The appellant disputes the correctness of this order. The Tribunal also recorded as part of the order a finding that the appellant had become subject to the disqualifications specified in section 140, sub clauses (1) (a) and (2). The appellant attacks this finding on 60 472 the ground that it was given without notice to him, as required by the proviso to section 99. The points that arise for decision in this appeal are (1) whether on the facts found, there was a contravention of section 123(7) of Act No. XLIII of 1951and (2) whether the finding that the appellant had become disqualified under section 140 is bad for want of notice under the proviso to section 99 of the Act. (1) Taking first the sum of Rs. 500 paid by the appellant to the Tamil Nad Congress Committee on 12 9 1951, the contention of the appellant is that section 123(7) and Rule 117 have reference only to expenses incurred by a candidate or his agent, that the appellant was nominated as a candidate only on 16 11 1951, and that as the payment in question was made long prior to the filing of the nomination paper, the provisions aforesaid had no application. That raises the question as to when the appellant became a 'candidate ' for purposes of section 123(7). Section 79(b) of Act No. XLIII of 1951. defines a candidate thus: "Candidate" means a person who has been or claims to have been duly 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". Under this definition which applies to section 123(7), all election expenses incurred by a candidate from the time when, with the election in prospect, he holds himself out as a prospective candidate and not merely from the date when he is nominated, will have to enter into the reckoning 'under Rule 117 read with Schedule V. That the election was in prospect when the amount of Rs. 500 was paid is clear from the very application of the appellant dated 12 9 1951 wherein he states that he desires "to contest as a 'Congress candidate in the forthcoming election". That is not disputed by the appellant. What he contends is that though the election was in prospect, he bad not become a prospective candidate at that time, and that he became so only when the Congress 473 adopted him as its candidate on 13 11 1951. It was argued that it was open to the Congress Committee either to adopt him as its candidate or not, that if it did not adopt him, he could not, under the rules to which he had subscribed, stand for election at all, that until he was actually adopted therefor, his candidature was nebulous and uncertain, and that the application was consequently nothing more than a preliminary step in aid of his becoming a prospective candidate. The question when a person becomes a candidate must be decided on the language of section 79(b). Under that section, the candidature commences when the person begins to hold himself out as a prospective candidate. The determining factor therefore is the decision of the candidate himself, not the act of other persons or bodies adopting him as their candidate. In The Lichfield, case(1) at page 36, Baron Pollock observed: "I think the proper mode of judging a question of this kind is to take it from the point of view of the candidate himself. Every man must judge when he will throw himself into the arena. But it is his own choice when he throws down the glove and commences his candidature". When, therefore, a question arises under section 79(b) whether a person had become a candidate at a given point of time, what has to be seen is whether at that time he had clearly and unambiguously declared his intention to stand as a candidate, so that it could be said of him that he held himself out as a prospective candidate. That he has merely formed an intention to stand for election is not sufficient to make him a prospective candidate, because it is of the essence of the matter that he should bold himself out as a prospective candidate. That can only be if he communicates that intention to the outside world by declaration or conduct from which it could be inferred that he intends to stand as a candidate. Has that been established in this case? When the appellant made the payment of Rs. 500 to (1) 474 the Tamil Nad Congress Committee, did he merely evince an intention to stand as a candidate, or did he hold himself out as a prospective candidate? The application contains a clear declaration of his intention to contest the election, and that declaration is backed by the solemn act of payment of Rs. 500. The appellant had thus clearly and unambiguously conveyed to the Committee his intention to stand as a candidate, and he thereby became a prospective candidate within the meaning of section 79(b). The possi bility that the Congress might not adopt him as its ,candidate does not, as already mentioned, affect the position, as the section has regard only to the volition and conduct of the candidate. It is true that if the Congress did not adopt him, the appellant might not be able to stand for election. But such a result is implicit in the very notion of a prospective candidate, and does not militate against his becoming one from the date of his application. It was also urged for the appellant that the declaration was made not to the constituency in the North Arcot District but to the Central Committee at Madras, and that unless there was proof of holding out to the electorate, the requirements of section 79(b) were not satisfied. It may be that the holding out which is contemplated by that section is to the Constituency; but if it is the Central Committee that has to decide who shall be adopted for election from the concerned constituency, any declaration made to the Committee is, in effect, addressed to the constituency through its accredited representative. The question when a candidature commences is, as has been held over and over again, one of fact, and a decision of the Tribunal on that question is not liable to be reviewed by this Court in special appeal. In the present case, the Tribunal has, in a well considered judgment, formulated the correct principles to be applied in determining when a candidature commences, examined the evidence in the light of those principles, and recorded a finding that the appellant was a prospective candidate when he made the payment of 475 Rs. 500 on 12 9 1951, and we do not find any ground for differing from it. Then, there is the payment of Rs. 500 made to the North Arcot District Congress Committee on 23 9 1951. The contention of Mr. Chatterjee with reference to this payment is that unlike the payment dated 12 9 1951, this was not spent for purposes of election but was donation made to the Committee out of philanthropic motives. It has been frequently pointed out that while it is meritorious to make a donation for charitable purposes, if that is made at the time or on the eve of an election, it is open to the charge that its real object was to induce the electors to vote in favour of the particular candidate, and that it should therefore be treated as election expense. In The Wigan Case(1), Bowen, J. observed: ". . I wish to answer the suggestion that this was merely charity. Charity at election times ought to be kept by politicians in the background. . In truth, I think, it will generally be found that the feeling which distributes relief to the poor at election time, though those who are the distributors may not be aware of it, is really not charity, but party feeling following in the steps of charity, wearing the dress of charity, and mimicking her gait". In The Kingston Case(2), Ridley, J. said: "Now assume for the moment that a man forms a design, which at the time is in prospect, for that is the point; yet if circumstances alter, and an election becomes imminent, he will go on with that design at his risk". It would again be a question of fact whether the payment of Rs. 500 by the appellant on 23 9 1951 was a pure act of charity or was an expense incurred for election purposes. It was admitted by the Secretary of the North Arcot District Congress Committee that it was usual for the Tamil Nad Congress Committee to consult the local Committee in the matter of adoption of candidates, and that at the time the payment was made, it was known that the appellant had ap plied to be adopted by the Congress. Exhibit A(7) (1) , (2) , 476 which is a statement of receipts and payments of the North Arcot District Congress Committee for the period 24 9 1951 to 24 5 1952 shows that the Committee started with an opening balance of Rs. 7 12 2, and that various amounts were collected including the sum of Rs. 500 paid by the appellant and utilised for election expenses. The Tribunal held on a consideration of these facts that the payment in question could not be regarded as innocent, and "not motivated by the desire to obtain the recommendations of the North Arcot District Congress Committee for candidature of the first respondent". No ground has been shown for differing from this conclusion. It was finally contended for the appellant that the two payments dated 12 9 1951 and 23 9 1951 could not be said to be expenses incurred on account of the conduct and management of an election, and reliance was placed on the decision in The Kennington Ca8e(1), where it was held that payments made for the running of a newspaper started for supporting a candidate were not expenses incurred in the conduct and management of an election. The facts of the present case have no resemblance to those found in that case, and the following comment on that decision in Parker 's Election Agent and Returning Officer, Fifth Edition, page 241 is instructive: "But this decision could not be safely followed except where the facts are precisely similar". On the findings recorded above, the expenses incurred by the appellant come to Rs. 8,063, and the corrupt practice specified in section 123(7) has been committed. The election was therefore rightly set aside under section 100(2)(b) of Act No. XLIII of 1951. (2) It is next contended for the appellant that the Tribunal was in error in recording as part of the order a finding that by reason of the contravention of section 123(7), the appellant had become subject to the disqualification specified in section 140, without giving notice to him as required by the proviso to section (1) 477 99. The question whether a party to an election petition is entitled to a notice under the proviso in respect of the very charges which were the subject matter of enquiry in the petition itself, has been considered by this Court in Civil Appeal No. 21 of 1955, and it has been held therein that if the party had opportunity given to him in the hearing of the petition to meet the very charge in respect of which a finding is to be recorded under section 99 (1) (a), then he is not entitled to a further notice in respect of the same matter, under the proviso. In the present case, the finding under section 99(1) (a) relates to the very payments which were the subject matter of enquiry in the election petition, and therefore no notice was required to be given to the appellant under the proviso. This objection also fails, and the appeal must accordingly be dismissed. The respondent has stated through his counsel Shri Naunit Lal that he does not propose to contest the appeal. There will accordingly be no order as to costs. Appeal dismissed.

The appellant, who fought and won the election as a Congress candidate, had applied to the Tamil Nad Congress Committee on 12 9 51 for party nomination stating his desire "to contest as a Congress candidate in the forthcoming election '? and paid a sum of Rs. 500 of which Rs. 100 was subscription for membership and Rs. 400 a deposit, liable to he refunded in case the application was refused. On 23 9 51 he paid another gum of Rs. 500 as donation to the District Congress Committee. On 13 11 51 he was adopted by the Congress as its candidate. His nomination paper for the election was filed on 16 11 51. The charge against him in the election petition was that he had failed to include these two sums in his return of election expenses and with the addition of these sums the maximum limit of election expenses prescribed for the constituency would be exceeded. The Tribunal found that both these sums were paid for election purposes and the maximum prescribed had been exceeded and, therefore, section 123(7) had been contravened and declared the election void under section 100(2)(b) of the Act. The Tribunal also recorded a _finding that the appellant was liable to the disqualifications specified in section 140, clauses (1)(a) and (2). Held, affirming the decision of the Tribunal, that the exact point of time from which a person must be deemed to be a candidate within the meaning of section 79(b) of the Representation of the People Act is the time when, with the election in prospect, he himself decides to stand as a candidate and communicates such decision to others leaving no manner of doubt as to his intention. This must be an met of his own volition and not that of other persons or bodies adopting him as their candidate. The Lichfield case, [1895] 5 p.m. & H. 1, referred to. That the applicant was a candidate from the date of his application to the Tamil Nad Congress Committee and the two sums were election expenses incurred by him and should have been shown in his return. 470 That the commencement of candidature in a particular case is. a question of fact to be determined by the Tribunal and its decision in this regard is not liable to be reviewed by the Supreme Court in an appeal by special leave. That whether a particular sum paid at the time or on the eve of the election was a donation, an act of charity or an election expense must depend on whether or not such payment was open to the charge of having been made in order to induce the voters to vote in favour of the donor. This again is a question of fact to be decided by the Tribunal. The Wigan case, , and The Kingston case , relied on. The Kennington case, (1886] , held inapplicable. That it was not necessary for the Tribunal to 'serve a notice under the proviso to section 99 of the Act on the appellant, a party to the election petition, to enable the Tribunal to record his liability to disqualification under section 140 of the Act in respect of the chargelevelled against him.

ition (Civil) No. 619 of 1987 (Under Article 32 of the Constitution of India). Dr. Y.S. Chitale, Brij Bhushan, S.K. Dhingra, Anil Kumar Gupta and B.N. Singhvi for the Petitioners. B. Datta, Additional Solicitor General, P.P. Rao, C.M. Nayyar and Girish Chandra for the Respondents. The Judgment of the Court was delivered by VENKATARAMIAH, J. The above petition was originally filed by two members of the Delhi Higher Judicial Service, by name S/Shri R.L. Gupta and S.M. Aggarwal. Since the Court was of the view that the petition of Shri S.M. Aggarwal should be considered independently, he was asked to file a separate petition. The present petition was, therefore, confined to Shri R.L. Gupta, who is hereafter referred to as 'the petitioner '. Shri R.L. Gupta, the petitioner joined the Judicial Service of Punjab on January 23, 1962 and became a member of the Delhi Judicial Service on its initial constitution on August 2, 197l. He was confirmed in the said service as a Sub Judge on August 6, 1971. He was sent on deputation as the first District & Sessions Judge, Sikkim at Gangtok on August 19, 1976. While he was on such deputation he was promoted as Additional District & Sessions Judge in the Delhi Higher Judicial Service under rule 16 of the Delhi Higher Judicial Service Rules, 1970. At the end of his period of deputation the petitioner came back to Delhi and joined as an Additional District & Sessions Judge. In June, 1979 the petitioner was sent on deputation as Registrar, Special Courts, New Delhi and he remained on deputation until March. Between March, 1980 and June, 1981 the petitioner again worked as an Additional District & Sessions Judge, Delhi. On 14.6.1981 on the establishment of the Delhi Legal Aid and Advice Board the petitioner was sent on deputation as the first Member Secretary of that Board. When he was still working as the Member Secretary of the Delhi Legal Aid and Advice Board, on April 26, 1985 the Government of India appointed a Commission of Inquiry presided over by Shri Justice Ranganath Misra, Judge, Supreme Court of India under the provisions of section 3 of the for the purpose of making enquiries into a matter of public 262 importance namely, the allegations in regard to the incidents of organised violence in Delhi following the assassination of Smt. Indira Gandhi, the late Prime Minister of India. On May 27, 1985 the Central Government addressed a letter to the Registrar of the Delhi High Court requesting the High Court to spare the services of the petitioner for being appointed as the Secretary of the Commission, referred to above. The said letter reads thus: "CONFIDENTIAL/MOST IMMEDIATE D.O.NO.II. 14013/28/84 IS(US:D.V.) GOVERNMENT OF INDIA MINISTRY OF HOME AFFAIRS North Block New Delhi 110001 27th May, 1985. S.K. PACHAURI DIRECTOR (IC II) Dear Miss Mehra, The Central Government vide Notification dated 26.4.1985, has appointed a Commission of Inquiry under the Chairmanship of Shri Ranganath Misra, a sitting Judge of the Supreme Court of India for the purposes of making an enquiry into the allegations in regard to the incidents of organised violence which took place in Delhi following the assassination of the former Prime Minister (copy enclosed). One of the posts sanctioned for the functioning of this Commission is Secretary to the Commission in the scale of Rs. 2500 2750. With the approval of Shri Justice Ranga Nath Misra, it has been proposed to appoint Shri Ramesh war Lal Gupta, Additional District and Sessions Judge and Member Secretary of the Delhi Legal Aid and Advice Board as Secretary of the Commission. The post of Secretary has been created from the date it is filled in and upto 26. 10.1985 for the present but likely to continue. We shall be grateful if you could kindly spare the service of Shri Rameshwar Lal Gupta to act as Secretary of the Commission for the aforesaid period. This may be treated as Urgent. 263 Regards, Yours sincerely, Sd/ (Dr. S.K. Pachauri) Miss Usha Mehra Registrar, Delhi High Court, New Delhi. Encl: As above." On receipt of the said letter the petitioner was asked by the High Court whether he was willing to work as the Secretary of the Commission. The petitioner expressed his willingness to do so by his letter dated May 30, 1985. On 31.5.85/ 1.6.85 the Registrar addressed a letter to the petitioner which reads thus: "Usha Mehra D.O. No. 279/Gaz. Dated:31st May, 1985/ 1.6.85 Dear Shri R.L. Gupta, In pursuance to the requisition of the Central Govt. contained in the Ministry of Home Affairs demi official letter No. II 14013/28/84 IS (US.D.V.) dated 27th May, 1985 and as desired by you and agreed to by the High Court, you are hereby permitted to go on deputation as Secretary to the Commission of Inquiry headed by Hon 'ble Mr. Justice Ranganath Misra, a Judge of the Supreme Court of India with effect from 1st June, 1985 at your own risk. Deputation will be upto 26th October, 1985 or till the date of your recall, whichever is earlier. Yours sincerely, Sd/ (USHA MEHRA) 264 Shri R.L. Gupta, Member Secretary, Delhi Legal Aid & Advice Board, New Delhi. " Accordingly, the petitioner got himself relieved from the Delhi Legal Aid and Advice Board and joined as Secretary of the Commission of Inquiry. Within three months from the date on which the petitioner joined the Commission, the Chief Justice of the Delhi High Court wrote a letter to Shri Justice Ranganath Misra stating that it had been decided by the High Court to place the petitioner on probation on the Delhi Higher Judicial Service as his turn had come for the same and, therefore, he might be relieved from his post of the Secretary of the Commission to enable him to report to the High Court as soon as possible but in any case not later than ten days from the receipt of the said communication. On receipt of the said letter Shri Justice Ranganath Misra wrote to the Chief Justice of the Delhi High Court stating that the petitioner had got himself acquainted with the working of the Commission and at that juncture it was difficult to relieve him in the public interest. Accordingly, he was not relieved by the Commission to revert to the Judicial Service. The letter of Shri Justice Ranganath Misra was considered by the Full Court of the High Court at its meeting held on 22.11.85 and the following resolution was passed: "Shri R.L. Gupta had been on deputation with Delhi Legal Aid & Advice Board. Vide this Court 's demi official letter No. 293/Gaz./VI.E.l0 dated 23.8.84 and D.O. No. 269/Gaz./VI.E.l0 dated 18.5.1985 he was asked to revert back to his parent cadre for being considered to be placed on probation. Mr. R.L. Gupta instead of reverting back, went on second deputation as Secretary to R.N. Misra Commission of Enquiry at his own request and risk. Shri R.L. Gupta was asked vide this Court 's endt. No. 457 dated 26.8.85 to come back to parent cadre within l0 days otherwise the next person shall be placed on probation. Mr. R.L. Gupta refused to come back and got it intimated through Justice R.N. Misra vide demi official letter dated 19 8.85 that he had come on deputation at his own risk. Hence the case of Shri R.L. Gupta for being placed on probation was considered and as he has declined to be available to be placed on probation at his own risk, the same has been rejected. Then the officers next to him were considered and the following officers were selected for 265 being placed on probation against regular vacancies: 1. Shri Jaspal Singh 2. Shri S.C. Jain 3. Shri R.K. Sain 4. Shri Mohd. Shamim 5. Shri P.K. Jain. " By the above resolution S/Shri Jaspal Singh, S.C. Jain, R.K. Sain, Mohd. Shamim and P.K. Jain were allowed to supersede the petitioner. During the period of his deputation as Secretary to the Commission of Inquiry twelve more officers were placed on probation by 22.8.1986. Thus in all seventeen Judicial officers were allowed to supersede the petitioner. On the completion of the work of the Commission of Inquiry on October 31, 1986 the petitioner was posted again as Additional District & Sessions Judge and was placed on probation for a period of two years with effect from April 4, 1987. Aggrieved by the aforesaid supersession the petitioner filed the above petition before this Court questioning the validity of the supersession on several grounds, some of them being common to the petitioner and Shri S.M. Aggarwal who had been impleaded as Petitioner No. 2. Since the case of the petitioner can be disposed of on a short ground we do not propose to express our opinion on the grounds which are common to the petitioner, S.M. Aggarwal and other Judicial officers working in the Delhi Higher Judicial Service. The contentions of the parties on those grounds are left open. The short question which arises for consideration in this case is whether the supersession of the petitioner made by the High Court by placing seventeen officers, who were junior to him, on probation before he was placed on probation is valid or not. While the petitioner 's contention is that no officer who is sent on deputation can be made to suffer from any evil consequences and that on his return to his parent department he should be placed in the same position in seniority which he would have occupied had he not gone on deputation, the submission made on behalf of the High Court is that the petitioner having gone on deputation at his own risk, he could not be placed on probation as an Additional District & Sessions Judge till 4.4.1987 and he was bound to lose his seniority. It was further urged on behalf of the High Court that those Judicial officers who were junior to him in the seniority list but who had been placed on probation as Additional District and Sessions Judge before 4.4 1987 were entitled to be treated as his seniors. 266 At the hearing of this case we asked the learned counsel appearing for both the parties to show whether there were any rules governing the deputation of an officer working in the judicial department. No such rules were produced before us. This case has, therefore, to be determined on the principles of justice, equity and relevant judicial precedents. In the State of Mysore vs M.H. Bellary, ; the facts of the case were these. The respondent in that case, M.H. Bellary, was a Government servant in one of the departments of the Bombay Government. He was sent on deputation to another department and after serving there for a long period and getting a number of promotions he was reverted back to his parent department and ordered to be posted at a considerably lower grade, while another Government servant who was below his rank had been promoted as Assistant Secretary. Thereupon the respondent therein filed a petition before the High Court of Mysore (Karnataka) under Article 226 of the Constitution of India challenging the order of his posting. There was a rule, rule 50(b) in the Bombay Civil Services Rules which read as follows: "50(b). Services in another post, other than a post carrying less pay referred to in clause (a) of rule 22 whether in a substantive or officiating capacity, service on deputation and leave other than extra ordinary leave count for increments in the time scale applicable to the post on which the Government servant holds a lien as well as in time scale applicable to the post or posts, if any, on which he would hold a lien had his lien not been suspended: Provided that Government may, in any case in which they are satisfied that the leave was taken on account of illness or for any other cause beyond the Government servant 's control, direct that extra ordinary leave shall be counted for increment under this clause. " That rule referred to the right of the Government servant who goes on deputation to earn increments in the pay scale applicable to the post on which he held a lien on his return to the parent department from the department to which he had been deputed. One of the questions which arose for consideration in that case also was whether the respondent who had gone on deputation was entitled to claim the promotion which he would have got in his parent department had he 267 not been sent on deputation. The High Court accepted the case of the respondent therein who had filed the writ petition and granted him the relief sought by him. Aggrieved by the decision of the High Court the appellant, State of Mysore, filed an appeal before this Court. In that appeal this Court observed thus: The other submission of learned counsel was that a Government servant though he had a right to increments in a time scale applicable to the post that he held on the date of his transfer on deputation and on which he had a lien, had no legal right to be promoted to a higher post and that the construction adopted by the High Court virtually conceded or guaranteed to officers on deputation a right to an automatic promotion which they would not have had if they had not been posted on deputation. We see no force in this contention either. Learned Counsel is right only in so far as the promotion involved relates to a selection post. But where it is based on seniority cum merit, those considerations are not relevant. The service of an officer on deputation in another department is treated by the rule as equivalent to service in the parent department and it is this equation between the services in the two departments that forms the basis of Rule 50(b). So long therefore as the service of the employee in the new department is satisfactory and he is obtaining the increments and promotions in that department, it stands to reason that that satisfactory service and the manner of its discharge in the post he actually fills, should be deemed to be rendered in the parent department also so as to entitle him to promotions, which are often on seniority cum merit basis. What is indicated here is precisely what is termed in official language the 'next below rule ' under which F an officer on deputation is given a paper promotion and shown as holding a higher post in the parent department if the officer next below him there is being promoted. If there are adverse remarks against him in the new department o punishments inflicted on him there, different considerations would arise and these adverse remarks etc. would and could certainly be taken into account in the parent department also, but that is not the position here. In view of the facts of the case it is not necessary to discuss this aspect in any detail or any further." (underlining by us) 268 The above decision was followed by this Court in the State of Mysore and Another vs P.N. Nanjundiah and Another, 3 S.C.C. 633. In that case this Court observed thus: "So long as the service of the employee in the new department is satisfactory and he is obtaining the increments and promotions in that department, it stands to reason that the satisfactory service and the manner of its discharge in the post he actually fills, should be deemed to be rendered in the parent department also so as to entitle him to promotion which are open on seniority cum merit basis. " It is not disputed in this case that the petitioner would have been placed on probation as a matter of course on 22.11.1985 if he had been serving as an Additional District and Sessions Judge and would have continued to be senior to Shri Jaspal Singh who was placed on probation on that date. In regard to the quality of the work rendered by the petitioner in the capacity of the Secretary to the Commission of Inquiry headed by Shri Justice Ranganath Misra, we may quote the certificate issued by Shri Justice Ranganath Misra on 29.11.1986. It reads thus: "Shri R.L. Gupta, a Member of the Delhi Superior Judicial Service, worked as the Secretary of the Commission of Inquiry set up under my Chairmanship to inquire into the atrocities in Delhi, Kanpur and Bokaro following the assassination of the late Prime Minister Mrs. Indira Gandhi. He worked in the Commission in that capacity from the beginning of June, 1985 till October, 1986. Shri Gupta handled his job with ability and efficiency. He impressed me as a brilliant judicial officer. I found him to be well versed in law. He exhibited character, courage and sagacity. I was impressed by his sense of social vision, legal acumen and capacity to comprehend human problems. " On his return to the Delhi Judicial Service from the Commission of Inquiry the High Court placed him on probation with effect from 4.4.1987. The question for consideration, therefore, is whether it is just and reasonable to deprive the petitioner of his seniority only because he was not working in the Delhi Higher Judicial Service dur 269 ing the period when his juniors were allowed to supersede him. We are not impressed by the submission made on behalf of the High Court that the petitioner having been informed by the High Court that he was going on deputation at his own risk he could not retain his seniority over his juniors who were placed on probation during the period of deputation. It is well known that many officers have to be sent on deputation in the public interest to other departments in order to meat the exigencies of public service and that before sending them on deputation their consent is invariably taken. Merely because they have given their consent to go on deputation they should not be allowed to suffer unless there is a specific rule to the contrary or other good reason for it. That is the ratio of the decision in State of Mysore vs M.H. Bellary (supra) and of the decision in State of Mysore and Anr. vs P.N. Nanjundiah (supra). These decisions declare that an officer on deputation is entitled to get increments in the pay scale attached to the post in their parent department and also to get promotion when it is based on seniority cum merit as and when his junior in the parent department is promoted by the application of the 'next below rule '. When increments and promotion can be earned, there is no reason why he should not be treated as being on probation also in the post held by him in the parent department even while he is on deputation. In this case the petitioner was not even sent on deputation to a department where his services could be absorbed permanently. He was sent on deputation as Secretary to a Commission which was asked to enquire into a certain matter of public importance which was to be over in a short time. The Commission itself was to become functus officio on the submission of its report. The Commission was presided over by a Judge of the Supreme Court of India and it was not possible for him to give up his post as Secretary of the Commission without the permission of the Chairman of the Commission and to return to the Delhi Judicial Service. He continued in the post of the Secretary to the Commission of Inquiry as the Chairman of the Commission found it difficult to relieve him in the midst of the inquiry. The object of placing an officer on probation is only to assess whether he is suitable for the post to which he is appointed. It is not necessary that such assessment should always be made by the appointing authority unless there is any legal impediment. Such assessment can also be made by the authority under whom the officer is required to work on deputation. In the instant case the authority under whom the petitioner was asked to work while on deputation was a Judge of the Supreme Court of India who had approved the service of the petitioner as can be seen from the certificate issued on 29.11.1986 which is extracted above. It may also 270 be seen from the decision of this Court in O.P. Singla & Anr. vs Union of India & Ors. , ; that the High Court had placed some of the officers of the Delhi Higher Judicial Service on probation for the purpose of confirming them in the Delhi Higher Judicial Service while they were on deputation in other departments. Shri D.C. Aggarwal was placed on probation while he was working as a Member of the Sales Tax Tribunal, Shri Mahesh Chandra was placed on probation while he was a Member of the Central Government Industrial Tribunal and Ms. Santosh Duggal had been placed on probation during her tenure as Member, Customs, Excise and Gold Control Appellate Tribunal. It is stated that the High Court declined to place the petitioner on probation when he was working as the Secretary of the Commission on account of the observation made by Justice Mukharjee in O.P. Singla 's case (supra) at page 396 of the Reports that such probations while the officers were on deputation were meaningless formalities. But the High Court overlooked that the same learned Judge had observed little lower down in the said judgment that "an appointment on probation is not a jurisprudential sine qua non for absorption into the services, though normally and generally various rules of different services make such provisions as rule 12(2) here. But as has been noted in the working out the practice of Delhi Judicial Service placement of promotees on probation has not been very strictly followed. The promotees cannot suffer for this." Even though it had been stated that the petitioner was sent on deputation at his own risk to the Commission of Inquiry it would be unjust to hold that the High Court could have on the facts and circumstances of this case passed orders which would have the effect of superseding the petitioner. We also fail to appreciate the implication of the observation made in the course of the resolution of the High Court that the petitioner had 'refused to come back and got it intimated through Justice R.N. Misra vide demi official letter dated 19.8.85 that he had come on deputation at his own risk. ' It was not truly a case of refusal on the part of the petitioner to go back to the Delhi Higher Judicial Service nor can it be said that he was responsible for what Shri Justice R.N. Misra had written. Shri Justice R.N. Misra found it difficult to relieve the petitioner in the midst of the inquiry for obvious reasons and that could not be used against the petitioner for depriving him of his seniority. The stand taken by the High Court in this case cannot, therefore, be upheld. We may, however, state at this stage that Shri P. Dutta, Additional Solicitor General of India appearing on behalf of the Union of India has very fairly supported the case of the petitioner. At this stage we have to observe that no innocent officer should 271 be exposed to the grave risk to which the petitioner has been exposed in this case. In the instant case, the petitioner was promoted as an Additional District and Sessions Judge under rule 16 of the Delhi Higher Judicial Service Rules in 1976. The post to which he was promoted was called a temporary post although truly it was not a temporary post. Neither the High Court nor the Delhi Administration ever believed that the post to which the petitioner was promoted would ever cease to exist. There was no chance of its abolition at all. Yet it was called a temporary because it was in excess of the strength of the posts in the Delhi Higher Judicial Service which had been fixed at 16 by rule 4 read with the Schedule attached to the Delhi Higher Judicial Service Rules in the year 1970. If the Schedule had been amended from time to time by increasing the number of posts keeping pace with the reality of the situation perhaps the strength should have been increased to 50 by now. Rule 12(2) of the said Rules states that all candidates, other than those appointed at the initial constitution of the Service on appointment to the Service shall be on probation for a period of two years. In the circumstances by appointing the Judicial officers of the Higher Judicial Service to temporary posts instead of appointing them to permanent posts the Delhi Administration has virtually made a mockery of the rules of recruitment. To place a Judicial officer, promoted to the Higher Judicial Service, on probation nearly 9 years after his promotion as in this case is a mere farce. Ordinarily an officer should be on probation from the date of his appointment and if he is found unsuitable within the period of probation he should be weeded out of service. We are told that the reason for not placing a judicial officer on probation on his appointment is that the strength of the cadre is fixed at 16. Is it just and reasonable to place an officer on probation nearly 9 years after his appointment and then turn him out of service if his services are found to be not satisfactory during the period of probation which would fall in the 10th and 11th year of his service in that cadre? The Administrators should know that the work in courts has increased by two or three times in almost every court during the last decade. The population has increased by 20 crores during this period. Laws have multiplied, transactions have increased and people are becoming more and more conscious of their rights. But the number of Judges has remained constant. This has led to frustration amongst litigants, lawyers and Judges. This frustration gives rise to different kinds of tensions including the tension which is now prevailing in the city of Delhi. We are told that the Delhi High Court has been pressing for the appointment of more number of Judges. The High Court 272 addressed a letter to the Delhi Administration requesting it to sanction 169 additional posts in the Delhi Judicial Service on 16.1.1983. The Delhi Administration sought some clarifications. In reply the High Court has again by its letter dated 7th/ 11th January, 1988 urged for the sanctioning of 169 posts. This letter shows that as on 1.9.1987 in the courts manned by the officers of the Delhi Judicial Service (who on promotion will be members of the Delhi Higher Judicial Service) there were 51,173 Regular Suits, 1210 Small Cause Suits, 974 Civil Appeals, 10,592 Rent cases, pending before courts dealing with such cases. There were 97,943 cases pending before the courts of Chief and Additional Chief Metropolitan Magistrates and 2,35,033 cases pending before other Magistrates as on 1.9.1987. The Delhi Administration appears to have not taken any serious notice of the appalling situation prevailing in the Delhi courts. The Administrators should not look at the recommendation as one which is intended to provide some jobs to lawyers. They should look at the recommendation of the High Court as one intended to give relief to the suffering litigants who waste their valuable time near courts for years waiting for justice. This is a problem which should be solved on a war footing. The Delhi Administration should straightaway increase the strength of the Delhi Judicial Service at least by 150, increase the number of posts in the Delhi Higher Judicial Service at least by 40, establish court premises in different parts of the Union Territory of Delhi and see that the pending cases which are in the order of lakhs, many of which are lingering for the last ten years and more, are disposed of within two years. If the total strength is increased at all levels, this farce of placing the Judicial officers on probation after nearly ten years will also end. We must also observe that the Government should not consider finance as a constraint because by not appointing sufficient number of Judges the Government is suffering more financially. The Government itself being a big litigant is subjected to several orders of stay, prohibitory orders, injunctions etc. leading to delay in completion of several projects and works. The indirect effects of frustration amongst the people lead to a greater financial drain. We may add here that if by any chance the arrears of cases come down, then the vacancies in judicial posts may not be filled up. The expenditure on judicial department will thus automatically come down. We hope that the Union of India and Delhi Administration will sanction at least 150 more posts in the Delhi Judicial Service and about 40 posts in the Delhi Higher Judicial Service and also take immediate steps to establish additional courts. We also suggest that the expenditure on judicial administration should not be subjected to the constraints of non plan expenditure. The judicial department is not an unproductive department. Peace and tran 273 quility that will result from quick disposal of cases is much more valuable than the economic goods produced by factories. Delay in disposal of cases affects the gross national product adversely. In fact peace and tranquility will help in greater production of economic goods. Quick disposal of cases will also save millions of man hours which are now being wasted near the courts in India. There must be a change of attitude on the part of the Governments and the administrators at the secretariats. It is imperative that every State should increase the strength of Judicial officers at least by thirty per cent immediately. Otherwise there would be a catastrophe in about a year or two. It is hoped that this warning will not go unheeded. We are of the view that the petitioner in this case should have been placed on probation on 22.11.1985 even though he was on deputation on that date and on his confirmation he is entitled to maintain his seniority above Shri Jaspal Singh. We, therefore, direct that the petitioner shall be deemed to have been on probation from 22.1.1985 and his services shall be regulated accordingly. The petitioner shall also be deemed to be above Shri Jaspal Singh in the seniority list of officers in the Delhi Higher Judicial Service. In making this order, as already stated, we have not considered the other contentions raised in the petition including the contention that the petitioner should be deemed to have been on probation from the date of his promotion to the cadre of Additional District Judge or any other date prior to 22.11.1985. All those contentions are left open. The Writ Petition is allowed accordingly. There is no order as to costs. S.L. Petition allowed.

% This writ petition was originally filed in this Court by two members of the Delhi Higher Judicial Service, namely, Shri R.L. Gupta and Shri S.B. Aggarwal, but as the Court was of the view that the case of Shri S.B. Aggarwal should be considered independently, he was asked to file a separate petition, and this petition was confined to Shri R.L. Gupta only. The petitioner, Shri R.L. Gupta, who had become a member of the Delhi Judicial Service on its initial constitution on August 2, 1971 and was confirmed in the said service as a sub judge on August 6, 1971, was working as an Additional District and Sessions Judge, Delhi, when on 14.5.1981, on the establishment of the Delhi Legal Aid and Advice Board, he was sent on deputation as the first Member Secretary of that Board. Thereafter, when the Government of India on April 26, 1985 appointed a Commission of Inquiry presided over by Shri Justice Ranganath Misra, Judge, Supreme Court of India, to enquire into the allegations in regard to the incidents of organised violence following the assassination of Smt. Indira Gandhi, the late Prime Minister of India, the Central Government by letter dt. May 27, 1985, requested the Delhi High Court to spare the services of the petitioner for being appointed as Secretary to the Commission above mentioned and upon the petitioner 's expressing his willingness to work as Secretary to the said Commission, he was permitted by the High Court to go on deputation to the Commission with effect from 1st June, 1985 at his own risk. Within three months from the date on which the petitioner had joined the Commission as its Secretary, the Chief Justice of the Delhi High Court wrote to Shri Justice Ranganath Misra, that it had been decided by the High Court to place the petitioner on probation on the Delhi Higher 256 Judicial Service as his turn had come for the same and, therefore, he might be relieved from the Commission to enable him to report to the High Court as soon as possible not later than ten days from the receipt of that communication. Shri Justice Ranganath Misra thereupon wrote to the Chief Justice of the Delhi High Court that the petitioner had got himself acquainted with the working of the Commission and it was difficult at that juncture to relieve him in public interest. The letter of Shri Ranganath Misra was considered by the High Court at its meeting held on 22.11.1985, when a resolution was passed to the effect that Shri R.L. Gupta, who had been on deputation with the Delhi Legal Aid & Advice Board, was asked to revert back to his parent cadre for being considered to be placed on probation, but he, instead of reverting back, went on a second deputation as Secretary to R.N. Misra Commission of Inquiry at his own request and risk; he was asked vide High Court 's endt. dated 26.8.85 to come back to parent cadre within ten days otherwise the next person would be placed on probation, and Mr. R.L. Gupta refused to come back and got it intimated through Justice R.N. Misra vide letter dt. 19.8.85 that he had come at his own risk. The Resolution further said that the case of Shri R.L. Gupta for being placed on probation was considered and as he had declined to be available to be placed on probation at his own risk, the same had been rejected and that the officers next to him were then considered and five officers Shri Jaspal Singh and four others were selected for being placed on probation against regular vacancies. By the above said resolution, Shri Jaspal Singh and four others were allowed to supersede the petitioner. Further, twelve more officers were placed on probation. Thus, in all seventeen judicial officers were allowed to supersede the petitioner. On completion of the work of the Commission of Inquiry on October 31, 1986, the petitioner was posted as Additional District & Sessions Judge, and placed on probation for a period of two years with effect from April 4, 1987. Aggrieved by the supersession, the petitioner filed this writ petition before this Court, questioning the validity of the supersession on several grounds, some of them being common to the petitioner and SHRI S.B. Aggarwal who had been impleaded as petitioner No. 2. Since the case of the petitioner could be disposed of on a short ground, the Court did not express its opinion on the grounds common to the petitioner and Shri S.B. Aggarwal and other judicial officers working in the Delhi Higher Judicial Service, and the contentions on those grounds were left open. 257 Allowing the writ petition, the Court, ^ HELD: The short question which arose for consideration in this case was whether the supersession of the petitioner made by the High Court by placing seventeen officers, junior to him, on probation before he was placed on probation was valid or not. No rules governing the deputation of an officer working in the judicial department were produced before the Court. The case, therefore, had to be determined on the principles of justice, equity and relevant judicial precedents. [265F; 266A B] It was not disputed that the petitioner would have been placed on probation as a matter of course on 22.11.85 if he had been serving as an Additional District and Sessions Judge and would have continued to be senior to Shri Jaspal Singh who was placed on probation on that date. [268C D] In regard to the quality of the work rendered by the petitioner in the capacity of the Secretary to the Commission of Inquiry headed by Shri Justice Ranganath Misra, the certificate issued by Shri Justice Ranganath Misra on 29.11.86 inter alia said: "Shri Gupta handled his job with ability and efficiency. He impressed me as a brilliant judicial officer. I found him to be well versed in law. He exhibited character, courage and sagacity. I was impressed by his sense of social vision, legal acumen and capacity to comprehend human problems." [268D G] On his return to the Delhi Judicial Service from the Commission of Inquiry, his being placed on probation by the High Court with effect from 4.4.87, raised the question for consideration whether it was just and reasonable to deprive the petitioner of his seniority only because he was not working in the Delhi Higher Judicial Service during the period when his juniors were allowed to supersede him. [268G H; 269A] The Court was not impressed by the submission made on behalf of the High Court that the petitioner having been informed by the High Court that he was going on deputation at his own risk, he could not retain his seniority over his juniors who were placed on probation during the period of deputation. It is well settled that many officers have to be sent on deputation in the public interest to other departments in order to meet the exigencies of public service and that before sending them on deputation their consent is invariably taken. Merely because they have given their consent to go on deputation they could not be allowed to suffer unless there is a specific rule to the contrary or other 258 good reason for it. That is the ratio of the decision in State of Mysore vs M.H. Bellary, ; , and the decision in State of Mysore and another vs P.N. Nanjundiah and another, The petitioner was not even sent on deputation to a department where his services could be absorbed permanently. He was sent on deputation to a Commission which was asked to enquire into a certain matter of public importance which was to be over in a short time. The Commission itself was to become functus officio on the submission of its report. The Commission was presided over by a Judge of the Supreme Court of India and it was not possible for the petitioner to give up his post as Secretary of the Commission without the permission of the Chairman of the Commission and return to the Delhi Judicial Service. The Chairman of the Commission found it difficult to relieve the petitioner in the midst of the inquiry. The object of placing an officer on probation is only to assess whether he is suitable for the post to which he is appointed. It is not necessary that such assessment should always be made by the appointing authority unless there is any legal impediment. Such assessment can also be made by the authority under whom the officer works while on probation. In this case, the authority under whom the petitioner worked while on deputation was a Judge of the Supreme Court of India who had approved the service of the petitioner as could be seen from the certificate issued . by him on 29.11.86, referred to above. Even though it was stated that the petitioner was sent on deputation to the Commission of Inquiry at his own risk, it would be unjust to hold that the High Court could have on the facts and circumstances of this case passed orders which would have the effect of superseding the petitioner. The Court could not appreciate the implication of the observation made in the resolution of the High Court that the petitioner had refused to come back and got it intimated through Justice R.N. Misra vide demi official letter dt. 19.9.85 that he had come on deputation at his own risk '. It was not truly a case of refusal by the petitioner to go back to the Delhi Higher Judicial Service, nor could it be said that he was responsible for what Shri Justice R.N. Misra had written, and the same could not be used against him for depriving him of his seniority. The stand taken by the High Court in this case could not, therefore, be upheld. Shri B. Dutta, Additional Solicitor General of India appearing on behalf of the Union of India supported the case of the petitioner. [269A H; 270F H] No innocent officer should be exposed to the grave risk to which the petitioner in this case was exposed. The petitioner was promoted as an Additional District & Sessions Judge under rule 16 of the Delhi Higher Judicial Service Rules in 1976. The post to which he was prom 259 oted was called a temporary post although truly it was not a temporary post. There was no chance of its abolition at all. Yet it was called a temporary post because it was in excess of the strength of the posts in the Delhi Higher Judicial Service which had been fixed at 16 by rule 4 read with the Schedule attached to the Delhi Higher Judicial Service Rules in the year 1970. If the schedule had been amended from time to time by increasing the number of the posts keeping pace with the reality of the situation, perhaps, the strength should have been increased to 50 by now. In the circumstances, by appointing the Judicial officers of the Higher Judicial Service to temporary posts instead of appointing them to permanent posts, the Delhi Administration has virtually made a mockery of the rules of recruitment. To place a Judicial officer, promoted to the Higher Judicial Service, on probation nearly after 9 years after his promotion, as in this case, was a mere farce. Ordinarily, an officer should be on probation from the date of his appointment. Is it just and reasonable to place an officer on probation nearly 9 years after his appointment and then turn him out of service if his services are found to be not satisfactory during the period of probation, which would fall in the 10th and 11th year of his service in that cadre? [270H; 271A F] The petitioner in this case should have been placed on probation on 22.11.85 even though he was on deputation on that date and on his confirmation he is entitled to maintain his seniority above Shri Jaspal Singh. The Court directed that the petitioner would be deemed to have been on probation from 22.11.85 and his services would be regulated accordingly. The petitioner would also be deemed to be above Shri Jaspal Singh in the seniority list of officers in the Delhi Higher Judicial Service. [273C D] OBSERVATlONS: The Administration should know that the work in the Courts has increased by two or three times during the last decade, but the number of judges has remained constant. This has led to frustration amongst the litigants, lawyers and judges. This frustration gives rise to tensions including the tension prevailing in the city of Delhi now. It is reported that the Delhi High Court has been pressing for the appointment of more judges. It has urged for the sanction of 169 additional posts in the Delhi Judicial Service. In the courts manned by the officers of the Delhi Judicial Service (who on promotion will be members of the Delhi Higher Judicial Service), there were pending as on 1.9.87, 51,173 Regular Suits, 1210 Small Cause Suits, 974 Civil Appeals, 10,592 Rent Cases. There were 97,943 cases pending before the courts of Chief and Addi 260 tional Chief Metropolitan Magistrates, and 2,35,033 cases pending before other magistrates as on 1.9.87. The Delhi Administration appears to have not taken any serious notice of the appalling situation prevailing in the Delhi Courts. The Administration should look at the recommendation of the High Court as one intended to give relief to the suffering litigants who waste their valuable time near the courts for years waiting for justice. This is a problem which should be solved on a war footing. The Delhi Administration should straightaway increase the strength of the Delhi Judicial Service at least by 150, the number of posts in the Delhi Higher Judicial Service, at least by 40, should establish court premises in different parts of Delhi, and see that the pending cases, in the order of lakhs, many of which lingering for the last ten years and more, are disposed of within two years. If the total strength is increased at all levels, the farce of placing the judicial officers on probation after nearly ten years will also end.[271G H; 272A E] The Government should not consider finance as a constraint because by not appointing sufficient number of judges, the Government is suffering more financially. The Government itself being a big litigant is subjected to several orders of stay, prohibitation, injunction etc. , leading lo delay in completion of several projects and works. The indirect effects of frustration amongst the people lead to a greater financial drain. If by any chance the arrears of cases come down, then the vacancies in the Judicial posts may not be filled up. The Court expressed the hope that the Union of India and Delhi Administration would sanction at least 150 more posts in the Delhi Judicial Service and about 40 posts in the Delhi Higher Judicial Service and also take immediate steps to establish additional courts. The expenditure on judicial administration should not be subjected to the constraints of non plan expenditure. The judicial department is not an unproductive department. Peace and tranquillity that will result from quick disposal of cases is much more valuable than the economic goods produced by factories. Delay in disposal of cases affects the gross national product adversely. Quick disposal of cases will save millions man hours now being wasted near the courts. It is imperative that every State should increase the strength of the Judicial officers at least by thirty per cent immediately; otherwise, there would be a catastrophe in about a year or two. The Court expressed the hope that this warning would not go unheeded. [272F H; 273A C] The State of Mysore vs M.H. Bellary, [1964] 7 S.C.R. 471, State of Mysore & Anr. vs P.N. Nanjudiah & Anr., , and O.P Singla & Anr., etc., vs Union of India & Ors. , ; 261

ition No. 4675 of 1978. (Under article 32 of the Constitution of India) M.C. Bhandare, Mrs. Urmila Kapoor, Mrs. Shobha Dikshit, Hasan Imam, Shanker Saran Lal and Miss Kamlesh Bansal for the Petitioners. 1086 O.P. Rana and section Markandeya for Respondents Nos. Anil B. Dewan, K.L. Hathi, P. Parmeswaran, P.C. Kapoor and M.A. Quadeer for Respondents Nos. Haider Abbas and Miss Kamini Jaiswal for Respondent No. 8 (Shia Waqf Board, U.P.) F.S. Nariman, M. Qamaruddin, Mrs. M. Qamaruddin, Z. Jilani and Mrs. Sahkil Ahmed for Respondent No. 7 (U.P. Sunni Central Board of Waqf) M.C. Dhingra for Intervenor Institute for Re writing History. The Judgment of the Court was delivered by TULZAPURKAR, J. By this writ petition filed under article 32 of the Constitution of India the petitioners and through them the Shia community of Mohalla Doshipura, Varanasi are complaining against the various actions of the respondents (including respondents 5 and 6 as representing the Sunni community of Mohalla Doshipura) which constitute serious infraction and/or infringement of their fundamental rights guaranteed to them under articles 25 and 26 of the Constitution in the matter of enjoying their religious faith and performance of religious rites, practices and observances on certain plots and properties situated in the said Mohalla of Doshipura, Police Station Jaitpura (formerly Adampur) in the city of Varanasi and in particular are seeking a declaration that the 9 plots of land bearing plot Nos. 245, 246, 247, 248/23/72, 602, 603, 602/1133, 246/1134 and 247/1130 in the said Mohalla and buildings and structures thereon belong to the Shia Waqf of Mohalla Doshipura and that the members of Shia community of that Mohalla have a right to perform their religious functions and practices on the said plots and structures thereon as also an appropriate writ, direction or order in the nature of mandamus commanding respondents 1 to 4 not to prohibit or restrain the Shias of the Mohalla from performing their religious functions and practices thereon. It may be stated that this Court by its order dated December 12, 1978 not merely granted permission to the petitioners under Order I Rule 8 C.P.C. to institute this action qua themselves as representing the Shia community and respondents 5 and 6 as representing Sunni community, but directed at certain stage of the hearing that the two Waqf Boards in U.P. State, namely, Shia 1087 Central Waqf Board and Sunni Central Waqf Board be impleaded as parties to the petition as their presence was felt necessary for complete adjudication of the controversy and even otherwise under the U.P. Muslim Waqf Act, 1960, which has been done and both the Waqf Boards have also been heard through their counsel in the matter. In Mohalla Doshipura of Varanasi City there are two seats of mohammedan the Shias and the Sunnis. Both the sects revere the martyrdom of Hazrat Imam Hasan and Hazrat Imam Hussain, grand sons of Prophet Mohammed, during the MOHARRAM but in a different manner. The case of the petitioners and through them of the Shias of Mohalla Doshipura is that the members of their sect numbering about 4000 constitute a religious denomination having a common faith and they observe MOHARRAM for two months and eight days in a year in memory of Hazrat Imam Hussain who alongwith his 72 followers attained martyrdom at Karbala in Iraq. The said religious belief is practised by the men folk and the women folk of the Shia community by holding Majlises (religious discourses), Recitations, Nowhas, Marsia, doing Matam (wailing) and taking out processions with Tabut Tazia, Alama, Zuljinha, etc. For performing these religious rites, practices and observances the Shia community has been customarily using from time immemorial the nine plots in Mohalla Doshipura and the structures on some of them, particulars whereof are as under: Plot No. 246: on which stands a Mosque which, it is common ground, belongs to both the sects as it was constructed out of general subscription from members of both the sects and every Mohammedan is entitled to go in and perform his devotions according to the ritual of his own sect or school. Plot No. 247/1130: on which stands the Baradari (Mardana Imambara structure of white stone having 12 pillars) constructed by Shias in 1893 used for holding Majlises, Recitations, Marsia and doing other performances. Plot No. 245: on which there is a Zanana Imambara used by Shias ladies for mourning purposes and holding Majlises etc. 1088 Plot No. 247: on which there is Imam Chowk used for placing the Tazia thereon (said to have been demolished by the Sunnis during the pendency of the instant proceeding). Plot No. 248/23/72: a plot belonging to one Asadullah, a Shia Muslim, with his house standing thereon. Plot No. 246/1134: on which stands a Sabil Chabutra (platform for distributing drinking water) belonging to one Nazir Hussain, a Shia Muslim. Plots Nos. 602/1133, 602 and 603: being vacant plots appurtenant to the Baradari in plot No. 247/1130 used for accommodating the congregation assembled for Majlises etc. when it over flows the Baradari. Particulars of the religious rites, practices and functions performed by the members of the Shia community on the occasion of the observance of MOHARRAM RE: (a) the Tazia (representing and signifying the dead body of Hazrat Imam Hussain) is kept in the Baradari on plot No. 247/1130 and for the first 12 days of MOHARRAM Majlises (religious discourses) of men folk and women folk is held daily by the men folk in the Baradari and on the adjoining plot Nos 602/ 1133, 603 and 602 and by the women folk in the Zanana Imam Bara on Plot No. 245. (b) On the 6th day of MOHARRAM the Zuljana procession (a procession of the replica of the horse of Prophet Mohammed, which was also killed at the Karbala at the time of martyrdom of Hazarat Imam Hussain) of not less than 5000 Shias from all over Banaras City is brought to the Baradari in which the Tazia is placed and after visiting the Tazia there the horse procession moves in the whole city of Varanasi non stop for another 36 hours and terminates at the place of its origin. Offerings to the horse are made not only by the Shias 1089 but also by persons of other communities during the procession under the religious belief that such offerings bring in good fortune. (c) On the 10th day of MOHARRAM, the Tazia bedecked with flowers is taken out in huge procession to Karbala situated near Lord Bharon, 3 miles from Doshipura (the place signifying the Karbala in Iraq where martyrdom occurred), where the flowers of the Tazia are buried and then Majlis is held at that place. (d) On the 11th and 12th day of MOHARRAM Majlis (religious discourse) is held and the Qurankhani and Tajia are performed in the Baradari and the adjoining plots which consist of offering of prayers, recitations of Quran Sharif, Nowhaz (short melancholic poems) and Marsias (poems of grief and sorrow) these being performed both by men folk and women folk, the latter at Zanana Imam Bara. (e) On the 25th day of MOHARRAM, being the death anniversary of Hazarat Zanulabadin s/o Hazrat Imam Hussain, again Majlis, Matam (wailing accompanied by breast beating), Nawhaz and Marsias are held and performed in the Baradari and the adjoining plots by men and in Zanana Imambara by women. (f) On the 40th day of the MOHARRAM Chehalum ceremony of Hazrat Imam Hussain is performed when Majlis, Matam, Nawhaz and Marsia are held, the Tazia bedecked with flowers is taken out in procession up to Karbala near Lord Bhairon where again the flowers are buried with religious ceremonies and the Tazia is brought back to the Baradari in Doshipura. (g) On the 50th day of the MOHARRAM i.e. 50th day of the martyrdom of Hazrat Imam Hussain Pachesa is performed by taking out the Tazia again in procession to the Karbala and after burial of flowers it is brought back to the Baradari. On both these days i.e. Chehalum and Pachesa, Majlis, Qurankhani, Nawhaz, Marsias and Matam are performed on the Baradari, 1090 adjoining plots and the Zanana Imam Bara in Doshipura. (h) Four days after the Moharram period the Shias observe the Barawafat which according to them is the death anniversary of Prophet Mohammad and on this day again on the Baradari, adjoining plots and Zanana Imambara Majlis is held which is accompanied by Qurankhani, Nawhaz and Marsias in which menfolk and women folk participate. It is the case of petitioners that the Tazia at Doshipura is a unique Tazia in the whole country, being made of fine wood carvings, about 15 ft. in height, having five storeys, and decorated with gold and silver and would be of the value of not less than Rs. 3 lakhs. According to the petitioners the entire period of Moharram is a period of mourning for the Shias whose staunch belief is that the whole purpose of their life is to carry out these religious practices and functions during the MOHARRAM and that in case they do not perform all these rites, practices, observances and functions, including those relating to the Tazia, they will never be delivered and till these are performed the whole community will be in mourning and in none of their families any marriage or other happy function can take place. The aforesaid religious faith and the performance of the rites, practices, observances and functions detailed above constitute their fundamental rights guaranteed to them under articles 25 and 26 of the Constitution and the members of the Shia community of Mohalla Doshipura have a customary right to perform these on the said nine plots and in or about the structures standing thereon from time immemorial. The Petitioners and through them the Shia community of Mohalla Doshipura are basing their customary rights to perform the aforesaid religious rites, practices, observances and functions on the said nine plots and the structures thereon on two foundations: (1) Decisions of competent civil courts adjudicating these rights in their favour in earlier litigations and (2) Registration of Shia Wakfs concerning the plots and structures for performance of these practices and functions under secs. 5 and 38 of the U.P. Muslim Wakfs Act, 1936 which has become final as no suit challenging the Commissioner 's Report and registration was filed within two years by any member of Sunni community or the Sunni Central Wakf Board. In other words previous decisions of Civil Courts and registration of their Shia Wakfs under the U.P. Muslim 1091 Wakfs Act. 1936 have concluded the said rights in their favour and therefore Counsel for the Petitioners pointed out that the prayer for declaration in the Writ Petition was really incidental, the rights in favour of the Shia community having been already determined and the real grievance was regarding the infringement of their said rights and their enforcement and hence the substantial prayer was for mandamus commanding the respondents not to prohibit or restrain the Shias from performing their religious rites, practices, observances and functions on the plots and the structures standing thereon. The Petitioners ' case further is that after the final declaration by the court of law in regard to their rights in their favour and the rejection of the false claims of the Sunnis the position in Mohalla Doshipura remained satisfactory for nearly two decades and the Shias could perform their religious functions and ceremonies without any let or hindrance but from the year 1960 onwards the Sunnis, who were in majority and were able to muster support of local politicians and the police, started creating trouble and interference by indulging in violence with a result that the Executive Authorities of Varanasi acting under sec. 144 Cr. P.C. but in abuse of the power thereunder started placing undue restrictions on the members of the Shia community in the performance of their religious functions and ceremonies. Thus during the period 1960 66 the Executive power under sec. 144 Cr. P.C. came to be used each year to curtail the rights of the Shias to perform their religious practices and functions at the Baradari, other structures and the appurtenant plots on the occasion of the Barawafat; sometimes restraints were also placed on the Sunnis. During the years 1967 to 1969 similar orders depriving the Shias of their legitimate rights on the occasion of MOHARRAM, Chehulam, Pachesa and Barawafats u./sec. 144 were issued by the District authorities. In subsequent years also similar orders were passed sometimes placing restrictions on one community and sometimes on the other, sometimes permitting certain observances on terms and conditions during the stated hours. More often than not under the pretext of imminent danger to peace and tranquility both the communities were completely prohibited from carrying out their religious functions and ceremonies under such orders but since members of the Sunni community had very little to lose in relation to the plots and structures in question it was the Shia community that suffered most. According to the Petitioners the aggrieved party and mostly Shias were aggrieved was required to approach 1092 the superior Courts by way of appeal or revision but usually before the matter could be decided on merits the impugned orders exhausted themselves by influx of time and the remedy by way of appeal or revision was rendered infructuous and the controversy remained undecided. However, when in the year 1973 on the occasion of Barawafat the City Magistrate, Varanasi by his order dated 12th April, 1973 prohibited the Shias from performing Barawafat on the Baradari and its adjoining plots and Sunnis were illegally permitted to observe Barawafat on Plot No. 602/1133 by reciting Qurankhani, Milad and Fathiha on 16th April, 1963 from 9 A.M. to 12 Noon Gulam Abbas and other Shia Muslims filed a Writ Petition No. 2397 of 1973 in the Allahabad High Court for quashing the order of the City Magistrate and for prohibiting the City Magistrate and local authorities from passing or promulgating any order depriving the Shia of peaceful use and enjoyment of the Baradari and the adjoining plots appurtenant to it and also prohibiting them from permitting the Sunnis to make use of the Baradari and its adjoining plots. This Writ Petition and the connected criminal cases (being Criminal Revision and a Criminal Reference against similar earlier orders u./sec. 144 Cr.P.C.) were heard and disposed of by the High Court by a common judgment delivered on August 8, 1975. Notwithstanding the fact that the various impugned orders had exhausted themselves by efflux of time the High Court felt that where a situation arose year after year making it necessary to take action u./sec. 144 Cr. P.C. it would be proper exercise of its discretion to interfere with the impugned order, if found to be illegal or improper, so that the Magistrate may not be encouraged to use his powers in the same manner again when the similar situation arose and that if a repetition of successive orders under sec. 144 resulted in a permanent interference with private legal rights it had to be deprecated and the High Court went on to give guide lines to the Magistrates in the exercise of their discretionary power under sec. 144 by observing that though the section does not empower a Magistrate to decide a dispute of a civil nature between the private individuals, he must, before passing his order, take into consideration the nature of the claims set up by the rival parties in order to judge whether or not it was possible to afford protection to those who seek only the lawful exercise of the legal and natural rights, that the authority of a Magistrate under this section should ordinarily be exercised in defence of legal rights and lawful performance of duties rather than in suppressing them and that this power is not to be used in a manner that would either give material advantage to one 1093 party to the dispute over the other or interdict the doing of an act by a party in the exercise of its right or power declared or sanctioned under the decree of a competent Court. On merits the High Court recorded its findings on the rights of the Shias in their favour in view of Civil Court 's decision in earlier litigation and quashed the City Magistrate 's order dated 12 4 1973 allowing the Sunnis and restraining the Shias from holding various religious functions on the occasion of Barawafat on the Baradari and the adjoining plots in question in Mohalla Doshipura and also passed appropriate orders in the connected criminal cases. Against this common judgment rendered by the High Court on August 8, 1975, Civil Appeal No. 941 of 1976 and Crl. 432 to 436 of 1976 were preferred by Mohammad Ibrahim, a Sunni Muslim, all of which were disposed of by this Court by a Common judgment dated 6 12 1976 and this Court held that the High Court should not have pronounced any view on the impugned orders under sec.144 when those orders had ceased to be operative and that the High Court should not have given findings on rights, title and property depending on disputed questions of facts in a writ petition the judgment and findings of the High Court were set aside and parties were relegated to have their rights agitated or settled in a civil suit. Feeling aggrieved by the said judgment, Gulam Abbas and others filed a Review Petition No. 36 of 1977 in Civil Appeal No.941 of 1976 which was dismissed by this Court on 16th December, 1977 after making some observations: "Questions of title cannot be decided here (under sec. 144) but previous judgment on them may have a bearing on the question whether and if so, what order could be passed under sec. 144 Cr.P.C. .It was asserted on behalf of the Petitioners (Gulam Abbas and others) that in a representative suit between Shia and Sunni sects of Muslims question of title to properties or places to which the Magistrates ' orders under sec. 144 Cr P.C. related has already been decided. If that be so, we have no doubt that the Magistrate will respect that decision in making an order under sec. 144 Cr. P.C. in the future. " According to the Petitioners even after the aforesaid decision of this Court the city Magistrate, Varanasi, who had passed an order on 15 12 1977 under sec. 144 directing both the communities of Mohalla Doshipura to follow the terms and conditions laid down in this said order, on the representation being made by the Shias on 17 12 1977 bringing to his notice this Court 's order dated 16 12 1977 in the Review Petition modified his earlier order on 19 12 1977 1094 permitting holding of Majlis only at the house of Shamsher Ali but in respect of other properties postponed the passing of his order till 21 1 1978 but on that day he merely passed an order stating that his initial prohibitory order dated 15th December, 1977 as modified on 19th December, 1977 has exhausted itself as Moharram had passed off and further observed that while passing orders on the occasion of Moharram, Chehalum and Pachesa etc. in the coming years due regard will be given to the judgment of this Court dated 16 12 1977 in Review Petition along with the decisions rendered in earlier civil litigation in representative character between the parties including the Allahabad High Court 's decision in second Appeal No. 1726 of 1935. But one week later the same City Magistrate passed another order under sec. 144 Cr. P. C. on 28th January, 1978 on the occasion of Chehalum and Pachesa to be observed on the Baradari and the adjoining plots which was quite contrary to his earlier order dated 21 1 1978 and in utter disregard of the judgment of this Court in Review Petition No. 36 of 1977 and all other earlier judicial pronouncements in favour of the Shias; in fact by that order the City Magistrate completely prohibited every person from holding any Majlis either on the Baradari or on any portion of the adjoining plots in Mohalla Doshipura. This order dated 28 1 1978 was challenged by way of revision in the High Court but the Revisional application was dismissed on 13 2 1978 on the ground that the impugned order had ceased to be operative by then and Revision had become infructuous. Subsequent to this on several occasions requests were made by Shias of Mohalla Doshipura seeking permission for doing ceremonies and taking out Tazia Procession but on every occasion the City Magistrate refused permission. In the circumstances a Writ Petition No. 3906 of 1978 was filed by Gulam Abbas and other Shia Muslims in the Allahabad High Court praying for mandamus against the State of U. P. and its Magisterial officers, Varanasi, directing them to grant permission for performing some ceremonies and taking out Tazias but the same was dismissed by the High Court in limini on 22.9.1978 principally relying on the earlier judgment dated 6.12.1976 of this Court in Civil Appeal No. 941 of 1976; Special Leave Petition No. 6226 of 1978 against the same was filed by Gulam Abbas and others but it was withdrawn on 4 12 1978 as they were advised to file the present Writ Petition. During the hearing the Petitioners have amended their Petition by challenging the latest order passed by the City Magistrate, Varanasi on 24th November, 1979 under sec. 144 Cr. P. C. prohibiting both Shia and Sunni communities from holding their Majlises and imposing other 1095 restrictions (the restriction on Recitation of Tabarra by Shias is not challenged) on the occasion of celebration of Moharram Festival at the Baradari and the adjoining plots in question in Mohalla Doshipura. The Petitioners have pointed out that Shias do not utter Tabarra (a ritual regarded as a filthy abuse of the elected Imams hurting the feelings of Sunnis) but have fairly conceded the justness of the prohibition against uttering Tabarra. Petitioners have contended that the exercise of the power under sec. 144 Cr. P. C. has invariably been perverse and in utter disregard of the lawful exercise of their legal rights to perform their religious ceremonies and functions and in stead of being in aid of such lawful exercise it is in favour of those who unlawfully and illegally interfere with such lawful exercise under the facile ground of apprehension of imminent danger to peace and tranquility of the locality. By their counter affidavit filed in reply Respondents 5 and 6 on behalf of themselves and the Sunni community have resisted the reliefs claimed by the Petitioners in the Writ Petition principally on three or four grounds. On merits they have denied that there is clear on decisive material on record either in the form of judicial pronouncements or the registration of the Shia Wakfs of Mohalla Doshipura under the U. P. Muslim Wakfs Act, 1936 concluding in favour of Shias ' title to the concerned plots or structures thereon or their entitlement to the performance of the religious rites, practices, observances and functions on the property in question as claimed; it is contended that a clear and sharp distinction must be made between title and ownership of the concerned plots of land, title and ownership of the structures on those plots and the rights exercisable by the Shia community over the concerned plots and structures thereon and there are considerable gaps and inadequacies in the documents and the material before the Court in that behalf which can only be filled in by trial and by recording evidence and in the absence of adequate material no declaration as to the title to the plots or the structures or even as to the rights in or over the plots and structures thereon could be granted in favour of the Shia community. In other words the contention is that a Writ Petition under Article 32 for such a relief of declaration is not maintainable in as much as the basic purpose of a Petition under Article 32 is to enforce existing or established fundamental rights and not to adjudicate and seek a declaration of such rights or entitlement thereto. In this behalf respondents 5 and 6 have doubted and disputed the effect and binding nature of the earlier court decisions, particularly of the judgments rendered by the Munsif 's Court, Vanarasi in Suit No. 232 of 1934 1096 (Fathey Ullah & Ors. vs Nazir Hussain and Ors.) and by the Appellate Courts in appeals therefrom, on the entire Sunni community and as regards registration of the Shia Wakfs they have contended that the position arising out of the U. P. Muslim Wakfs Act, 1936 and the U. P. Muslim Wakfs Act, 1960 in the context of the Sunni Wakfs in regard to the properties in dispute under the latter Act requires serious consideration. As regards reliefs sought against the orders passed by a City Magistrate or Sub Divisional Magistrate under sec. 144 Cr. P. C. it is contended that no mandamus under article 32 is competent in as much as these are judicial or quasi judicial orders passed by a Court under sec. 144 Cr. P. C. and no fundamental right can be said to be infringed by any judicial or quasi judicial orders; alternatively are administrative even if it were assumed that these orders are administrative or executive orders passed by Executive Magistrates these cannot be challenged unless the Magistrate has exceeded his powers or acted in disregard to the provisions of the law or perversely and in the instant case the impugned orders subsequent to this Court 's decision dated 16 12 1977 in Review Petition No. 36 of 1977 have been passed by keeping in mind the observations or the guide lines contained in that decision and in light of the emergent situation then obtaining in the locality. In the circumstances, the Petitioners are not entitled to any of the reliefs sought by them in the Writ Petition: Lastly, it has been contended that the present Writ Petition is barred by res judicata or principles analogous to res judicata by reason of this Court 's decisions in (a) Civil Appeal No. 941 of 1976, (b) Review Petition No. 36 of 1977 and (c) Order permitting withdrawal of SLP No. 6226 of 1978 on 4.12.1978. In any case the view taken by a Bench of three judges of this Court in their judgment dt. 6 12 1976 and reiterated in the order dt. 16 12 1977 on the Review Petition, however wrong it may appear to be, should not be disturbed. The two Boards, Shia Central Wakfs Board and Sunni Central Wakfs Boards impleaded as parties to the Writ Petition under this Court 's Order dated 28th March, 1980 have supported the respective cases of each community represented by the Petitioners on the one hand and respondents 5 and 6 on the other respectively and each one has placed such additional material before the court as was in its possession touching the registration of Shia Wakfs and Sunni Wakfs under the two enactments U.P. Muslim Wakfs Act, 1936 and U.P. Muslim Wakfs Act, 1960. 1097 It cannot be disputed that ordinarily adjudication of questions of title or rights and granting declaratory relief consequent upon such adjudication are not undertaken in a Writ Petition under article 32 of the Constitution and such a petition is usually entertained by this Court for enforcement of existing or established title or rights or infringement or encroachment thereof complained by granting appropriate reliefs in that behalf. But as stated earlier, counsel for the Petitioners contended before us and in our view rightly that all that the Shia community is seeking by this Petition is enforcement of their customary rights to perform their religious rites, practices, observances and functions on the concerned nine plots and structures thereon which have already been adjudicated, determined and declared in their favour by decisions of competent Civil Courts in the earlier litigations and that the declaration sought in the prayer clause is really incidental. It is true that title and ownership of the plots of land in question is distinct from title and ownership of structures standing thereon and both these are again distinct from the customary rights claimed by the members of the Shia community to perform their religious ceremonies and functions on the plots and the structures thereon. However, it is clear that even if the Petitioners and through them the Shia community are unable to prove their existing or established title either to the concerned plots or to the structures standing thereon but they are able to prove that they have existing or established customary rights to perform their religious ceremonies and functions on the plots and the structures thereon simultaneously complaining of illegal deprivation or encroachment by executive officers at the behest of respondents 5 and 6 or the Sunni community the reliefs sought by them by way of enforcement of such customary rights will have to be entertained and considered on merits and whatever relief they may be found legally and properly entitled to may have to be granted to them. This is not to suggest that the petitioners or the Shia community have failed to prove that they have existing or established title and ownership over the plots and/or over the structures thereon an aspect which will have to be considered on merits though secondarily, the primary question being whether they have succeeded in proving their subsisting entitlement to the customary rights claimed by them. In this behalf, as stated earlier, they are basing their customary rights on two foundations, namely, decisions of competent Civil Courts adjudicating these rights in their favour and registration of Shia Wakfs concerning the plots and structures for performance of these practices and functions under secs. 5 and 1098 38 of the U.P. Muslim Wakfs Act, 1936 and we proceed to examine critically these two foundational basis. Dealing first with Civil Court 's decisions in earlier litigations it would be necessary to refer to two or three earlier litigations and to state accurately the result in each which will have a bearing on the rival contentions of the parties hereto. In Suit No. 849 of 1878 filed by Sheikh Sahib and Ors. (Shia Muslims) against Sheikh Rahmatu and Ors. (Sunni Muslims) in the Munsif 's Court at Benaras the dispute pertained to the mosque in Plot No. 246 and the Plaintiffs ' rights to hold their Majlises on 9th and 12th of MOHARRAM inside the mosque and to keep and repair their Tazia in that mosque, and the learned Munsif Shri Pramode Charan Banerji by his judgment dated 29th March, 1879 held : (a) that the disputed mosque was built by general subscription, that it belonged to members of both the sects and that every Mohammedan had a right to worship in it; (b) that the plaintiffs failed to establish their claims about the holding of the Majlises and the cooking and distribution of food in the mosque but the probabilities were that the Majlises of 9th and 12th MOHARRAM were held by them on or close to the platform on the surrounding ground and (c) that the plaintiffs had acquired by a long user a right to keep their Tazia in the Hujra (apartment) of the mosque and to repair the same in the tiled Saeban (Varandah) of the mosque and the defendants were restrained from interfering with plaintiff 's rights in respect of the above matter; the rest of the plaintiffs ' claim was dismissed. Civil Appeal No. 73 of 1879 was preferred by the plaintiffs against that part of the decision which went against them and cross objections were filed by the defendants against declaratory relief and injunction passed against them but both the appeal as well as the cross objections were dismissed by Shri Ram Kali Choudhary, Subordinate Judge, Banaras on 16th December, 1879 and the trial court 's decree was confirmed. In other words this litigation declared the mosque in plot No. 246 to be a public mosque at which every Mohammedan became entitled to worship and further declared the plaintiffs right to keep their Tazia in the apartment attached to the mosque and repair it in the Varandah thereof and to hold their Majlises on 9th and 12 of MOHARRAM on or near the platform on the surrounding ground of the mosque as early as on 29th March, 1879. 1099 It appears that the Sunni Muslims of Mohalla Doshipura, Varanasi repeatedly tried to put forward their false claims and rights over some of the Plots in question and in particular attempted to encroach upon plot No. 602/1133, which had been recorded as Banjar Qadim (barren land) in the revenue records, by falsely alleging that it was a grave yard where they had buried their dead. The then Maharaja of Banaras (plaintiff No. 1) filed Suit No. 424 of 1931 in the Court of Additional Munsif, Banaras against Shamshuddin and Ors. representing all Muslims residing in Banaras under O. 1, R. 8 C.P.C. (though the nominee defendants were Sunni Muslims) praying for a declaration of his rights as owner and Zamindar and for a permanent injunction restraining the defendants from interfering with his rights and also for removal of fictitious graves if any on that plot. It may be stated that Shias of Varanasi had never claimed the plot to be a grave yard, though they were claiming other rights to perform their religious ceremonies and functions thereon, but only Sunnis were claiming the plot as their grave yard and therefore the suit and the reliefs were virtually directed against the Sunni Muslims residing in Banaras. It appears that since a portion of the plot No. 602/1133 to the extent of two Biswas had been taken by one Abdul Hamid (also a Sunni) under Qabuliyat dated 7th January, 1907 on payment of Rs. 1/4/ as Parjat from the Maharaja for construction of a house and since even after his death plaintiffs Nos. 2 to 5, though in continuous possession of the said portion as Abdul Hamid 's heir 's could not construct a house over that portion because of defendants ' interference, they were also joined as co plaintiffs in the suit. It was alleged that the defendants had interfered with the plaintiffs ' rights by claiming plot No. 602/1133 to be a grave yard and they had built some bogus graves since one year back to support their illegal stand. The suit was contested primarily on the ground that the plot in question was an old grave yard and that the defendants (representing Sunni Muslims) had acquired a right to bury their dead in the said plot. The suit was dismissed by the trial court, the learned Munsif holding that the plot in question was an old grave yard and the defendants had acquired customary right to bury their dead. All the plaintiffs filed an appeal being Civil Appeal No. 134 of 1932 but subsequently plaintiffs Nos. 2 to 5 retired leaving plaintiff No. 1 (the Maharaja) alone to fight out the case. Shri Kanhaiya Lal Nagar the learned Subordinate Judge by his judgment dated 6th February, 1933 allowed the appeal and decreed the suit in favour of the Maharaja. In the course of his judgment he made a reference to the fact that 1100 the plot in question had become an apple of discord between the two rival Muslim communities of Shias and Sunnis, that the former was using it for holding their religious meetings on occasions of festivals, marriages and for Taziadari, with structures on adjoining places while she latter wanted to make their encroachments by burying their dead just in close proximity with the above sacred places in order to wound the former 's religious feelings but one had to look to the proprietory title and possession of His Highness the Maharaja. On appreciation of oral and documentary evidence on record the learned Sub Judge held: (a) that the plot in question was not a grave yard but that between 1929 and 1931 attempts had been made by the Sunni Muslims to manufacture and fabricate evidence indicating that it was a grave yard; (b) that the Sunni Muslims had acquired no customary rights in the matter of burial of their dead over the plot in question; and (c) by permanent injunction he restrained the defendants and through them the Muslims of Banaras (in effect Sunni Muslims) from using the said plot in the future as a burial ground. However, as regards the prayer for actual removal of graves he took the view that it would be a bit improper that the soul of the dead be stirred and the defendants be ordered to remove them and they were given liberty to read Fathia or attend to the graves if any (there was clear evidence of only one old grave that of one Hakim Badruddin situate on the southern side of the plot in suit as shown in Map Paper No. 3A existing since 1307 H or 45 years) with due regard to the rights of the Maharaja. This decree was upheld by the High Court and it thus became final. Two things become clear from the aforesaid decision. In the first place though the suit was directed against all muslims residing in Banaras (defendants representing them under O.1, R.8 P. C.) the customary rights of Shias to perform their religious ceremonies and functions on plot No. 62/1133 or on adjoining plots were not but the customary rights of Sunnis in the matter of the burial of their dead on the plot were the subject matter of litigation and secondly the decision was virtually against all Sunni Muslims residing in Banaras to the effect that the plot in question was neither a grave yard nor had they any customary right to bury their dead in the said plot and such rejection of their claim must be held to be binding on the entire Sunni community not only of Doshipura but all those residing in the city of Banaras, albeit as against the Maharaja. Then comes the third and the most important litigation which was between the two rival sects of Muslims of Mohalla Doshipura, 1101 Varanasi and that is Suit No. 232 of 1934 filed in the Court of City Munsif, Banaras by Fathey Ullah and Ors. (Sunni Muslims against Nazir Hussain and Ors. (Shia Muslims). The plots in dispute were Khasra Nos. 245, 246, 247, 248/23/72, 602, 603, 602/1133, 246/1134 and 247/1130 (same as are involved in the instant Writ Petition) which were claimed to be Sunni Wakfs by long user. The plaintiffs asserted their customary rights (specified in para 4 of the plaint) over the said plots and structures thereon. It was alleged that the defendants ' ancestors had no rights in these plots except for placing their Tazia in a Huzra (apartment) on the mosque and repairing the same and holding their Majlises on the 9th and the 12th of the MOHARRAM (apparently accepting the decision of Pramode Charan Banerji in the earlier litigation being Suit No. 849 of 1878 as affirmed in Civil Appeal No. 73 of 1879) but they had made unauthorised constructions on some of the plots. The plaintiffs prayed that the defendants be directed to remove their unauthorised constructions and that a perpetual injunction be issued against them restraining them from holding their majlises near the mosque or Imam Chowk. Or on any other plot in suit except on 9th and 12th of MOHARRAM. The defendants contested the suit and denied that the plots were Sunni Wakfs and further denied that the plaintiffs had acquired any customary right over them. They asserted their exclusive rights to perform their religious ceremonies and functions over the plots and averred that existing constructions (details whereof were specified) had been put up long ago exclusively by the Shias and were used for their religious ceremonies and functions. The trial court (Shri Shah Ghayas Alam Sahib, the Additional Munsif) partly decreed the suit on 2nd February, 1935. He ordered the demolition of the construction on plot No. 245 (being Zanana Imambara) and issued a perpetual injunction restraining the defendants from holding their Majlises in the Baradari (being Mardana Imambara on plot No.247/1130) except on the 9th and 12th of MOHARRAM but he dismissed the suit so far as it related to the demolition of Chabutra (platform) of Asadullah 's house in plot No. 248/23/72. The Shias went up in appeal being Civil Appeal No. 65 of 1935 while the Sunnis filed a cross objection regarding that part of the relief which was denied. Shri Brij Narain the learned second Additional Sub Judge of Banaras on 18th September, 1935 allowed the defendants ' appeal, set aside the decree of the trial Court and dismissed the plaintiffs ' suit with costs through out; the cross objection was also dismissed with costs. It was admitted by both the parties before the appellate Court that His Highness the Maharaja of Banaras was the Zamidar of the plots 1102 in question and the Khasras of 1291 Fasli (1884 A.D.) also showed the same thing. The appellate Court held: (a) that in plot No. 246 there was a Pokhta mosque which was wakf property but that none of the other plots in suit were appurtenant to that mosque in 246 as was claimed by plaintiffs and that neither the plaintiffs nor members of Sunni community were owners of any of the plots in question; (b) that the plaintiffs had failed to prove that the other plots were wakfs in their favour: (c) that the plaintiffs had failed to prove that they had been exercising customary rights specified in para 4 of the plaint over the plots in suit except in the mosque in plot No. 246; (d) that the boundary walls on plot No. 245 described in settlement papers to be Chabutra Imam Sahib (Zanana Imambara) had been built by Shias about 25 years ago and that this plot had all along been used by Shia ladies for mourning purposes during the MOHARRAM; (e) that the Baradari (Mardana Imambara) was built by the Shias in the year 1893 A.D. (1311 Hizri) on plot No.247/1130 which had been in their possession all along and it was a Wakf; (f) that the defendants and the Shia Muslims were entitled to use plots Nos.246/1134,(containing Sabil Chabutra) and 247/1130 (the Baradari i.e. Mardana Imambara) for holding their majlises on all the days during the MOHARRAM but were not entitled to hold Majlises an Thursday of the remaining portion of the year; (g) that on plot No. 248/23/72 there existed the house of Asadullah, a Shia Muslim being defendant No. 5 to the suit and the construction (Chabutra) that appertained to the house had been rightly directed not to be demolished. As regards the two plots namely plot No. 602 (Two Biswas and ten Dhoors) which was taken on lease by one Sheikh Fazil, a Sunni barber from the Maharaja of Banaras under a Patta dated 26th June, 1927 and plot No. 603 (Two Biswas Three Dhoors) which was taken on lease by one Mahomad Niamat Ullah a Sunni weaver from the Maharaja under a Patta dated 15th September, 1930 the appellate Court observed that these did not appear to have remained in the possession of the plaintiffs (Sunni Muslims). The decision clearly establishes the title or ownership of Shias over at least two main structures Zanana Imambara on plot No. 245 and Baradari on plot No. 247/1130 and the land below the structures and what is more substantially the customary rights claimed by the Shia Muslims over the plots and structures were upheld and those claimed by the Sunni Muslims were rejected and the plaintiffs ' suit stood wholly dismissed. The Sunnis preferred an appeal to the High Court being Second Appeal No. 1726 of 1935 but the same was dismissed by the High Court by its judgment 1103 dated 9th December, 1938. Dealing with the question of the Shias ' right to hold their Majlises in the Baradari in the context of the position that the Baradari had been built by the Shias for that purpose the High Court observed: "the plaintiffs in the present suit have claimed that the Shias defendants are not entitled to hold their Majlises in the Baradari which the Shias have built. This appears to us to be a very strange proposition. Where a community has made a building for the purpose of its own religious services it appears to us contrary to law that any one can question the right of that community to hold its services. " The clear implication is no restriction could be imposed on Shias in the matter of holding their Majlises and other services in the Baradari built by them as was done by the lower appellate Court. Counsel for respondents 4 and 5 strenuously contended that the aforesaid litigation was not a representative one so as to bind the entire Sunni community of Mohalla Doshipura, Banaras by the result thereof and in that behalf counsel pointed out that neither the title of the plaint showed that the suit had been filed by the plaintiffs as representing all the members of Sunni community of Mohalla Doshipura, Varanasi nor was any copy of the Order passed by the trial Court granting leave to the plaintiffs to file the suit in representative capacity produced and there was no statement in any of the judgments indicating the representative character of the suit. It is not possible to accept this contention for more than one reason. In the first place besides reciting in para 1 of the plaint that the plaintiffs were Muslims of Sunni sect and defendants were Muslims of Shia sect, both settled in Mohalla Doshipura of Banaras City, in para 11 there was an express averment that the suit was filed under Order 1 r. 8 C.P.C. and that a proclamation be issued by the Court in the interest of justice so that those from Sunni sect and Shia sect of Muslims who desired to contest the suit may get themselves impleaded to the suit, secondly a public notice under Order 1 r. 8 of the C.P.C. with the Court 's seal was actually published in Urdu language in the issue of Oudh Panch dated 19th August, 1934 (English translation whereof has been annexed as Annexure VI to the Writ Petition and the original issue of Oudh Panch, Lucknow dated 19th August 1934 was produced during the hearing) setting out in brief the averments and the reliefs contained in the plaint and inviting members of both Sunni and Shia sects to get them impleaded as party to the suit if they so desired; thirdly the expenses of such publication of the notice amounting to Rs. 7 have been shown as an item of costs 1104 incurred by the plaintiffs in the Bill of costs appearing at the foot of the preliminary decree passed by the trial Court in the suit (certified copy whereof was produced by respondents 5 and 6) and lastly the suit Register (general Index) of the Court of Additional Munsif (Extract copy whereof has been produced) shows that public notice was published in Oudh Panch and the copy of the newspaper issue was filed in the Court on 21st August, 1934 and the bill received from that Newspaper was also filed on 25th Sept. 1934. From this material which is available on the record it seems to us clear that the Suit No. 232 of 1934 had been filed in the representative capacity both as regards the plaintiffs as well as the defendants and all the formalities under Order 1 r. 8 of the C.P.C. had been complied with. A crude attempt was made at a belated stage of hearing by respondents 5 and 6 to get over the effect of the aforesaid material by producing a document which purports to be a certified copy of a purported Order said to have been passed by the Additional Munsif, Banaras rejecting the plaintiffs ' application to file the suit in a representative character. To say the least the document is of a spurious character, reciting a dubious order. Apart from the fact that this document is seeing the light of the day nearly fifty years after the expiry of litigation, the copy does not bear any seal of the court; the order recites that the defendants have denied the plaintiffs ' status and capacity as being representatives of their (Sunni) sect and have also denied their status as representatives of Shias whereas there is no such denial to be found at all in the written statement, and what is more it passes one 's comprehension how such an order rejecting the plaintiffs ' application for leave under O. 1 r. 8 came to be passed on 24th August, 1934 5 days after the publication of the public notice in the issue of Oudh Panch on 19th Aug. 1934; and if the order dt. 24th August, 1934 was genuine how could expenses of such publication be shown as an item of plaintiffs costs in the preliminary decree passed on 2nd Feb. 1935 and why were the issue of Oudh Panch and the Bill from the Newspaper filed in the Court on 21st August, 1934 and 25th Sept. 1934 respectively. In our view the three or four circumstances which we have indicated above conclusively establish that the suit was filed by the plaintiffs as representing entire Sunni community of Mohalla Doshipura, Varanasi against the defendants who represented the Shia community and as such the final decision in that litigation is binding on members of both the communities. 1105 Counsel for respondents 5 and 6 next contended that the decision in this litigation (Suit No. 242 of 1934) would not operate res judicata against them or the Sunni community of Mohalla Doshipura inasmuch as Munsif 's Court at Banaras did not have either pecuniary or subject wise jurisdiction to grant the reliefs claimed in the instant writ petition; in other words that Court was not competent to decide the present subject matter and such the bar of res judicata under section 11 of the Civil Procedure Code 1908 was not attracted, and it would be open to the respondents 5 and 6 and the members of the Sunni community to agitate question of title either to the plots or to the structures thereon or even the Shias ' entitlement to their customary rights over them. In support of this contention counsel relied on two decisions namely, Rajah Run Bahadoor Singh vs Mussumut Lachoo Koer and Mst. Gulab Bai vs Manphool Bai. It is not possible to accept this contention for the reasons which we shall presently indicate. It is well settled that section 11 of the C.L.C. is not exhaustive of the general doctrine of res judicata and though the rule of res judicata as enacted in section 11 has some technical aspects the general doctrine is founded on considerations of high public policy to achieve two objectives, namely, that there must be a finality to litigation and that individuals should not be harassed twice over with the same kind of litigation. In Daryao and others vs The State of U.P. this Court at page 582 has observed thus: "Now the rule of res judicata as indicated in section 11 of the Code of Civil Procedure has no doubt some technical aspects, for instance, the rule of constructive res judicata may be said to be technical; but the basis on which the said rule rests is founded on considerations of public policy. It is in the interest of the public at large that finality should attach to the binding decisions pronounced by Courts of competent jurisdiction, and it is also in the public interest that individuals should not be vexed twice over with the same kind of litigation. " Reference in this connection was made by the Court to the famous decision in the leading Duchess of Kingston 's(4) case. Halsbury 's laws 1106 of England and Corpus Juris. In Gulab Chand Chhotalal Parikh vs State of Bombay (now Gujarat) the question was whether after the dismissal of a writ petition on merits after full contest by the High Court under article 226 of the Constitution a subsequent suit raising the same plea claiming discharge from the liability on the same ground was entertainable or not and this Court held that on general principles of res judicta the decision of the High Court on the writ petition operated as res judicata barring the subsequent suit between the same parties with respect to the same matter. On a review of entire case law on the subject, including Privy Council decisions, this Court at page 574 observed thus: "As a result of the above discussion, we are of opinion that the provisions of section 11 C.P.C. are not exhaustive with respect to an earlier decision operating as res judicata between the same parties on the same matter in controversy in a subsequent regular suit and that on the general principle of res judicata, any previous decision on a matter in controversy, decided after full contest or after affording fair opportunity to the parties to prove their case by a Court competent to decide it, will operate as res judicata in a subsequent regular suit. It is not necessary that the Court deciding the matter formerly be competent to decide the subsequent suit or that the former proceeding and the subsequent suit have the same subject matter. The nature of the former proceeding is immaterial. We do not see any good reason to preclude such decisions on matters in controversy in writ proceeding under articles 226 or 32 of the Constitution from operating as res judicata in subsequent regular suits on the same matters in controversy between the same parties and thus to give limited effect to the principle of the finality of decisions after full contest." (Emphasis supplied). The above observations were approved by this Court in a subsequent decision in the case of Union of India vs Nanak Singh. It is thus 1107 clear that technical aspects of section 11 of C. P. C., as for instance, pecuniary or subject wise competence of the earlier forum to adjudicate the subject matter or grant reliefs sought in the subsequent litigation would be immaterial when the general doctrine of res judicata is to be invoked. The two decisions relied upon by counsel for the respondents 5 and 6 were directly under section 11 of C. P. C. Even under section 11 the position has been clarified by inserting a new Explanation VIII in 1976. It was not disputed that the Munsif 's Court at Banaras was competent to decide the issues that arose for determination before it in earlier litigation and, therefore, the decision of such competent Court on the concerned issues must operate as a bar to any subsequent agitation of the same issues between the same parties on general principles of res judicata. The contention raised by counsel for respondents 5 and 6 in this behalf, therefore, has to be rejected. It was then faintly urged by counsel for respondents 5 and 6 that the dismissal of plaintiffs ' suit (No. 232 of 1934) would not confer any rights on the Shia community who were party defendants to the suit. The contention is merely required to be stated to be rejected. Not only were the Sunnis ' customary rights (specified in para 4 of the plaint) over the plots and structures in question put in issue during the trial but the customary rights to perform their religious ceremonies and functions on the plots and structures thereon claimed by the Shias were also directly and substantially put in issue inasmuch as the plaintiffs (Sunni Muslim) `had sought an injunction restraining the Shias from exercising their customary rights. Therefore, the decision in this litigation which bore a representative character not merely negatived the Sunnis ' customary rights claimed by them over the plots and structures but adjudicated, determined and declared the Shias ' entitlement to their customary rights to perform their religious ceremonies and functions on the plots and structures thereon in question and this decision is binding on both the communities of Mohalla Doshipura. There is no question of there being any gap or inadequacy of the material on record in the matter of proof of Shias ' entitlement to customary rights over the plots and structures in question, whatever be the position as regards their title to the plots or structures. We have already indicated that this decision even upholds their title to two main structures, Zanna Imambara and Mardana Imambara (Barardari). In our view, therefore, this is a clear case of an existing or established entitlement to the customary rights in favour of the Shias ' community to perform their religious ceremonies and functions over the plots and structures 1108 in question under the decree of competent Civil Court for the enforcement of which the instant Writ Petition has been filed. Turning to the other fundamental basis on which the petitioners are claiming their customary rights for performing their religious ceremonies and functions on the plots and constructions in question is the registration of these plots and structures thereon as Shia Wakfs under the U. P. Muslim Wakfs Act, 1936. A two fold plea has been raised by counsel on their behalf namely (a) that the Report of the Chief or Provincial Commissioner of Wakfs dated 28th/31st October, 1938 submitted to the State Government under sec. 4 (5) showing these plots and structures as Shia Wakfs followed by the Notification dated 15 1 1954 issued by the Shia Central Wakf Board under sec. 5 (1) of the Act and published in the U. P. Government Gazette on 23rd January, 1954, had become final and conclusive under sec. 5(3) of the Act since no suit challenging his decision had been filed either by the Sunni Board or any other Sunni Muslim interested in it within the period specified under sec. 5(2) of the Act, and (b) that plots and structures in question had been registered as Shia Wakfs for purposes of performing their religious ceremonies and functions thereon under sec. 38 of the Act as early as in 1952 and therefore their case is that Shia Muslims cannot be deprived of the lawful exercise of their customary rights over the properties which have been recognised and registered as Shia Wakfs. As against this, respondents 5 and 6 and through them the Sunni community are relying upon a notification dated 26th February, 1944 issued by the Sunni Central Wakfs Board under sec. 5(1) of the U. P. Muslim Wakf Act, 1936 following upon the Report of the Chief or Provincial Commissioner of Wakfs in respect of Mosque in Doshipura showing the same as Sunni Wakfs and registration of some of these properties as Sunni Wakfs under sec. 29 of the U. P. Muslims Wakfs Act, 1960. Before going into the factual aspects it will be desirable to indicate briefly the legal position arising under the two enactments, the U.P. Muslim Wakfs Act, 1936 (Act XVIII of 1936) and the U.P. Muslim Wakfs Act, 1960 (Act XVI of 1960), which repealed earlier Act, in the matter of finality Survey Reports and effect of Registration of Wakfs belonging to the respective sects in the State of U.P. Broadly speaking it could be stated that while repealing the 1936 Act the 1960 Act maintains and preserves the finality and conclusiveness accorded to the Survey Reports completed and submitted by the Wakfs Commissioners under the former Act and the 1109 registration of Wakfs under the 1936 Act has been kept alive and effective as if such registration has taken place under the latter Act and registration of Wakfs under the latter Act has been permitted only in respect of Wakfs other than those which have already been registered under the former Act. Under the 1936 Act appointment of district wise Commissioners of Wakfs for the purpose of undertaking survey of all Wakfs in such districts and appointments of Provincial Commissioners of Wakfs having jurisdiction in all the districts of the State for the same purpose and with same duties and powers were contemplated by sec. 4 and 4A respectively; under sec. 4 (3) such Commissioners were required to make such inquiries as they considered necessary for ascertaining and determining the number of all Shia and Sunni Wakfs within the area of their jurisdiction, the nature of each Wakf, the gross income of property comprised in the Wakf etc. and under sec. 4 (5) on completion of inquiry they had to submit their Reports of Inquiries to the State Government; under sec. 5 (1) a copy of the Commissioner 's Report had to be sent to each of the Central Boards (the Shia Central Wakfs Board and Sunni Central Wakfs Board) whereupon each Central Board had to, as soon as possible, notify in the Official Gazette the Wakfs relating to the particular sect to which, according to such report, the provisions of this Act applied: under sec. 5 (2) the Central Board or the Mutawali of a wakf of any other person interested in it, if aggrieved by the decision recorded by the Commissioner in his Report had to bring a suit in a Civil Court competent jurisdiction for a declaration or appropriate relief and such a suit by the Central Board had to be filed within two years of the receipt of the Report by the Board and by the Mutawali or a person interested within one year of the Notification mentioned in sub sec. (1); and sec. 5 (3) accorded, subject to the final result of such suit, finality and conclusiveness to the Commissioner 's Report. Section 38 of the Act provided for registration of Wakfs pertaining to each sect by the concerned Central Board and the procedure to be followed and inquiry to be made by the concerned Board in that behalf was indicated in that section and under sec. 39 it was made incumbent upon each Central Board to maintain a Register of Wakfs showing various particulars specified therein in respect of each Wakf. Under the 1960 Act, appointments of Commissioner of Wakfs and Additional or Assistant Commissioner of Wakfs is contemplated by sec. 4 while Survey of Wakfs to be undertaken by such Commissioners is contemplated by sec. 6 and under sec. 6(4) the Commissioner 's Report of Inquiry is required to be forwarded to each of the Boards 1110 and to the State Government and the State Government has to, as soon as possible, notify in the Official Gazette the Wakfs relating to particular sect to which, according to such Report, the provisions of this Act apply; sec. 8 provides that if a dispute arises with regard the findings or decisions recorded by Commissioner in his Report the same shall be referred to Tribunal for adjudication, which must be done within one year from the date of publication by the State Government of the list of Wakfs under sec. 6 (4); sec. 9 is important and provides that proceedings of any survey of wakf properties started before the commencement of this Act shall continue and such survey shall be completed in accordance with provisions of the 1936 Act and under sub sec. (2) it is provided that nothing in this chapter shall effect the finality of the decisions of the Chief State Commissioner of Wakfs or of any State Commissioner of Wakfs or Commissioner of Wakfs in cases in which, prior to the commencement of this Act, the report of such Commissioner has become final; in other words the finality and conclusiveness accorded to the Wakf Commissioners ' Report under sec. 5 (3) of the 1936 Act has been preserved. Registration of Wakfs under the 1960 Act has been provided by secs. 28 and 29: under sec. 28 it is provided that a Wakf registered before the commencement of this Act under the 1936 Act shall be deemed to have been registered under the provisions of this Act; and sec 29 which follows sec. 28: says: Every other Wakf, whether subject to this Act or not and whether created before or after the commencement of this Act shall be registered at the office of the Board of the sect to which the Wakf belongs"; the opening words "every other Wakf" occurring in sec. 29 must mean that sec. 29 provides for registration of all Wakfs other than those which have already been registered under the 1936 Act. As stated earlier a perusal of these provisions of the two enactments clearly show that the finality and conclusiveness accorded to the Commissioner 's Report under sec. 5 (3) of the 1936 Act has been preserved and the registration of Wakfs under the 1936 Act has been maintained under the 1960 Act notwithstanding the repeal of the former Act by the latter. In other words any Survey Report submitted under the 1960 Act and any Registration made under the 1960 Act will be futile and of no avail in regard to Wakf properties respecting which the Commissioner 's Report under the 1936 Act has become final and registration has been effected under the 1936 Act. It appears that the Government of Uttar Pradesh appointed Shri Munshi Azimuddin Khan, a Deputy Collector, as a Chief or 1111 Provincial Commissioner of Wakfs under sec. 4A of the 1936 Act for the purpose of making a survey of all the Waqfs in all the districts of the State. During the survey proceedings one Imam Ali Mahto, a Shia Muslim, who was defendant No. 2 in Suit No. 232 of 1934 as the Mutawalli of Imambara and the Mosque of Mohalla Doshipura has filed an application on 25th June, 1938 before the said Chief or Provincial Commissioner of Waqfs claiming six items of property, namely, (1) the Mosque on Municipal No. J 15/94 (i.e. plot No. 246) (2) Imambara on Municipal No. J. 15/95 (i. e. Baradari on plot No. 247/1130), (3) Zanana Imambara on Municipal No. J 15/96 (i.e. Plot No. 245), (4) Imam Chowk with land (i. e. on plot No. 247), (5) Chabutra Sabil Pucca (i. e. on Plot No. 246/1134) and (6) one Sabil Stone on the land to the east of Imambara Baradari (i.e. on plot No. 602/1133) to be Shia Waqfs having been used since time immemorial for the purposes of their religious ceremonies and functions (Azadari, Majlises Mourning in Moharram, Tazia and Zulzana processions, Taziadari, Matam, etc.), the constructions having been made by subscriptions and requesting the Commissioner to enter the same in the list of Shia Public Waqfs; on the same day i.e. 25th June, 1938 Imam Ali 's statement on oath was also recorded before the Commissioner and an order was passed to the effect "the waqf property be taken under the control of Waqfs Act". A copy of the application, the statement of Imam Ali recorded on oath, together with the endorsement of the order, which formed part of Survey File No. 55 before the Commissioner have been produced as Annexure P 15 (colly) to the affidavit in rejoinder dt. Nov. 5, 1979 of Shri Iqbal Hussain, petitioner No. 3 filed on behalf of the writ petitioners and also as an Annexure to the affidavit dated January 9, 1980 of Dularey Mirza, the Peshkar of the Shia Central Waqfs Board, Lucknow. After making the necessary inquiries Shri Munshi Azimuddian Khan submitted to the State Government his Report dated 28th/31st October, 1938 and annexed several appendices to his Report; Appendix VIII referred to Waqfs pertaining to Sunnis and declared as subject to the 1936 Act and Appendix IX mentioned waqfs pertaining to Sunni sect which were exempted from the Act; Appendices X and XI contained corresponding information about the Shia waqfs which were respectively declared as subject to the Act or exempt from the Act. The original Report bearing the signature of Shri Munshi Azimmuddin Khan, Chief Waqfs Commissioner was produced before us (marked Exh. A) for our inspection by Mr. Rana, counsel for the State of U.P. and the same was made available for inspection to the parties. There is a slip attached to 1112 the Report placed in between Annexure VII and Annexure XIII containing an endorsement to the effect "Appendices VIII and IX sent to the Sunni Board" and Appendices X and XI sent to the Shia Board" with the signature of the Chief Commissioner of Waqfs below it. The aforesaid facts mentioned in connection with the original Report have been stated in the affidavit of Shri Sayed Shamshuddin Ahmed, Secretary to the Government of Uttar Pradesh in the Waqfs and Appointment Department sworn on January 6, 1980, filed before us by the counsel for the State of U. P. alongwith the Report. Presumably the aforesaid action of sending the relevant appendices alongwith a copy of the Commissioner 's report to the respective Sunni Central Waqf Board and the Shia Central Waqf Board was taken as required by section 5(1) of the Act. It may be stated that the Shia Central Waqfs Board has accepted the position that it did receive a copy of Commissioner 's Report together with Appendices X and XI and through an affidavit dated 9th January, 1980 of their Pashkar Dularey Mirza, the Shia Board offered to produce the said Appendices stating that the copy of the Report itself was not traceable as the same appeared to have been produced in some court proceedings. It further appears that after receiving the aforesaid documents (Report together with the Appendices X and XI), the Shia Central Waqf Board, as required by sec. 5 (1) of the Act, took steps to notify in the Official Gazette all the Waqfs relating to their sect on the basis of the Appendices annexed to the Report; the relevant Notification under sec. 5 (1) was issued on 15th January, 1954 and published in the Government Gazette on 23rd January, 1954. According to the petitioners the Shia Waqfs in question appear at Sl. No. 55 (entry against the name of Imam Ali, Dhoshipura, Banaras) on page 157 of Appendix X and at Sl. No. 431 (entry being 'Imambara and Masjid against the name of Imam Ali Mahato in the Gazette Notification dated 15th January, 1954). Photostat copy of Entry at Sl. No. 55 on page 157 of Appendix X has been annexed to Dularey Mirza 's Affidavit dated. 9th January, 1980 and a copy of the Gazette Notification dated 15th January, 1954 published in the U.P. Government Gazette on 23rd January, 1954 under sec. 5 (1) of the 1936 Act has been separately produced by the petitioners on the record. It is true that entry at Sl. No. 431 in the Gazette Notification dated 15th January, 1954 shows the name of Imam Ali Mahato as the Waqif, which is obviously a mistake for he never claimed himself to be the settlor or Waqif but only a Mutawalli of the Waqfs as is clear from the application made by him and the statement on oath given by him before the Commissioner and in fact the properties were claimed 1113 to be Shia public Waqfs by long user. It is also true that in the column 'Name of Waqf 's the entry reads 'Imambara and Masjid ' suggesting as if only two properties were declared to be Shia Waqfs but at the foot of the Notification under section 5 (1) there is a nota bena to the following effect: "the details regarding property and other matters relating to the Wakfs are kept in the Board 's office and can be inspected by any person who is interested in the matter. " It seems to us quite clear having regard to the six properties being specifically asked to be entered in the list of Shia Waqfs by Imam Ali Mahto in his application and the order made thereon, all the properties mentioned in the application must be regarded as having been entered in the list of Shia Waqfs by the Chief or Provincial Commissioner for Waqfs and the Notification under section 5(1) related to all those properties as having been notified to be Shia Waqfs, particulars whereof were stated to be available in the Board 's office. The Nota Bena at the foot of the Notification, in our view amounted to sufficient particularisation of the properties notified as Shia Waqfs. Non mentioning of those properties as Sunni Waqfs in Appendices VIII and IX sent to the Sunni Central Waqfs Board must amount to a notice to the Sunni Board and the Sunni Muslims that these had been enlisted as Shia Waqfs. Admittedly, no suit was filed either by the Sunni Central Board or any other person interested in those waqfs challenging the decision recorded in his Report by the Chief or Provincial Commissioner for Waqfs within the time prescribed under section 5(2) of the Act, and, therefore, the Chief Commissioner 's Report together with the appendices X and XI thereto dated 28th/31st October, 1938, on the basis of which the Notification dated 15th January, 1954 was issued and published in Official Gazette on 23rd January, 1954, must be held to have become final and conclusive as between the members of the two communities. In this behalf we would like to refer to the decision of the Court in Board of Muslim Waqfs vs Radha Krishna and Ors. where one of us (Sen, J.) has analysed the scheme of the Waqfs Act,1954 (a Central enactment) which is substantially the same as the scheme of the 1936 Act and we are in respectful agreement with the ratio of that case but here we are not concerned with any paramount title of any stranger (like the 1114 Maharaja) to any property declared as waqf and hence that part of the ratio of that decision will be inapplicable. As against the aforesaid material respondents 5 and 6 and through them the Sunni community have relied upon a Notification dated 26th February, 1944 issued by the Sunni Central Waqfs Boards under section 5(1) of the U.P. Muslim Waqfs Act, 1936 following upon the receipt of the Report of the Chief or Provincial Commissioner of Waqfs in respect of mosque in Doshipura showing the same as Sunni Waqf, copy whereof has been annexed as Annexure S 2 to the affidavit dated 6th February, 1980 of Mohd. Bashir Khan filed on behalf of the Sunni Central Waqfs Board as its 'Pairokar '. This Notification on which reliance has been placed by the Sunnis appears to us of doubtful validity and probative value for the reasons which we shall presently indicate. Though issued and published earlier in point of time than the Notification of Shia Central Waqfs Board, it is admittedly not based on Appendices VIII and IX annexed to the Chief Commissioner 's Report dated October 28th/31st October, 1938 but on the basis of some Registers of Waqfs (meaning lists of Waqfs) (said to have been received by the Sunni Board from the Commissioner of Waqfs. Curiously enough the Sunni Central Waqfs Board had stated through two affidavits dated 6th January, 1980 and 9th January, 1980 of their Pairokor Shri Mohd. Bashir Khan that along with the copy of the Commissioner 's Report Registers of Waqfs were received but no appendices like Appendices VIII and IX were received from the Commissioner, that according to the Registers of Waqfs there were 245 charitable Sunni Waqfs in the District of Banaras which were covered by the 1936 Act and all such Waqfs were accordingly notified by the Sunni Board in the Government Gazette by issuing the Notification dated 26th February, 1944 under sec. 5 (1) of the Act. The Original Report of the Commissioner does not refer to anything like Registers of Waqfs but, as stated earlier, it refers to Appendices Nos. VIII, IX, X and XI and the endorsement on the slip under the signature of the Chief Commissioner shows that the former two appendices were sent to the Sunni Board and the latter two to the Shia Board. In face of this endorsement and having regard to the fact that the Shia Board had received Appendices X and XI alongwith the Commissioner 's Report which that Board offered to produce, it is difficult to accept the statement of the Pairokar of the Sunni Board that no appendices were received by the Board along with a copy of the Commissioner 's Report. It seems the relevant appendices, though received, are being withheld as their production would be adverse to the Sunnis. Apart form that aspect it is clear on their own 1115 admission that the Notification under section 5 (1) of the 1936 Act was issued by the Sunni Central Waqfs Board not on the basis of Appendices VIII and IX which formed part of the Commissioner 's Report but on the basis of some Registers of Waqfs said to have been received by it. The Notification regarding the Sunni Waqfs issued on the basis of material which did not form part of the Chief Commissioner 's Report would be in violation of section 5(1) of the Act which required issuance of a Notification thereunder 'according to ' the Commissioner 's Report and as such the Notification dated February 26, 1944 relied upon by respondents 5 and 6 and members of the Sunni community would be of doubtful validity. Secondly, the relevant entry in the Register of Waqfs is at Serial No. 224 and it pertains to "one quita mosque and land" of which the "present Mutawali" is shown as "Hayatullah resident of Dhosipura, Banaras" and correspondingly the entry in the Notification dated February 26, 1944 issued under section 5 (1) of the 1936 Act is also at Sl. No. 224 which reads: "Masjid Dhoshipura Hayatullah r/o Doshipura, Banaras one quita mosque", but the petitioners have produced documentary and other material throwing doubt on the genuineness of the entry as being in relation to the mosque in question on plot No. 246 (i.e. Municipal No. J 15/94); according to the affidavits of Dularey Misra (the Peshkar of Shia Central Waqfs Board) dated 12th August, 1980 and 1st October, 1980 there were two Hayatullahs in Mohalla Dhoshipura, Varanasi, one was Hayatullah alias Hayatoo r/o H. No. J 15/125, Mohalla Doshipura, who had died in 1926 long prior to Survey of Waqfs under the 1936 Act, that his son Abdul Shakoor, who was plaintiff No. 2 in suit No. 232/1934 admitted in his evidence in that suit that his father (Hayatullah) had expired 8 years before the filing of the suit and as such entry at serial No. 224 which describes Hayatullah r/o Mohalla Doshipura as the "present Mutawali" (i.e. in 1944 when the Notification was issued) obviously could not refer to this Hayatullah father of Abdul Shakoor, while the other Hayatullah, who was known by the name of Moulavi Hayatullah r/o H. No J 15/8 in Mohalla Dhosipura was the father of Hakim Mahmood and Ali Ahmed, who are the present Mutawalis of a mosque in Mohalla Salarpura standing on Municipal No. J 18/108 and therefore, if the name in entry at serial No. 224 refers to this Hayatullah who could be its "present Mutawali" in 1944 then the mosque would be the mosque in Mohalla Salarpur and not the mosque in question standing on Municipal No. J 15/94 (i.e. Plot No. 246) in Mohalla Doshipura and while making the entry by mistake Mo 1116 halla Doshipura was wrongly mentioned instead of Mohalla Salarpura as the two Mohallas are quite adjacent to each other; in other words, according to the petitioners if the entry at serial No. 224 in the Registers of Waqfs or in the Notification dated 26th February, 1944 refers to Hayatullah father of Abdul Shakoor the entry is obviously wrong as it would be mentioning a dead person as the "present Mutawali" of the mosque and in case the entry at serial No. 224 is referable to Maulvi Hayatullah then the reference to the mosque being in Mohalla Doshipura would be erroneous. It is the petitioners ' case that it was Maulavi Hayatullah who had as early as in 1944 submitted an application for registration of the mosque in Mohalla Salarpura standing on Municipal No. J 18/108 to the Sunni Central Waqfs Board but by mistake it was stated therein that the mosque was for the benefit of people of Doshipura and it was registered under his name under serial No. 224 in the Register of Waqfs maintained by the Sunni Board and by mistake that mosque was wrongly entered as being in Mohalla Doshipura; and in support of this reliance has been placed upon a Report dated 14th February, 1961 submitted by Inspector Ashraf Ali to the Sunni Board in which he had noticed and placed on record such mistake having taken place copy whereof has been annexed as Annexure I to the affidavit of Dularey Mirza (Peskhar of Shia Board) dated 13th February, 1980; in other words, the aforesaid material casts a serious doubt on the aspect whether the mosque mentioned in entry No. 224 in the Notification dated February 26, 1944 really pertains to the mosque in question standing on Plot No. 246 (Municipal No. J 15/94) in Mohalla Doshipura and as such the Notification will have no probative value. In this state of affairs Notice dated 11.4.1945 issued by Shia Board under section 53 of the 1936 Act complaining about this entry at Sl. No. 224 relied upon by counsel for respondents 5 and 6 must be regarded as having been issued ex majori cautela. Thirdly, even if it were assumed for the purposes of argument that entry at Serial No. 224 in the Notification dated 26th February, 1944 refers to the mosque in question it cannot affect the customary rights of the petitioners and through them the Shia community to perform their religious ceremonies and functions over the other 8 plots and structures thereon which had been listed as Shia Wakfs under the Notification dated 15th January, 1954, especially when it is now common ground that the mosque on Plot No. 246 is a public mosque constructed by general subscriptions and is accessible to members of both the sects for offering 1117 prayers and doing worship therein. Admittedly the Notification dated 26th February, 1944, does not refer to any other plots or the structures thereon at all. We are, therefore, clearly of the view that the Notification dated 26th February, 1944 issued under section 5(1) of the 1936 Act by the Sunni Board is of no avail to the Sunnis for the purpose of defeating the customary rights of the Shias to perform their religious ceremonies and functions on the other plots and structures thereon. Apart from the finality attaching to the Chief Commissioner 's Report (together with the Appendices X and XI annexed thereto) dated 28th/31st October, 1938 the petitioners have also claimed that the aforesaid plots and structures thereon had been registered as Shia Waqfs for performance of their religious ceremonies and functions under s.38 of the 1936 Act by the Shia Central Waqfs Board after making full inquiry and following the procedure prescribed by that section as early as in 1952 and the Board had issued the requisite Sanads in that behalf. Reliance in this regard has been placed on five certificates issued by Shia Central Waqfs Board, Lucknow, bearing Certificate Nos. 209, 210, 211, 214 and 21 all dated 22nd December, 1952 first relating to Mardana Imambara (the Baradari) on Plot No. 247/1130, the second relating to Zanana Imambara on Plot No. 245, the third relating to Imam Chowk on Plot No. 247, being appurtenant to Baradari the fourth relating to the entire Plot No. 602/1133 being appurtenant to the Baradari and the last relating to Sabil Chabutra Mardana on Plot No. 246/1134 (Annexures VIII & VIII A to VIII D to the Writ Petition). It may be stated that the petitioners have also produced a certificate of registration in respect of Purani Masjid of Doshipura as a Shia Waqf dated 3rd July, 1973, the registration being under the 1960 Act, but counsel for the petitioners fairly conceded that the mosque in question belongs to both the sects and no special rights are claimed by the Shias over it except those conferred on them under the decree in Suit No. 849 of 1878 by Shri Pramoda Charan Banarjee. The registration in respect of the five properties mentioned above under sec. 38 of the 1936 Act would be available to the petitioners and must prevail over the subsequent registration, if any, obtained by the Sunnis in respect of some of the properties under the 1960 Act; really speaking such latter registration would be non est in the eye of law. Apart from the Certificates of Registration issued by the Shia Central Waqfs Board on 22nd December, 1952 the petitioners are 1118 also relying upon yet another Notification issued by the Shia Central Waqfs Board under Rule 54 (vii) of the U.P. Shia Central Waqfs Rules, 1944 enlisting the Shia Waqfs in question and published in the U.P. Government Gazette on 1st December, 1956. It may be stated that the Shia Board had framed rules called the U.P. Shia Central Waqfs Rules 1944 in exercise of powers conferred on it by sec. 61 of the 1936 Act and under Rule 54(vii) the Board was required to notify a list of Waqfs which had been registered during the year under report. It appears that a consolidated list of Shia Waqfs which were registered during the period 28th July, 1942 to 31st March, 1956 subsequent to the submission of the Report of the Chief Commissioner for Waqfs under sec. 5 of the Act was published for the first time by the Shia Board under the Notification dated 1st December, 1956 issued under Rule 54(vii); a copy of the relevant portion of that Notification is annexed as Annexure VII to the writ petition showing registration of Imambara Baradari, Doshipura, at Serial No. 152, Imambara Mutalik Purani Masjid, Doshipura at Serial No. 153, Mardana Imambara Baradari at Serial No. 155, Purani Masjid, Doshipura at Serial No. 157, Zanana Imambara, Doshipura at Serial No. 159, Imam Chowk, Dhoshipura at Serial No.160 and Chabutra Mardana Sabil at Serial No. 161 as Shia Waqfs. This Notification issued by the Shia Board on 1st December, 1956 also supports the petitioners ' case that the concerned properties had been registered as Shia Waqfs under section 38 of the Act. It is thus clear that even on the second foundational basis the Shias have proved their existing or established entitlement to their customary rights to perform their religious ceremonies and functions on the concerned plots and structures thereon. Much was made by Counsel for respondents 5 and 6 of certain documents on record showing derivative title of Sunni Muslims to a couple of plots in question and Counsel contended that whatever be the position with regard to three earlier documents (Pattas of 1907, 1927 and 1930 about which the Courts have made observations in earlier litigations), there was yet one more lease of 20.4.1952 in respect of portions of three plots, namely, 602/1133,247 and 245 in favour of Hafiz Mohd. Yusuf and Akram ul Haq, two Sunni Muslims from the Maharaja, whereunder they had acquired lessee 's interest over the plots at an yearly rent of Rs. 3 and they had dedicated the same to the Sunni community for use as graveyard and such subsequent title could not be affected by the decisions in earlier litigations. It must be stated that in support of this lease of 1952 no lease deed nor any Patta has been produced, but reliance is placed on two 1119 documents (i) Extract of Register of Agreements (Agreement to Lease) dated 20.4.52 and (ii) Receipt for payment of rent (curiously enough relating to three prior years July 1949 to June 1950, July 1950 to June 1951 and July 1951 to June 1952=1357, 1358 and 1359 Fasli), being Annexures 3 and 4 to the Counter Affidavit of Respondent No. 5 dated 17.4.1979. At the outset we would observe that it is difficult to accept the claim that the three plots had been dedicated by the two Sunni Muslims to their community for use as graveyard, for, the Commissioners appointed by this Court for survey and spot inspection in December 1979 did not find any such use being made of plots No. 247 and 245 and merely noticed two graves and one in damaged condition on plot No. 602/ 1133 only same plot with graves which was the subject matter of Maharaja 's Suit No. 424/1931 in which a permanent injunction was issued restraining all Muslims (virtually all Sunnis) from using the said plot as any graveyard in future. Dealing with the aspect of derivative title put forward by counsel on behalf of the respondents No. 5 and 6, we have already made the position clear in the earlier part of our judgment that the Shias ' are claiming the right to perform their religious ceremonies and functions on the plots and structures in question not so much on the basis of any title or ownership thereof but on the basis of customary exercise since time immemorial and they have been claiming customary rights by prescription over the plots belonging to the Maharaja of Banaras as Zamindar and superior title holder and the prescriptive rights have enured for the benefit of all the Shias notwithstanding such superior title in the Maharaja and if that be so they will also enure for their benefit as against any derivative title claimed by anyone under the Maharaja. Moreover, when these plots and structures, particularly these three plots were being registered as Shia Waqfs under the U.P. Muslim Waqfs Act 1936 by the Shia Board and Sanads of Certificates of Registration in respect thereof were being issued in December 1952, the two Sunni Lessees who are said to have obtained a Lease on 20.4.1952 did not raise any objection to such registration. The Shias customary rights acquired by prescription over these plots cannot thus be defeated by such derivative title. The next question that arises for consideration is whether an Order made under section 144 Criminal Procedure Code is judicial or quasi judicial order or whether it is passed in exercise of an executive power in performance of executive function amenable to writ jurisdiction under article 32 of the Constitution ? Counsel for respon 1120 dents 5 and 6 and through them the Sunni community contended that such an order is a judicial or quasi judicial order passed by a Magistrate 's Court after hearing parties (except in cases of emergency when it is passed ex parte without notice to the person or persons affected under sub section (2) of section 144) and since no fundamental right can be said to be infringed by any judicial or quasi judicial order a Writ of mandamus under article 32 would not lie, but the order may be and is revisable by a superior Court like the Sessions Court or the High Court. In support of this contention reliance was placed upon one decision of the Bombay High Court and three of the Madras High Court. It was pointed out that in D. V. Belvi vs Emperor a Division Bench of the Bombay High Court has held that the orders under section 144 are judicial and not administrative and that this question had been set at rest by several earlier decisions cited in the judgment; in Queen Empress vs Tirunarasimha Chari the Madras High Court has taken the view that the Magistrate, making inquiry before the issue of an order under section 144 is acting in a stage of judicial proceeding and has, therefore, jurisdiction to take action under section 476, if he is of the opinion that false evidence has been given before him; similarly in Muthuswami Servaigram and Anr. vs Thangammal Ayyiar as also in Bondalpati Thatayya vs Gollapuri Basavayya and Ors. the same view is taken. Counsel also invited our attention to three cases of this Court, namely Babulal Parate 's case, K K. Mishra 's case and Madhu Limaye 's case, in each one of which the constitutional validity of section 144 Cr. P.C. or part thereof was challenged, and while upholding the constitutional validity of the section or of the concerned part this Court has touched upon certain aspects of the section and the procedure thereunder (hearing the parties, order being of temporary character and revisable) which suggest that the proceeding before the Magistrate is judicial or quasi judicial proceeding. Counsel, therefore, urged that if the order under section 144 Cr. P. C. is a judicial or quasi judicial order then this Court has taken the view that such an order will not attract writ jurisdiction of this Court under article 32 since such an order cannot affect or infringe any fundamental right and in that behalf reliance 1121 was placed upon Sahibzada Saiyed Muhammed Amirabbas Abbasi and Ors. vs The State of Madhya Bharat and Ors., The Parbhani Transport Co operative Society Ltd. vs The Regional Transport Authority, Smt. Ujjam Bai ' case (subject to three exceptions mentioned therein) and N.S. Mirajkar 's case, the principle in the last mentioned case having been stated at p. 760 of the Report thus: "When a Judge deals with matters brought before him for adjudication, he first deals with questions of facts on which the parties are at issue, and then applies the relevant law to the said facts. Whether the findings of fact recorded by the Judge are right or wrong and whether the conclusions of law drawn by him suffers from any infirmity, can be considered and decided if the party aggrieved by the decision of the Judge takes the matter up before the Appellate Court. But it is singularly inappropriate to assume that a judicial decision pronounced by a Judge of competent jurisdiction in or in relation to a matter brought before him for adjudication can affect the fundamental rights of the citizens under Art 19(1). What the judicial decision purports to do is to decide the controversy between the parties brought before the court and nothing more. If this basic and essential aspect of the judicial process is borne in mind, it would be plain that the judicial verdict pronounced by Court in or in relation to a matter brought before it for its decision cannot be said to affect that fundamental rights of citizens under article 19(1). " The question whether an order under section 144 Criminal Procedure Code is a judicial order or an order in exercise of the executive power in performance of an executive function will have to be decided in the instant case by reference to the new Criminal Procedure Code, 1973 and not by reference to the old Criminal Procedure Code, 1898. We would like to point out that the position under the 1898 Code, wherein separation between the judicial functions and executive or administrative functions of Magistrates did not obtain, was quite different and the power to act in urgent cases of nuisance and apprehended danger to public tranquility under section 144 1122 of the Code had been conferred on "District Magistrates, Chief Presidency Magistrates, Sub Divisional Magistrates, or other Magistrates specially empowered by the State Government" and it was in those circumstances that the view prevailed in the decisions of several High Courts that the order passed by a Magistrate under section 144 of that Code was a judicial order and it must be pointed out that all the decisions including those of this Court that have been relied upon by counsel for respondents 5 and 6 are in relation to the said section under that Code, while the position under the new Criminal Procedure Code 1973 is entirely different whereunder the scheme of separation of judicial functions from executive functions of the Magistrates, as recommended by the Law Commission has been implemented to a great extent. The Law Commission in its 37th Report on the Code of Criminal Procedure 1898 made several recommendations in this behalf to which we might usefully refer, At page 15 of the Report the Law Commission in para 41 has observed thus: "41. The usual way of classifying the functions of Magistrates under the Code of Criminal Procedure and various other statutes is to divide them into three broad categories, namely (a) Functions which are 'police ' in their nature, as for instance, the handling of unlawful assemblies; (b) functions of an administrative character, as for instance, the issue of licences for fire arms, etc., etc. ; and (c) functions which are essentially judicial, as for instance, the trial of criminal cases. The essential features of the scheme for separation (it is stated) would be, that purely judicial functions coming under category (c) above are transferred from the Collector and Magistrates subordinate to him, to a new set of officers who will be under the control not of the Collector but of the High Court. Functions under (a) and (b) above will continue to be discharged by the Collector and the Revenue Officers subordinate to him. " Again in para 43 the Law Commission observed thus: 1123 "43. It is in this background that the concept of separation has to be understood. In its essence, separations means separation of judicial and executive functions in such manner that the judicial functions are exercised by the judiciary which is not controlled by the executive. This would ensure that influence of the executive does not pollute the administration of criminal justice. " On the question of allocation of functions between judicial and executive Magistrates it appears that there were before it three main patterns of separation (1) the Bombay pattern (suggested in the Report of the Committee on the separation of judiciary from the executive, 1947 appointed by the Government of Bombay), (2) the Madras pattern (Government of Madras, Public (Separation) Department G.O. Ms. No. 2304 dated 24th September, 1952) and (3) the Punjab pattern (introduced by Punjab Separation etc. Act 25 of 1964) and according to the Law Commission the allocation under the Bombay and Punjab schemes proceeded on the basis that powers other than those of trial of offences should be left to the Executive Magistrates even where recording and sifting of evidence and a decision thereon were required and this was brought about by making the requisite amendments in certain sections of the Code including section 144 while under the Madras scheme matters involve the recording and sifting of evidence were strictly within the purview of the Judicial Magistrates but concurrent jurisdiction was provided in some cases and powers in those cases particularly under section 144 were kept with both judicial and executive Magistrates but Judicial Magistrate were to exercise them in emergency and until an executive Magistrate was available. After considering all the patterns of allocation as also patterns of Magistracy under the Bombay, Punjab, and Madras schemes in paragraphs 94 to 98 of the Report the Law Commission came to the conclusion that the combination of Bombay and Punjab scheme was the best for being adopted as a model. In Paragraph 113 of its Report while dealing with the aspect of appointment of Magistrates the Law Commission recommended that executive Magistrates should be continued to be appointed by the State Government and their area should be defined by the State Government or by the District Magistrate subject to the control of the State Government while judicial Magistrates should to appointed by the High Court and if separation was to be introduced effectively the conferment of magisterial powers should belong to the High Court. As regards section 144 (1) of the old Code in para 353 of its Report the Law Commission in terms recommended that before 1124 the words 'other magistrate ' the word 'executive ' be added and the recommendation has been accepted while drafting that section in the new Code. Turning to the 1973 Code itself the scheme of separating judicial Magistrates from executive Magistrates with allocation of judicial functions to the former and the executive or administrative functions to the latter, as we shall presently indicate, has been implemented in the Code to a great extent. Section 6 provides that there shall be in every State four classes of Criminal Courts, namely, (1) Courts of Session, (ii) Judicial Magistrates of the First Class and, in any Metropolitan area, Metropolitan Magistrates; (iii) Judicial Magistrates of the Second Class; and (iv) Executive Magistrates; sections 8 to 19 provide inter alia for declaration of metropolitan area, establishment of Courts of Session, Courts of Judicial Magistrates, Courts of Metropolitan Magistrates and appointments of Sessions Judges, Additional Sessions Judges, Assistant Sessions Judges, Chief Judicial Magistrates Judicial Magistrates, Chief Metropolitan Magistrates and Metropolitan Magistrates together with inter subordination, but all appointments being required to be made by the High Court, while sections 20, 21, 22 and 23 deal with appointment of District Magistrates, Additional District Magistrates, Executive Magistrates, Sub Divisional Magistrates and Special Executive Magistrates and their respective jurisdictions in every district and metropolitan area together with inter se subordination, but appointments being made by the State Government, Chapter III comprising sections 26 to 35 clearly shows that Executive Magistrates are totally excluded from conferment of powers to punish, which are conferred on Judicial Magistrates; this shows that if any one were to commit a breach of any order passed by an Executive Magistrate in exercise of his administrative or executive function he will have to be challaned or prosecuted before a Judicial Magistrate to receive punishment on conviction. Further, if certain sections of the present Code are compared with the equivalent sections in the Old Code it will appear clear that a separation between judicial functions and executive or administrative functions has been achieved by assigning substantially the former to the Judicial Magistrates and the latter to the Executive Magistrates. For example, the power under section 106 to release a person on conviction of certain types of offences by obtaining from him security by way of execution of bond for keeping peace and good behaviour for a period not exceeding three years a judicial function is now exclusively entrusted to a Judicial Magistrate whereas under section 106 of the old 1125 Code such power could be exercised by a Presidency Magistrate, a District Magistrate or Sub Divisional Magistrate, but the power to direct the execution of a similar bond by way of security for keeping peace in other cases where such a person is likely to commit breach of peace or disturb the public tranquility an executive function of police to maintain law and order and public peace which was conferred on a Presidency Magistrate, District Magistrate, etc. under the old section 107 is now assigned exclusively to the Executive Magistrate under the present section 107; Chapter X of the new Code deals with the topic of maintenance of public order and tranquility and in that Chapter sections 129 to 132 deal with unlawful assemblies and dispersal thereof, sections 133 to 143 deal with public nuisance and abatement or removal thereof, section 144 deals with urgent cases of nuisance and apprehended danger to public tranquility and sections 145 to 148 deal with disputes as to immovable properties likely to cause breach of peace all being in the nature of executive ( 'police ') functions, powers in that behalf have been vested exclusively in executive Magistrate whereas under equivalent provisions under the old Code such powers were conferred indiscriminately on any Magistrate, whether Judicial or Executive. In particular it may be stated that whereas under the old section 144 the power to take action in urgent cases of nuisance or apprehended danger to public tranquility had been conferred on "a District Magistrate, a Chief Presidency Magistrate, a sub Divisional Magistrate or any other Magistrate, specially empowered by the State Government", under the present section 144 the power has been conferred on "a District Magistrate, Sub Divisional Magistrate or any other Executive Magistrate specially empowered by the State Government in that behalf." Having regard to such implementation of the concept of separation of judicial functions from executive or administrative functions and allocation of the former to the Judicial Magistrates and the latter to the Executive Magistrates under the Code of 1973, it will be difficult to accept the contention of the counsel for respondents 5 and 6 that the order passed by a District Magistrate, Sub Divisional Magistrate or any other Executive Magistrate under the present section 144 is a judicial order or quasi judicial order, the function thereunder being essential an executive (police) function. Under the new Code the designation of District Magistrate of Sub Divisional Magistrate has been statutorily used in relation to officers performing executive functions only in recognition of the concept of separating Executive Magistrates from Judicial Magistrates. It is true that before passing the order the District 1126 Magistrate, Sub Divisional Magistrate or the Executive Magistrate gives a hearing parties except in cases of emergency when ex parte order can be made under section 144 (2) by Him without notice to the person or persons against whom it is directed, but in which cases on an application made by any aggrieved person he has to give hearing to such person under section 144 (5) and thereupon he may rescind or alter his earlier order. It is also true that such an order made by the Executive Magistrate is revisable under section 397 of the Code because under the Explanation to that section all Magistrates, whether executive or judicial or whether exercising appellate or original jurisdiction, are deemed to be inferior Courts for purposes of the revisional power of the High Court or Court of Sessions. But the fact that the parties and particularly the aggrieved party are heard before such an order is made merely ensures fair play and observance of audi alteram partem rule which are regarded as essential in the performance of any executive or administrative function and the further fact that a revision lies against the order of the executive magistrate either to the Sessions Court or to the High Court removes the vice of arbitrariness, if any, pertaining to the section. In fact, in the three decisions of this Court which were relied upon by counsel for respondents 5 and 6 namely Babu Parate 's case, K. K. Mishra 's case and Madhu Limaye 's where the constitutionality of sec. 144 of the old code was challenged on the ground that it amounted to unreasonable restriction on the fundamental right of a citizen under article 19 (1) of the Constitution the challenge was repelled by relying upon these aspects to be found in the provision. In our view, however these aspects cannot make the order a judicial or quasi judicial order and such an order issued under sec. 144 of the present code will have to be regarded as an executive order passed in performance of an executive function where no lis as to any rights between rival parties is adjudicated but merely an order for preserving public peace is made and as such it will be amenable to writ jurisdiction under article 32 of the Constitution. We would like to mention in this context that the power conferred upon sec. is comparable to the power conferred on the Bombay Police under sec. 37 of the Bombay Police Act, 1951, both the provisions having been put on the statute book to achieve the objective of preservation of public peace and tranquility and prevention of disorder and it has never been disputed that any order passed under sec. 37 of the Bombay Police Act is subject to writ jurisdiction of the High Court under article 226 of the Constitution on the ground that it has the effect of violating or infringing 1127 a fundamental right of a citizen. The nature of the power under both the provisions and the nature of function performed under both being the same by parity of reasoning an order made under sec. must be held to be amenable to writ jurisdiction either under article 32 or under 226 of the Constitution if it violates or infringes any fundamental right. The contention raised by Counsel for respondents 5 and 6 therefore, has to be rejected. Having come to the conclusion that the order under sec. is amenable to writ jurisdiction under article 32, the same being in exercise of executive power in performance of executive function the next question that we have to deal with is whether the petitioners could be said to have made out any ground for challenging the impugned order passed by the City Magistrate, Varanasi on 24th November, 1979 prohibiting both Shia and Sunni communities from holding their Majlises and imposing other restrictions on the occasion of celebration of MOHARRAM festival at the Baradari in Mohalla Doshipura. As already stated the challenge to this order was incorporated in the writ petition by way of an amendment which had been allowed by the Court. Since however, that impugned order has by now exhausted itself by efflux of time it would not be proper for us to go into either the grounds of challenge urged by the petitioners or the materials justifying the same put forward by the respondents for determining its legality or validity. Since however, occasions or situations arise even during a year as well as year after year making it necessary for the executive magistracy of Varanasi to take action under sec. 144 and since it has been the contention of the petitioners, though stoutly disputed by all the respondents that the exercise of the power under the said provision has invariably been perverse and in utter disregard of the lawful exercise of their legal rights to perform their religious ceremonies and functions on the plots and structures in question it will be desirable to make general observations by way of providing to the local authorities requisite guidelines with a view to ensure a correct and proper exercise thereof with a brief reference to few decided cases on the point. Without setting out verbatim the provisions of sec. 144 of the 1973 Code, we might briefly indicate the nature of power thereunder and what it authorises the executive magistracy to do and in what circumstances. In urgent cases of nuisance or apprehended danger, where immediate prevention or speedy remedy 1128 is desirable, a District Magistrate, a Sub Divisional Magistrate or any other Executive Magistrate specially empowered by the State Government in this behalf may, by a written order stating the material facts of the case, direct a particular individual, or persons residing in a particular place or area, or the public generally when frequenting or visiting a particular place or area, (i) to abstain from a certain act or (ii) to take certain order with respect to certain property in his possession or under his management, if he considers that such direction is likely to prevent or tends to prevent obstruction, annoyance or injury to any other person lawfully employed, or danger to human life, health or safety, or a disturbance of public tranquillity, or a riot or an affray. As stated earlier sub sec. (2) authorises the issuance of such an order ex parte in cases of emergency or in cases where circumstances do not admit of the serving in due time of a notice upon the person or persons against whom the order is directed but in such cases under sub sec. (5) the executive magistrate, either on his own motion or on the application of the person aggrieved after giving him a hearing, may rescind or alter his original order. Under sub section (4) no order under this section shall remain in force for more than two months from the making thereof unless under the proviso thereto the State Government by Notification directs that such order shall remain in force for a further period not exceeding six months. The entire basis of action under section 144 is provided by the urgency of the situation and the power thereunder is intended to be availed of for preventing disorders, obstructions and annoyances with a view to secure the public weal by maintaining public peace and tranquillity. Preservation of the public peace and tranquillity is the primary function of the Government and the aforesaid power is conferred on the executive magistracy enabling it to perform that function effectively during emergent situations and as such it may become necessary for the Executive Magistrate to over ride temporarily private rights and in a given situation the power must extend to restraining individuals from doing acts perfectly lawful in themselves for, it is obvious that when there is a conflict between the public interest and private rights the former must prevail. It is further well settled that the section does not confer any power on the Executive Magistrate to adjudicate or decide disputes of Civil nature or questions of title to properties or entitlements to rights but at the same time in cases where such disputes or titles or entitlements to rights have already been adjudicated and have become the subject 1129 matter of judicial pronouncements and decrees of Civil Courts of competent jurisdiction then in the exercise of his power under section 144 he must have due regard to such established rights and subject of course to the paramount consideration of maintenance of public peace and tranquillity the exercise of power must be in aid of those rights and against those who interfere with the lawful exercise thereof and even in cases where there are no declared or established rights the power should not be exercised in a manner that would give material advantage to one party to the dispute over the other but in a fair manner ordinarily in defence of legal rights, if there be such and the lawful exercise thereof rather than in suppressing them. In other words, the Magistrate 's action should be directed against the wrong doer rather than the wronged. Furthermore, it would not be a proper exercise of discretion on the part of the Executive Magistrate to interfere with the lawful exercise of the right by a party on a consideration that those who threaten to interfere constitute a large majority and it would be more convenient for the administration to impose restrictions which would affect only a minor section of the community rather than prevent a larger section more vociferous and militant. In Muthialu Chetti vs Bapun Sahib the facts were that in 1875 Mohammedans of Sevvaipett applied for permission to erect a mosque in that village on the site occupied by the previous mosque that had recently been destroyed but the Hindus objected and the application was refused; the Mohammedans nevertheless occupied the site and in 1878 again applied for permission to build the mosque but the Hindus again opposed the application expressing their apprehension that the erection of mosque would lead to disturbances when they were conducting their processions with music or celebrating ceremonies in the temples adjoining the river. The Collector accorded sanction to the erection of the mosque on condition that the Mohammedans undertook to allow the free passage of processions but professing to act as the District Magistrate he at the same time ordered that all music should cease when any procession was passing or repassing the mosque and directed that the order be notified to the inhabitants of Sevvaipett and Gogoi. The restriction that music should cease when processions would be passing or repassing the mosque was imposed in accordance with G.O. dated 9th May, 1874 which ran thus "All Magistrates should 1130 make it an invariable condition that music shall cease playing while the procession is passing any recognised place of worship, to whatever denomination belonging, except of course the places of worship appertaining to the processionaries themselves. " Some leading Hindus of Sevvaipett filed a suit in Munsif 's Court against Mohammedans for a declaration of their right to conduct their processions with music past the site occupied by the mosque and challenged the validity of the District Magistrate 's order that the music of their processions should stop whilst passing or repassing the mosque. The Munsif 's Court granted a decree in favour of the plaintiffs which was reversed by the District Court but was restored with some qualification by the High Court in second appeal. The High Court laid down that whilst the law recognised the right of an assembly, lawfully engaged in religious worship or religious ceremonies, not to be disturbed, it also recognised the right of persons for a lawful purpose, whether civil or religious, to use a common highway in parading it attended by music, so that they do not obstruct use of it by other persons; that whenever a conflict of rights exists, it is the duty of the Magistrate, if he apprehends civil tumults, to guard against it, and, if necessary, to interdict a procession; but that a general order interdicting all musical processions is ultra vires and illegal. The High Court pointed out that the extent of authority possessed by the Magistrate was to suspend the exercise of the right on particular occasions, and not prohibit it absolutely and before the occasion arose which entitled him to act; and it consequently held the District Magistrate 's order to be ultra vires. In Parthasaradi Ayyangar vs Chinna Krishna Ayyangar Turner C.J. laid down the law at page 309 of the report thus: "Persons of whatever sect are entitled to conduct religious processions through public streets so that they do not interfere with the ordinary use of such streets by the public and subject to such directions as the Magistrates may lawfully give to prevent obstructions of the thoroughfare or breaches of the public peace." In Sundram Chetti and Ors. vs The Queen before a Full Bench of the Madras High Court the aforesaid position was maintained and it was further laid down that the worshippers in the mosque or temple 1131 which abutted on a high road could not compel the processionists to intermit their (processionists ') worship while passing the mosque or temple on the ground that there was continuous worship there. Turner C.J. who presided over the Full Bench observed at page 217 of the Report thus: "With regard to processions, if they are of a religious character, and the religious sentiment is to be considered, it is not less a hardship on the adherents of a creed that they should be compelled to intermit their worship at a particular point, than it is on the adherents of another creed, that they should be compelled to allow the passage of such a procession past the temples they revere. But the prejudices of particular sects out not to influence the law. " At page 215 of the Report the learned Chief Justice observed thus: "The Criminal Procedure Code declares the authority of the Magistrate to suspend the exercise of rights recognised by law, when such exercises may conflict with other rights of the public or tend to endanger the public peace. But by numerous decisions it has been ruled that this authority is limited by the special ends it was designed to secure and is not destructive of the suspended rights. " Again at page 220 he has observed thus: "I must nevertheless observe that this power (to suspend the exercise of legal rights on being satisfied about the existence of an emergency) is extraordinary and that the Magistrate should resort to it only when he is satisfied that other powers with which he is entrusted are insufficient. Where rights are threatened, the persons entitled to them should receive the fullest protection the law affords them and circumstances admit of. It needs no argument to prove that the authority of the Magistrate should be exerted in the defence of rights rather than in their suspension; in the repression of illegal rather than in interference with lawful acts. If the Magistrate is satisfied that the exercise of a right is likely to create a riot, he can hardly be ignorant of the per 1132 sons from whom disturbance is to be apprehended, and it is his duty to take from them security to keep the peace. (Emphasis supplied). It may be stated that the aforesaid view of the Madras High Court was preferred by the Privy Council to the contrary view of the Bombay High Court. In Manzur Hasan and Ors. vs Muhammad Zaman and Ors. the facts were that Shia Mahomedans in the town of Aurangabad, District Aligarh conducted Muharram a procession bearing religious emblems and pausing from time to time for the performance of "matam" (wailing). From time immemorial the procession performing "matam" had passed along a public street immediately behind a Sunni Mahommedan mosque; in and after 1916 the respondents (Sunnis) interfered to prevent "matam" near the mosque, as they alleged that it disturbed their devotions. The appellants (Shias) brought a suit for declaration of their rights to make short pauses behind the mosque for the performance of "matam" and for a permanent injunction against the Sunnis from interfering with their rights. The Judicial Committee upholding the Madras view and rejecting the Bombay view held that in India there is a right to conduct a religious procession with its appropriate observances through a public street so that it does not interfere with the ordinary use of the street by the public, and subject to lawful directions by the Magistrates and that a civil suit for declaration lies against those who interfere with a religious procession or its appropriate observances. These decisions show that legal rights should be regulated and not prohibited altogether for avoiding breach of peace or disturbance or public tranquillity. In Haji Mohammed Ismail vs Munshi Barakat Ali and Ors. there was a dispute concerning the conduct of a prayer in a mosque, and there being an apprehension of breach of peace the Magistrate under section 144 drew up a proceeding and eventually recorded an order that ."no man of either party will be allowed to read prayers in the mosque." The Court held that the order was mis conceived; that the effect of the order was that no Mohammedan would be allowed to say his prayers in the mosque it was not justified under section 144 and that the proper course was for the Magistrate to ascertain which party was in the wrong and was interfering unnecessarily with 1133 the legal exercise of the legal rights of the other party, and to bind down that party restraining them from committing any act which may lead to a breach of peace. (Emphasis supplied). In Madhu Limaye 's case (supra) this Court has also expressed the view that the key note of the power in section 144 is to free the society from menace of serious disturbances of a grave character and the section is directed against those who attempt to prevent the exercise of legal rights by others or imperil the public safety and health. The instant case, as we have held above, is one where the entitlement of the Shias to their customary rights to perform their religious ceremonies and functions on the plots and structures in question has been established and is the subject matter of a judicial pronouncement and decree of Civil Court of competent jurisdiction as also by reason of these properties having been registered as Shia Waqfs for performance of their religious ceremonies and functions and their complaint has been that the power under section 144 is being exercised in utter disregard of the lawful exercise of their legal rights and every time instead of exercising the power in aid of their rights it is being exercised in suppressing their rights under the pretext of imminent danger to peace and tranquillity of the locality. Having elaborated the principles which should guide the exercise of that power we hope and trust that in future that power will be exercised by the executive magistracy in defence of such established rights of the petitioners and the Shia community and instead of prohibiting or suspending the exercise of such rights on concerned occasions on the facile ground of imminent danger to public peace and tranquillity of the locality the authorities would make a positive approach to the situation and follow the dictum of Turner C.J. that if they are satisfied that the exercise of the rights is likely to create a riot or breach of peace it would be their duty to take from those from whom disturbance is apprehended security to keep the place. After all the customary rights claimed by the petitioners part take of the character of the fundamental rights guaranteed under Articles 25 and 26 of the Constitution to the religious denomination of Shia Muslims of Varanasi, a religious minority, who are desirous of freely practising their religious faith and perform their rites, practices, observances and functions without let or hindrance by members belonging to the majority sect of the community namely, Sunni Muslims, and as such a positive approach is called for on the part of the local authorities, 1134 It is only in an extremely extraordinary situation, when other measures are bound to fail, that a total prohibition or suspension of their rights may be resorted to as a last measure. Lastly, counsel for the respondents contended that the present writ petition was barred by res judicata or principle analogous to res judicata by reason of this Court 's decision in (a) Civil Appeal No. 941 of 1976, (b) Review Petition No. 36 of 1977 and (c) order dated 4.12.1978 permitting withdrawal of Special Leave Petition No. 6226 of 1978; alternatively it was urged that the view taken by a Bench of 3 Judges of this Court in their Judgment dated 6.12.1976 in Civil Appeal No. 941 of 1976 and reiterated in its order dated 16.12.1976 on Review Petition No. 36 of 1977, however wrong, should not be disturbed by another Bench of 3 Judges, especially as the petitioners are seeking by the present petition to set at naught the earlier decision or get it revised on the same material which they should not be allowed to do. It is difficult to accept either of these contentions for reasons which we shall presently indicate. As regards res judicata or the bar based on the principle analogous to res judicata, we have already referred in the earlier part of our judgment to the leading decision of this Court in Daryao 's case (supra) where the basts on which the general doctrine of res judicata is founded has been explained, namely, that it is founded on considerations of high public policy to achieve two objectives, namely, (a) that there must be a finality to litigation and (b) that the individuals should not be harassed twice over with the same kind of litigation and in our view neither of these aspects is present here so as to bar the present petition by res judicata or principle analogous to res judicata. We would like to point out that the present litigation has been fought in a representative character both as regards the petitioners who are representing the Shia community and as regards the respondents 5 and 6 who are representing the Sunni community whereas the earlier writ petitions Nos. 2397 of 1973 (out of which arose the Civil Appeal No. 941 of 1976) and No.3906 of 1978 (out of which arose Special Leave Petition No. 6226 of 1978) were filed in the Allahabad High Court by the then petitioners in their individual capacity and as such these earlier litigations which were fought right up to this Court cannot be regarded as between the same parties who are before us; further, where it was felt by this Court that proper adjudication would not be possible without impleading the two Boards (Shia Central Wakf Board and Sunni Central Wakf Board) notices were issued to them and they were also im 1135 pleaded as parties to the petition who have filed their respective affidavits in the matter and have been heard through respective counsel. Secondly, the earlier decision of this Court in Civil Appeal No.941 of 1976 did not record any decision on the rights of the parties on merits but the Court took the view that the parties should be relegated to a civil suit on the assumption that the petitioners before the Allahabad High Court (in W.P.No.2397) had raised disputed questions of title and the Allahabad High Court had decided them for the first time in the writ petition; irrespective of whether the assumption made by this Court was right or wrong, the fact remains that there was no adjudication or decision on the petitioners ' rights on merits as a result of the final order passed by this Court in the appeal, which was confirmed in the Review Petition; all that could be said to have been decided by this Court in Civil Appeal No. 941 of 1976 and Review Petition No. 36 of 1977 was that parties should get their rights adjudicated in a Civil Court suit. For these reasons it is obvious that neither res judicata nor principle analogous to res judicata would bar the present writ petition. We may point out that the setting aside of the Allahabad High Court judgment and its findings in writ Petition No.2397/1973 by this Court in Civil Appeal No.941 of 1976 cannot have effect of obliterating or effecting in any manner the findings recorded and adjudication done between the parties to the earlier litigations, particularly Suit No. 232/1934. As regards the alternative submission made by counsel for the respondents, we would like to point out that it is not correct to say that the petitioners are seeking to set at naught the earlier decision of this Court or to have the same revised by present petition on the same materials; if that were so there would have been some force in the contention. Fresh material of substantial character in the form of the original Survey Report of the Chief Commissioner of Wakfs dated 28th/31st October, 1938 and the relevant Notification issued by the Shia Board on 15th of January, 1954 published in the U. P. Government Gazette dated 23rd of January 1954 under sec. 5 (1) of the U. P. Muslim Wakfs Act, 1936, not produced in the earlier litigation either before the Allahabad High Court, or before this Court was produced before us during the hearing on the basis of which the members of the Shia community sought to prove their existing and established entitlement to their customary rights. In fact it was one of the contentions of the respondents 5 and 6 that before the Allahabad High Court in the earlier litigation the then petitioners had misled the Court into believing that the Notification issued by the Shia Board on 1st of December, 1956 under Rule 54 1136 (vii) was the Notification under s.5 (1) of the U.P. Muslim Wakfs Act, 1936. Moreover, additional material has come before us through both the Boards affording considerable assistance to us in arriving at proper conclusions in the case. Thus where the parties before us are different and when fresh material has been produced before us which was not there in the earlier litigation, the alternative contention loses all force and must be rejected. In the result we hold that the petitioners and through them the Shia community of Mohalla Doshipura, Varanasi have established their existing customary rights to perform their religious rites, practices, observances, ceremonies and functions minus the recitation and utterance of Tabarra (detailed in the writ petition) over the Plots and structures in question and respondents 5 and 6 and the Sunni community of Mohalla Doshipura are permanently restrained by an injunction from interfering with the exercise of said rights in any manner by the petitioners or members of Shia community and respondents 1 to 4, particularly the executive magistracy of Varanasi is directed, if action under section 144 Cr. P.C. is required to be taken, to issue their orders under the said provision having regard to the principles and the guidelines indicated in that behalf in this judgment. The writ petition is thus allowed but each party will bear its own costs. S.R. Petition allowed.

Uttar Pradesh Muslim Wakf Act, 1960 (Act XVI of 1960) repealing Uttar Pradesh Muslim Wakf Act, 1936 (Act XIII of 1936 Legal position as to the finality of Survey Reports and effect of registration of Wakfs already made under the earlier Act long before it was repealed Words and phrases "Every other Wakf " in section 29 of the 1960 Act, meaning of. Criminal Procedure Code, 1973, section 144 Whether an order made under section 144 Criminal Procedure Code is judicial or quasi judicial order or whether it is passed in exercise of an executive power in performance of executive function amenable to writ jurisdiction under Article 32 of the Constitution Nature and power under the section and what it authorises the executive magistracy to do and in what circumstances, explained. In Mohalla Doshipura of Varanasi city, there are two sects of Mohamedans the Shias and the Sunnis. Both the sects revere the martyrdom of Hazrat Imam Hasan and Hazrat Imam Hussain, grand sons of Prophet Mohammed, during the Moharram but in a different manner. Nine plots bearing Nos. 245, 246, 247, 248/23/72, 602, 603, 602/1133, 246/1134 and 247/1130 in the said Mohalla and buildings and structures thereon belong to the Shia Waqf of Mohalla Doshipura. Shias of that Mohalla numbering about 4000 constitute a religious denomination having a common faith and they observe Moharram for two months and eight days in a year in memory of Hazrat Imam Hussain who along with his 72 followers attained martyrdom at Karbala in Iraq. The said religious belief is practised by the men folk and the women folk of the Shia community by holding Majlises (religious discourses), Recitations, Nowhas, Marsia, doing 1078 Matam (wailing) and taking out processions with Tabut Tazia, Alams, Zukinha, etc. For performing these religious rites, practices and observances the Shia community has been customarily using from time immemorial the nine plots in Mohalla Doshipura and the structures thereon. The entire period of Moharram is a period of mourning for the Shias whose staunch belief is that the whole purpose of their life is to carry out these religious practices and functions during the Moharram and that in case they do not perform all these rites, practices, observances and functions, including those relating to the Tazia, they will never be delivered and till these are performed the whole community will be in mourning and in none of their families any marriage or other happy function can take place. The petitioners, in the writ petition, and through them the Shia community, contended as follows: (i) that their customary rights to perform several religious rites, practices, observances and functions on the said nine plots and the structures thereon having been already determined in their favour by decisions of competent civil courts ending with the Review Petition 36177 in Civil Appeal 941176 in the Supreme Court, the respondents must be commanded by a mandamus not to prohibit or restrain the Shias from performing their religious rites etc. On the said plots; (ii) that the registration of Shia Waqfs concerning the plots and structures for performance of these practices and functions under sections 5 and 38 of the Uttar Pradesh Muslim Wakfs Act, 1936, which had become final as no suit challenging the Commissioner 's report and registration was filed within two years by any member of Sunni Community or the Sunni Central Wakf Board, also concluded the said rights in their favour; and (iii) that the power under section 144 Criminal Procedure Code is being invariably exercised perversely and in utter disregard of the lawful exercise of Shias ' legal rights to perform their religious ceremonies and functions and instead of being exercised in aid of such lawful exercise it is exercised in favour of those who unlawfully and illegally interfere with such lawful exercise under the facile ground of apprehension of imminent danger to peace and tranquility of the locality. The respondents contested and contended as follows: (i) that a Writ Petition under Article 32 for such a relief of declaration is not maintainable in as much as the basic purpose of a petition under Article 32 is to enforce existing or established fundamental rights and not to adjudicate and seek a declaration of such rights or entitlement thereto; (ii) that no mandamus under Article 32 is competent inasmuch as orders under section 144 Cr. P.C. these are judicial or quasijudicial; alternatively even if it were assumed that these orders are administrative or executive orders passed by the Executive Magistrates, they cannot be challenged unless the Magistrate has exceeded his powers or acted in disregard to the provisions of the law or perversely; and (iii) that the writ petition was barred by res judicata or principles analogous to res judicata by reason of the Supreme Court 's decisions in (a) Civil Appeal 941/1976. (b) Review Petition 36 of 1977 and (c) order permitting withdrawal of S.L.P. 6226 of 1978 on 4 12 1978. Allowing the petition, the Court ^ HELD: 1: 1. The petitioners and through them the Shia community of Mohalla Doshipura, Varanasi, have established their customary rights to perform 1079 their religious rites, practices, observances, ceremonies and functions minus the A recitation and utterance of Tabura over the plots in question. [1136 B C] 1: 2. The litigation arising out of Suit No. 849 of 1878 (Sheik Sahib and ors. vs Rahtnatu and ors.) declared the mosque in plot No. 246 to be a public mosque at which every mohammedan became entitled to worship and further declared the Shias ' right to keep their Tazia in the apartment attached to the mosque and repair it in the verandah thereof and to hold their majlises on 9th and 12th of Moharram on or near the platform on the surrounding ground of the mosque as early as on 29th March, 1879. [1098 B, G H] The alleged customary rights of Sunnis in the matter of burial of their dead on the plot No. 60211133 was decided against them, in the Suit No. 42411931 filed by the then Maharaja of Banaras in the Court of Addl. Munsiff, Banaras. [1099 A B, G] The third and most important Suit No. 232/1934 filed in the court of City Munsiff, Banaras (Fathey Ullah and Ors. (Sunnis) vs Nazir Hussain and Ors. (Shias) in respect of all the plots in Khasra Nos 245, 246, 247, 248/23/72, 602, 603, 602/1133, 246/1134 and 247/1130 which were claimed to be Sunni Wakfs by long user, also went against the Sunnis and in favour of the Shias, clearly establishing the title or ownership of Shias over at least two main structures Zanana Imambara on plot No. 245 and Baradari on plot No. 247/1130 and to the land below the structures and what is more substantially the customary rights claimed by the Shia Muslims over the plots and structures were upheld. [1100 H, 1101 A B, 1102 F G] The said suit 232/34 had been filed in the representative capacity both as regards the Sunni plaintiffs and Shia defeadants and all the formalities under order I rule 8 of the Civil Procedure Code had been complied with and as such he final decision in that litigation is binding on both the communities. [1104 B C, G H] 2 :1. Ordinarily adjudication of questions of title or rights and granting declaratory relief consequent upon such adjudication are not undertaken in a Writ Petition under Article 32 of the Constitution and such a petition is usually entertained by the Supreme Court for enforcement of existing or established title or lights for preventing infringement or encroachment thereof by granting appropriate reliefs in that behalf. Here, what Shia community is seeking by the Writ Petition is enforcement of their customary rights to perform their religious rites, practices, observances and functions on the concerned nine plots and structures thereon which have already been adjudicated, determined and declared in their favour by decisions of competent Civil Courts in the earlier litigations and that the declaration sought in the prayer clause is really incidental. [1097 A C] 2: 2. It is true that title and ownership of the plots of land in question is distinct from title and ownership of structures standing thereon and both these are again distinct from the customary rights claimed by the members of the Shia community to perform their religious ceremonies and functions on the plots and the structures thereon. However, even if the petitioners and through them the Shia community are unable to prove their existing or established title either to the concerned plots or to the structures standing thereon but they are able to 1080 prove that they have existing or established customary rights to perform their religious ceremonies and functions on the plots and the structures thereon simultaneously complaining of illegal deprivation or encroachment by executive officers at the behest of the respondents or the Sunni community the reliefs sought by them by way of enforcement of such customary rights will have to be entertained and considered on merits and whatever relief they may be found legally and properly entitled to may have to be granted to them. [1097 C F] 3: 1. It is well settled that section 11 of the Civil Procedure Code is not exhaustive of the general doctrine of res judicata and though the rule of res judicata as enacted in section 11 has some technical aspects the general doctrine is founded on considerations of high public policy to achieve two objectives, namely, that there must be a finality to litigation and that individuals should not be harassed twice over with the same kind of litigation. The technical aspects of section 11 of Civil Procedure Code, as for instance, pecuniary or subject wise competence of the earlier forum to adjudicate the subject matter or grant reliefs sought in the subsequent litigation would be immaterial when the general doctrine of res judicata is to be invoked. Even under section 11 of the Civil Procedure Code the position has been clarified by inserting a new Explanation VIII in 1976 [1105 C D, 1107 A B] 3: 2. In the instant case; (a) it was not disputed that the Munsif 's Court at Banaras was competent to decide the issues that arose for determination before it in earlier litigation and, therefore, the decision of such competent court on the concerned issues must operate as a bar to any subsequent agitation of the same issues between the same parties on general principles of res judicata; (b) not only were the Sunnis ' customary rights over the plots and structures in question put in issue during the trial but the customary rights to perform their religious ceremonies and functions on the plots and structures thereon claimed by the Shias were also directly and substantially put in issue inasmuch as the plaintiffs (Sunni Muslims) has sought an injunction restraining the Shias from exercising their customary rights. Therefore, the decision in this litigation which bore a representative character not merely negatived the Sunnis ' customary rights claimed by them over the plots and structures but adjudicated, determined and declared the Shias ' entitlement to their customary rights to perform their religious ceremonies and functions on the plots and structures thereon in question and this decision is binding on both the communities of Mohalla Doshipura; (c) there is no question of there being any gap or inadequacy of the material on record in the matter of proof of Shias ' entitlement to customary rights over the plots and structures in question, whatever be the position as regards their title to the plots or structures; and (d) a clear case has been made out of an existing or established entitlement to the customary rights in favour of the Shias ' community to perform their religious ceremonies and functions over the plots and structures in question under the decrees of competent Civil Court for the enforcement of which the instant Writ Petition has been filed. [1107 B H, 1108 A] Rajah Run Bahadoor Singh vs Musumut Lachoo Koer, XII I. A. 23: Mst. Gulab Bai vs Manphool Bai, ; ; Daryao and others vs State of U.P. ; ; Gulabchand Chhotalal parikh vs State of Bombay (now 1081 Gujarat); , and Union of India vs Nanak Singh, ; , referred to. Broadly speaking, while repealing the 1936 Act, the 1960 Act maintains and preserves the finality and conclusiveness accorded to the Survey Reports completed and submitted by the Wakfs Commissioners under the former Act and the registration of Wakfs under the 1936 Act has been kept alive and effective as if such registration has taken place under the latter Act and registration of Wakfs under the latter Act has been permitted only in respect of Wakfs other then those which have already been registered under the former Act. A perusal of sections 6, 9, 28 and 29 of the 1960 Act and sections 4(3), 4(5), 5(1), (2), (3) and 39 of the 1936 Act clearly show that the finality and conclusiveness accorded to the Commissioner 's report under section 5(3) of the 1936 Act has been preserved and the registration of Wakfs under the 1936 Act has been maintained under the 1960 Act notwithstanding the repeal of the former Act by the latter. In other words any Survey Report submitted under the 1960 Act and any registration made under the 1960 Act will be futile and of no avail in regard to Wakf properties respecting which the Commissioner 's Report under the 1936 Act has become final and registration has been effected under the 1936 Act.[1108H, 1109A, 1110 F G] 4:2. In the instant case; (a) having regard to the six properties being specifically asked to be entered in the list of Shia waqfs by Imam Ali Mahto in his application and the order made thereon, all the properties mentioned in the application must be regarded as having been entered in the list of Shia wakfs by the Chief or Provincial Commissioner for Wakfs and the Notification under section 5(1) related to all those properties as having been notified to be Shia Wakfs particulars whereof were stated to be available in the Board 's office. The Nota Bena at the foot of the Notification amounted to sufficient particularisation of the properties notified as Shia Wakfs. Non mentioning of those properties as Sunni Wakfs in Appendices VIII and IX sent to the Sunni Central Wakfs Board must amount to a notice to the Sunni Board and the Sunni Muslims that these had been enlisted as Shia Wakfs. Admittedly, no suit was filed either by the Sunni Central Board or any other person interested in those Wakfs challenging the decision recorded in his Report by the Chief or Provincial Commissioner for Wakfs within the time prescribed under section 5(2) of the Act and, therefore, the Chief Commissioner 's Report together with the appendices X and XI thereto dated 28th/31st October, 1938, on the basis of which the Notification dated 15th January, 1954 was issued and published in Official Gazette on 23rd January, 1954, must be held to have become final and conclusive as between the members of the two communities; (b) the Notification dated 26 2 1944 issued by the Sunni Wakf Board on the basis of material which did not form part of the Chief Commissioner 's Report would be in violation of section 5(1) of the 1936 Act; (c) Notice issued by the Shia Board under section 53 of the 1936 Act complaining about the entry at Serial No. 224 must be regarded as having been issued ex majori cautela; and (d) even if it were assumed for the purposes of argument that entry at Serial 224 in the Notification dated 26th February, 1944 refers to the mosque in question it cannot affect the customary rights of the petitioners and through them the Shia community to perform their religious ceremonies and functions over the other 8 plots and structures thereon which had been listed as Shia Wakfs under the Notification dated 15th January, 1954, especially when it is now common ground 1082 that the mosque on Plot No. 246 is a public mosque constructed by general subscriptions and is accessible to members of both the sects for offering prayers and doing worship therein; (e) the registration under section 38 of the 1936 Act would be available to the petitioners and must prevail over the subsequent registration, if any, obtained by the Sunnis in respect of some of the properties under the 1960 Act; really speaking such latter registration would be non est in the eye of law. Even on the second foundational basis the Shias have proved their existing or established entitlement to their customary rights to perform their religious ceremonies and functions on the concerned plots and structures thereon.[1113 B G, 1115 A B, 1116 E A, 1117 A B] 4:3. Shias are claiming the right to perform their religious ceremonies and functions on the plots and structures in question not so much on the basis of any title or ownership thereof but on the basis of customary exercise since time immemorial and they have been claiming such customary rights by prescription over the plots belonging to the Maharaja of Banaras as Zamindar and superior title holder and the prescriptive rights have enured for the benefit of all the Shias notwithstanding such superior title in the Maharaja and if that be so they will also enure for their benefit as against any derivative title claimed by anyone under the Maharaja. Moreover when these plots and structures, particularly these three plots were being registered as Shia Wakfs under the U.P. Wakfs under the U.P. Muslims Wakfs Act 1936 by the Shia Board and Sanads or Certificates of Registration in respect thereof were being issued in December 1952, the two Sunni Lessees who are said to have obtained a lease on 20.4.1952 did not raise any objection to such registration. The Shias ' customary rights acquired by prescription over these plots cannot thus be defeated by such derivative title. [1119 C G] 5:1. Having regard to such implementation of the concept of separation of judicial functions from executive or administrative functions and allocation of the former to the Judicial Magistrate and the later to the Executive Magistrates under the Code of 1973, the order passed by a District Magistrate, Sub Divisional Magistrate or any other Executive Magistrate under the present section 144 is not a judicial order or quasi judicial order, the function thereunder being essentially an executive (police) function. [1125 E G] 5:2. It is true that before passing the order the District Magistrate, Sub Divisional Magistrate or the Executive Magistrate gives a hearing to parties except in cases of emergency when exparte order can be made under section 144(2) by him without notice to the person or persons against whom it is directed, but in which cases on an application made by any aggrieved person he has to give hearing to such person under section 144(5) and thereupon he may rescind or alter his earlier order. It is also true that such an order made by the Executive Magistrate is revisable under section 397 of the Code because under the Explanation to that section all Magistrates, whether executive or judicial or whether exercising appellate or original jurisdiction, are deemed to be inferior Courts for purposes of the revisional power of the High Court or Court of Sessions. But the fact that the parties and particularly the aggrieved party are heard before such an order is made merely ensures fair play and observance of audi alterem partem rule which are regarded as essential in the performance of any executive or administrative function and the further fact that a revision lies against the order of the executive magistrate either to the Sessions Court or to the High Court 1083 removes the vice of arbitrariness, if any, pertaining to the section. In fact, in the three decisions of the Supreme Court which were relied upon by counsel for respondents 5 and 6, namely, Babu Parate 's case, K.K. Mishra 's case and Madhu Limaye 's case where the constitutionality of section 144 of the old Code was challenged on the ground that it amounted to unreasonable restriction on the fundamental right of a citizen under Article 19(1) of the Constitution, the challenge was repelled by relying upon these aspects to be found in the provision. However, these aspects cannot make the order a judicial or quasi judicial order and such an order issued under section 144 of the present code will have to be regarded as an executive order passed in performance of an executive function where no lis as to any rights between rival parties is adjudicated but merely an order for preserving public peace is made and as such it will be amenable to writ jurisdiction under Article 32 of the Constitution.[1125H, 1126 F] 5:3. The power conferred under section 144 Criminal Procedure Code 1973 is comparable to the power conferred on the Bombay Police under section 37 of the Bombay Police Act, 1951 both the provisions having been put on the statute book to achieve the objective of preservation of public peace and tranquility and prevention of disorder and it has never been disputed that any order passed under section 37 of the Bombay Police Act is subject to writ jurisdiction of the High Court under Article 226 of the Constitution on the ground that it has the effect of violating or infringing a fundamental right of a citizen. The nature of the power under both the provisions and the nature of function performed under both being the same by parity of reasoning an order made under section 144 Criminal Procedure Code, 1973 is amenable to writ jurisdiction either under Article 32 or under 226 of the Constitution if it violates or infringes any fundamental right. [1126 F H, 1127 A B] 5:4. In urgent cases of nuisance or apprehended danger, where immediate prevention or speedy remedy is desirable, a District Magistrate, a Sub Divisional Magistrate or any other Executive Magistrate specially empowered by the State Government in this behalf may, by a written order stating the material facts of the case, direct a particular individual, or persons residing in a particular place or area, or the public generally when frequenting or visiting a particular place or area, (i) to abstain from a certain act or (ii) to take certain order with respect to certain property in his possession or under his management, if he considers that such direction is likely to prevent or tends to prevent obstruction, annoyance or injury to any other person lawfully employed, or danger to human life, health or safety, or a disturbance of public tranquility, or a riot or an affray. Sub section (2) authorises the issuance of such an order ex parte in cases of emergency or in cases where circumstances do not admit of the serving in due time of a notice upon the person or persons against whom the order is directed but in such cases under subsection (5) the executive magistrate, either on his own motion or on the application of the person aggrieved after giving him a hearing, may rescind or alter his original order. Under Sub section (4) no order under this section shall remain in force for more than two months from the making thereof unless under the proviso thereto the State Government by Notification directs that such order shall remain in force for a further period not exceeding six months.[1127 H, 1128 A E] 1184 The entire basis of action under section 144 is provided by the urgency of the situation and the power thereunder is intended to be availed of for preventing disorders, obstructions and annoyances with a view to secure the public weal by maintaining public peace and tranquility. Preservation of the public peace and tranquility is the primary function of the Government and the aforesaid power is conferred on the executive magistracy enabling it to perform that function effectively during emergent situations and as such it may become necessary for the Executive Magistrate to over ride temporarily private rights and in a given situation the power must extend to restraining individuals from doing acts perfectly lawful in themselves, for, it is obvious that when there is a conflict between the public interest and private rights the former must prevail. The section does not confer any power on the Executive Magistrate to adjudicate or decide disputes of Civil nature or questions of title to properties or entitlements to rights but at the same time in cases where such disputes or titles or entitlement to rights have already been adjudicated and have become the subject matter of judicial pronouncements and decrees of Civil Courts of competent jurisdiction then in the exercise of his power under section 144 he must have due regard to such established rights and subject of course to the paramount consideration of maintenance of public peace and tranquility the exercise of power must be in aid of those rights and against those who interfere with the lawful exercise thereof and even in cases where there are no declared or established rights the power should not be exercised in a manner that would give material advantage to one party to the dispute over the other but in a fair manner ordinarily in defence of legal rights, if there be such and the lawful exercise thereof rather than in suppressing them. In other words, the Magistrate 's action should be directed against the wrong doer rather than the wronged. Furthermore, it would not be a proper exercise of discretion on the part of the Executive Magistrate to interfere with the lawful exercise of the right by a party on a consideration that those who threaten to interfere constitute a large majority and it would be more convenient for the administration to impose restrictions which would effect only a minor section of the community rather than prevent a larger section more vociferous and militant. Legal rights should be regulated and not prohibited all together for avoiding breach of peace or disturbance or public tranquility. The key note of the power in section 144 is to free the society from menace of serious disturbances of a grave character and the section is directed against those who attempt to prevent the exercise of legal rights or others or imperil the public safety and health.[1128 E H, 1129 A D, 1138B] Muthialu Chetti vs Bapun Sahib, ILR ; Parthasaradi Ayyangar vs Chinna Krishna Ayyangar, ILR 5 Mad. 304 and Sundram Chetti and Ors. vs The Queen, ILR 6 Mad. 203, approved. Hasan and Ors. vs Muhammad Zaman and Ors. 52 I.A. 61 and Haji Mohammad Ismail vs Munshi Barkat Ali and Ors., , applied. Madhu Limaye 's case; , , followed. D.V. Belvi vs Emperor, AIR 1931 Bom. 325; Queen Empress vs Tirunarasimha Chari, I.L.R. ; Muthuswami Servaigram and Anr. vs Thangammal Ayiyar, AIR 30 Mad. 242; Bondalpati Thatayya vs Gollapuri Basavayya and Ors., AIR 1953 Mad. 956; Babulal Parate 's case ; K.K. Misra 's case. 1085 ; ; Sahibzada Saiyed Muhammed Amirabbas Abbasi and Ors. vs The State of Madhya Bharat and Ors., , The Parbhani Transport Co operative Society Ltd. vs The Regional Transport Authority; , , Smt. Ujjam Bai 's case, [1963] 1 SCR 778, N. section Mirajkar 's case; , , explained and distinguished. After all the customary rights claimed by the petitioners partake of the character of the fundamental rights guaranteed under Articles 25 and 26 of the Constitution to the religious denomination of Shia Muslims of Varanasi, a religious minority, who are desirous of freely practising, their religious faith and perform their rites, practices, observances and functions without let or hindrance by members belonging to the majority sect of the community, namely, Sunni Muslims and as such a positive approach is called for on the part of the local authorities. It is only in an extremely extraordinary situation, when other measures are bound to fail, that a total prohibition or suspension of their rights may be resorted to as a last measure.[1133F H.1134A] 6:2. In the instant case, the earlier litigations which was fought right up to the Supreme Court cannot be regarded as between the same parties, in as much as the same was not fought in representative character while the present writ petition is litigated between the petitioners and the respondents representing their respective sects; further, it was felt by the Supreme Court that proper adjudication would not be possible without impleading the two Boards (Shia Central Wakf Board and Sunni Central Wakf Board) notices were issued to them and they were also impleaded as parties to the petition who have filed their respective affidavits in the matter and have been heard through respective counsel. Moreover the earlier decision of the Supreme Court in Civil Appeal No. 941 of 1976 did not record any decision on the rights of the parties on merits but the Court took the view that the parties should be relegated to a civil suit on the assumption that the petitioners before the Allahabad High Court (i.e. W.P. No.2397 of 1978) had raised disputed questions of title and the Allahabad High Court had decided them for the first time in the writ petition; irrespective of whether the assumption made by the Supreme Court was right or wrong; the fact remains that there was no adjudication or decision on the petitioners ' right on merits as a result of the final order passed by the Supreme Court in the appeal, which was confirmed in the Review Petition; all that could be said to have been decided by the Supreme Court in Civil Appeal No. 941 of 1976 and Review Petition No. 36 of 1977 was that parties should get their rights adjudicated in Civil Suit. For these reasons it is obvious that neither res judicata nor principle analogous to res judicata would bar the present writ petition. [1134 G H, 1135 A D]

Civil Appeal No. 377 of 1970. From the Award dated the 22nd October, 1969 of the Industrial Tribunal, Gauhati in Reference No. 16 of ]965. Anand Prakash and D. N. Mishra, for the appellant. D.L. Sen Gupta and section K. Nandy, for respondents. The Judgment of the Court was delivered by FAZAL AL1, J. This is an appeal by special leave against the award dated October 22, 1969 by Mr. R. Medhi, Presiding officer, Industrial Tribunal. Gauhati on a reference made to the Tribunal by the Government of Assam by virtue of its notification No. FLR. 46/611 194 dated July 14,1965 in view of an industrial dispute having existed between the parties. The appellant is the management of the Indian oil Corporations Ltd. which has undertaken what is known as the Assam oil Refineries situated at Gauhati. The reference to the Tribunal was made by the Government in the following circumstances: By virtue of a notification dated September 3, 1957, the Central Government granted compensatory allowance according to certain rates to all Central Government employees posted throughout Assam. The appellant set up the refinery some time in the year 1959 and in view of the circular of the Central Government referred to above the management thought it fit in the circumstances to grant compensatory allowance to all its employees some time in September 1959. The grant of compensatory allowance was not made through any standing order or circular but it is alleged to have been given as an implied condition of service. Thereafter there was another notification by the Central Government dated December 8, 1 960 by which it was provided that the employees in receipt of the compensatory allowance would be given the option to choose the house rent allowance or compensatory allowance but will not be entitled to draw both. This order was to remain in force for five years. By virtue of another notification dated August 9, 1965 the Central Government made it further clear that the employees of the Central Government would have to draw either compensatory allowance at the existing rates or the house 112 rent allowance but not both. In view, however, of the notification dated December 8, 1960, alluded to above, the management thought that the contents of the circular were binding on the Company and, therefore, they unilaterally, without giving any notice to the workers, withdrew the concession of the compensatory allowance which had been granted to the workers in September 1959. This concession was withdrawn with effect from July 1960. The workers moved the Government for making a reference to the Tribunal because a dispute arose between the parties regarding the competency of the appellant to withdraw the concession granted by it unilaterally. The Government made a reference to the Industrial Tribunal which has held that there was a dispute between the parties and as section 9A of the Industrial Disputes Act, 1947 hereinafter referred to as 'the Act ' has not been complied with by the Company the management was not legally entitled to withdraw the concession of the Assam Compensatory Allowance granted to the employees. The award of the Industrial Tribunal was published by the Government of Assam in the Gazette dated July 14, 1965. Dr. Anand Prakash, counsel for the appellant, made the following three contentions before us: (1) that the compensatory allowance was given purely on the basis of the Central Government circular dated September 3, 1957, on the distinct understanding that it was a temporary measure which could be withdrawn at the will of the employer and did not amount to a condition of service at all; (2) that even if the provisions of section 9A of the Act applied, since the management had substituted the house rent allowance for compensatory allowance the workers were not adversely affected and therefore, it was not necessary to give and notice to them before withdrawing the concession of the compensatory allowance: and (3) that even if the provisions of section 9A of the Act were not complied with, the Tribunal should have at least gone into the question on merits instead of basing its award on the question of applicability of section 9A of the Act. Before, however, dealing with the contentions raised before us, it may be necessary to mention a few admitted facts. In the first place it 1 is the admitted case of the parties that the circulars of the Central Government were not binding" on the appellant Corporation, but the Corporation chose to follow them in its own wisdom Secondly it is also ` ' ' admitted that at the time well the concession of compensatory allowance was granted to the employees of the Corporation. there was nothing to show that it was given only by way of an interim measure which 113 could be withdrawn at the will of the employer. Thirdly it is also not disputed that before withdrawing the concession of compensatory allowance in August 1960 the appellant gave no notice to the workers, not did it consult them in any way before depriving them of the concession originally granted by the employer. In fact the Tribunal has found very clearly that the act of the Corporation in granting the Assam Compensatory Allowance was an independent one and made out of their own volition, though the circulars of the Central Government may have been one of the factors that swayed the decision of the management. It is against the background of these admitted facts and circumstances that we have to examine the contentions raised by counsel for the appeal in this appeal. As regards the first contention that the concession of the compensatory allowance was granted to the workers by way of a temporary 4 measure and would not amount to a condition of service, we find absolutely no material on the record to support the same. There is no evidence to show that the management before granting the concession of the compensatory allowance had in any way indicated to the workers that this was only a stop gap arrangement which could be withdrawn after the housing subsidy was granted. Even before the unilateral withdrawal of the concession granted by the appellant no notice was given to the workers nor were they taken into confidence, nor any attempt was made to open a dialogue with them on this question. Indeed if the circulars of the Central Government are admittedly not binding on the Corporation, then we are unable to appreciate the stand taken by the appellant that the management unilaterally withdrew the concession merely because of the Central Government circulars. So far as the compensatory allowance is concerned it was given in order to enable P the workers to meet the high cost of living in a far off and back ward area like Assam. It had absolutely no causal connection with the housing subsidy or house rent allowance which was a different type of concession. Furthermore, the grant of compensatory allowance by the appellant was indeed a very charitable act which showed that the employers were extremely sympathetic towards the needs of their r workers. In there circumstances we have no hesitation in holding that the grant of compensatory allowance was undoubtedly an implied condition of service so as to attract the mandatory provisions of s.9A of the Act which runs thus: "No employer, who proposes to effect any change in the conditions of service applicable to any workman in respect of any matter specified in the Fourth Schedule, shall effect such change, (a) without giving to the workmen likely to be affected by such change a notice in the prescribed manner of the nature of the change proposed to be effected; or (b) within twenty one days of giving such notice: Provided . . . . " An analysis of section 9A of the Act clearly shows that this provision comes into operation, the moment the employer proposes to change any condi 114 tion of service applicable to any workman, and once this is done twenty one days notice has to be given to the workmen. This admittedly was not done in this case. By withdrawing the Assam Compensatory Allowance the employers undoubtedly effected substantial change in the conditions of service, because the workmen were deprived of the compensatory allowance for all, time to come. Dr. Anand Prakash however relied on a few decisions in support of the fact that such a change in the conditions of service does not amount to any change as contemplated by section 9A of the Act. Reliance was placed on a decision of the Andhra Pradesh High Court in Workmen of Hindustan Shipyard (Private) Ltd. vs Industrial Tribunal, Hyderabad and others(J). In our opinion the facts of that case are clearly distinguishable from the facts in the present case. In that case a concession was granted to the employees to attend the office half an hour late due to war time emergency, but this concession was conditional on the reservation of the right to change the office hours and it was open to the employer to take a different decision. Secondly the working hours being fixed at 6 1/2 hours were below the maximum prescribed by the Factories Act which were 8 hours and, therefore, there t was no adverse change in the conditions of service. Finally in this case there was a clear finding given by the learned Judge that the concession would not amount to a condition of service. In this connection,: Jaganmohan Reddy, J., observed as follows: "In this case as it cannot be said that the concession which they were enjoying in the winter month was a privilege to which they were entitled before the Act came into force in February 1948. I have already stated that the concession was subject to the condition of its withdrawal unilaterally and cannot, therefore, be said to have conferred any right on the employees to enjoy it as such. . . further that section 9A came into play only when the conditions of service were altered, but the workmen having agreed to the reservation of the employer lo alter it, they have made the right to alter it also a condition of service and therefore the action in accordance with the said right can give no cause for complaint. " In the instant case we have already held that the grant of compensatory allowance cannot be construed to be merely an interim measure. hut having regard to the circumstances in which this concession was given will amount to an implied condition of service. Reliance was also placed on a decision by this Court in Bhiwani Textile Mills vs Their Workmen and others(2), where this Court observed as follows: "Sri G. B. Pai, on behalf of the mills, and Sri M. section K. Sastri and Y. Kumar for the two unions representing the workmen, stated before us that the parties are agreed that this 115 direction given in the award may be deleted as no party objects to its deletion. Consequently, we need not go into the question whether the tribunal was in law competent to make such a direction in the award or not In view of this agreement between the parties, the only question that remains for decision by us is whether the tribunal was right in directing that workmen, who do duty on any Sunday, will be entitled to an extra payment of 20 per cent of their consolidated wages for that Sunday. " A perusal of the observations made by this Court would clearly show that the case before this Court proceeded on the basis of a consent order as agreed to by counsel for the parties. Secondly the question for decision was whether the workmen were entitled to additional payment for working on Sundays even if they were given another off day as a substitute for Sunday. The Court pointed out that this could not be treated as a condition of service because all that the workman were entitled to was that they should take at least one day off in a week and this facility was not disturbed but instead of giving Sunday off they were given some other day as weekly off. In these circumstances this case also does not assist the appellant. Dr. Anand Prakash also cited a decision in oil & Natural was Commission vs The Workmen(1). In this case also there was a finding of fact by this Court that there was nothing to show that 6 1/2 hours per day was a condition of service. In this connection, the Court observed as follows: "In our opinion, on the facts and circumstances of this it can not be said that 6 1/2 working hours a day was a term of service, for the simple reason that it was only during a period of the first six months, when the factory was being constructed . at the site of the workshop that, due to shortage of accommodation, the administrative office was, as an interim arrangement, temporarily located in tents at a place about 2 k.m. away, that the state in this office was not required to work for more than 62 hours per day. There is no evidence that 6 1/2 hours per day was a condition of service; neither is there any such term of service in their letters of appointment, nor is such a term of service otherwise discernible from other material on the record. " In view of our finding, however, that the grant of the Assam Compensatory Allowance was undoubtedly a condition of service this case has absolutely no application. Reliance was placed on a decision of this Court in Hindustan Lever Ltd. vs Ram Mohan Ray and others(2) for the proposition that withdrawal of the concession of the compensatory allowance did not adversely affect the service conditions of the workmen. In this case this Court observed as follows: 116 "As regards item 11 it was urged that as one department out of three has been abolished, this item applies. Though to bring the matter under this item the workmen are not required to show that there is increase in the work load, it must be remembered that the 4th Schedule relates to conditions of service for change of which notice is to be given and section 9 A requires the employer to give notice under that section to the workmen likely to be affected by such change. The word affected ' in the circumstances could only refer to the workers being adversely affected and unless it could be shown that the abolition of one department has adversely affected the workers It cannot be brought under item 11. The same consideration applies to the question of change in usage under item 8. " It is true that this Court held on the facts of that case that the Company had abolished one department, but as the work load was not increased the workers were not adversely affected and the abolition of one department could not be brought under item 11. The contingency contemplated in the aforesaid case, however, cannot be equated with the present case by virtue of the unilateral deprivation of the compensatory allowance which was received by the employees by the withdrawal of which they were undoubtedly prejudiced. It cannot be contended that the sudden withdrawal of a substantial concession in the conditions of service would not materially or adversely affect the workmen. We are, therefore, of opinion that the aforesaid case also does not support the contention of the learned counsel for the appellant. On the other hand Mr. Sen Gupta appearing for the respondents drew our attention to the decision of this Court in M/s. Tata Iron and Steel Co. Ltd. vs The Workmen and others(1) where this Court, while pointing out the object of section 9A, observed as follows: "The real object and purpose of enacting Section 9 A seems to be to afford an opportunity to the workmen to consider the effect of the proposed change and, if necessary, to represent their point of view on the proposal. Such consultation further serves to stimulate a feeling of common joint interest of the management and workmen in the industrial progress and increased productivity. This approach on the part of the industrial employer would reflect his harmonious and sympathetic co operation in improving the status and dignity of the industrial employee in accordance with the egalitarian and progressive trend of our industrial jurisprudence, which strives to treat the capital and labour as co sharers and to break away from the tradition of labour 's subservience to capital. " The observations made by this Court lay down the real test as to the circumstances in which section 9A would apply. In the instant case, however, we are satisfied (1) that the grant of the compensatory allow 117 ance was an implied condition of service; and (2) that by withdrawing this allowance the employer sought to effect a change which adversely and materially affected the service conditions of the workmen. In these circumstances, therefore, section 9A of the Act was clearly applicable and the non compliance with the provisions of this section would undoubtedly raise a serious dispute between the parties so as to give jurisdiction to the Tribunal to give the award. If the appellant wanted to withdraw the Assam Compensatory Allowance it should have given notice to the workmen, negotiated the matter with them and arrived at some settlement instead of withdrawing the compensatory allowance overnight. It was also contended that the compensatory allowance was only an allowance given in substitution for housing subsidy. We are, however, unable to agree with this contention. Mr. Sen Gupta appearing for the respondents rightly pointed out that there is a well knit and a clear distinction between the compensatory allowance and a housing subsidy or house rent allowance. This distinction is clearly brought out by the Second Pay Commission 's Report (1957 59) in which the Commission observed as follows: "The compensatory allowances considered here fall into there broad groups: (i) allowances to meet the high cost of living in certain specially costly cities and other local areas, including hill stations where special requirements such as additional warm clothing and fuel etc., add to the cost of living; (ii) those to compensate for the hardship of service in certain areas, e.g. areas which have a bad climate, or are remote and difficult of access; and (iii) allowances granted in areas, e.g. field service areas, where because of special conditions of living or service, an employee cannot, besides other disadvantages, have his family with him. There are cases in which more than one of these conditions for grant of a compensatory allowance are fulfilled. " The Second Pay Commission also observed: "The rent concessions dealt with here are of two kinds: (i) provision of rent free quarters, or grant of a house rent allowance in lieu thereof; and (ii) grant of a house rent allow ance in certain classes of cities to compensate the employees concerned for the specially high rents that have to be paid in those cities. The former is allowed only to such staff as are required to reside on the premises where they have to work. and is thus intended to be a facility necessary to enable an employee to discharge his duties. In some cases, it is a supplement to pay or substitute for special pay etc., which would have been granted but for the existing of that concession. In either case, it is not related to the expensiveness of a locality. The latter, on the other hand, is a compensatory or a sort of a dearness allowance, intended to cover not the high cost of living as a whole but the prevailing high cost of residential accommodation; and it has no relationship to the nature of an employee 's duties. " 118 The observations made by the Second Pay Commission throw light on this question. In fact the compensatory allowance and housing subsidy are two different and separate categories of the terms of service conditions and they cannot be clubbed together, nor can the one be made dependent on the other. The object of these two concessions is quite different and both of them serve quite different purposes. It was next contended that even if section 9A of the Act applied, the Tribunal should have gone into the question on merits instead of giving the award on the basis of non compliance with the provisions of section 9A. This argument also appears to us to be equally untenable. On the facts and circumstances of the present case the only point that fell for determination was whether there was any change in the conditions of service of the workmen and, if so, whether the provisions of section 9A of the Act were duly complied with. We cannot conceive of any other point that could have fallen for determination on merits, after the Tribunal held that section 9A of the Act applied and had not been complied with by the appellant. It was also faintly suggested that there was no question of a customary claim or usage because the period during which the compensatory allowance was granted and withdrawn was too short. It is, how ever, not necessary to take any notice of this argument, because counsel for the respondents Mr. Sen Gupta fairly conceded that he had not based his claim on any customary claim at all. It was argued by Mr. Sen Gupta that after the Central Government notification of September 3, 1957, the appellant took an independent and voluntary decision on their own to give the facility of the Assam Compensatory Allowance as an implied term of the contract and having done so they could not wriggle out from the provisions of section 9A of the Act. Thus all the contentions raised by the appellant fail and the appeal is dismissed, but in the circumstances of this case we leave the parties to bear their own costs. V.M.K. Appeal dismissed.

By virtue of a notification dated September 3, 1957, the Central Government granted compensatory allowance according to certain rates to all Central Government employees posted throughout Assam. The appellant thought it fit in the circumstances to grant compensatory allowance to all its employees in September 1959. It was not made through any standing order or circular. Thereafter there was another notification by the Central Government dated December 8, 1960 by which it was provided that the employees in receipt of the compensatory allowance would be given the option to choose the house rent allowance or compensatory allowance but will not be entitled lo draw both. this was to remain in force for five years. In view, however, of the notification dated December 8, 1960, the management thought that the contents of the circular were binding on the company and therefore they unilaterally. without giving any notice to the workers, withdrew the concession of the compensatory allowance which had been granted to the workers in September 1959. This concession was withdrawn with effect from July 1960. The workers moved the Government for making a reference to the Tribunal because a dispute arose between the parties regarding the competency of the appellant to withdraw he concession granted by it unilaterally. The Government made a reference to the Industrial Tribunal which has held that there was a dispute between the parties and as s.9A of the , has not been complied with by the Company the management was not legally entitled to with draw the concession of the Assam Compensatory Allowance granted to. the employees. This appeal has been preferred by the management on the basis of the specials leave granted by this Court. It was contended for the appellant (i) that the compensatory allowance was given purely on the basis of ' the Central Government circular dated September 3, 1957, on the distinct understanding that it was a temporary measure which could be withdrawn at the will of the employer and did not amount to a condition of service at all; (ii) that even if the provisions, of s.9A of the Act applied, since the management had substituted the house rent allowance for compensatory allowance the workers were not adversely affected and, therefore, it was not necessary to give any notice to them before withdrawing the concession of the, compensatory allowance. Rejecting the contentions and dismissing the appeal, ^ HELD: (i) 'There is no evidence to show that the management before granting the concession of the compensatory allowance had in any way indicated to the workers that this was only a stop gap arrangement which could be withdrawn after the housing subsidy was granted. Even before the unilateral withdrawal of the concession granted by the appellant no notice was given to the workers nor. were they taken into confidence, nor any attempt was made to open a dialogue with them on this question. So far as the compensatory allowance is concerned it was given in order to enable the workers to meet the high cost of living in a far off and backward area like Assam. It had absolutely no casual connection with the housing subsidy or house rent allowance which was a different type of concession. Furthermore, the grant of compensatory allowance by the appellant was indeed a very charitable act which showed that the employers were extremely sympathetic towards the need of their 111 workers. In these circumstances, the conclusion is irresistible that the grant of compensatory allowance was an implied condition of service so as to attract the mandatory provisions of section 9A of the Act. Twenty one days notice has to be given to the workmen. This was not done in this case. [113C 114B] Workman of Hindustan Shipyard (Private) Ltd. vs Industrial Tribunal Hyderabad and others, [1961] 2 L.L.J. 526, Bhiwani Textile Mills vs Their The Workman and others , Oil and Natural Gas Commission vs The Workman ; , Hindustan Lever Ltd. vs Ram Mohan Ray and Other ; , and M/s. Tata Iron and Steel Co. Ltd. vs The Workman and others[1972] 2 S.C.C 383, referred to. (ii) The compensatory allowance and housing subsidy are two different and separate categories of the terms of service conditions and they cannot be clubbed together, nor can one be made dependent on the other. the object of these two concessions is quite different and both of them serve quite different purposes. [118A B] .

122 of 1958. Petition under Article 32 of the Constitution of India for the enforcement of Fundamental rights. 1958, Oct. 16, 17, 28, 29, 30. Basdeva Prasad and Naunit Lal, for the petitioner : The main question to be considered in the case is as to whose privilege has been involved and violated those of the press or the House of the Legislature. Notice served on the petitioner by the Privileges Committee of the Bihar Assembly is illegal and invalid and the Constitution of the Privileges Committee is illegal as the Chief Minister of the State Dr. section K. Sinha himself has been the Chairman of the Committee. On May 30, 1957, there was a debate in the Bihar Legislative Assembly when M. P. N. Singh, one of the oldest members of the Assembly, made a speech the gist of which was a criticism of the administration of Bihar as run by Dr. section K. Sinha, the Chief Minister, and cited certain instances of favouritism. At this stage the Speaker held that a portion of the speech was objectionable and ordered it to be struck off and expunged. It was a general statement. No specific 102 810 direction was given to the Press. The opposite party was claiming the right to prohibit all publication of proceedings a right which the House of Commons possesses with its own history, but never exercises it. The speech was made on May 30, 1957, and the official authorised report was published and made available on January 2, 1958. 'The Search Light ', being a daily newspaper, came out on May 31 with what happened in the Assembly. A privilege motion was said to have been moved and referred to the Committee of Privileges; no voting was taken and no time limit was given for the presentation of the report which was required under the rules of the House. If no time limit was prescribed then under rule 215 the report was to be submitted within a month. It was after more than a year i.e. on August 18, 1958, that the petitioner received a notice to show cause why appropriate action should not be taken against him for the breach of privilege. This showed malice on the part of the Privileges Committee. The action of the Privileges Committee raised constitutional points affecting the petitioners fundamental right of freedom of expression. The Legislature cannot have such a privilege as will deprive the citizens of their fundamental rights which are guaranteed by the Constitution, specially the right of freedom of expression under article 19(1) (a). In the actual motion the charge was that the speech was published in its entirety, " Jyon ka Tyon " ; but the motion adopted by the Privileges Committee, the charge against the Editor was that he published a perverted and unfaithful report of the proceeding, and the expunged portions of the speech was also published in derogation of the order of the Speaker. [Wanchoo, J. If the publication of expunged portions would make a report false, how could it be anything other than perverted and unfaithful?] [Daphtary:It was unfaithful as it was not a true report, as portions expunged had also been published]. The reference was not by the House but by the Speaker. It was open to the petitioner to challenge the procedure, as one of the grounds of his objection 811 was that the motion was not put to vote. Important questions arose as a result of the proceedings, one of them being : Can a Committee presided over by a Chief Minister who has such an interest in the matter as might give him a real bias be deemed to be empowered to carry on the investigation and recommend punishment ? [Daphtary:I object to the use of the word 'bias '. It is not supported by the petition or the plea]. The allegation of mala fide is much stronger than bias. [Chief Justice. article 19(1) had granted fundamental rights against law made by the State. There were no fundamental rights against the Constitution itself. If the Constitution provided that the House shall have certain privileges then it was clear that there cannot be a question of fundamental rights against the Constitution. If the Constitution provided that the House shall have the privileges that so much shall be published then article 19(1) will not prevail against the Constitution]. I rely on Amendment One of the American Constitution on which the fundamental rights in article 19(1) are based. Cooley 's " Constitutional Law " (P. 350). Express Newspapers (Private) Ltd. vs Union of India, , 121. [Sinha, J. In America people were more forthright in their views and opinions and that we could have better guidance from English precedents than from American.] Article 194 (3) which dealt with powers, privileges and immunities of the Legislatures were subject to the provisions of the Constitution. Article 194(3) cannot be said to abridge the provisions of article 19(1) which guaranteed fundamental rights. Article 194(3) of the Constitution provided the procedure of the British House of Commons in regard to powers, privileges and immunities. Even then any power or privilege which militated against the fundamental rights cannot be deemed to be valid. The Legislature can follow the procedure of the British House of Commons, but this 812 privilege of legislature cannot go contrary to the fun damental rights. If such a privilege is allowed, the Legislature would assume sovereignty as against the Constitution itself under the garb of privileges. Even in England, the ban on the publication of the proceedings in Parliament had ceased to exist in practice after the 16th century. The proceedings of legislatures are open to the public and the citizens have a right to know whatever happens in the House and also to know as to how any portion of the proceedings is ordered to be expunged. The Blitz case Gunupati Keshavram Reddy vs Nafisul Hasan, A. I. R. in which the Supreme Court ordered the release of a correspondent who had been arrested by the Speaker of the U. P. Assembly in connection with breach of privilege. He was not produced before the Magistrate and on Habeas Corpus petition, he was released. Article 20 prevailed and it was established that article 194(3) could not go against article 20 guaranteeing a person 's liberty. [Chief Justice. If the privileges were given by the Constitution itself, then the question of fundamental rights does not come at all. Article 19(1) is against law made by the State Government. Fundamental rights do not prevail against the Constitution. The counsel could take the stand that Bihar Legislative Assembly has not got the powers which it claims. The question was whether the Assembly had such powers under the Constitution]. In England there was no written constitution. The House of Commons had claimed the right to prohibit publication but in fact and in actual practice never exercised that right. The American Constitution also granted full freedom to publish the proceedings of the House including the expunged portions. That being so, it was for the Court to interpret article 194(3) harmoniously with article 19(1) and the provisions of the former had to be consistent with fundamental rights granted under the Constitution. In England the Parliament is supreme and there is no written constitution, but here the Constitution is supreme. The right to expunge could be claimed only for the purpose of 813 official record. They could not claim a total prohibition. There was a common basis for this in both American and English democratic systems. The people, had the right to know as to what was happening in the House to enable them to exercise their franchise properly. If people have a right to see and hear the proceedings, other people who are not able to be in the House have a right to know through publi shed proceedings. Wason vs Walter, (1868) L. R. IV Q. B. 73, 95. (The counsel refers to the standing orders in the British House of Commons quoting May 's Parliamentary Practice). Article 194(1) in its entirety was subject to the provisions of the Constitution and under article 19 to the provisions of the Constitution. If under article 194(3) the application of the House of Common laws provided complete immunity, then it was impossible to continue the consistency of article 194(1) and article 194(3). Article 194(1) provided clearly that it was subject to the provisions of the Constitution in the matter of freedom of speech, etc., in the State Legislature. It was impossible to contend that article 194(3) was not subject to the provisions of the Constitution. Under article 194(1) it was made clear that a member of the House of Legislature did not have the same immunity as had a member of the House of Commons who enjoyed complete freedom and had no restriction of whatever sort. Here article 194(1) made the freedom of speech in the House subject to the provision of the Constitution. [The Chief Justice. It might be that one of the immunities was singled out and made subject to the provisions of the Constitution]. Privileges and rights of the House of Commons extended also to elections. The power of the House of Commons to fix its own elections could not be challenged in a tribunal or a court. Here in India, elections were held under a separate authority provided by the Constitution under Ch. XV and such elections could be challenged and appeared against in the High Court, tribunals, etc. In England, the validity of an election was to be determined by the House 814 of Commons itself or its tribunal. Such a privilege could not be claimed by a House of Legislature here. [The Chief Justice. Here we had powers, privileges and immunities which may be prescribed by law by legislation under article 194(3) and it was Part XV in the Constitution which provided for elections. It showed that powers, privileges and immunities had been separated and dealt with separately]. The whole scheme of the Constitution had to be taken into account. The reasonable interpretation of article 194(3) was that, like article 194(1) it was also in its entirety made subject to the provisions of the Constitution. The next point was that the Chief Minister could not be the Chairman of the Committee of Privileges with quasi judicial powers to summon witness and demand production of evidence. In this case, the Chief Minister had a certain interest in the matter and this was against all principles of natural justice: [The Chief Justice. Whether Counsel claimed that the Chief Minister could not be at all the Chairman of the Committee or that the Chief Minister or anybody should not be the Chairman or in the Committee if he had an interest]. I put it on the ground of interest only. Voting took place in the Committee and if the Chief Minister had not been there might be a tie. (Quoted Rule 62 of the Standing Orders of the House of Commons to show that the Chief Minister could not be the Chairman of the Committee of Privileges). I will now deal with and challenge the procedural aspect of the matter. It was the House alone which had a right to refer the matter of breach of privilege. Rule 207 of the Assembly clearly laid down that the matter must be of recent occurrence. In the House of Commons, it was accepted that " recent occurrence " could not go beyond ten days. The privilege motion got precedence over even adjournment motions. Then under r. 215, no time limit was fixed by the House for the report to be submitted, as such the report was to be submitted within 815 a month. The House had not extended the date for the submission of the Report by the Privileges Committee and in the absence of such extension, the reference not being reported, the Committee became " functus officio ". It was against this that the petitioner sought to move the Honourable Court for prohibition of the proceedings against him and for the vindication of his fundamental rights. Either the Committee had become " functus officio " or the non submission of the report within the stipulated time under r. 215 first proviso could only mean that the Committee had nothing to recommend. Regarding the procedure adopted, Rules 208 and 209 had to be taken together. There were objections to the motion at the time it was moved. The publication of a true and full account could not be termed unfaithful and perverted. It was for the court to determine whether there has been a breach of privilege committed. [Sinha, J. Is it our jurisdiction? Is it not the exclusive function of the Parliament ?] [The Chief Justice. What was a privilege and what was not could be stated but whether there was a breach of privilege or not it was for the House to say]. There was no breach of privilege. What we are claiming is that the reporting of proceedings is not a privilege the House can claim. Then my other point is that I have not published the expunged portion. [Daphtary, Solicitor General: It is for the House to decide]. Am I not entitled to come to this Court as custodian of my fundamental rights, that powers are claiming to punish and proceed against me and coerce me? The question was whether one was not entitled to bring a petition under article 32 against it ? C. K. Daphtary, Solicitor General for India, B. K. P. Sinha and section P. Varma, for the respondents. The question to be considered is how much of the portion which contained all the allegations fell under article 32. The Article could deal only with breach of fundamental rights. If any of the powers or exercise of the 816 powers and privileges and the defence and assertion of any of the immunities involved, were a breach of fundamental rights or were something contrary to fundamental rights, even then the powers and the privileges were good. They could not be considered bad as offending those rights. It was not open for someone to come and say that there was no such power and immunity when such powers and immunities were provided under article 194(1) and was made part of the Constitution. Every citizen had been given the right of freedom of speech by the Constitution. A member of the House of a Legislature also enjoys that freedom by virtue of being a citizen. Only rules and regulations made in excess of legislative powers could be questioned and not the powers themselves. Then there was the question of amendment of the Constitution which was not affected by fundamental rights. The result would be that by amendments of the Constitution fundamental rights could be modified or removed. That was what was done by amendments in articles 31(a) and 31(b) where the rights were modified. Article 194 was put there in the Constitution by the framers simultaneously with other provisions. It therefore had an equal footing with other provisions of the Constitution and unless expressly stated in the provision itself could not be made subject to other provisions of the Constitution. All parts of the Constitution were made by the same people and were equal. One could not be made more important than the other. [Subba Rao, J. What was the idea then in giving a paramount position to fundamental rights in our Constitution ?] They are fundamental to human beings. [Subba Rao, J. If the legislature had made a law defining its powers and privileges, could that law be valid if it infringed the fundamental rights?] The Constitution itself said that powers, privileges and immunities would be such as the Legislature would lay down. Even such a law would not be against the fundamental rights. It would be in exercise of the constituent law. The Constitution makers 817 thought it best that they would not define the powers of the Legislature and left to the Legislature to decide what powers it will have. [Subba Rao, J. When a law was made by the Legislature it was subject to fundamental rights under article 19 but when the Legislature made laws relating to its powers, etc. , it was not subject to article 19. Was that not an anomalous situation ?] There was no anomaly at all. The Constitution makers themselves had said what powers and privileges of the Legislature were. When it was so made as a law by virtue of powers granted by the Constitution then it could not be subject to fundamental rights. That what the Constitution itself had chosen to give was subject to fundamental rights was not a sound argument. [Bhagwati, J. The fundamental rights were on a high pedestal and any other provisions should not infringe them]. What was constitutional was constitutional. Unless there were provisions made expressly subject to other provision or provisions they had all the same footing and were on the same plane. Wherever the Constitution makers wanted to say it, they said so. They were otherwise independent of each other, unless stated to the contrary. No part of the Constitution could be said to be void and if one part was struck down then it would mean that the Constitution itself was being struck down. Article 194 had to be given the status of Constitution law. The first point was that powers, privileges and immunities given by article 194(3), were not subject to article 19. Having established that, the second point that would arise would be what were those powers and privileges. What was the ambit of those powers. In England there were instances to show that breach of privilege was treated as contempt of the House, disobedience of the Speaker 's order was contempt. (Refers to the standing order 62 of the House of Commons). 103 818 The argument advanced by the other side was fallacious. [Quotes from May 's Parliamentary Practice]. Standing order 62 did not apply to the Committee of Privileges. It applied to select committees and standing committees but not to the Committee of Privileges, which was a sessional committee appointed at the beginning of each session. The House of Commons had powers to make rules from time to time and regulate its own procedure. All that the court had to satisfy itself about was whether or not the House had the power to follow up a breach of privileges. [Bhagwati, J. Whether power to make rules had not been within limits. In an effort to protect immunities and privileges one could not expand the privileges and immunities]. All the precedents of the House of Commons were not available dating back to 16th or 17th Century but there was enough in May 's Parliamentary Practice to support the argument. So long as the debates were correctly and faithfully reported the right to prevent publication was not enforced. Journalists were present in the House galleries by the leave and licence of House and on sufferance. What the Speaker said was not to be published, it could not be published. [Subba Rao, J. What was the purpose of expunging a portion of the proceedings ?] The expunged portion was not deemed to have been stated in the House. There was the case in the House of Lords where an expunged portion was published and became breach of privilege. The privilege of the House to control publication was always there though it might not be exercised. The House, was always zealous of its privileges. Even here in India, House privilege had been asserted at the time when Mr. Vithalbhai Patel was President of the Assembly. There was heated debate on the question as to in whom did the control of the precinct of the House vest, the Viceroy or the President of the Assembly. Mr. Patel to assert the Privilege of the House asked the galleries to be cleared. Privilege was not ordinarily exercised if the report was faithful and accurate. But it was 819 necessary in order to ensure if the member could say things without fear of being misreported. Otherwise his freedom of speech was affected. It was the power and privilege of the House of Commons to decide what was a breach or not. The courts could go to the extent to find whether a particular privilege existed. [The Chief Justice: If the privilege claimed was excessive would it not affect fundamental rights ?] It depended on the wording of the notice. In the present case the motion and Committee 's notice had to be read together. It would not be correct to give fundamental rights paramountcy over other parts of the Constitution. With reference to the allegations of mala fide '. What was the ' mala fide '? Who could deny it except the secretary as the 'mala fides ' charge was levelled against the Committee of Privileges ? [Sinha, J. Including the Chief Minister]. " Mala Fides " was alleged against the Committee. [Sinha, J. The petition says that the committee is influenced by the Chairman]. It is not so. I will confine myself to the petition which says that the Committee of Privileges is proceeding against the petitioner mala fide ' in order to muzzle him and restrict him from expressing his views. The Chief Minister was the Chairman of the Committee. There was nothing to show nor was it claimed that the member of the Committee were all his party men. There were members of other parties. It was not alleged otherwise. It could not also be said that the members of the Committee were all his adherents. In the circumstances, what else could be done except for the Secretary to deny the allegations of 'mala fide ' which was levelled against the committee appointed by the Speaker and the Chief Minister was Chairman from long before the matter under consideration was taken up. [The Chief Justice. What about the time lag? No step was taken for one whole year and the allegation 820 is that, when some articles were published, the matter was taken up]. The action was taken after some time to enable the party to correct itself. Sinha, J. The point raised was that the Committee did not do anything for one year and then woke up one morning and then pressed the matter]. How is the matter carried any further by these arguments. Ultimately the House would judge and it was composed of 316 members. Where was the question of mala fide '? No one in the House opposed the motion. Where was the malice of the Committee, whether it issued the notice immediately or after some time ? [Sinha, J. The argument of the petitioner 's Counsel was that the House should have been presumed to have dropped the matter as the House had not done anything at all for one year and all of a sudden the matter was taken up. The point made out was that but for the petitioner 's subsequent action, no notice would have been issued by the Committee]. They had issued the notice stating that there was a breach of privilege. [Sinha, J. Had not the Committee become 'functus officio ' by lapse of time ?] No. the Committee had the power to launch the prosecution. It did not do it immediately. It waited for three or four months. [Sinha, J. The very essence of these proceedings which are of a summary character is that the matter should be expeditiously dealt with]. Is it not a matter of internal management ? The House had decided something and it was for the Committee to take some action. The House did not rescind the decision. With reference to the claim that rules had not been followed: the standing Order 62 of the House of Commons did not apply to the Privileges Committee which was a sessional committee. Then there was rule 215 about the time limit. What was it that the House had done? It appointed one of its committees to 821 inquire and submit its report within a period. The House could say that it could extend the time and enlarge the scope of time limit. [The Chief Justice. But as long as the rule stand. . ]. The nature of the rule had to be gone into. It was something fixed by the House for the guidance of the Committee. The rules were made for the benefit of the House. It was a matter for themselves, not for the benefit of an outsider to seek to enforce it. On the subject of malice, if something was lawful it did not matter how much malice there was, the motive of malice could not make unlawful what was otherwise lawful. Malice imputed was that the Chief Minister was the Chairman of the Committee. He might not be there. The Speaker might appoint some one else. How can then one presume that the committee would act maliciously ? There were responsible persons holding, responsible positions. H. N. Sanyal, Additional Solicitor General of India, for the Attorney General for India, cited the powers of the legislature of Nova Scotia and the position there, summed up the law relating to powers and privileges ' Basdeva Prasad, in reply. The main fact to be borne in mind is that the Parliament or the Legislature in India was not really as sovereign as the ' British Parliament which was supreme in all matters. Article 194(1) is not a repetition of article 19(1)(a), but are abridgement of the freedom of expression and, speech which would have otherwise been available to ' the members of the legislature as ordinary citizens. Article 194(3) itself does not provide a constitutional exemption to the freedom guaranteed under article 19(1)(a) and article 194(3) is subject to the provisions of the Constitution in Part III and the other article 21. Article 194(3) does not import into the Indian Constitution the powers, privileges and immunities in their entirety, as for instance the right to prohibit publication altogether could not be imported. 822 It had already been made clear that article 194(1) was subject to the provisions of the Constitution. The point was that article 194(3) in its entirety was subject to the Constitution. Article 32 itself was very significant as to what rights and powers of Part III were ]lore important. Writs could be issued for breach of fundamental rights or other violation of rights, including powers of taxation. Therefore, article 194 did not enlarge but it abridged the scope of application of article 19(1)(a), since it was also made subject to the rules and standing orders that might be made by the House. [The Chief Justice. Whether Parliament could not under the residuary powers of legislation, make a law imposing restrictions on the freedom of speech of members of the State Legislature. It was pointed that article 19(1) was a primary right; article 19(2) cut it to some extent; article 194(1) also made it subject to the provisions of the Constitution but the freedom of speech was further restricted. The Constitution itself appeared to provide those limitations. Would not then article 194(1) read with article 19(1) equally lead to an anomaly?] Article 194(2) flowed from article 194(1). If article 194 imported powers, privileges and immunities wholesale from the House of Commons of Great Britain, how could they be exercised ? There was article 208. Any other form of restriction arising from the exercise of those powers would be unreasonable restriction. What article 194 gave powers, privileges and immunities. Article 208 gave the power to punish, subject to the provisions of the Constitution. It could not be said that the British House of Commons had the power to punish a man twice. A man could not be held guilty of privilege by an ordinary court of law and at the same time by the House of Commons. But here article 208 and article 194 came to be subject to article 21 in that no one could be deprived of personal liberty with. out a procedure of law. [The Chief Justice. But then you have not come to the stage of article 21 at all. Your liberty has not been taken away]. 823 My liberty is threatened. The notice says there is prima facie case. Then there is the allegation of mala fide and bias. I refer to the claim of the House to be the Bole Judge of its privileges. I say that the, must be subject at least to constitutional rights. [The Chief Justice. If article 194(3) incorporated all the privileges, then could not that privilege itself be taken as procedure established by law ?] Article 21 never contemplated that there would be no procedure. Supposing none of them was followed and a warrant was issued, could not that be questioned in a court of law ? [The Chief Justice. If the man is arrested then we shall consider]. It would then be subject to the jurisdiction of their Lordships. Article 21 guaranteed that there would be no interference with the personal liberty of the citizen except according to a procedure enacted by law. There must be a substantive law. and such law must be valid. If your Lordships hold with me that fundamental rights were superior, then article 194 would have to be read with article 19(1) and the American position would help. If the House was the sole Judge then neither article 21 nor article 22 would be available. [The Chief Justice. If one could publish anything that was said in the House there would be no meaning in expunging. Being expunged,, meant it was not said]. Yes, but will not the House take notice? It is the right of the people to know what had been said and what was expunged. Expunction would be for the purposes of official record. Even in Hansard, the expunged portion is not removed but only red lines put over it. [Sinha, J. The argument advanced was that under the language of article 194(2) you could not publish anything at all]. Yet, if the claim of total prohibition was accepted, then I would be on velvet. But would that position be allowed in India ? The House of Commons debated 824 on the Public, and I have a right to publish what takes place. [Sinha, J. You claim a total right to publish]. Yes, total right to publish whatever takes place in the House. I will not claim I have a right to publish garbled and unfaithful report, I have a right to publish a faithful report of what was said or done. The argument of the learned Solicitor General was that article 194(3) was not subject to the provisions of the Constitution. In the Constitution, the power was given to the President to make all laws and regulations in Part D States and the provision did not say subject to fundamental rights Could the President make laws that would have the effect of taking away fundamental rights or that it was said that citizens in Part D states aid not have any fundamental rights? All the provisions of the Constitution had to be read in relation to the chapter on fundamental rights. In the absence of law, the power to make rules could come in conflict with fundamental rights. Law could mean a power or authority. [Subba Rao, J. Under article 194(3), the legislature of a State had all the powers, privileges and immunities of the House of Commons. One of such powers was to prevent publication of a garbled version. If in exercise of that power, the legislature made an order asking someone to appear at its bar, would that order come within the meaning of law ?] " Law included order, regulation or notification." [The Chief Justice. What is the meaning of an order ? Does it mean an executive order ?] It is an executive order. Order flowing from public authority. The definition of the State included Government, Parliament, Legislature and local authority. It would be an order passed by authority. Article 21 would cover acts under the enacted law. Here, a Committee of the House was proceeding to take action to deprive the petitioner of his personal liberty. What was the remedy? What could be the procedure? [The Chief Justice. It would be argued that the Constitution itself was law. It Deed not be enacted by 825 the Legislature. If article 194 imported all the privileges of the House of Commons, then no question arose at all. That itself prescribed the powers and privileges]. [Subba Rao, J. If in exercise of such a power an order was made by the legislature, would it not be law within the meaning of its definition in the Constitution ?] Executive order will be included in the expression law ". [Subba Rao, J. If an order, which would be law as thus defined, be made, would it be valid if it infringed the fundamental rights ?] [The Chief Justice. The State could make a law relating to contempt of Court. Supposing the State did not make such a law, the Court could still haul up people for contempt. Was not there inherent power ?] The High Courts had the power to punish. But the question of punitive punishment would arise. [The Chief Justice. Fundamental rights were fundamental in the sense that human rights which were valuable were fundamental. The other provisions of the Constitution could be equally efficacious]. My point was that any law or action had to be within the constitutional rights guaranteed by the Constitution. Even the right to punish would have to be within the ambit of the fundamental rights chapter. If anyone was committed for contempt of court which was not fully established, could he not seek redress ? Justice 'Was not a cloistered virtue. Could be not then claim a remedy under the ordinary law ? [Subba Rao, J. A law made by the Legislature in respect of privileges would be subject to fundamental rights. If the law was not made, the privileges were not subject to fundamental rights]. [Sinha, J. This will be a good reason for the Legislature not to make law at all]. Article 194(3) bad to be interpreted as coming within the scope of fundamental rights. The first part was admittedly so. The second part was equally subject to the fundamental rights by the very necessary implication. 104 826 Privileges did come within judicial review. They could go into the nature of privilege and on the given facts decide their constitutional validity. December 12. The Judgment of Das, C. J., Bhagwati, Sinha and Wanchoo, JJ., was delivered by Das, C. J. Subba Rao, J., delivered a separate Judgment. DAS, C. J. The petitioner before us, who is a citizen of India, is by profession a journalist and has at all material times been and is still working as the editor of the Searchlight., one of the well known English daily newspapers having a large circulation in Patna and other places in the State of Bihar. The first respondent has at all material times been and is the Chief Minister of the State of Bihar and the Chairman of the Committee of Privileges of the Bihar Legislative Assembly. The Committee of Privileges has been impleaded as the second respondent as if it is a legal entity entitled to sue or to be sued in its name. The third respondent is called and described as the Secretary to the Bihar Legislative Assembly as if it also is a legal entity but the incumbent of that office has not been named in the cause title. As no objection has been taken to the way the second and the third respondents have been impleaded as parties nothing further need be said about the propriety of such procedure. This petition under article 32 of the Constitution raises several important questions of far reaching effect. It came to be filed in the following circumstances: In his speech made in the Bihar Legislative Assembly on May 30, 1957, in course of the general discussion on the Budget for the year 1957 58 Shri Maheshwar Prasad Narayan Sinha, a Congress mem ber of that Assembly, delivered what has been described as " one of the bitterest attacks against the way the Chief Minister was conducting the administration of the State ". The Chief Minister, who also belongs to the Congress party, is the first respondent before us. Shri Maheshwar Prasad Narayan Sinha 827 referred to the way the Chief Minister, according to him, was being guided by the advice of a gentleman who was well understood by all to be Shri Mahesh Prasad Sinha, who was an ex minister of Bihar and had been defeated at the last general elections. The member referred, as common knowledge, to the activities of Shri Mahesh Prasad Sinha in the selection of Ministers and the formation of the Ministry as also to the glaring instances of encouragement of corruption by the Government by, amongst other things, the transfer of a Muslim District Engineer from Darbhanga to Muzaffarpur for exploiting that officer 's influence on the Muslim voters of Muzaffarpur. Similar reference was made to the case of a District and Sessions Judge who, notwithstanding the recommendation for his discharge made by the Chief Justice after a regular judicial enquiry had been held by a High Court Judge, was ordered only to be transferred to another place on the intervention of Shri Mahesh Prasad Sinha. The member strongly criticised the appointment of Shri Mahesh Prasad Sinha as the Chairman of the Bihar State Khadi Board as having been made only to enable him to stay in Patna where residential accommodation at Bailey Road had been procured for him. The distribution of portfolios amongst the ministers did not also escape strictures from this member. There is no dispute indeed it is admitted in paragraph 6 of the present petition that immediately after Shri Maheshwar Prasad Narayan Sinha referred to the question of appointment of the Chairman of the Khadi Board, a point of order was raised by another member of the Assembly, Shri Satendra Narain Agarwal, and the Speaker stated as follows: " Mahesh Babu ke Sambandh Me Jitni Baten Kahi Gain Uske Bare Me Maine Kah Diya Ki Us Tarah Ki Bat Ko Proceeding Se Nikal Diya Jayega Lekin State Khadi Board Ke Chairman Ke Bare Me Jo Kuch Kahenge We Karyawahi Me Rahenge or Iske Bishai Me Manniya Sadasya Ko Kahane Ka Hak Hai. " which translated into English means roughly: " I have already ruled with reference to whatever has been said about Mahesh Babu that such words 828 would be expunged from the proceedings but that whatever may be said with reference to the Chairmanship of the State Khadi Board will remain in the proceedings and the Hon 'ble member has the right to speak on that matter. " In its issue of May 31,1957, the Searchlight published a report of the speech of Shri Maheshwar Prasad Narayan Sinha which is set out in paragraph 2 of the petition and also reproduced in what has been called "annexure B " in annexure III to the petition. It will suffice, for the purposes of our decision of this petition, to set out the opening part of the report which reads as follows: BITTEREST ATTACK ON CHIEF MINISTER M. P. Sinha 's choice as Khadi Board chief condemned. Maheswar Babu 's scathing criticism of Government. (By our Assembly Reporter) Patna, May 30. One of the bitterest attacks against the way the Chief Minister was conducting the administration of the State was made in the Bihar Assembly today by Mr. Maheshwar Prasad Narayan Singh, a Congress member who said that contrary to all principles of good Government, the Chief Minister was guided by the advice of a gentleman who had been defeated at the election and stood condemned before the bar of public opinion. He also named the gentleman by whose advice the Chief Minister was allegedly running the administration. In this sixty minute speech which was punctuated with frequent applause by Congress as well as Opposition benches, Mr. M. P. N. Singa said that corruption 829 could not be eradicated from Government unless the Chief Minister refused to be influenced by such undesirable elements. He said it was common knowledge that (luring the period of the formation of the new ministry which took unduly long time many aspirants for Ministership and Deputy Ministership went to a defeated Minister for pleading their case so that the defeated Minister concerned could influence the Chief Minister. " It has not been denied by the learned advocate for the petitioner that the references to the gentleman who had been defeated at the election and was said to have stood condemned and by whose advice the Chief Minister (respondent 1) was alleged to be guided, were intended to be and were understood by the public to be references to Shri Mahesh Prasad Sinha, all reference to whom had, as herein before mentioned, been directed by the Speaker to be expunged from the proceedings. On June 10, 1957, one Shri Nawal Kishore Sinha, a member of the Bihar Legislative Assembly, gave notice to the Secretary, Bihar Legislative Assembly (respondent 3) that he wanted to raise a question of the breach of privilege of the House. That notice was in the following terms "To The Secretary, Bihar Legislative Assembly, Patna. The 10th June, 1957. Sir, I give notice that I want to raise the following question involving a breach of privilege of the House, after question hour today. " That the Hon 'ble Speaker ordered that all references regarding Shri Mahesh Prasad Sinha, Ex Industry Minister, made in the speech of Shri Maheshwar Prasad Narain Sinha on the 30th May, 1957, except that of his appointment as the Chairman of the Khadi 830 Board, be expunged but in spite of this the " Searchlight ", a local daily, published the entire speech of Shri Maheshwar Prasad Narayan Sinha, containing all references to Shri Mahesh Prasad Sinha which were ordered to be expunged. Hence there has been a breach of the privilege of the House. A copy of the " Searchlight ", dated the 31st of May, is filed herewith. Yours faithfully, Nawal Kishore Sinha, M.L.A." An account of the proceedings that took place in the House on June 10, 1957, appears from " annexure D " in annexure III to the petition. It will appear from that account that after Shri Nawal Kishore Sinha had asked for leave to move his motion, the Speaker read out to the members the relevant rule as to the procedure that has to be followed when, on such leave being asked for, an objection is or is not taken. Thereafter, as no objection was raised in accordance with that rule, the Speaker declared that the mover had received the permission of the House to move his motion. One Shri Karpuri Thakur having remarked that he could express no view without knowing what had been printed and what had been directed not to be printed, the Speaker read out the text of the notice sent in by Shri Nawal Kishore Sinha set out above which referred to the issue of the Searchlight in question. As Shri Karpuri Thakur was apparently satisfied by this, the Speaker then requested Shri Nawal Kishore Sinha to move his resolution. The account shows that Shri Nawal Kishore Sinha then said "Sir, I beg to move: that the matter be referred to the Privilege Committee of the House". No amendment having been moved, the Speaker, according to the report of the proceedings set forth in " annexure D " ' put the question to the louse and, nobody objecting to the same, declared the resolution carried. It appears that the Committee of Privileges (respondent 2) did not take up the consideration of the matter promptly and while the mattet was pending before the 831 Committee sharp exchanges of charges and counter charges took place between the petitioner and the Chief Minister (respondent 1) as are evidenced by the extracts from the issues of the Searchlight of May 27, 28 and 31, 1958. There appears to have been a debate on June 5, 1958, for two hours in the Bihar Legislative Assembly on the alleged failure of the State Government to protect the petitioner from being assaulted by goondas. It is said that these exchanges roused the Committee of Privileges from slumber into activity on August 10, 1958, when it passed a resolution which, according to annexure II to the petition, ran as follows "The question is that Shri M. section M. Sharma, Editor and Shri Awadhesh Kumar Tiwari, Printer and Publisher of the " Searchlight " be called upon to show cause why appropriate action be not taken against them by reason of the commission of a breach of privilege in respect of the Speaker of the Bihar Legislative Assembly and the Assembly itself by publishing a perverted and unfaithful report of the proceedings of the Assembly relating to the speech of Shri Maheswar Prasad Narain Sinha, M.L.A., expunged portions of whose speech were also published in derogation to the orders of the Speaker passed in the House on the 30th May, 1957, and that they be further directed to be in attendance at the meeting or meetings of the Committee on such date or dates as may be fixed by the Committee for consideration of the case against them." On August 18, 1958, the petitioner was served with a notice dated August 14,1958, issued by respondent 3, the Secretary to the Bihar Legislative Assembly, calling upon the petitioner to show cause, on or before September 8, 1958, why appropriate action should not be recommended against him for breach of privilege of the Speaker and the Assembly in respect of the offending publication. It is necessary, in view of one of the points taken by the learned advocate for the petitioner, to set out the full text of this notice which was thus worded: 832 "Government of Bihar, Legislative Assembly Secretariat. Confidential No. 3538 1A. From Shri Enayetur Rahman, B.A., B.L., Secretary to the Legislative Assembly. To Shri M. section M. Sharma, Editor, " The Searchlight Searchlight Press, Patna. Patna, August 13/14, 1958. Whereas a question involving breach of privilege of the Bihar Legislative Assembly arising out of the publication of a news item in the Searchlight, dated the 31st May, 1957, under the caption " Bitterest attack on Chief Minister", was raised in the Assembly by Shri Nawal Kishore Sinha, M. L. A. (Patna) on the 10th June, 1957, and whereas the same, having been referred to the Committee of Privileges for examination, investigation and report, was considered by the Committee which has been pleased to find a prima facie case of breach of privilege made out against you. You are hereby directed to show cause, if any, on or before the 8th September, 1958, why appropriate action should not be recommended against you for breach of privilege of the Speaker and the Assembly. Please also take notice that the question will come up for examination by the Committee on the 8th September, 1958, at 11 am. in the Official Sitting Room (Ground Floor) of the Assembly Buildings, Patna, and thereafter on such day or days and at such time and 833 place as the Committee may from time to time appoint. You are also informed that if the matter comes to evidence, you can, if you so choose, adduce evidence, both oral and documentary, relevant to the issue, and you must come prepared with the same on the date fixed in this behalf. Enayetur Rehman, Secretary to the Legislative Assembly. " Finding that things had begun to move and apprehending an adverse outcome of the enquiry to be held by the Committee of Privileges (respondent 2), the petitioner moved the High Court at Patna under article 226 for an appropriate writ;, order or direction restraining and prohibiting the respondents from proceeding further with the enquiry referred to above. It appears that on August 29, 1958, the article 226 petition came up for preliminary hearing and after it had been urged for a day and a half before the High Court for admission, the petitioner on September 1, 1958, withdrew that petition allegedly " with a view to avail the fundamental rights granted to him under article 32 of the Constitution. " The present petition under article 32 of the Constitution was filed on September 5, 1958. The petitioner contends that the said notice and the proposed action by the Committee of Privileges (respondent 2) are in violation of the petitioner 's fundamental rights to freedom of speech and expression under article 19(1)(a) and to the protection of his personal liberty under article 21 and the petitioner claims by this petition to enforce those fundamental rights. An affidavit in opposition affirmed by Shri Enayatur Rahman, the present incumbent of the office of respondent 3, has been filed on behalf of the respondents wherein it is maintained that the report contained in the offending publication was not in accordance with the authorised report of the proceedings in the House in that it contained even those remarks which, having been, by order of the Speaker, directed to be expunged, did not form part of the proceedings. 105 834 It is claimed that generally speaking proceedings in the House are not in the ordinary course of business meant to be published at all and that under no circumstances is it permissible to publish the parts of speeches which had been directed to be expunged and consequently were not contained in the official report. Such Publication is said to be a clear breach of the privilege of the Legislative Assembly, which is entitled to protect itself by calling the offender to book and, if necessary, by meting out suitable punishment to him. This claim is sought to be founded on the pro visions of cl. (3) of article 194 which confers on it all the powers, privileges and immunities enjoyed by the House of Commons of the British Parliament at the commencement of our Constitution. Learned advocate for the petitioner relies upon article 19(1)(A) and contends that the petitioner, as a citizen of India, has the right to freedom of speech and expression and that, as an editor of a newspaper, he is entitled to all the benefits of freedom of the Press. It is, therefore, necessary to examine the ambit and scope of liberty of the Press generally and under our Constitution in particular. In England freedom of speech and liberty of the Press have been secured after a very bitter struggle between the public and the Crown. A short but lucid account of that struggle will be found narrated in the Constitutional History of England by Sir Thomas Erskine May (Lord Farnborough), Vol. 11, ch. IX under the heading " Liberty of Opinion ". In the beginning the Church is said to have persecuted the freedom of thought in religion and then the State suppressed it in politics. Matters assumed importance when the art of printing came to be developed. The Press was subjected to a rigorous censorship. Nothing could be published without the imprimatur of the licenser and the publication of unlicensed works was visited with severe punishments. "Political discussion was silenced by the licenser, the Star Chamber, the dungeon, the pillory, mutilation and branding." Even in the reign of Queen Elizabeth printing was interdicted save in London, Oxford and Cambridge. " Nothing marked more deeply the tyrannical spirit 835 of the first two Stuarts than their barbarous persecutions of authors, printers and the importers of prohibited books: nothing illustrated more signally the love of freedom than the heroic courage and constancy with which those persecutions were borne " (1). There was no mention of freedom of speech or of liberty of the Press in the Petition of Rights of 1628. The fall of the Star Chamber augured well for the liberty of the Press, but the respite was short lived, for the Restoration brought renewed trials upon the Press. The Licensing Act (13 & 14 Chs. 11 c. 33) placed the entire control of the Press in the Government. Liberty of the Press was interdicted and even news could not be published without licence. Then came the Revolution of 1688; but even in the Bill of Rights of 1688 there was no mention of freedom of speech or of liberty of the Press. In 1695, however, the Commons refused to renew the Licensing Act and the lapse of that Act marked the triumph of the Press, for thenceforth the theory of free Press was recognised and every writing could be freely published, although at the peril of the rigorous application of the law of libel. William Blackstone in his 4th Book of Commentaries published in 1769 wrote at p. 145: " The liberty of the Press is indeed essential to the nature of a free State; but this consists in laying no previous restraints upon publication, and not in freedom from censure for criminal matter when published. Every free man has an undoubted right to lay what sentiments he pleases before the public; to forbid this, is to destroy the freedom of the Press; but if he publishes what is improper, mischievous or illegal, he must take the consequences of his own temerity. " Halam in his Constitutional History of England expresses the same view by saying that liberty of the Press consists merely in exemption from the licenser. To the same effect are the observations of Lord Mansfield, C. J., in King vs Dean of St. Asaph (2). The liberty of the Press, therefore, primarily consists in (1) May 's Constitutional History of England, Vol. ii PP. 240 41. (2) ; 836 printing without any previous license subject to the consequences of law. It is, in substance, a mere application of the general principle of the rule of law, namely, that no man is punishable except for a distinct breach of the law (1). It was thus, as a result of a strenuous struggle, that the British people have at long last secured for themselves the greatest of their liberties the liberty of opinion. In the United States of America freedom of speech and liberty of the Press have been separately and specifically safeguarded in the Constitutions of most of the different States. Portions of the Constitutions of the 48 federating States, relevant for our purpose, have been collected in Cooley 's Constitutional Limitations, Vol. 11, ch. 12, pp. 876 880. Fifteen States, only, namely, Alabama, Arizona, Colorado, Idaho, Illinois, Indiana, Kansas, Missouri, Montana, Nebraska, North Dakota, Oregon, South Dakota, Wash ington and Wyoming do not specifically refer to liberty of the Press but content themselves by providing for freedom of speech. The Constitutions of the rest of the federating States separately and 'Specifically mention liberty of the Press in addition to freedom of speech. The first Amendment of the federal Constitution of the United States, which was ratified in 1791, provides that " Congress shall make no law. . . abridging the freedom of speech or of the Press ". The Fifth and the Fourteenth Amendments also protect people from being deprived of life, liberty or property without due process of law. Prior the advent of our present Constitution, there was no constitutional or statutory enunciation of the freedom of speech of the subjects or the liberty of the Press. Even in the famous Proclamation of Queen Victoria made in 1858 after the British power was firmly established in India, there was no reference to the freedom of speech or the liberty of the Press, although it was announced that " none be in any wise favoured, none molested or disquieted by reason of their Religious Faith or Observances; but that all shall alike enjoy the equal and impartial protection (1) Dicey 's Law of the Constitution, 9th Edn., p. 247. 837 of the law;. . . Indeed during the British period of our history the Press as such had no higher or 'better rights than the individual citizen. In Arnold vs King Emperor (1) which was a case of an appeal by the editor of a newspaper against his conviction for criminal libel under section 499 of the Indian Penal Code, Lord Shaw of Dunfermline in delivering the judgment of the Privy Council made the following observations at p. 169: " Their Lordships regret to find that there appeared on the one side in this case the time worn fallacy that some kind of privilege attaches to the profession of the Press as distinguished from the members of the public. The freedom of the journalist is an ordinary part of the freedom of the subject, and to whatever lengths the subject in general may go, so also may the journalist, but, apart from statute law, his privilege is no other and no higher. The responsibilities which attach to his power in the dissemination of printed matter may, and in the case of a conscientious journalist do, make him more careful; but the range of his assertions, his criticisms, or his comments, is as wide as, and no wider than, that of any other subject, No privilege attaches to his position. " Then came our Constitution on January 26, 1950. The relevant portions of article 19, as it now stands and which is relied on, are as follows: " 19 (1) All citizens shall have the right (a) to freedom of speech and expression; . . . . . . . . . . . . . . . . . . . (2) Nothing in sub clause (a) of clause (1) shall affect the operation of any existing law, or prevent the State from making any law, in so far as such law imposes reasonable restrictions on the exercise of the right conferred by the said sub clause in the interests of the security of the State, friendly relations with foreign States, public order, decency or morality, or in relation to contempt of court, defamation or incitement to an offence. " (1) (1914) L.R. 41 I.A. 149. 838 It will be noticed that this Article guarantees to all citizens freedom of speech and expression but does not specifically or separately provide for liberty of the Press. It has, however, been held that the liberty of the Press is implicit in the freedom of speech and expression which is conferred on a citizen. Thus, in Romesh Thappar vs State of Madras (1) this Court has held that freedom of speech and expression includes the freedom of propagation of ideas and that freedom is ensured by the freedom of circulation. In Brijbhushan vs The State of Delhi (2) it has been laid down by this Court that the imposition of pre censorship on a journal is a restriction on the liberty of the Press which is an essential part of the right to freedom of speech and expression declared by article 19(1)(a). To the like effect are the observations of Bhagwati, J., who, in delivering the unanimous judgment of this Court in Express Newspapers Ltd. vs Union of India(1) said at page 118 that freedom of speech and expression includes within its scope the freedom of the Press. Two things should be noticed. A non citizen running a newspaper is not entitled to the fundamental right to freedom of speech and expression and, therefore, cannot claim, as his fundamental right, the benefit of the liberty of the Press. Further, being only a right flowing from the freedom of speech and expression, the liberty of the Press in India stands on no higher footing than the freedom of speech and expression of a citizen and that no privilege attaches to the Press as such, that is to say, as distinct from the freedom of the citizen. In short, as regards citizens running a newspaper the position under our Constitution is the same as it was when the Judicial Committee decided the case of Arnold vs The King Emperor (4) and as regards non citizens the position may even be worse. The petitioner claims that as a citizen and an editor of a newspaper he has the absolute right, subject, of course, to any law that may be protected by el. (2) of article 19, to publish a true and faithful report of the publicly heard and seen proceedings of Parliament or (1) ; (3) (2) ; (4) I.A. 149. 839 any State Legislature including portions of speeches directed to be expunged along with a note that that portion had been directed to be so expunged. The respondents before us do not contend that the petitioner 's freedom of speech and expression is confined only to the publication of his own sentiments, feelings, opinions, ideas and views but does not extend to the publication of news or of reports of proceedings or of views of others or that such last mentioned publications are not covered by the interpretation put upon the provisions of article 19(1)(a) by this Court in the three decisions referred to above or that the case of Srinivasa vs The State, of Madras (1), which apparently supports the petitioner, was wrongly decided. For the purposes of this case, therefore, we are relieved of the necessity for examining the larger questions and have to proceed on the footing that the freedom of speech and expression conferred on citizens includes the right to publish news and reports of proceedings in public meetings or in Parliament or State Legislatures. The respondents, however, deny that the petitioner has the absolute right broadly formulated as here in before mentioned. They urge, inter alia, that under article 194(3) Parliament and the State Legislatures have the powers, privileges and immunities enjoyed by the House of Commons of British Parliament and those powers, privileges and immunities prevail over the freedom of speech and expression conferred on citizens under article 19(1)(a). Besides a few minor miscellaneous points raised by the learned advocate for the petitioner, which will be dealt with in due course, two principal points arising on the pleadings have been canvassed before us and they are formulated thus: I. Has the House of the Legislature in India the privilege under article 194(3) of the Constitution to prohibit entirely the publication of the publicly seen and heard proceedings that took place in the House or even to prohibit the publication of that part of the proceedings which had been directed to be expunged ? II. Does the privilege of the House under article (1) A.I.R. (1951) Mad. 70. 840 194(3) prevail over the fundamental right of the petitioner under article 19(1)(a) ? Re I: Article 194, on which depends our decision not only on this point but also on the next one, may now be set out: "194. (1) Subject to the provisions of this Constitution and to the rules and standing orders regulating the procedure of the Legislature, there shall be freedom of speech in the Legislature of every State. (2) No member of the Legislature of a State shall be liable to any proceedings in any court in respect of anything said or any vote given by him in the Legislature or any committee thereof, and no person shall be so liable in respect of the publication by or under the authority of a House of such a Legislature of any report, paper, votes or proceedings. (3) In other respects, the powers, privileges and immunities of a House of the Legislature of a State, and of the members and the committees of a House of such Legislature, shall be such as may from time to time be defined by the Legislature by law, and, until so defined, shall be those of the House of Commons of the Parliament of the United Kingdom, and of its members and committees, at the commencement of this Constitution. (4) The provisions of clauses (1), (2) and (3) shall apply in relation to persons who by virtue of this Constitution have the right to speak in, and otherwise to take part in the proceedings of, a House of the Legislature of a State or any committee thereof as they apply in relation to members of that Legislature." This Article, which applies to the State Legislatures and the members and committees thereof, is a reproduction, mutatis mutandis, of article 105 which applies to both Houses of Parliament and the members and committees thereof. It is common ground that the. Legislature of the State of Bihar has not made any law with respect to the powers, privileges and immunities of the House of the Legislature as enumerated in entry 39 of List II of the Seventh Schedule to the Constitution just as Parliament has made no law with respect to the matters enumerated in entry 74 of List 841 I of that Schedule. Therefore under the latter part of cl. (3) of article 194 the Legislative Assembly of Bihar has all the powers, privileges and immunities enjoyed by the House of Commons at the commencement of our Constitution. What, then, were the powers, privileges and immunities of the House of Commons which are relevant for the purposes of the present petition ? Parliamentary privilege is defined as " the sum of the peculiar rights enjoyed by each House collectively as a constituent part of the High Court of Parliament, and by members of each House individually, without which they could not discharge their functions, and which exceed those possessed by other bodies or individuals " (1). According to the same author " privilege, though part of the law of the land, is to a certain extent an exemption from the ordinary law ". The privileges of Parliament are of two kinds, namely, (i) those which are common to both Houses and (ii) those which are peculiar either to the House of Lords or to the House of Commons (2 ). The privileges of the Commons, as distinct from the Lords, have been defined as " the sum of the fundamental rights of the House and of its individual members as against the prerogatives of the Crown, the authority of the ordinary courts of law and the special rights of the House of Lords (3). Learned Solicitor General appearing for the respondents claims that the Legislative Assembly, like the House of Commons, has the power and privilege, if it so desires, to prohibit totally the publication of any debate or proceedings that may take place in the House and at any rate to prohibit the publication of inaccurate or garbled versions of it. In other words, it is claimed that the House of Commons has the power and privilege to prohibit the publication in any newspaper of even a true and faithful report of its proceedings and certainly the publication of any (1) Sir Thomas Erskine May 's Parliamentary Practice, 16th Edn., Ch. III, P. 42. (2) Halsbury 's Laws of England, 2nd Edn., Vol. 24, article (3) Redlich and Ilbert on Procedure of the House of Commons, Vol. 106 842 portion of speeches or proceedings directed to be expunged from the official record. As pointed out in May 's Parliamentary Practice, 16th Edn., p. 151, in the early days of British History the maintenance of its privileges was of vital importance to the House of Commons. They were necessary to preserve its independence of the King and the Lords and, indeed, to its very existence. The privileges of the House of Commons have been grouped under two heads, namely, (1) those demanded of the Crown by the Speaker of the House of Commons at the commencement of each Parliament and granted as a matter of course and (2) those not so demanded by the Speaker. Under the first heading come (a) freedom from arrest (claimed in 1554), (b) freedom of speech (claimed in 1541), (c) the right of access to the Crown (claimed in 1536) and (d) the right of having the most favourable construction placed upon its proceedings. The second head comprises (i) the right to the due composition of its own body, (ii) regulate its own proceedings, (iii) the right strangers, (iv) the right to prohibit publication of its debates and (v) the right to enforce observation of its privileges by fine, imprisonment and expulsion (1). Admonition and reprimand are milder forms of punishment. The privileges of the House of Commons under the first head are claimed at the commencement of every Parliament by the Speaker addressing the Lord Chancellor on behalf of the Commons. They are claimed as " ancient and undoubted " and are, through the Chancellor " most readily granted and confirmed by the Crown (2). Of the three things thus claimed, two, namely, the freedom of the person and the freedom of speech and certain consequential rights like the right to exclude strangers from the House and the control or prohibition of publication of the debates and proceedings are common to both Houses (3). (1) Ridge 's Constitutional Law, 8th Edn., p. 61; also Halsbury 's Laws of England, 2nd Edn., Vol. (2) Anson 's Law and Custom of the Constitution, Vol. 1, Ch. 4,p. 162. (3) Halsbury 's Laws of England, 2nd Edn., Vol. 24, p. 346. 843 For a deliberative body like the House of Lords or the House Commons, freedom of speech is of the utmost importance. A full and free debate is of the essence of Parliamentary democracy. Although freedom of speech was claimed and granted at the commencement of every Parliament, it was hardly any protection against the autocratic Kings, for the substance of the debates could be and was frequently reported to the King and his ministers which exposed the members to the royal wrath. Secrecy of Parliamentary debates was, therefore, considered necessary not only for the due discharge of the responsibilities of the members but also for their personal safety. " The original motive for secrecy of debate was the anxiety of the members to protect themselves against the action of the. sovereign, but it was soon found equally convenient as a veil to hide their proceedings from their constituencies " (1). This object could be achieved in two ways, namely, (a) by prohibiting the publication of any report of the debates and proceedings and (b) by excluding strangers from the House and holding debates within closed doors. These two powers or privileges have been adopted to ensure the secrecy of debates to give full play to the members ' freedom of speech and therefore, really flow, as necessary corollaries, from that freedom of speech which is expressly claimed and granted at the commencement of every Parliament. As to (a): " The history of Parliamentary privilege is to a great extent a story of the fierce and prolonged struggle of the Commons to win the rights and freedoms which they enjoy to day " (2). The right to control and, if necessary, to prohibit the publication of the debates and proceedings has been claimed, asserted and exercised by both Houses of Parliament from very old days. In 1628 and again in 1640 the clerk was forbidden to make notes of " particular men 's speeches " or to " suffer copies to go forth of (1) Taswell Langmead 's Constitutional History, 10th Edn., p. 657. (2) Encyclopaedia of Parliament by Norman Widling and Laundy,p. 451. 844 any arguments or speech whatsoever The House of Commons of the Long Parliament in 1641 framed a standing order " that no member shall either give a copy or publish in print anything that he shall speak in the House " and " that all the members of the House are enjoined to deliver out no copy or notes of anything that is brought into the House, or that is propounded or agitated in this House ". In that critical period it was a necessary precaution. So strict was the House about this privilege that for printing a collection of his own speeches without such leave, Sir E. Derring was expelled from the House and imprisoned in the Tower and his book was ordered to be burnt by the common hangman. This standing order has not up to this date been abrogated or repealed. In 1680 to prevent inaccurate accounts of the business done, the Commons directed their " votes and proceedings, without any reference to the debates, to be printed under the direction of the Speaker. After the Revolution of 1688 frequent resolutions were passed by both Houses of Parliament from 1694 to 1698 to restrain newsletter writers from " intermeddling with their debates or other proceedings " or " giving any account of minute of the debates ". But such was the craving of the people for political news that notwithstanding these resolutions and the punishment of offenders imperfect reports went on being published in newspapers or journals. Amongst the papers were Boyer 's " Political State of Great Britain ", " London Magazine ", and " Gentleman 's Magazine " in which reports of debates were published under such titles as " Proceedings of a Political Club " and " Debates in the Senate of Magna Lilliputia ". In 1722 the House of Commons passed the following resolutions: " Resolved, That no News Writers do presume in their Letters, or other Papers, that they disperse as Minutes, or under any other Denomination, to intermeddle with the Debates, or any other Proceedings, of this House. Resolved, That no Printer or Publisher of any printed News Papers, do presume to insert in any such (1) Hatsell 265 quoted in May 's Parliamentary Practice, 16th Edn. 55. 845 Papers any Debates, or any other Proceedings of this House, or any Committee thereof" (1). In 1738 the publication of its proceedings was characterised in another resolution of the House of Commons as " a high indignity and a notorious breach of privilege The publication of debates in the " Middlesex Journal" brought down the wrath of the House of Commons on the printers who were ordered to attend the House. The printers not having been found warrants were issued for their arrest and one printer was arrested and brought before Alderman John Wilkes who immediately discharged him on the ground that no crime had been committed. Another printer was arrested and brought before another Alderman who, likewise, discharged the prisoner inasmuch as he was not accused of having committed any crime. By way of reprisal the House of Commons imprisoned the Lord Mayor and an Alderman, both of whom were the members of the House. Both men, on their release, were honoured in a triumphal procession from the Tower of London to the Mansion House. After this political controversy, debates in both Houses continued to be reported with impunity, although technically such reporting was a breach of privilege. Accurate reporting was, however, hampered by many difficulties, for the reporters had no accommodation in the House and were frequently obliged to wait for long periods in the halls or on the stairways and were not permitted to take notes. The result was that the reports published in the papers were full of mistakes and misrepresentations. After the House of Commons was destroyed by fire in 1834, galleries in temporary quarters were provided for the convenience of reporters, and in the new House of Commons a separate gallery was provided for the Press. In 1836 the Commons provided for the publication of parliamentary papers and reports, which led to the conflict between the House of Commons and the courts, which was decided in Stockdale vs Hansard (2), where Lord Chief Justice Denman held that (1) 20 journals of the House of Commons, p. 99; quoted in Frank Thayer 's Legal Control of the Press, pp. 28 29. (2) Moody and Robson, 9. ; ; also see (1839) 9 A. & E. Reports, Eng. Q.B. 1; 112 Eng. Rep. 1112. 846 the fact of the House of Commons having directed Messrs. Hansard to publish all their parliamentary reports was no justification for their or for any other bookseller publishing a parliamentary report, containing a libel against any man. Subsequently the House retaliated by committing Stockdale and his attorney and also the sheriff to prison. The deadlock thus brought about was at length removed by the passing of the Parliamentary Papers Act, 1840 (3 and 4 Vic. c. 9). Learned advocate for the petitioner has drawn our attention to the judgment of Cockburn, C. J., in the celebrated case of Wason vs Walter (1). The plaintiff in that case had presented a petition to the House of Lords charging a high judicial officer with having, 30 years before, made a statement false to his own know. ledge, in order to deceive a committee of the House of Commons and praying enquiry and the removal of the officer if the charge was found true. A debate ensued on the presentation of the petition and the charge was utterly refuted. Allegations disparaging to the character of the plaintiff had been spoken in the course of the debate. A faithful report of the debate was published in the Times and the plaintiff proceeded against the defendant, who was a proprietor of the Times, for libel. It was held that the debate was a subject of great public concern on which a writer in a public newspaper had full right to comment, and the occasion was, therefore, so far privileged that the comments would not be actionable so long as a jury should think them honest and made in a fair spirit, and such as were justified by the circumstances as disclosed in an accurate report of the debate. Learned advocate for the petitioner contends that this decision establishes that the Press had the absolute privilege of publishing a report of the proceedings that take place in Parliament, just as it is entitled to publish a faithful and correct report of the proceedings of the courts of justice, though the character of individuals may incidentally suffer and that the publication of such accurate reports is privileged and entails neither criminal nor civil responsibility. This argument overlooks (1) (1868) L.R. IV Q.B. 73. 847 that the question raised and actually decided in that case, as formulated by Cockburn, C. J., himself at p. 82, was simply this: " The main question for our decision is, whether a faithful report in a public newspaper of a debate in either House of Parliament, containing matter disparaging to: the character of an individual, as having been spoken in the course of the debate, is actionable at the suit of the party whose character has thus been called in question. " The issue was between the publisher and the person whose character had been attacked. The question of the privilege, as between the House and the newspaper, was not in issue at all. In the next place, the observations relied upon as bearing on the question of privilege of Parliament were not at all necessary for deciding that case and, as Frank Thayer points out at p. 32 of his Legal Control of the Press, ',this part of the opinion is purely dictum ". In the third place, the following observations of the learned Chief Justice clearly indicate that, as between the House and the Press, the privilege does exist: "It only remains to advert to an argument urged against the legality of the publication of parliamentary proceedings, namely, that such publication is illegal as being in contravention of the standing orders of both houses of parliament. The fact, no doubt, is, that each house of parliament does, by its standing orders, prohibit the publication of its debates. But, practically each house not only permits, but also sanctions and encourages, the publication of its proceedings, and actually gives every facility to those who report them. Individual members correct their speeches for publication in Hansard or the public journals, and in every debate reports of former speeches contained therein are constantly referred to. Collectively, as well as individually, the members of both houses would deplore as a national misfortune the withhold ing their debates from the country at large. Practically speaking, therefore, it is idle to say that the publication of parliamentary proceedings is prohibited by parliament. The standing orders which prohibit 848 it are obviously maintained only to give to each house the control over the publication of its proceedings, and the power of preventing or correcting any abuse of the facility afforded. Independently of the orders of the houses, there is nothing unlawful in publishing reports of parliamentary proceedings. Practically, such publication is sanctioned by parliament; it is essential to the working of our parliamentary system, and to the welfare of the nation. Any argument founded on its alleged illegality appears to us, therefore, entirely to fail. Should either house of parliament ever be so ill advised as to prevent its pro ceedings from being made known to the country which certainly never will be the case any publication of its debates made in contravention of its orders would be a matter between, the house and the publisher. For the present purpose, we must treat such publication as in every respect lawful, and hold that, while honestly and faithfully carried on, those who publish them will be free from legal responsibility, though the character of individuals May incidentally be injuriously affected. " With the facilities now accorded to the reporters, the practice of reporting has improved, and the House, sensible of the advantage which it derives from a full and clear account of its debates, has even encouraged the publication of reports of debates and proceedings that take place in the House. From this it does not at all follow that the House has given up this valuable privilege. The following passage in Anson 's Law and Custom of the Constitution at p. 174 is significant and correctly states the position : " We are accustomed, therefore, to be daily informed, throughout the Parliamentary Session, of every detail of events in the House of Commons; and so we are apt to forget two things. The first is, that these reports are made on sufferance, for the House can at any moment exclude strangers and clear the reporter 's gallery ; and that they are also published on sufferance, for the House may at any time resolve that publication is a breach of privilege and deal with it accordingly. 849 The second is, that though the privileges of the House confer a right to privacy of debate. they do not confer a corresponding right to the publication of debate." Frank Thayer at pp. 31 32 expresses the same view in the following terms: " Parliamentary privilege as part of the unwritten English Constitution is the exclusive right of either House to decide what constitutes interference with its duties, its dignity, and its independence. Its power to exclude strangers so as to secure privacy of debate closely follows the right of Parliament to prevent the publication of debates. Attendance at Parliamentary debates and the publication of debates are by sufferance only, although it is now recognized that dissemination of information on debates and Parliamentary proceedings is advantageous to English democracy and, in fact, necessary to public safety. By judicial dictum it has been stated that there is a right to publish fair and accurate reports of Parliamentary debates, but actually the traditional privilege of Parliament continues in conflict with judicial opinion. There is still a standing order forbidding the publication of Parliamentary debates, an order that by custom and the right of sufferance has become practically obsolete; yet the threat of such an order and the possibility of a contempt citation for its abuse, should Parliament deem it advantageous to withhold some particular discussion, serve as a check upon careless reporting and distorted comment. " May in his Parliamentary Practice, 16th Edn., p. 118 puts the matter thus: " Analogous to the publication of libels upon either House is the publication of false or perverted, or of partial and injurious reports of debates or proceedings of either House or committees of either House or misrepresentations of the speeches of particular members. But as the Commons have repeatedly made orders forbidding the publications of the debates or other proceedings of their House or any committee thereof which, though not renewed in any subsequent 107 850 session, are considered to be still in force, it has been ruled that an alleged misrepresentation is not in itself a proper matter for the consideration of the House, the right course being to call attention to the report as an infringement of the orders of the House, and then to complain of the misrepresentation as an aggravation of the offence. " The fact that the House of Commons jealously guards this particular privilege is amply borne out by the fact that as late as May 31, 1875, when Lord Hartington sponsored a motion in the House of Commons " that this House will not entertain any complaint in respect of the publication of the debates or proceedings of the House, or of any committee thereof, except when such debates or any proceedings shall have been conducted within closed doors or when such publication shall have been expressly prohibited by the House or any committee or in case of wilful misrepre sentation or other offence in relation to such publication " the House of Commons rejected the same outright. The conclusion deducible from this circumstance is thus summarised in May 's Parliamentary Practice at p. 118: " So long as the debates are correctly and faithfully reported, the orders which prohibit their publication are not enforced; but when they are reported mala fide the publishers of newspapers are liable to punishment. " Several instances are given in May 's Parliamentary Practice at pp. 118 19 where proceedings have been taken for breach of privilege including a case of the publication in 1801 of a proceeding which the House of Lords had ordered to be expunged from the journal. It is said that that was a case of privilege of the House of Lords and not a case of privilege of the House of Commons and it is pointed out that there has been no instance of such a claim of privilege having been made by the House of Commons for over a century. In the first place, it should be remembered that this privilege, as stated in Halsbury 's Laws of England, 2nd Edn., Vol. 24, p. 351, is a common privilege claimed by both Houses and, if the House of 851 Lords could assert and exercise it in 1801, there is no reason to suppose that the House of Commons will not be able to do so if any occasion arises for its assertion or exercise. If the House of Commons has not done so for a long time it must rather be assumed that no occasion had arisen for the assertion and exercise of this power than that it had ceased to have the power at all (Cf. the observations in Wason vs Walter) (1) and In re: Banwarilal Roy (2)). Further the fact that the House of Commons in 1875 rejected Lord Hartington 's motion referred to above also clearly indicates that the House of Commons is anxious to preserve this particular privilege. It is interesting also to note the new point that arose in the House of Commons regarding the publication of certain proceedings in August 1947. A Committee of Privileges found that one Mr. Evelyn Walkden, member for Doncaster, had revealed the proceedings of a private party meeting to a newspaper. The Committee thought that the practice of holding party meetings of a confidential character had become well established and must be taken as a normal and everyday incident of parliamentary procedure. The Committee felt that attendance at such meetings within the precincts of the Palace of Westminster during the session was part of the member 's normal duties and the publication by the handing out of a report of the proceedings amounted to a breach of the privilege of the House. It is true that the House only resolved that Mr. Walkden was guilty of dishonourable conduct, but did not expel him but it also passed a resolution that in future any person offering payment for the disclosure of such information would incur the House 's grave displeasure (3). In this case the inquiry was with regard to the conduct of a member for having committed a breach of the privilege of the House by publishing the pro ceedings to an outsider. The point, however, to note is that whatever doubts there might have been as to whether the proceedings of the private party meetings could be equated with the regular proceedings of (1) (1868) L.R. IV Q.B. 73. (2) , 787. (3) Ridge 's Constitutional Law, 8th Edn., P. 70 and May 's Parliamentary Practice, 16th Edn., P. 52. 852 the House of Commons, there was, nevertheless, no question or doubt about the existence of the power or privilege of the House to forbid publication of the proceedings of the House. This case also shows that the House of Commons had not only not abandoned its power or privilege of prohibiting the publication of its proceedings proper but also considered the question of applying this power or privilege to the publication by a member of the proceedings that took place in a private party meeting held within the precincts of the House. As to (b): It has already been said that the freedom of speech claimed by the House and granted by the Crown is, when necessary, ensured by the secrecy of the debate which in its turn is protected by prohibiting publication of the debates and proceedings as well as by excluding strangers from the House. Any member could in the old days " spy a stranger " and the Speaker had to clear the House of all strangers which would, of course, include the Press reporters. This right was exercised in 1849 and after 20 years in 1870 and again in 1872 and 1874. In 1875, however, this rule was modified by a resolution of the House only to this extent, namely, that, on a member spying a stranger, the Speaker would put the matter to the vote of the House (1). This right was exercised in 1923 and again as late as on November 18, 1958 (2). This also shows that there has been no diminution in the eagerness of the House of Commons to protect itself by securing the secrecy of debate by excluding strangers from the House when any occasion arises. The object of excluding strangers is to prevent the publication of the debates and proceedings in the House and, if the House is tenaciously clinging to this power or privilege of excluding strangers, it is not likely that it has abandoned its power or privilege to prohibit the publication of reports of debates or proceedings that take place within its precincts. The result of the foregoing discussion, therefore, is that the House of Commons had at the commencement (1) Taswell Langmead, p. 660. (2) The Statesman dated November 20, 1958. 853 of our Constitution the power or privilege of prohibiting the publication of even a true and faithful report of the debates or proceedings that take place within the House. A fortiori the House had at the relevant time the power or privilege of prohibiting the publication of an inaccurate or garbled version of such debates or proceedings. The latter part of article 194(3) confers all these powers, privileges and immunities on the House of the Legislature of the States, as article 105(3) does on the Houses of Parliament. It is said that the conditions that prevailed in the dark days of British history, which led to the Houses of Parliament to claim their powers, privileges and immunities, do not now prevail either in the United Kingdom or in our country and that there is, therefore, no reason why we should adopt them in these democratic days. Our Constitution clearly provides that until Parliament or the State Legislature, as the case may be, makes a law defining the powers, privileges and im munities of the House, its members and Committees, they shall have all the powers, privileges and immunities of the House of Commons as at the date of the commencement of our Constitution and yet to deny them those powers, privileges and immunities, after finding that the House of Commons had them at the relevant time, will be not to interpret the Constitution but to re make it. Nor do we share the view that it will not be right to entrust our Houses with these powers, privileges and immunities,, for we are well persuaded that our Houses, like the House of Commons, will appreciate the benefit of publicity and will not exercise the powers, privileges and immunities except in gross cases. Re. II: Assuming that the petitioner, as a citizen and an editor of a newspaper, has under article 19(1)(a) the fundamental right to publish a true and faithful report of the debates or proceedings that take place in the Legislative Assembly of Bihar and granting that that Assembly under article 194(3) has all the powers, privileges and immunities of the House of Commons which include, amongst others, the right to prohibit the publication of any report of the debates or proceedings, 854 whose right is to prevail ? Learned advocate for the petitioner contends that the powers, privileges and immunities of the Legislative Assembly under article 194(3) must give way to the fundamental right of the petitioner under article 19(1)(a). In other words, article 194 (3), according to him, is subject to article 19 (1) (a). Learned advocate for the petitioner seeks to support his client 's claim in a variety of ways which may now be noted, seriatim : (i) that though cl. (3) of article 194 has not, in terms, been made "subject to the provision of the Constitution ", it does not necessarily mean that it is not so subject, and that the several clauses of article 194 or article 105 should not be treated as distinct and separate provisions but should be read as a whole and that, so read, all the clauses should be taken as subject to the provisions of the Constitution, which, of course, would include article 19(1)(a); (ii) that article 194(1), like article 105(1), in reality operates as an abridgement of the fundamental right Of freedom of speech conferred by article 19(1)(a) when exercised in Parliament or the State Legislatures respectively, but article 194(3) does not, in terms, purport to be an exception to article 19(1)(a) ; (iii) that article 19, which enunciates a transcendental principle and confers on the citizens of India indefeasible and fundamental rights of a permanent nature,, is enshrined in Part III of our Constitution, which, in view of its subject matter, is more important, enduring and sacrosanct than the rest of the provisions of the Constitution, but that the second part of article 194(3) is of the nature of a transitory provision which, from its very nature, cannot override the fundamental rights; (iv) that if, in pursuance of the provisions of article 105(3), Parliament makes a law under entry 74 in List I to the Seventh Schedule defining the powers, privileges and immunities of the House or Houses of Parliament and its members and committees or if, in pursuance of the provisions of article 194(3), the State Legislature makes a law under entry 39 in List II to 855 the Seventh Schedule defining the powers, privileges and immunities of the House or Houses of the Legislature of a State and its members and committees and if, in either case, the powers, privileges and immunities so defined and conferred on the House or Houses are repugnant to the fundamental rights of the citizens, such law will, under article 13, to the extent of such repugnancy, be void and that such being the intention of the Constitution makers in the earlier part of article 194(3) and there being no apparent indication of a different intention in the latter part of the same clause, the powers, privileges and immunities of the House of Commons conferred by the latter part of cl. (3) must also be taken as subject to the fundamental rights; (v) that the observations in Anand Bihari Mishra vs Ram Sahay (1) and the decision of this Court in Gunupati Keshavram Reddy vs Nafisul Hasan (2) clearly establish that article 194(3) is subject to the fundamental rights. The arguments, thus formulated, sound plausible and even attractive, but do not bear close scrutiny, as will be presently seen. Article 194 has already been quoted in extenso. It is quite clear that the subject matter of each of its four clauses is different. Clause (1) confers on the members freedom of speech in the Legislature, subject, of course, to certain provisions therein referred to. Clause (2) gives immunity, to the members or any person authorised by the House to publish any report etc. from legal proceedings. Clause (3) confers certain powers. Privileges and immunities on the House of the Legislature of a State and on the members and the committees thereof and finally el. (4) extends the pro visions of cls. (1) to (3) to persons who are not members of the House, but who, by virtue of the Constitution, have the right to speak and otherwise to take part in the proceedings of the House or any committee thereof. In the second place, the fact that cl. (1) has been expressly made subject to the provisions of the Constitution but cls. (2) to (4) have not been stated to (1) A.1.R. (1952) M.B. 31, 43. (2) A.I.R. (1954) S.C. 636. 856 be so subject indicates that the Constitution makers did not intend cls. (2) to (4) to be subject to the provisions of the Constitution. If the Constitution makers wanted that the provisions of all the clauses should be subject to the provisions of the Constitution, then the Article would have been drafted in a different way, namely, it would have started with the words: " Subject to the provisions of this Constitution and the rules and standing orders regulating the procedure of the Legislature " and then the subject matter of the four clauses would have been set out as sub cls. (i), (ii), (iii) and (iv) so as to indicate that the overriding provisions of the opening words qualified each of the subclauses. In the third place, in may well be argued that the words " regulating the procedure of the Legislature " occurring in cl. (1) of article 194 should be read as governing both " the provisions of the Constitution " and " the rules and standing orders ". So read freedom of speech in the Legislature becomes subject to the provisions of the Constitution regulating the procedure of the Legislature, that is to say, subject to the Articles relating to procedure in Part VI including articles 208 and 211, just as freedom of speech in Parliament under article 105(1), on a similar construction, will become subject to the Articles relating to procedure in Part V including articles 118 and 121. The argument that the whole of article 194 is subject to article 19(1)(a) overlooks the provisions of cl. (2) of article 194. The right conferred on a citizen under article 19(1)(a) can be restricted by law which falls within cl. (2) of that Article and he may be made liable in a court of law for breach of such law, but el. (2) of article 194 categorically lays down that no member of the Legislature is to be made liable to any proceedings in any court in respect of anything said or any vote given by him in the Legislature or in committees thereof and that no person will be liable in respect of the publication by or under the authority of the House of such a Legislature of any report, paper or proceedings. The provisions of cl. (2) of article 194, therefore, indicate that the freedom of speech referred to in el. (1) is different from the freedom of speech and expression guaranteed 857 under article 19(1)(a) and cannot be cut down in any way by any law contemplated by cl. (2) of article 19. As to the second head of arguments noted above it has to be pointed out that if the intention of cl. (1) of article 194 was only to indicate that it was an abridgement of the freedom of speech which would have been available to a member of the Legislature as a citizen under article 19(1)(a), then it would have been easier to say in cl. (1) that the freedom of speech conferred by article 19(1)(a), when exercised in the Legislature of a State, would, in addition to the restrictions permissible by law under cl. (2) of that Article, be further subject to the provisions of the Constitution and the rules and standing orders regulating procedure of that Legislature. There would have been no necessity for conferring a new the freedom of speech as the words " there shall be freedom of speech in the Legislature of every State " obviously intend to do. Learned advocate for the petitioner has laid great emphasis on the two parts of the provisions of cl. (3) of article 194, namely, that the powers, privileges and immunities of a House of the Legislature of a State and of the members and committees thereof shall be such as may from time to time be defined by the Legislature by law and that until then they shall be those of the House of Commons of the Parliament of the United Kingdom and of its members and committees. The argument is that a law defining the powers, privileges and immunities of a House or Houses and the members and committees thereof can be made by Parliament under entry 74 in List I and by the State Legislature under entry 39 of List 11 and if a law so made takes away or abridges the right to freedom of speech guaranteed under article 19(1)(a) and is not protected under article 19(2), it will at once attract the operation of the peremptory provisions of article 13 and become void to the extent of the contravention of that Article. But it is pointed out that if Parliament or the State Legislature does not choose to define the powers, privileges and immunities and the Houses of Parliament or the House or Houses of the State Legislature 108 858 or the members and committees thereof get the powers, privileges and immunities of the House of Commons, there can be no reason why, in such event, the last mentioned powers, privileges and immunities should be independent of and override the provisions of article 19 (1)(a). The conclusion sought to be pressed upon us is that that could not be the intention of the Constitution makers and, therefore, it must be held that the powers, privileges and immunities of the House of Commons and of its members and committees that are conferred by the latter part of article 105(3) on each House of Parliament and the members and committees thereof and by the latter part of article 194(3) on a House of the Legislature of a State and the members and committees thereof must be, like the powers, privileges and immunities defined by law, to be made by Parliament or the State Legislature as the case may be, subject to the provisions of article 19(1)(a). We are unable to accept this reasoning. It is true, that a law made by Parliament in pursuance of the earlier part of article 105(3) or by the State Legislature in pursuance of the earlier part of article 194(3) will, not be a law made in exercise of constituent power like the law which was considered in Sankari Prasad Singh Deo vs Union of India (1) but will be one made in exercise of its ordinary legislative powers under article 246 read with the entries referred to above and that consequently if such a law takes away or abridges any of the fundamental rights it will contravene the peremptory provisions of article 13(2) and will be void to the extent of such contravention and it may well be that that is precisely the reason why our Parliament and the State Legislatures have not made any law defining the powers, privileges and immunities just as the Australian Parliament had not made any under section 49 of their Constitution corresponding to article 194(3) up to 1955 when the case of The Queen vs Richards (2) was decided. It does not, however, follow that if the powers, privileges or immunities conferred by the latter part of those Articles are repugnant to the fundamental rights, they must also be void to the (1) ; , go. (2) 859 extent of such repugnancy. it must not be overlooked that the provisions of article 105(3) and article 194(3) are constitutional laws and not ordinary laws made by Parliament or the State Legislatures and that, therefore, they are as supreme as the provisions of Part III. Further, quite conceivably our Constitution makers, not knowing what powers, privileges and immunities Parliament or the Legislature of a State may arrogate and claim for its Houses members or committees, thought fit not to take any risk and accordingly made such laws subject to the provisions of article 13 ; but that knowing and being satisfied with the reasonableness of the powers, privileges and immunities of the House of Commons at the commencement of the Constitution, they did not in their wisdom, think fit to make such powers, privileges and immunities subject to the fundamental right conferred by article 19(1)(a). We must, by applying the cardinal rules of construction ascertain the intention of the Constitution makers from the language used by them. In this connection the observations made in Anantha Krishnan vs State of Madras (1) by Venkatarama Aiyar, J., appear to us to be apposite and correct: "As against this the learned Advocate for the petitioner urges that the fundamental rights are under the Constitution in a paramount position, that under article 13 the Legislatures of the country have no power to abrogate or abridge them, that the power to tax is the power to destroy and that, therefore, part 12 is inoperative in respect of the rights conferred under Part 111. I am unable to agree. article 13 on which this argument is mainly founded does not support such a wide contention. It applies in terms only to laws in force before the commencement of the Constitution and to laws to be enacted by the States, that is, in future. It is only those two classes of laws that are declared void as against the provisions of Part 111. It does not apply to the Constitution itself It does not enact that the other portions of the Constitution should be void as against the provisions in Part III and it would be surprising if it did, seeing that all of them (1) A.I.R. (1952) Mad, 395, 405. 860 are parts of one organic whole. Article 13, therefore, cannot be read so as to render any portion of the Con stitution invalid. This conclusion is also in accordance with the principle adopted in interpretation of statutes that they should be so construed as to give effect and operation to all portions thereof and that a construction which renders any portion of them inoperative should be avoided. For these reasons I must hold that the operation of Part 12 is not cut down by Part III and that the fundamental rights are within the powers of the taxation by the State." Article 19(1)(a) and article 194(3) have to be reconciled and the only way of reconciling the same is to read article 19(1)(a) as subject to the latter part of article 194(3), just as article 31 has been read as subject to article 265 in the cases of Ramjilal vs Income tax Officer, Mohindargarh (1) and Laxmanappa Hanumantappa vs Union of India (2), where this Court has held that article 31(1) has to be read as referring to deprivation of property otherwise than by way of taxation. In the light of the foregoing discussion, the observations in the Madhya Bharat case (3) relied on by the petitioner, cannot, with respect, be supported as correct. Our decision in Gunupati Keshavram Reddy vs Nafisul Hasan (4), also relied on by learned advocate for the petitioner, proceeded entirely on a concession of counsel and cannot be regarded as a considered opinion on the subject. In our judgment the principle of harmonious construction must be adopted and so construed, the provisions of article 19(1)(a), which are general, must yield to article 194(1) and the latter part of its el. (3) which are special. Seeing that the present proceedings have been initiated on a petition under article 32 of the Constitution and as the petitioner may not be entitled, for reasons stated above, to avail himself of article 19(1)(a) to support this application, learned advocate for the petitioner falls back upon article 21 and contends that the proceedings before the Committee of Privileges threaten to deprive him of personal liberty otherwise (1) ; (3) A.I.R. (1952) M.B. 31, 43, (2) ; (4) A.I.R. (1954) S.C. 636. 861 than in accordance with procedure established by law. The Legislative Assembly claims that under article 194(3) it has all the powers, privileges and immunities enjoyed by the British House of Commons at the commencement of our Constitution. If it has those powers, privileges and immunities, then it can certainly enforce the same, as the House of Commons can do. Article 194(3) confers on the Legislative Assembly those powers, privileges and immunities and article 208 confers power on it to frame rules. The Bihar Legislative Assembly has framed rules in exercise of its powers under that Article. It follows, therefore, that article 194(3) read with the rules so framed has laid down the procedure for enforcing its powers, privileges and immunities. If, therefore, the Legislative Assembly has the powers, privileges and immunities of the I louse of Commons and if the petitioner is eventually deprived of his personal liberty as a result of the proceedings before the Committee of Privileges, such deprivation will be in accordance with procedure established by law and the petitioner cannot complain of the breach, actual or threatened, of his fundamental right under article 21. We now proceed to consider the other points raised by learned counsel for the petitioner. He argues that assuming that the Legislative Assembly has the powers, privileges and immunities it claims and that they override the fundamental right of the petitioner, the Legislative Assembly, nevertheless, must exercise those privileges and immunities in accordance with the standing orders laying down the rules of procedure governing the conduct of its business made in exercise of powers under article 208. Rule 207 lays down the conditions as to the admissibility of a motion of privilege. According to cl. (ii) of this rule the motion must relate to a specific matter of recent occurrence. The speech was delivered on May 30,1957, and Shri Nawal Kishore Sinha M.L.A. sent his notice of motion on June 10, 1957, that is to say, 10 days after the speech had been delivered. The matter that occurred 10 days prior to the date of the submission of the notice of motion cannot be said to be a specific matter of recent 862 occurrence. It is impossible for this Court to prescribe a particular period for moving a privilege motion so as to make the subject matter of the motion a specific matter of recent occurrence. This matter must obviously be left to the discretion of the Speaker of the House of Legislature to determine whether the subject matter of the motion is or is not a specific matter of recent occurrence. The copies of the proceedings marked as Annexure D in Annexure III to the petition do not disclose that any objection was taken by any member on the ground that the matter was not a specific matter of recent occurrence. We do not consider that there is any substance in this objection. Reference is then made to rr. 208 and 209 which lay down the procedure as to what is to happen if any objection is taken to leave being granted to the mover to move his motion. It is said that Shri Ramcharitra Sinha M.L.A. had raised an objection to leave being granted to Shri Nawal Kishore Sinha to move the privilege motion. This allegation in the petition does not appear to be borne out by the account of proceedings in the House to which reference has been made. Shri Ramcharitra Sinha only wanted to know the convention relating to the question of admissibility of such a motion and the Speaker accordingly read out el. (ii) of r. 208. After that Shri Ramcharitra Sinha did not say anything further. The Speaker then said that he understood that there was no opposition in the matter and, therefore, the Hon 'ble member was to be understood as having received the leave of the House and called upon him to say what be wanted to say. Thereupon, as stated earlier, Shri Karpuri Thakur wanted to know what had been published in the Searchlight of May 31, 1957, and what ought not to have been published. The Speaker thereupon read out the notice submitted by Shri Nawal Kishore Sinha which concisely referred to the subject matter of the motion and contained a reference to the issue of the Searchlight of May 31, 1957, a copy of which was filed along with the notice. After the notice had been read the Speaker permitted Shri Nawal Kishore Sinha to move his privilege motion, which the latter did. There 863 was no amendment proposed and the Speaker then stated what the question before the House was, Nobody having indicated his opposition, he declared the motion to be carried. There was, in the circumstances, no non compliance with the provisions of r. 208 read with r. 209. The next argument founded on non compliance with the rules is based on r. 215. Clause (i) of that rule provides that the Committee of Privileges should meet as soon as may be after the question has been referred to it and from time to time thereafter till a report is made within the time fixed by the House. In this case the House admittedly did not fix a time within which the report was to be made by the Committee of Privileges. This circumstance immediately attracts the proviso, according to which where the House does not fix any time for the presentation of the report, the report has to be presented within one month of the date on which the reference to the Committee was made. Learned advocate for the petitioner argues that one month 's time had long gone past and, therefore, the Committee of Privileges became functus officio and cannot, under the rules, proceed with the reference. There is no substance in this contention, because the second proviso to cl. (i) of r. 215 clearly provides that the House may at any time on a motion being made direct that the time for the presentation of the report by the Committee be extended to a date specified in the motion. The words " at any time " occurring in the second proviso quite clearly indicate that this extension of time may be within the time fixed by the House or, on its failure to do so, within the time fixed by the first proviso or even thereafter, but before the report is actually made or presented to the House (Cf. Raja Har Narain Singh vs Chaudhrain Bhagwant Kuar) (1). Further, the question of time within which the Committee of Privileges is to make its report to the House is a matter of internal management of the affairs of the House and a matter between the House and its Committee and confers no right on the party whose conduct is the subject matter of investigation (1) (1891) L.R. 18 I.A. 55, 58. 864 and this is so particularly when the House has the power to extend time " at any time ". The next argument is that the Committee cannot proceed to investigate what has not been referred to it. Reference is made to the resolution of the Committee (Annexure 11 to the petition) and the notice issued to the petitioner (Annexure I to the petition). It is said that while the Committee 's resolution speaks of publishing " a perverted and unfaithful report of the proceedings of the Assembly relating to the speech of Maheshwar Prasad, Narayan Sinha M.L.A." including the expunged portion thereof, the notice simply refers to " a question involving breach of privilege of the Bihar Legislative Assembly arising out of the publication of the news item " and calls upon the petitioner to show cause why appropriate action should not be recommended against him " for breach of privilege of the Speaker and the Assembly ". We fail to perceive how the two documents can be read as re ferring to two different charges. The notice served on the petitioner is couched in terms which cover the matters referred to in the Committee 's resolution. The effect in law of the order of the Speaker to expunge a portion of the speech of a member may be as if that portion bad not been spoken. A report of the whole speech in such circumstances, though factually correct, may, in law, be rewarded as perverted and unfaithful report and the publication of such a perverted and unfaithful report of a speech, i.e., including the expunged portion in derogation to the orders of the Speaker passed in the House may, prima facie, be regarded as constituting a breach of the privilege of the House arising out of the publication of the offending news item and that is precisely the charge that is contemplated by the Committee 's resolution and which the petitioner is by the notice called upon to answer. We prefer to express no opinion as to whether there has, in fact, been any breach of the privilege of the House, for of that the House alone is the judge; The next argument urged by learned advocate for the petitioner is that, after the House had referred the matter to the committee of privileges, nothing was 865 done for about one year, and after such a lapse of time the committee has suddenly woke up and resuscitated the matter only with a view to penalise the petitioner. In paragraph 17 of the petition the charge of mala fides is thus formulated: " 17. That the Committee of Privileges aforesaid is proceeding against the petitioner mala fide with a view to victimise and muzzle him since the petitioner has been through his newspaper unsparingly criticising the administration in the State of Bihar of which opposite party No. 1 is the Chief Minister. " It will be noticed that the allegation of mala fides is against the Committee of Privileges and not against the Chief Minister and, therefore, to controvert this allegation an affidavit affirmed by the Secretary to the Bihar Legislative Assembly has been filed. In the affidavit in reply reference is made to certain issues of the Searchlight indicating that charges were being made by the paper against the Chief Minister and the suggestion is that it is at the instance of the Chief Minister that the Committee has now moved in the matter. This is a new allegation. That apart, the Chief Minister is but one of the fifteen members of the Committee and one of the three hundred and nineteen members of the House. The Committee of Privileges ordinarily includes members of all parties represented in the House and it is difficult to expect that the Committee, as a body, will be actuated by any mala fide intention against the petitioner. Further the business of the Committee is only to make a report to the House and the ultimate decision will be that of the House itself. In the circumstances, the allegation of bad faith cannot be readily accepted. It is also urged that the Chief Minister should not take part in the proceedings before the Committee because he has an interest in the matter and reference is made to the decision in Queen vs Meyer (1). The case of bias of the Chief Minister (respondent 2) has not been made anywhere in the petition and we do not think if would be right to permit the petitioner to raise this question, for it depends (1) 109 866 on facts which were not mentioned in the petition but were put forward in a rejoinder to which the respondents had no opportunity to reply. Finally, the petitioner denies that the expunged portions have been published. We do not think we should express any opinion on this controversy, at any rate, at this stage If the Legislature Assembly of Bihar has the powers and privileges it claims and is entitled to take proceedings for breach thereof, as we hold it is, then it must be left to the House itself to determine whether there has, in fact, been any breach of its privilege. Thus, it will be for the House on the advice of its Committee of Privileges to consider the true effect of the Speaker 's directions that certain portions of the proceedings be expunged and whether the publication of the speech, if it has included the portion which had been so directed to be expunged in the eye of the law, tantamount to publishing something which had not been said and, whether such a publication cannot be claimed to be a publication of an accurate and faithful report of the speech. It will, again, be for the House to determine whether the Speaker 's ruling made distinctly and audibly that a portion of the proceedings be expunged amounts to a direction to the Press reporters not to publish the same, and whether the publication of the speech, if it has included the portion directed to be so expunged, is or is not a violation of the order of the Speaker and a breach of the privilege of the House amounting to a contempt of the Speaker and the House. For reasons stated above we think that this petition should be dismissed. In the circumstances, there will be no order for costs. SUBBA RAO, J. I have had the advantage of perusing the well considered judgment of my. Lord the Chief Justice. It is my misfortune to differ from him and my learned brethren. I would not have ventured to do so but for my conviction that the reasoning adopted therein would unduly restrict and circumscribe the wide scope and content of one of the cherished fundamental rights, namely, the freedom of speech in its application to the Press. 867 This is an application under Article 32 of the Constitution for quashing the proceedings before the Committee of Privileges of the Bihar Legislative Assembly I and for restraining the respondents, i.e., the Chief Minister of Bihar and the said Committee of Privileges, from proceeding against the petitioner for the s publication in the issue of the " Searchlight " dated May 31, 1957, an account of the debate in the House (The Legislative Assembly, Bihar) on May 30, 1957, and for other incidental reliefs. The petitioner, Pandit M. section M. Sharma, is the editor of the " Searchlight ", an English daily newspaper published from Patna in the State of Bihar. On May 30, 1957, Shri Maheswara Prasad Narayan Singh, a member of the State Assembly made a bitter attack in the Assembly on the Chief Minister, Shri Sri Krishna Sinha, and on Shri Mahesh Prasad Sinha, a minister in the previous cabinet, who was defeated at the last General Elections. It is said that in regard to that speech the Speaker gave a ruling that certain portions thereof should be expunged from the proceedings. In the issue of the " Searchlight" dated May 31, 1957, an accurate and faithful account of the, proceedings of the Bihar Legislative Assembly of May 30, 1957, was published under the caption "BITTEREST ATTACK ON CHIEF MINISTER ". It was also indicated in the report that the Speaker had disallowed the member to name Mr. Mahesh Prasad Sinha in respect of the Ministry formation and confined him to his remarks in regard to his chairmanship of the Khadi Board. It is alleged in the affidavit that till May 31, 1957, it was not known to any member of the staff of the " Searchlight ", including the petitioner, that any portion of the debate in question had been expunged from the official record of the Assembly proceedings of May 30, 1957, and that in fact the petitioner did not publish the expunged remarks. This fact was denied by the respondents in their counter, but it was not alleged that the Speaker made any specific order or gave any direction prohibiting the publication of any part of the proceedings of the Assembly in any newspaper. On June 10, 1957, Shri Nawal Kishore Sinha moved a privilege motion 868 in the House and it was carried, as, presumably, :no one had opposed it. On the same day, the House referred the matter to the Committee of Privileges without fixing any date for the presentation of the report a of the Committee. The Committee in due course held its meeting presided over by the Chief Minister and found that a prima facie case of breach of privilege had been made out against the petitioner. Then, the Secretary to the Legislative Assembly issued a notice to the petitioner informing him of the fact that the Committee had found a prima facie case of breach of privilege made out against him and asking him to show cause, if any, on or before September 8, 1958, why appropriate action should not be taken against him. Along with that notice, a copy of the motion as adopted by the Committee of Privileges in its meeting held on August 10, 1958, and a copy of a booklet containing a collection of the papers relating to the privilege motion moved by Shri Nawal Kishore Sinha, M.L.A., on June 16, 1957, were enclosed for ready reference. The booklet accompanying the notice contained the motion moved in the House, the report published in the "Searchlight " dated May 31, 1957, and the rules of the Assembly relating to the Committee of Privileges. Though there was some argument on the construction of the terms of the resolution passed by the Committee on account of the unhappy language in which it was couched, it is manifest that the breach of privilege pleaded was that the petitioner, by including the expunged portion of the speech of Maheshwar Prasad Narayan Singh, published a perverted and unfaithful report of the proceedings of the Assembly. The petitioner, thereafter, filed a petition under article 32 of the Constitution for the aforesaid reliefs. On the aforesaid facts, the learned Counsel for the petitioner, raised the following points in support of the petition : (1) The petitioner, as a citizen of India, has the fundamental right under article 19 (1) of the Constitution to freedom of speech and expression, which includes the freedom of propagation of ideas and their publication and circulation; and the Legislature of a State cannot claim a privilege in such a 869 way as to infringe that right. This contention is put in two ways: (i) The privilege conferred on the Legislature of a State is subject to the freedom conferred on a citizen under article 19 (1) of the Constitution ; and (ii) that even if the privilege was not expressly made subject to the fundamental right under article 19 (1), having regard to the nature of the fundamental right and the rules of interpretation, this Court should so construe the provisions as to give force to both the provisions. (2) Even if article 194 (3) overrides the provisions of article 19, the powers, privileges and immunities of the House of Legislature are only those of the House of Commons of the Parliament of the United Kingdom, at the commencement of the Constitution, i.e., January 26, 1950; and the House of Commons on that date had no privilege to prevent the publication of its proceedings or portion expunged by the Speaker in respect of the proceedings. (3) Under article 21 of the Constitution, no person is to be deprived of his personal liberty except in accordance with the procedure established by law and that the Privilege Committee, by calling upon the petitioner to appear at the Bar of the Legislature after making an enquiry in violation of the rules, particularly the rr. 207 (2), 208 (3) and 215 of the rules of the Assembly relating to the Committee of Privileges, has infringed his right under that Article. (4) Mr. Maheshwara Prasad Narayan Singh made a bitter attack on the Chief Minister and that report was published in the " Searchlight ". The Chief Minister, who has admittedly control over the Legislature or at any rate over the majority of the members of the Assembly, was actuated by mala fides in securing the initiation of the, proceedings against the petitioner for breach of privilege, and therefore his presiding over the meeting of the Sub Committee would vitiate its entire proceedings. (5) The Committee of Privileges enquired into an allegation not referred to it by the House. The learned Solicitor General, appearing for the respondents, countered the said arguments and his contentions may be summarized thus: Under the Constitution, no particular Article has more sanctity than the other, even though that 870 Article deals with fundamental rights. Article 194 (3) is not made subject to article 19 of the Constitution, and, therefore, if the House of Commons of the Parliament of the United Kingdom has the power or privilege to prevent the publication of its proceedings, or at any rate of the expunged portions of it, the Legislature of a State in India, has also a similar privilege or power and it can exercise it, notwithstanding the fact that it infringes the fundamental right of a citizen. The House of Commons of the United Kingdom has such a privilege and therefore the Legislature of Bihar can exercise it and take action against the person committing a breach thereof. While a Court of Law can decide on the question of the existence and the extent of the privilege of a House, it has no power or jurisdiction to consider whether a particular person in fact committed a breach thereof. The Legislature in this case has not broken any of the rules of the Assembly relating to the Committee of Privileges, and even if it did, by reason of article 212 (1) of the Constitution, the validity of its proceedings cannot be questioned on the ground of any alleged irregularity of the procedure. There was no allegation in the petition that the Committee or the Assembly was actuated by mala fides and even if the Chief Minister was acting with mala fides which fact was denied , the proceedings of the Committee or of the Legislature, which is the final authority in the matter of deciding whether there was a breach of privilege, would not de vitiated. It was also denied that the Committee of Privileges enquired into any allegation not referred to it by the House. At the outset it would be convenient to clear the ground of the subsidiary ramifications falling outside the field of controversy and focus on the point that directly arises in this case. We are not concerned here with the undoubted right of a State Legislature to control and regulate its domestic affairs. In " Cases in Constitutional Law " by Keir and Lawson, it is stated, at page 126, as follows: "The undoubted privileges of the House of Commons are of three kinds. They include (i) exclusive 871 jurisdiction over all questions which arise within the walls of the house, except, perhaps, in case of felony. . . . . . (ii) Certain personal privileges which attach to members of Parliament. The most important of these are freedom of debate, and immunity from civil arrest during the sitting of Parliament and for forty days before and after its assembling. . . . . ' That the freedom of speech and debates or proceedings in Parliament ought not to be impeached or questioned in any Court or place out of Parliament '. (iii) The power of executing decisions on matters of privilege by committing members of Parliament, or any other individuals, to imprisonment for contempt of the House. " Nor we are called upon to decide on the scope of a Court 's jurisdiction to set aside the orders of contempt made by the Legislature or warrants issued to implement the said orders. Reported decisions seem to suggest that if the order committing a person for contempt or the warrant issued pursuant thereto discloses the reasons, the Court can decide whether there is a privilege and also its extent; but, when it purports to issue a bald order, the Court has no power to decide, on the basis of other evidence, whether in fact a breach of privilege is involved. As this question does not arise in this case, I need not express any opinion thereon. The stand taken by the Legislature, as disclosed in the notice issued, the enclosed records sent to the petitioner, in the counter affidavit filed and the arguments advanced by the respondents, is that the Legislature of a State has the privilege to prevent any citizen from publishing the proceedings of the Legislature or at any rate such portions of it as are ordered to be expunged by the Speaker, and therefore it has a right to take action against the person committing a breach of such a privilege. The main question, therefore, that falls to be decided is whether the Legislature has such a privilege. If this question is answered against the Legislature, no other question arises for consideration. 872 The powers, privileges, and immunities of a State Legislature are governed by article 194 of the Constitution and the freedom of propagation of ideas, their publication and circulation by article 19(1)(a) thereof. For convenience of reference, both these articles may be read in juxtaposition. Article 19 reads: " (1) All citizens shall have the right (a) to freedom of speech and expression . . . . . . . . . . (2) Nothing in sub clause (a) of clause (1) shall affect the operation of any existing law, or prevent the State from making any law, in so far as such law imposes reasonable restrictions on the exercise of the right conferred by the said sub clause in the interests of the security of the State, friendly relations with foreign States, public order, decency or morality, or in relation to contempt of court, defamation or incitement to an offence. " Article 194 states: " (1) Subject to the provisions of this Constitution and to the rules and standing orders regulating the procedure of the Legislature, there shall be freedom of speech in the Legislature of every State. (2) No member of the Legislature of a State shall be liable to any proceedings in any court in respect of anything said or any vote given by him in the Legislature or any committee thereof, and no person shall be so liable in respect of the publication by or under the authority of a House of such a Legislature of any report, paper, votes or proceedings. (3) In other respects, the powers, privileges and immunities of a House of the Legislature of a State, and of the members and the committees of a House of such Legislature, shall be such as may from time to time be defined by the Legislature by law, and, until so defined, shall be those of the House of Commons of the Parliament of the United Kingdom and of its members and committees, at the commencement of this Constitution. 873 (4) The provisions of clauses (1), (2) and (3) shall apply in relation to persons who by virtue of this Constitution have the right to speak in, and otherwise to take part in the proceedings of, a House of the Legislature of a State or any committee thereof as they apply in relation to members of that Legislature." In Romesh Thappar vs The State of Madras (1), this Court ruled that freedom of speech and expression includes freedom of propagation of ideas and that freedom is ensured by the freedom of circulation. This freedom is, therefore, comprehensive enough to take in the freedom of the press. The said view is accepted and followed in Brij Bhushan vs The State of Delhi (2). To the same effect is the decision of this Court in Express Newspapers Ltd. vs Union of India (3), where Bhagwati, J., delivering the judgment of the Court, held that freedom of speech and expression includes within its scope the freedom of the Press. In Srinivasan vs The State of Madras (4) it was held, on the basis of the view expressed by this Court, that the terms " freedom of speech and expression " would include the liberty to propagate not only one 's own views but also the right to print matters which are not one 's own views but have either been borrowed from someone else or are printed under the direction of that person. I would, therefore, proceed to, consider the argument advanced on the basis that the freedom of speech in article 19(1)(a) takes in also the freedom of the Press in the comprehensive sense indicated by me supra. The importance of the freedom of speech in a democratic country cannot be over emphasized, and in recognition thereof, cl. (2) of article 19 unlike other clauses of that Article, confines the scope of the restrictions on the said freedom within comparatively narrower limits. Clause (2) enables the State to impose reasonable restrictions on the exercise of the said right in the interest of the security of the State, friendly relations with foreign States, public order, decency or (1) ; (2) ; (3) , 118. (4) A.I.R. (1951) Mad. 110 874 morality, or in relation to contempt of Court defamation or incitement to an offence. The said Article finds place in Part III under the heading " Fundamental Rights ". Article 13 makes laws that are inconsistent with or in derogation of the fundamental rights void and clause (2) thereof expressly prohibits the State from making laws in contravention of the said rights. In the words of Patanjali Sastri, C. J., the said rights in Part III are " rights reserved by the people after delegation of the rights by the people to the institutions of government ". It is true, and it cannot be denied, that notwithstanding the transcendental nature of the said rights, the Constitution may empower the Legislature to restrict the scope of the said rights within reasonable bounds, as in fact it did under cls. (2) to (6) of article 19. Such restrictions may be by express words or by necessary implication. But the Court would not and should not, having regard to the nature of the rights, readily infer such a restriction unless there are compelling reasons to do so. The Constitution adopted different and well understood phraseology to resolve conflicts and prevent overlapping of various provisions. Some Articles are expressly made subject to the provisions of the Con stitution vide articles 71(3), 73(1), 105, 131, etc. , and some to specified Articles vide articles 81, 107(1), 107(2) 114(3), 120(1), etc. Some Articles are made effective notwithstanding other provisions in the Constitution vide articles 120(1), 136(1), 143(2), 169(1), etc. Where the Constitution adopts one or other of the said two devices, its intention is clear and unambiguous; but, there are other Articles which are not expressly made subject to provisions of the Constitution or whose operation is not made effective notwithstanding any other provisions. In such cases, a duty is cast upon the Court to ascertain the intention of the Constituent Assembly. Cooley in his " Constitutional Law " points out that " however carefully constitutions may be made, their meaning must be often drawn in question ". He lays down, at page 427, the following rule, among others, as a guide to the construction of these instruments: 875 "The whole instrument is to be examined, with a view of determining the intention of each part. Moreover, effect is to be given, if possible, to the whole instrument, and to every section and clause. And in interpreting clauses it must be presumed that words have been used in their natural and ordinary meaning. The rule may also be stated in a different way: If two Articles appear to be in conflict, every attempt should be made to reconcile them or to make them to co exist before excluding or rejecting the operation of one. Article 194(3) of the Constitution, with which we are concerned, does not in express terms make that clause subject to the provisions of the Constitution or to those of article 19. Article 194 has three clauses. The first clause declares that there shall be freedom of speech in the Legislature of every State and that freedom is expressly made subject to the provisions of the Constitution and to the rules and the standing orders regulating the procedure of the Legislature. Clause (2) gives protection to members of the Legislature of a State from any liability to any proceedings in any Court in respect of anything said or any vote given by him in the Legislature or any committee thereof and to every person in respect of the publication by or under the authority of a House of such a Legislature of any report, paper, votes or procedure. The third clause, with which we are now directly concerned, confers upon a House of the Legislature of a State and of the members and the committees thereof certain powers, privileges and immunities. It is in two parts. The first part says that the powers, privileges and immunities of a House of the Legislature of a State and of the members and the committees of a House of such Legislature shall be such as may from time to time be defined by the Legislature by law; and the second part declares that until so defined, they shall be those of the House of Commons of the Parliament of the United Kingdom and its members and committees, at the commencement of the Constitution. The question is whether 876 this clause confers on the Legislature powers, privileges and immunities so as to infringe the fundamental right of a citizen under article 19(1)(a) of the Constitution. The first thing to be noticed is that while article 19(1)(a) of the Constitution deals with the freedom of Speech and expression of a citizen, article 194(1) declares that there shall be freedom of speech in the Legislature of every State. While article 19(1) is general in terms and is subject only to reasonable restrictions made under clause (2) of the said Article, article 194(1) makes the freedom of speech subject to the provisions of the Constitution and rules and standing orders regulating the procedure of the Legislature. Clause (2) flows from cl. (1) and it affords protection from lia bility to any proceedings in a Court for persons in respect of the acts mentioned therein. But these two provisions do not touch the fundamental right of a citizen to publish proceedings which he is entitled to do under article 19(1) of the Constitution. That is dealt with by el. That clause provides for powers, privileges and immunities of a House of the Legislature of a State and of the members and the committees of a House, other than those specified in cl. it is not expressly made subject to the provisions of the Constitution. I find it difficult to read in that clause the opening words of el. (1), viz.,, " subject to the provisions of this Constitution ", for two reasons: (i) cl. (3) deals with a subject wider in scope than cl.(1) and therefore did not flow from cl. (1); and (ii) grammatically it is not possible to import the opening words of cl. (1) into cl. Therefore, I shall proceed on the basis that cl. (3) is not expressly made subject to article 19 or expressly made independent of other Articles of the Constitution. We must, therefore, scrutinize the provisions of that clause in the context of the other provisions of the Constitution to ascertain whether by necessary implication it excludes the operation of article 19. The first thing to be noticed in cl. (3) of article 194 is that the Constitution declares that the powers, privileges and immunities of a House of Legislature of a State and of the members and com mittees of a House of such Legislature are such as 877 defined by the Legislature by law. In the second part, as a transitory measure, it directs that till they are so defined, they shall be those of the House of. Commons of the Parliament of the United Kingdom and of its members and committees, at the commencement of the Constitution. I find it impossible to accept the contention that the second part is not a transitory provision; for, the said argument is in the teeth of the express words used therein. It is inconceivable that the Constituent Assembly, having framed the Constitution covering various fields of activity in minute detail, should have thought fit to leave the privileges of the Legislatures in such a vague and nebulous position compelling the Legislatures to ascertain the con tent of their privileges from those obtaining in the House of Commons at the commencement of the Constitution. The privilege of the House of Commons is an organic growth. Sometimes a particular rule persists in the record but falls into disuse in practice. Privileges, just like other branches of common law, are results of compromise depending upon the particular circumstances of a given situation. How difficult it is to ascertain the privilege of the House of Commons and its content and extent in a given case is illustrated by this case. Reliance is placed upon other Articles of the Constitution in support of the contention that the second part of cl. (3) is not intended to be transitory in nature. Under article 135 of the Constitution, until Parliament by law otherwise provides, the Supreme Court shall have certain appellate jurisdiction. Under article 137, subject to the provisions of any law made by Parliament or any rules made under article 145, the Supreme Court shall have power to review any judgment pronounced or order made by it. Article 142(2) says: "Subject to the provisions of any law made in this behalf by Parliament, the Supreme Court shall, as respect the whole of the territory of India, 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 145 878 reads:"Subject to the provisions of any law made by Parliament, the Supreme Court may from time to time, with the approval of the President, make rules for regulating generally the practice and procedure of the Court. . . Under article 146(2), "Subject to the provisions of any law made by Parliament, the conditions of service of officers and servants of the Supreme Court shall be such as may be prescribed by rules made by the Chief Justice of India or by some other Judge or officer of the Court authorised by the Chief Justice of India to make rules for the purpose." Under article 187(3), " Until provision is made by the Legislature of the State under clause (2), the Governor may, after consultation with the Speaker of the Legislative Assembly or the Chairman of the Legislative Council, as the case may be, make rules regulating the recruitment, and the conditions of service of persons appointed, to the secretarial staff of the Assembly or the Council, and any rules so made shall have effect subject to the provisions of any law made under the said clause ". Clause (2) of article 210 says " Unless the Legislature of the State by law otherwise provides, this article shall, after the expiration of a period of fifteen years from the commencement of this Constitution, have effect as if the words I or in English ' were omitted therefrom. " I do not see any analogy between the first part of article 194(3) and the provisions of the aforesaid Articles. Firstly, the said Articles do not import into India the law of a foreign country; secondly, they either make the existing law subject to the provisions of any law made by Parliament, or declare a particular law to be in force unless modified by Parliament; whereas in article 194(3) the Constitution expressly declares that the law in respect of powers, privileges and immunities is that made by a House of the Legislature from time to time and introduces a rider as a transitory measure that till such law is made, the powers, privileges and immunities of the House of Commons should be those of the Legislature also. I have no doubt, therefore, that part two of cl. (3) of article 194 is intended to be a transitory provision and ordinarily, 879 unless there is a clear intention to the contrary, it cannot be given a higher sanctity than that of the first part of cl. The first part of el. (3) reads: In other respects, the powers, privileges and immunities of a House of the Legislature of a State, and of the members and the committees of a House of such Legislature, shall be such as may from time to time be defined by the Legislature by law. . . Article 245 enables a State to make laws for the whole or any part of the State. Article 246(3) pro vides that the Legislature of any State has exclusive power to make laws with respect to any of the matters enumerated in List II in the Seventh Schedule (in the Constitution referred to as the " State List "). Item 39 of List II of the Seventh Schedule enumerates the following matters among others: " Powers, privileges and immunities of the Legislative Assembly and of the members and the committees thereof. . . Clause (2) of article 13, which is one of the Articles in Part III relating to fundamental rights, prohibits the State from making any law which takes away or abridges the rights conferred by that Part and declares that any law made in contravention of that clause shall to the extent of the contravention be void. It is, therefore, manifest that the law made by the Legislature in respect of the powers, privileges and immunities of a House of the Legislature of a State, would be void to the extent the law contravened the provisions of article 19(1)(a) of the Constitution, unless it is saved by any law prescribing reasonable restrictions within the ambit of article 19(2). So much is conceded by the learned Solicitor General. Then, what is the reason or justification for holding that the second part of that clause should be read in a different way as to be free from the impact of the fundamental rights. When the Constitution expressly made the laws prescribing the privileges of the Legislature of a State of our country subject to the fundamental rights, there is no apparent reason why they should have omitted that limitation in the case of the privileges of the Parliament of the United Kingdom in their application to a State Legislature. We cannot assume that 880 the framers of the Constitution thought that the privileges of the House of Commons were subject to the fundamental rights in that country; for, to assume that is to impute ignorance to them of the fact that the Parliament of the United Kingdom was supreme and there were no fetters on its power of legislation. The contention also, if accepted, would lead to the anomaly of a law providing for privileges made by Parliament or a Legislature of our country being struck down as infringing the fundamental rights, while the same privilege or privileges, if no law was made, would be valid. Except the far fetched suggestion that the Constitution makers might have thought that all the privileges of the House of Commons, being the mother of Parliaments, would not in fact offend the fundamental rights and that, therefore, they designedly left them untouched by Part III as unnecessary or the equally untenable guess that they thought that for a temporary period the operation and the extent of the said privileges need not be curtailed, no convincing or even plausible reason is offered for the alleged different treatment meted out to the said privileges in the said two parts of el. If the Constitution intended to make the distinction, it would have opened the second part of cl. (3) with the words " Notwithstanding other provisions of the Constitution or those of article 19 ". I cannot also appreciate the argument that article 194 should be preferred to article 19(1) and not vice versa. Under the Constitution, it is the duty of this Court to give a harmonious construction to both the provisions so that full effect may be given to both, without the one excluding the other. There is no inherent inconsistency between the two provisions. Article 19(1) (a) gives freedom of speech and expression to a citizen, while the second part of article 194(3) deals with the powers, privileges and immunities of the Legislature and of its members and committees. The Legislature and its members have certainly a wide range of powers and privileges and the said privileges can be exercised without infringing the rights of a citizen, and particularly of one who is not a member of the Legislature. 881 When there is a conflict, the privilege should yield to the extent it affects the fundamental right. This construction gives full effect to both the Articles. A This Court in Gunupati Keshavram Reddy vs Nafisul Hasan (1) held that the order of arrest of Mr. Mistry and his detention in the Speaker 's custody was a breach of the provisions of article 22(2) of the Constitution. In that case, the said Mistry was directed by the Speaker of the U. P. Legislative Assembly to be arrested and produced before him to answer a charge of breach of privilege. Though the question was not elaborately considered, five judges of this Court un animously held that the arrest was a clear breach of the provisions of article 22(2) of the Constitution indicating thereby that article 194 was subject to Articles of Part III of the Constitution. I am bound by the decision of this Court. In the result, I hold that the petitioner has the fundamental right to publish the report of the proceedings of the Legislature and that, as no reasonable restrictions were imposed by law on the said fundamental right, the action of the respondents infringes his right entitling him to the relief asked for. This case does not, as it is supposed or suggested illustrate any conflict between the Legislature and the Court, but it is one between the Legislature and the citizens of the State whose representatives constituted the Legislature. I yield to none in my respect for that august body, the Legislature of the State; but, we are under a duty, enjoined on this Court by article 32 of the Constitution, to protect the rights of the citizens who in theory reserved to themselves certain rights and parted only the others to the Legislature. Every institution created by the Constitution, therefore ' should function within its allotted field and cannot encroach upon the rights of the people who created the institutions. It may not be out of place to suggest to the appropriate authority to make a law regulating the powers, privileges and immunities of the Legislature instead of keeping this branch of law in a nebu lous state, with the result that a citizen will have to (1) A.I.R. (1954) S.C. 636. 882 make a research into the unwritten law of the privileges of the House of Commons at the risk of being called before the Bar of the Legislature. The said conclusion would be sufficient to dispose of this petition. But as it was argued at some length, it would be as well that I expressed my opinion on the question of the existence and the extent of the relevant privileges of the House of Commons at the commencement of the Constitution. Before considering that question, it would be convenient to notice briefly the scope of a Court 's jurisdiction to investigate the nature and the extent of the privilege claimed by the House of Commons. It is often said that each House of Parliament is the sole judge of its own privileges. But early in the history of British Parliament the question of the scope of that equivocal statement was raised and it was contended that the House 's jurisdiction was confined only within the limits of the privileges as defined by the Courts of Common Law. The said question was raised and decided in Ashby vs White (1), Paty 's Case (2), Stockdale vs Hansard (3) and in the Case of the Sheriff of Middlesex(1). In the said cases, the Common Law rights of a citizen were threatened by the House of Commons on the ground that the person concerned committed a breach of the privilege of the House. The combined effect of these decisions is that " the Courts deny to the Houses the right to determine the limits of their privileges, while allowing them within those limits exclusive jurisdiction " In Anson 's Law and Custom of the Constitution, the principle has been neatly stated, at page 190, thus: " The Privileges of Parliament, like the prerogative of the Crown, are rights conferred by law, and as such their limits are ascertainable and determinable, like the limits of other rights, by the Courts of Law. " As the learned Solicitor General conceded the said legal position, it would be unnecessary to pursue the matter further or consider the decisions in greater detail. The main question, therefore, that falls to be decided is the existence and the extent of the privilege (1) ; (3) (1839) 9 A. & F. (2) ; (4) ; 883 claimed by the respondents. As the privilege claimed by the respondents is in derogation of the fundamental right of a citizen, the burden lies heavily upon them to establish by clear and unequivocal evidence that the House of Commons possessed such a privilege. In the words of Coke " as the privilege is part of the law of custom of the Parliament, they must be collected out of the rolls of Parliament and other records and by precedent and continued experience ". They can be found only in the Journals of the House compiled in the Journal Office from the manuscript minutes and notes of proceedings made by the clerks at the table during the sittings of the House. Decided cases and the text books would also help us to ascertain the privileges of the Houses. The words " at the commencement of the Constitution " indicate that the privileges intended to be attracted are not of the dark and difficult days, when the House of Commons passed through strife and struggle, but only those obtaining in 1950, when it was functioning as a model Legislature in a highly democratized country. In the circumstance, a duty is cast upon the respondents to establish with exactitude that the House of Commons possessed the particular privilege claimed at the com mencement of the Constitution. The respondents claimed two privileges: (i) that the House of Commons has the privilege of preventing the publication of its proceedings ; and (ii) that it has the privilege to prevent the publication of that part of the proceedings directed by the Speaker to be expunged. Indeed the second privilege is in fact comprehended by the first, which is larger in scope. A history of the said privilege is given in May 's Parliamentary Practice as well as in Halsbury 's Laws of England. In Halsbury 's Laws of England, 2nd Edition, Volume 24 (Lord Hailsham 's Edition), it is stated at pages 350 351 as follows: It is within the power of either House of Parliament, should it deem it expedient, to prohibit the publication of its proceedings. In the House of Lords, it is a breach of privilege for any person to print or publish anything relating to 884 the proceedings of the House without its permission. The House of Commons, upon many occasions, has declared the publication of its proceedings without the authority of the House to be a breach of privilege, and the House has never formally rescinded the orders which from time to time it has made with regard to this subject. At the present time, however, neither House will consider a report of its proceedings in a newspaper or other publication to be a breach of its privileges, unless such report is manifestly inaccurate or untrue. " At page 350 in the foot note (d) the history of the said privilege is given thus: " The jealousy of the House of Commons with regard to the privacy of its proceedings dates from the Long Parliament, and was due to the antagonism which existed between that assembly and the King. The object of the House at that time was to prevent its own members or officers from supplying the King with information which might incriminate its mem bers; see Resolutions of the House of Commons of July 13, 1641 (Journals of the House of Commons, 1641, Vol. II, page 209). It was not until after the Revolution of 1689 that the House came in contact with unofficial reporters who furnished, for the news letters of the day, reports, often prejudicial and generally inaccurate, of the proceedings of the Commons. In 1738 the House passed a resolution stating that it was " an high indignity to, and a notorious breach of privilege of, this House, for any news writer, in letters or other papers (as minutes, or under any other denomination), or for any printer or publisher of any printed newspaper of any denomination to insert in the said letters or papers, or to give therein any account of the debates or other proceedings Of this House or any committee thereof, as well during the recess, as the sitting of Parliament; and that this House will proceed with the utmost severity against such offenders (Journals of the House of Commons, 1738, Vol. XXIII, p. 148; Parliamentary History, Vol. X, pp. 799 811). This resolution was repeated in 1753 and 1762; see Journals of the House of 885 Commons, 1753, Vol. XXVI, p. 754; 1762, Vol. XXIX, pp. 206, 207. But, in spite of the attitude of the House, unofficial reports of the proceedings of the House of Commons were still published, and in 1771, during the disturbances caused by John Wilkes, the claim of the House to forbid the publication of its debates led to a struggle between the Commons and the City of London which, although it resulted in the committal to prison of the Lord Mayor and two alder. men, practically put an end to the attempts of the House of Commons to prevent the publication of its debates. " Much to the same effect it is stated in May 's Parliamentary Practice: at page 54, the learned author, under the heading " Right to control publication of Debates and Proceedings", observes: " Closely ' connected with the power to exclude strangers, so as to obtain, when necessary, such privacy as may secure freedom of debate, is the right of either House to prohibit the publication of debates or proceedings. The publication of the debates of either House has been repeatedly declared to be a breach of privilege, and especially false and perverted reports of them; and no doubt can exist that if either House desire to withhold their proceedings from the public, it is within the strictest limits of their jurisdiction to do so, and to punish any violation of their orders. " After tracing the history of the privilege, the practice obtaining in modern times is described thus: " The repeated orders made by the House forbidding the publication of the debates and proceedings of the House, or of any committee thereof, and of comments thereon, or on the conduct of Members in the House, by newspapers, newsletters, or otherwise, and directing the punishment of offenders against such rules, have long since fallen into disuse. Indeed, since 1909, the debates have been reported and issued by an official reporting staff under the authority of Mr. Speaker, and are sold to the public by Her Majesty 's Stationery Office. " The same idea is repeated at page 56 as follows: 886 " So long as the debates are correctly and faithfully reported, however, the privilege which prohibits their publication is waived." At page 118, the same result is described in different words thus: "So long as the debates are correctly and faithfully reported, the orders which prohibit their publication are not enforced ; but when they are reported mala fide, the publishers of newspapers are liable to punishment." Then the following eight instance of misconduct, in connection with the, publication of the debates which is generally treated as a breach of privilege of the House are given by the learned author : (i) Publishing a false account of proceedings of the House of Lords; (ii) Publishing scandalous misrepresentation of what had passed in either House or what had been said in debate; (iii) Publishing gross or wilful misrepresentations of particular Members, speeches; (iv) Publishing under colour of a report of a Member 's speech a gross libel on the character and conduct of another Member; (v) Suppressing speeches of particular Members (vi) Publishing a proceeding which the House of Lords had ordered to the expunged from the journals; (vii) Publishing a libel on counsel appearing before a committee under colour of a report of the proceedings of such committee; and (viii) Publishing a forged paper, publicly sold as His Majesty 's speech to both Houses. It would be seen from the instances that mala fides is a necessary ingredient of the publication to attract the doctrine of privilege and that the instances given are of the period between 1756 to 1893. One of the instances on which strong emphasis is laid by the learned Solicitor General is the publishing of a proceeding which the House of Lords bad ordered to be expunged from the Journals. Apart from the fact that the instance in question relates to the House of Lords, the Journal is not available for us to ascertain 887 under what circumstances the publication was made Further the instance was of the year 1801 and no other instances of that kind appear to have occurred from 1801 to 1950. In the circumstances, on the authority of May, it may be accepted that the House of Lords asserted the privilege in 1801 when its proceedings were published mala fide, though they were expressly ordered to be expunged. Cockburn, C. J., in Wasan vs Walter(1) forcibly pointed out the irrelevance of the privilege claimed in the modern democratic set up. At page 89, the learned Chief Justice observed : " It seems to us impossible to doubt that it is of paramount public and national importance that the proceedings of the houses of Parliament shall be communicated to the public, who have the deepest interest in knowing what passes within their walls, seeing that on what is there said and done, the welfare of the community depends. Where would be our confidence in the government of the country or in the legislature by which our laws are framed, and to whose charge the great interests of the country are committed, where would be our attachment to the Constitution under which we live, if the proceedings of the great council of the realm were shrouded in secrecy and concealed from the knowledge of the nation ? How could the communications between the representatives of the people and their constituents, which are so essential to the working of the representative system, be usefully carried on, if the constituencies were kept in ignorance of what their representatives are doing? What would become of the right of petitioning on all measures pending in Parliament, the undoubted right of the subject, if the people are to be kept in ignorance of what is passing ID either house? Can any man bring himself to doubt that the publicity given in modern times to what passes in Parliament is essential to the maintenance of the relations subsisting between the government, the legislature, and the country at large ? It may, no doubt, be said that, while it may be necessary as a matter of national interest that the (1) 888 proceedings of Parliament should in general be made public, yet that debates in which the character of individuals is brought into question ought to be suppressed. But to this, in addition to the difficulty in which parties publishing parliamentary reports would be placed, if this distinction were to be enforced and every debate had to be critically scanned to see whether it contained defamatory matter, it may be further answered that there is perhaps no subject in which the public have a deeper interest than in all that relates to the conduct of public servants of the State, no subject of parliamentary discussion which more requires to be made known than an inquiry relating to it". At page 95, dealing with the contention based upon the Standing Orders of both the Houses of Parliament prohibiting the publication of the proceedings, the learned Chief Justice proceeded to state as follows: " The fact, no doubt, is, that each house of Parliament does, by its standing orders, prohibit the publication of its debates. But, practically, each house not only permits, but also sanctions and encourages, the publication of its proceedings, and actually gives every facility to those who report them. Individual members correct their speeches for publication in Hansard or the public journals, and in every debate reports of former speeches containing therein are constantly referred to. Collectively, as well as individually, the members of both houses would deplore as a national misfortune the withholding their debates from the country at large. Practically speaking, therefore, it is idle to say that the publication of Parliamentary proceedings is prohibited by Parliament. The standing orders which prohibit it are obviously maintained only to give to each house the control over the publication of its proceedings, and the power of preventing or correcting any abuse of the facility afforded. " I have given the said passages in extenso as they give neatly and graphically not only the extent of the privilege in modern times, but the reasons for and the process by which the larger concept of the privilege has been gradually reduced to its present form. These 889 are weighty observations and, if they were appropriate to the conditions obtaining in the 19th century, they would be more so in 1950, when the parliamentary system of government was perfected in England. Jennings in his book on " The British Constitution states at page 82 thus: " All this assumes, of course, that the House debates in public. Government and Opposition speak to each other, but for the education of the people. The criticisms brought against the Government are the criticisms of ordinary individuals; the answers of the Government are formally answers to the Opposition, but substantially they are replies to the questions raised in the factory, the railway carriage and the office. The members of the House of Commons were not elected for their special qualifications, but because they supported the policies which the majority, of their constituents were prepared to accept. They have no authority except as representatives, and in order that their representative character may be preserved they must debate in public. Secret sessions were suited to the oligarchic government of the eighteenth century. They are the negation of democratic principles. No doubt there are exceptional occasions when secrecy is justified. " This passage succinctly gives the principles underlying the doctrine that in a democratic country, debates in Parliament are public and there should not be any prohibition against the publication of the said debates. The extent of the privilege of the House of Commons in regard to the publication of its proceedings may be stated thus: In the seventeenth century, the House of Commons made standing orders prohibiting the publication of its proceedings. But that was a necessary precaution in that critical period when the representatives of the people were in conflict with the crown and they were careful that their proceedings should not reach the ear of the Crown. In the aristocratic eighteenth century, the opposition to publication was founded not only on the fear of misrepresentation, 112 890 but on impatience of the pressure of public opinion. But gradually and imperceptibly, as a result of conflicts and compromises and as Parliamentary form of government became perfect and broad based, not only publication was allowed but actually encouraged by the House of Commons. In the year 1950, it would be unthinkable and indeed would have been an extraordinary phenomenon for the House Of Commons claiming the privilege of preventing the publication of its proceedings. The said orders, though not expressly repealed or modified, were no longer enforced in accordance with their tenor; but were in effect modified by practice and precedents. The stringent part of the orders had fallen into disuse and in practice it was restricted to mala fide publication of the proceedings. 1, therefore, hold that in the year 1950, the House of Commons had no privilege to prevent the publication of the correct add faithful reports of its proceedings save those in the case of secret sessions held under exceptional circumstances and had only a limited privilege to prevent mala fide publication of garbled, un faithful or expunged reports of the proceedings. It follows from my view, namely, that the petitioner 's fundamental right under article 19(1) is preserved despite the provisions of article 194(3) of the Constitution, that the petitioner is entitled to succeed. I am further of the opinion that even if article 194(3) of the Constitution excludes the operation of article 19(1), the petitioner in the circumstances of the present case would not be in a worse position. That apart, the charge as disclosed either in the notice served on the petitioner or in the enclosures annexed thereto does not impute any mala fide intention to the petitioner. The notice only says that the Committee of Privileges, on the basis of the publication of the news item in the " Searchlight ", found that a prima facie case of breach of privilege has been made out against the petitioner. The resolution enclosed therein indicates that the petitioner committed a breach of privilege by printing the expunged portion of the speech of Maheshwara Prasad Narayan Singh and thereby published a perverted and unfaithful report of the proceedings. Other documents 891 enclosed with the notice contained a motion moved in the House by another member charging the petitioner for publishing the expunged portion of the speech. The petitioner in his petition states that till May 31, it was not known to any member of the staff of the " Searchlight ", including the petitioner, that any portion of s the debate in question had been expunged from the official record of the Assembly. Though in the official record of the proceedings, portions of the speech reported have been expunged, no order of the Speaker expunging any portions of the speech made on May 30, has been produced. Admittedly there was no order of the Speaker prohibiting the publication of the expunged portion of the speech. In the counter affidavit filed by the respondents, they did not allege any mala fides to the petitioner but they took their stand on the fact that the Legislature had the privilege of preventing the petitioner from publishing the expunged por tion of the speech. In the circumstances, neither the notice nor the documents enclosed with the notice disclose that the petitioner published the speech, including the expunged portion mala fide, or even with the knowledge that any portion of the speech was directed to be expunged. As I have pointed out, the Legislature has the privilege of preventing only mala fide publication of the proceedings of the Legislature and, as in this case the petitioner is not alleged to have done so, the Legislature has no power to take any action in respect of the said publication. In the result, the petition is allowed. A Writ of Prohibition will issue restraining the respondents from proceeding against the petitioner for the alleged breach of privilege by publishing in the issue of the " Searchlight ", dated May 31, 1957, an account of the debate of the House (Legislative Assembly, Bihar) of May 30, 1957. ORDER In view of the judgment of the majority, the petition is dismissed. There will be no order as to costs.

The petitioner, the Editor of the English daily newspaper Searchlight of Patna, was called upon by the Secretary of the Patna Legislative Assembly to show cause before the Committee of Privileges of the Assembly why appropriate action should not be taken against him for the breach of privileges of the Speaker and the Assembly for publishing in its entirety a speech delivered in the Assembly by a member thereof, portions of which were directed to be expunged by the Speaker. It was contended on behalf of the Petitioner that the said notice and the proposed action by the Committee were in violation of his fundamental right to freedom of speech and expression under article 19(1)(a) and of the protection of his personal liberty under article 21 of the Constitution, and that, as an editor of a newspaper, he was entitled to all the benefits of the freedom of the Press. The respondents relied on article 194(3) Of the Constitution and claimed that the proceedings in the House as those in the British House of Commons were not usually meant to be published, and in no circumstances was it permissible to publish the parts of a 807 speech which were directed to be expunged and, therefore, formed no part of the official report and such publication was in clear breach of the privileges of the Assembly. The points for determination were: (1) Could the British House of Commons entirely prohibit the publication of its proceedings or even of such portions of them as had been directed to be expunged ? (2) Assuming that the British House of Commons had such power and consequently the State Legislature also had such power under Article 194(3), could the privileges of the Legislature under that Article prevail over the fundamental right guaranteed by article 19(1)(a)? The Bihar Legislature not having admittedly made any law governing its powers and privileges under Entry 39 of List II of the Seventh Schedule to the Constitution, the question naturally was as to what were the powers, privileges and immunities of the British House of Commons at the commencement of the Constitution. Held (per Das, C. J., Bhagwati, Sinha and Wanchoo, jj.) that there could be no doubt that the liberty of the Press was implicit in the freedom of speech and expression guaranteed to a citizen under article 19(1)(a) of the Constitution and that must include the freedom of propagation of ideas ensured by the freedom of circulation. Romesh Thappar vs State of Madras, ; , Brijbhushan vs The State of Delhi, ; and Express Newspaper Ltd. vs Union of India, , relied on. The liberty of the Press in India flowed from this freedom of speech and expression of a citizen and stood on no higher footing and no privilege attached to the Press as such. Arnold vs King Emperor, (1914) L.R. 41 I.A. 149, referred to. A survey of the evolution of Parliamentary privileges in England showed beyond doubt that at the commencement of the Indian Constitution, the British House of Commons had the power or privilege of prohibiting the publication of even a true and faithful report of the debates or proceedings that took place in the House, and with greater reason, the power and privilege of prohibiting publication of an inaccurate or garbled version of such debates and proceedings. These were the powers and privileges that article 194(3) conferred on State Legislatures and article 05(3) conferred on the Houses of Parliament in India. It would not be correct to contend that article 19(1)(a) of the Constitution controlled the latter half of article 194(3) or of article 105(3) Of the Constitution and that the powers, privileges and immunities conferred by them must yield to the fundamental right of the citizen under article 19(1)(a). As articles 194(3) and 105(3) stood in the same supreme position as the provisions of Part III of the Constitution and could not be affected by article 13, the principle of harmonious construction must be adopted. 808 So construed, the provisions of article 19(1)(a), which were general, must yield to article 194(1) and the latter part of its cl. (3), which are special, and article 19(1)(a) could be of no avail to the petitioner. Ramjilal vs Income tax Officer, Mohindergarh, [1951] S.C.R. a 127 and Laxamanappa Hanumantappa vs Union of India, ; , applied. Anand Bihayi Mishra vs Ram Sahay, A.I.R. (1952) M.B. 31, disapproved. Gunapati Keshavyam Reddy vs Nafisul Hasan, A.I.R. (1954) S.C. 636 explained as having proceeded on concession by counsel. Nor could the petitioner complain of any breach, actual or threatened, of his fundamental right under article 21 of the Constitution since article 194(3) read with the rules, framed by the Bihar Legislative Assembly in exercise of its power under article 208 of the Constitution, laid down the procedure for enforcing its powers, privileges and immunities under that Article and any deprivation of his personal liberty as a result of the proceedings before the Committee of Privileges would be in accordance with procedure established by law. Held, further, that it was not for this Court to prescribe any particular period for moving a privilege motion so as to make the subject matter of the motion a specific matter of recent occurrence within the meaning of the said rules. This was a matter for the speaker alone to decide. The time within which the Committee of privileges was to submit its report was a matter between the House and its Committee and the party whose conduct was the subject matter of investigation could have no say in the matter. The effect in law of the order of the Speaker to expunge a portion of the speech of a member might be as if that portion had not been spoken and a report of the whole speech despite the speaker 's order might be regarded as a perverted and unfaithful report and Prima facie constitute a breach of the privilege of the Assembly. Whether there had in fact been a breach of the privilege of the Assembly was, however, a matter for the Assembly alone to judge. Per Subba Rao, J. The second part of article 194(3) was clearly a transitory provision and had no higher sanctity than that of the first. While a law when made by the State Legislature under the first part would, by virtue of article 13(2), be void to the extent it contravened the provisions of 19(1)(a), unless saved by article 19(2), there could be no reason why the powers, privileges and immunities conferred under the second part should be free from the impact of the fundamental rights. As there was no inherent inconsistency between articles 19(1)(a) and the second part of article 194(3), full effect must be given to them both on the principle of harmonious construction. The 809 wide powers and privileges enjoyed by the Legislature and its members should, therefore, be so exercised as not to impair the fundamental rights of the citizen, particularly of one who was not a member of the Legislature. In case of a conflict, article 19(1)(a) must prevail over article 194(3) and not vice versa and the privilege must yield to the extent it affected the fundamental right. Gunupati Keshavarm Reddy vs Nafisul Hasan, A.I.R. (1954) S.C. 636, applied. At the commencement of the Constitution the House of Commons had no privilege to prevent the publication of a correct and faithful report of its proceedings, save those in respect of secret sessions held under exceptional circumstances, and had only a limited privilege to prevent mala fide publications of garbled, unfaithful and expunged reports of the proceedings. In the instant case, neither the notices nor the documents enclosed therewith disclosed any mala fides on the part of the petitioner or that he had knowledge that any portion of the speech had been expunged by the Speaker. Consequently, even supposing article 194(3) prevailed over article 19(1)(a), the petitioner was entitled to succeed. Wasan vs Walter, , relied on.

Civil Appeal No. 2371 of 1969. From the Judgment and order dated 23 5 1968 of the Allahabad High Court in Special Appeal No. 247/66. G. L. Sanghi, Mrs. section Bagga for the Appellant. G. N. Dikshit and O. P. Rana for Respondents 1 5. section K. Bagga for Respondent No. 6 The Judgment of the Court was delivered by 181 SEN J. This appeal, by certificate, is directed against a judgment of the Allahabad High Court dated May 23, 1968, whereby it upheld a judgment of a Single Judge of that Court dated March 16, 1966, dismissing the applicants writ petition to quash recovery proceedings initiated by the Collector, Azamgarh for realisation of the sum remaining due on account of a taccavi loan under s.7 (1) of the . The facts leading to this appeal, in brief, are as follows: The appellant and his brother Shashi Bhushan Gupta the sixth respondent, constituted a joint Hindu family owning extensive zamindari properties, over several districts in United Provinces including Azamgarh zamindari comprising of 34 villages. They owned an agricultural farm known as Mukundpur Farm situated in Azamgarh zamindari. It is alleged that by virtue of a family settlement in 1940, the appellant even though younger in age, became the karta of the joint family. By his application dated February 25, 1947 the appellant applied for a taccavi loan of Rs. 1,22,000 in the prescribed form for improvement of Mukundpur Farm, to the Director of Agriculture, United Provinces through the Collector, Azamgarh. The property offered as security for advance of the loan was the zamindari rights in Azamgarh zamindari comprising of the aforesaid 34 villages bearing a land revenue of Rs. 11,000/ . During the verification proceedings, the appellant by his application dated February 22, 1948, offered a security of his half share in Azamgarh zamindari, which on enquiry by the Collector for the grant of sanction for the loan, was evaluated at Rs. 1,43,869.66p. The taccavi loan was duly sanctioned by the Government on September 23, 1948. The appellant having defaulted in payment of the loan, the Collector, Azamgarh by his order dated March 24, 1952 directed that the entire ilaqa lying in Tahsil Sagri, district Azamgarh forming part of the hypothecated property be attached under section 150 of the U.P. Land Revenue Act, 1901. It, however, seems that no attachment of any land situated in Tahsil Sagri forming part of the hypothecated property had, in fact ', been effected either under s.150 of the U.P. Land Revenue Act or section 289 (1) of the U.P. Zamindari Abolition and Land Reforms Act, 1950. It appears that some plots at the Mukundpur Farm lying in two villages, Mahnajpur and Ghaibipur, were later taken under the management of the Collector under section 290 of that Act and half share 'hereof let out to tenants, and the proceeds were adjusted towards the 182 outstanding taccavi dues. It also appears that a sum of Rs. 38,951.8P representing the appellant 's half share of the compensation money due ,, and payable to him were adjusted under s.6 (e) of the Act towards the loan. It is the appellant 's case that there was a partition between the appellant and his brother, the sixth respondent in 1951, and the hypothecated property was allocated to the share of the sixth respondent. This resulted in a compromise decree between the appellant and his brother, the sixth respondent, in Civil Suit No. 72 of 1952 under the terms of which, the sixth respondent undertook upon himself the liability to discharge the loan as the property offered in security had fallen to his share. In compliance thereof, the sixth respondent actually paid Rs. 16,012.50P. The Government was admittedly not impleaded as a party to, the suit. On July 15, 1952, the sixth respondent resiled from the terms of compromise and objected to the recovery proceedings being taken against him on the ground that the loan in question had not been taken by him nor had the appellant borrowed it in the capacity as karta of the joint family. He, indeed, denied the factum of partition. These objections were, however, over ruled by the Sales officer, Azamgarh on October 22, 1952. On May 15, 1953, the appellant applied to the State Government for expunging his name from the debtor sheet. The application was forwarded by the Government to the Collector, Azamgarh for enquiry and report. The appellant raised an objection alleging inter alia that the loan had been incurred by him in his capacity as karta of the joint Hindu family and that since the hypothecated property had fallen to . to the share of the sixth respondent, he was not personally liable to repay the loan. The Collector by his order dated January 18, 1955, after holding an enquiry held that the appellant had taken the taccavi loan in his individual capacity and not as karta of the joint family and accordingly he was personally liable to repay the loan. He, however, directed the Sales officer that the recovery be made, in the first . instance, from the hypothecated property before proceeding against the appellant personally. The action taken by the Collector was duly endorsed by the Land Reforms Commissioner by his letter dated April 7, 1955, and approved of the State Government by its order dated July 22, 1955. The recovery proceedings were accordingly initiated against the appellant. lt appears that the appellant was a Member of the Legislative Assembly and apparently wielded considerable influence. He appears 183 to have addressed a representation to the Chief Minister on April 1(), A 1956. The State Government referred the matter to the Commissioner, Gorakhpur Division, Gorakhpur who by his letter dated October 19, 1956 stated that he was fully in agreement with the Collector that the appellant must be treated as having taken the loan in his individual capacity and proceedings for its recovery had to be taken against the hypothecated property as well as against him personally. The latter also mentioned that the Collector had been asked, if necessary, to explain the case personally to the Chief Minister. Evidently, the State Government after reviewing the matter at all levels, by its order dated August 13, 1957 directed that the realisation of the taccavi dues outstanding against the appellant should be made from the hypothecated property as well as from his person immediately. It further directed that 'all the modes for recovery legally permissible should be adopted against him simultaneously and pursued vigorously '. Despite all this, the appellant has not paid a pie towards the outstanding debt except through coercive process. On December 17, 1) 1957, the appellant addressed a representation to the Board of Revenue although under the taccavi rules no appeal or revision lay to the Board. It is somewhat strange that the Addl. Land Reforms Commissioner, contrary to the Government 's orders in that behalf, submitted a report, on his own, upholding the appellant 's contention that he had borrowed the loan in his capacity as karta of the joint family, and recommending that the loan in question should be recovered from the hypothecated property. The state Government naturally did not act upon this gratuitous advice. On June 19, 1959, the appellant has informed of the Government 's decision. Thereafter, the Collector started proceedings for realisation of Rs. 72,152.50P as principal and Rs. 23,689.81P as interest. Thereupon, the appellant on August 4, 1959 moved the Allahabad High Court under article 226. The appellant 's writ petition was dismissed by a learned Single Judge. It appears that the contention that the loan was incurred by him as karta of the joint Hindu family was not raised before the learned Single Judge, as he observes "It appears that recovery proceedings were taken against the Mukundpur Farm, which, it is not disputed, belongs exclusively to the petitioner". He negatived the contention that the Collector had let out a part of the Mukundpur Farm in 1952 and therefore, after expiry of a period often years, the Government was precluded by reason of s.291 (3) of the U.P. Zamindari Abolition and Land Reforms Act from further continuing the recovery proceedings. He held that this involved a 13 475 SCI/79 184 disputed question of fact as according to the Government certain plots of Munkundpur Farm were first let out in 1959 60 and not in 1952, and therefore, the bar of s.291 (3) was not applicable. As regards the contention based on s.6 (e) of the Act that the Government had no power to make the recovery except from out of the compensation amount, he held that the provision did not debar the Government from proceeding otherwise. On the question of accounting he held that the submission calls for an accounting of the amount received by such letting out and there was no material upon which the decision of the Court could rest. On appeal, the appellant for the first time raised an objection as to his personal liability alleging that the loan in question was incurred by him in the capacity of karta, and, therefore, recoverable from the hypothecated property alone. There was a difference of opinion on the question between the learned Judges constituting the Bench as to whether he had taken the loan as karta of the joint family or in his individual capacity, but nonetheless the appeal failed because they repelled all other contentions. Four questions arise in this appeal: 1. Whether the taccavi loan was incurred by the appellant as a karta of the joint Hindu family and not in his individual capacity and, therefore, the loan in question has to be recovered from the sixth respondent, inasmuch as the hypothecated property had fallen to his share in a family partition ? 2. Is the Collector precluded from taking resort to any one or other modes prescribed by s.7 (1) of the , for recovery of the sum remaining unrealised towards the taccavi loan, by reason of s.289 (2) or s.291 (3) of the U.P. Zamindari Abolition and Land Reforms Act, 1950? 3. Have the Government no right to recover the outstanding amount due except from the compensation amount in terms of s.6 (e) thereof? 4. Was the Government bound to render an account of the rents and profits derived from letting out of the plots of Mukundpur Farm? Section 7 (1) of the , reads as follows: "7 (1) Subject to such rules as may be made under section ten, all loans granted under this Act, all interest (if any) chargeable thereon, and costs (if any) incurred in making the same, shall, when they become due, be recoverable by the Collector in all or any of the following modes, namely: (a) from the borrower as if they were arrears of land revenue due by him; 185 (b) from his surety (if any) as if they were arrears of land A revenue due by him; (c) (c) out of the land for the benefit of which the loan has been granted as if they were arrears of land revenue due in respect of that land; (d) out of the property comprised in the collateral security (if any) according to the procedure for the realization of land revenue by the sale of immovable property other than the land on which that revenue is due. " on the first point, we agree with one of the learned Judges (Uniyal J.). The conclusion reached by the learned Judge that 'the taccavi loan was taken by the appellant in his individual capacity ' is the only conclusion possible. The appellant maintained that the loan was incurred for family purposes i.e., for improvement of Munkundpur Farm by the appellant in his capacity as the karta and it having fallen to the share of the sixth respondent in the family partition, the recovery proceedings against the appellant under section 7 were not maintainable. We fail to see how can the appellant escape liability on this account. The Government was not a party to Civil Suit No. 72 of 1952 and was, therefore, not bound by the terms of the compromise decree. Nor was the Government bound by the alleged partition effected between the appellant and the sixth respondent. It matters little whether there was a partition or not in 1951; and if so, whether the hypothecated property had fallen to the share of the sixth respondent. The appellant had bound himself by the terms of the taccavi bond to discharge the liability from his property The instrument is not on record. The document was, however, before the High Court. Uniyal J. in the course of his judgment, with regard to appellant 's personal liability, observes: "He pledged his half share in 34 villages of Tahsil Sagri. After verification of the proprietary rights of the appellant in the hypothecated property, the Collector issued a certificate declaring that the same as sufficient to cover the amount of taccavi loan. Thereupon a formal document in the nature of taccavi bond was executed by the appellant of the one part and the Collector of the other part evidencing the transaction of loan. A list containing particulars of the immovable property was annexed to the bond, and it was stated therein that a half share of the appellant in the said zamindari property had been pledged by way of security." (Emphasis supplied) The correctness of this observation is not open to question. The learned Judge then goes on to say: 186 "The naqsha maliyat attached to the taccavi bond clearly mentioned the details of the hypothecated property in tahsil Saygri consisting of one half share of the appellant. " He then rightly concludes, saying: "It is of no consequence if the creditor proceeds against the share of the Karta alone in the joint family property hypothecated as security for the loan, or from his person, or both. " We concur in the conclusion reached by the learned Judge that the loan in question was taken by the appellant in his individual capacity and not as a karta of the joint Hindu family. Even assuming he took the loan as karta, still he would be personally and severally liable to repay it. The remaining points are equally devoid of substance. The contention based on section 289 (2) of the U.P. Zamindari Abolition and Land Reforms Act, 1950 does not arise. No doubt, the Collector is em powered under section 7 (1) of the to recover all the taccavi dues from the defaulter as arrears of land revenue, and by reason of section 288, the provisions of section 289 are attracted. By section 288 it is provided that the provisions of the Act with regard to the recovery of arrears of land revenue shall apply to all arrears of land revenue and ' 'sums of money recoverable as arrears of land revenue ' due at the commencement of the Act. The Collector could, therefore, have taken resort to section 289 (1) for the recovery of the unrealised amount of the taccavi loan by attachment and sale of properties belonging to the appellant. But, the ilaka of Tahsil Sagri was not, in fact, ever attached under section 289 (1). In the instant case, no previous sanction of the Board of Revenue was obtained under section 272(2). Consequently, the attachment could not be said to be one made under section 289 (1). Further, section 289 applies only to those cases in which the provisions of section 243(1) have been made applicable by the Government under a notification issued under section 243 (2) . It is nobody 's case that a notification contemplated by section 243 (2) was ever issued. The question of section 289 (2) operating as a bar to the recovery proceedings after expiry of a period of three years, therefore, does not arise. There is also a fallacy in the argument. The provisions of section 289 run thus. Attachment of village for arrears of land revenue. (1) At any time after an arrear of land revenue has accrued, the Collector may attach the village or any area therein 187 in respect of which the arrear is due and place it under his own A management or that of an agent appointed by him for that purpose for such period as he may consider necessary: Provided that the period for which any village or any area therein may be so attached, shall not exceed three years from the commencement of the agricultural year next following the date of attachment, and the attachment shall be cancelled if the arrears are sooner liquidated. (2) Upon the expiry of the period of attachment, the village shall be restored free of any claim on the part of the Government for any arrear of land revenue due in respect thereof. " When an arrear of land revenue has accrued, the Collector may under section 289(1) attach a village or any area therein in respect of which the arrear is due and place it under his own management or that of an agent appointed by him for that purpose. The proviso to section 289 (1), however, interdicts that the period for which any village or any area therein may be so attached, shall not exceed three years from the commencement of the agricultural year next following the date of attachment, and the attachment shall be cancelled if the arrears are sooner liquidated. If section 289 (2) is read in the context of sub section (1), it will be clear that upon the expiry of the period of three years the village has to be restored free of any claim on the part of the Government for any arrear of land revenue due in respect thereof. The consequence that ensues is that liability for payment of land revenue in respect of the village or any area therein in respect of which arrears are due stands discharged. There is a distinction between arrears of land revenue and other government dues recoverable as if they were arrears of land Revenue. In respect of other sums of money recoverable as arrears of land revenue, the debtor is not discharged of his liability for payment of such dues even after three years. The next question is whether by virtue of section 291 (3), the appellant stood relieved of all liability for payment of arrears of taccavi due after the expiry of ten years. We may here read section 291 (3). It is in these terms: "291 (3) Upon the expiry of the period of lease the holding shall be restored to the tenure holder concerned free of any claim on the part of the State Government for any arrears in respect of such holding. " 188 The High Court has relied upon the affidavit of the Chief Revenue Accountant, Collectorate stating that certain plots of Mukundpur Farm were for the first time let out in the year 1959 60. It would, therefore, appear that the period of ten years had not expired when the recovery proceedings were initiated. There remains the question whether the Government is bound to recover the unrealised sum of taccavi loan from the amount of compensation money and relying upon section 6 (e) of the U.P. Zamindari Abolition and Land Reforms Act it is urged that is the only remedy left. The contention, we are afraid, proceeds on a misconception of the purport and effect of section 6 (e) of the Act, which reads: "6(e). all amounts ordered to be paid by an intermediary to the State Government under Sections 27 and 28 of the U.P. Encumbered states Act, 1934, and all amounts due from him under the , or the Agricultural Loans Act, 1884, shall, notwithstanding anything contained in the said enactments, become due forthwith and may, without prejudice to any other mode of recovery provided therefor, be realized by deducting the amount from the compensation money payable to such intermediary under Chapter III. " It is plain upon its terms, that the provisions of section 6(e) are not obligatory. It is an enabling provision. It provides that all amounts due under the , shall notwithstanding anything contained therein, become due 'forthwith ', upon the vesting of the zamindari rights. It then lays down that such dues may, with out prejudice to any other mode of recovery provided therefor, be realised by deducting the amount from the compensation money payable to such intermediary. It, therefore, provides an additional mode of recovery for realisation of the dues. The word 'may ' in section 6(e) clearly indicates that the Government has the option to fall back upon the compensation amount. It does not entail in the consequence that the mode indicated in section 6(e) is the one and the only mode available. The High Court has observed that the entire amount of compensation money which fell to the appellant 's share amounting to Rs. 38,951.8P had been adjusted towards the loan, on the basis that the half share of the appellant in the zamindari property had been hypothecated as security for the loan. The recovery proceedings now pending before the Collector is for the balance remaining after such adjustment together with interest. It was faintly argued by learned counsel for the appellant that the Government was bound to render an account of the rents and profits 189 realised from the letting of plots of Mukundpur Farm, but he did not A pursue the argument any further and rightly so. The High Court has observed that it had scrutinized the accounts maintained by the Government and the same have been maintained as required by the taccavi rules as per appendix 'A ' to Form VII. It was certainly not open to the High Court to grant any such relief under article 226 of the Constitution particularly when it involved consideration of disputed question of fact. The result, therefore, is that the appeal fails and is dismissed with costs. P.B.R. Appeal dismissed.

The appellant and the sixth respondent, who were brothers, constituted a joint Hindu family. Though younger in age than the sixth respondent, the appellant by virtue of a settlement, became Karta. Of the joint family. The family owned vast Zamindari properties. One of which was a Farm known as Mukundpur Farm. For the improvement of the Farm the appellant took taccavi loan by offering his half share in the joint family property as security. On his failure to repay the loan the Collector of the District ordered attachment of the hypothecated property under section 150 of the U.P. Land Revenue Act, 1901. The appellant alleged that as a result of the partition of properties between him and his brother the hypothecated property fell to the share of his brother, that under the compromise decree his brother undertook to discharge the loan and that therefore it was he who was responsible for repayment of the loan. (The Government, however was not impleaded as a party to the suit in which compromise was arrived at between the brothers.) Sometime later the sixth respondent resiled from the compromise decree and stated that he was not liable to repay the loan because it was not taken by the appellant in his capacity as Karta of the joint family but that it was taken only in his (appellant 's) personal capacity and that, therefore, he alone was liable to repay it. The Collector made enquiries and held that the loan was taken by the appellant in his individual capacity and not as Karta of the joint family and held that he was personally liable to repay the loan. Eventually it was decided that the realisation of the dues should be made from the hypothecated property as well as from his person and accordingly proceedings for realisation of the principal and interest on the loan were started. The High Court rejected the appellant 's writ petition. In appeal the following three questions were raised. ( I ) whether the taccavi loan was taken by the appellant as Karta of the joint family, and, therefore, had to be recovered from the sixth respondent to whose share the hypothecated property had fallen in the partition of the property; (2) Whether the Collector was precluded from taking resort to any one of other modes prescribed by section 7(1) of the land Improvement Loans Act, 1883 for recovery of the sum remaining unrealised towards the taccavi loan; (3) Whether the Government had no right to recover the outstanding amount due except from the compensation amount in terms of section 6 (e ) thereof ? ^ HELD: 1. The loan in question was taken by the appellant in his individual capacity and not as Karta of the joint family. By the terms of the taccavi bond the appellant had bound himself to discharge the liability from his property. Even 180 assuming that he took the loan as Karta, he was personally and severally liable to pay. In the compromise suit the Government was not made a part and therefore, was not bound by the terms of the compromise decree; nor was the Government bound by the alleged partition effected between the. appellant and the sixth respondent. [185 D E; 186C] 2.(a) Section 7(1) of the Land Improvement Loans Act empowers the Collector to recover taccavi dues from the defaulter as arrears of land revenue and the Collector could have taken resort to s.289(1) of the U.P. Zamindari Abolition and Land Reforms Act, 1950, for the recovery of the unrealised amount of taccavi loan by attachment and sales of properties belonging to the appellant. Section 289 applies only to those cases in which the provision of section 243(1) have been made applicable and it is nobody 's case that a notification contemplated by section 243(2) was ever issued. The question of section 289(2) operating as a bar to the recovery proceedings upon expiry of period of three years, therefore, does not arise. If section 289(2) is read in the context of sub section (1) it will be clear that upon the expiry of the period of three years the village has to be restored free of claim on the part of the Government for any arrear of land revenue due in respect thereof. The consequence that ensures is that liability for payment of land revenue in respect of the village or any area therein in respect of which arrears are due stands discharged. But in regard to other Sums of money recoverable as arrears of land revenue the liability continues. [186D; G, 187E F] (b) As section 291(3) contemplates that upon expiry of the period of lease, the holding shall be restored to the tenure holder concerned free of any claim on the part of the State Government for any arrears in respect of such holding. In this case the period of the lease had not expired when the recovery proceedings were initiated. [188A B] 3. Section 6(c) provides that all amounts due under the Land Improvement Loans Act shall become due forthwith upon the vesting of the Zamindari right. It also provides that such dues may, without prejudice to any other mode of recovery provided therefor, be realised by deducting the amount from the compensation money payable to such intermediary. What it provides is an additional mode of recovery for realisation of the dues. Under the scheme the Government has the option and the mode indicated in the section is not the one and the only mode available. The recovery proceedings pending before the Collector were for the remainder of the loan after such adjustment together with interest. [188F G]

Appeal Nos. 2410 and 2411 of 1966. 91 Appeal from the judgment ,and order dated March 20, 1963 of the Punjab High Court, Circuit Bench at Delhi in R.F.A. No. 122 D of 1962. Bishan Narain, K. K. Raizada and A.G. Ratnaparkhi, for the appellant (in both the appeals). A.S. Nambiar, K.R. Nambiar and Lily Thomas, for the respondent (in both the appeals). The Judgment of the Court was delivered by Hidayatullah, C.J. This is an appeal against the judgment, dated March 20, 1963, of a Division Bench of the Punjab High Court dismissing an appeal and a revision filed by the present appellant. The appeal arises under the following circumstances: A suit was filed by the appellant in the Court of the Senior Sub Judge, Delhi for three reliefs in respect of a business in which the respondent was stated to be the manager and also for ejectment of the respondent from the premises in which the business was being carried on The same valuation was adopted for purposes of court fee and jurisdiction. The valuation was divided into three parts: Rs. 4,000/ were taken as the valuation for rendition of accounts or arrears of rent, Rs. 130/ for injunction and Rs. 710/ for ejectment Total Rs. 4,840/ . During the hearing of the suit and on objection by the defendant, the= valuation for ejectment was raised to Rs. 1,800/ . It appears that the appellant paid the additional court fee but did not amend the plant. The suit was decreed in part on May 11, 1961. The appellant obtained a decree for Rs. 600/ as arrears of rent for 3/4 portion off the shop and Rs. 463.33 P. as damages for 1/4 portion of the shop ejectment from which portion was also decreed in his favour. But the suit was dismissed as to the remaining arrears of rent or for accounts and ejectments from 3/4 of the premises. The plaintiff (appellant) thereupon filed an appeal in the District Court of Delhi. In stating the valuation for appeal, he correctly described the: three fold valuation in the suit as Rs. 4,000/ , Rs. 130/ and Rs. 1,800/ (total Rs. 5,930/ ). He however valued the appeal as follows: Rs. 3,400/ as the valuation for arrears of rent or for rendition of accounts, Rs. 130/ for injunction and Rs. 1,350/ for ejectment (Total Rs. 4,880/ ). Now it is obvious that if the valuation was Rs. 4,880/ appeal would have lain in the District Court, but if the appeal had to be valued at Rs. 5,930/ it had to go before the High Court. When the notice of the appeal was served on the defendent (respondent) he flied a cross objection in the same court 92 but did not take any exception to the valuation of the appeal in the District Court on its presentation in that Court. On July 25, 1962, the District Judge made an order upholding a preliminary objection taken before him at the hearing that the memorandum of appeal was liable to be returned for presentation to the proper court, and he ordered the memorandum of appeal to be so returned. It appears that it was filed in the High Court the same day and, therefore, there was no loss of time after the return of the memorandum. The appeal was delayed by nearly one year. It may, however, be mentioned that the plaintiff (appellant) did not submit to the decision of the District Court but took the matter in revision before the High Court. The appeal as represented and the application for revision were disposed of by the common judgment under appeal before us. The High Court held that there was no ground for extending time under section 5 of the Limitation Act for which purpose an application had been sub joined to the appeal filed in the High Court. The question in this case is whether the High Court was fight in dealing with this problem as it did. The High Court seemed to be of the opinion that an Advocate (Mr. K.K. Raizada) of 34 years ' standing could not possibly make the mistake in view of the clear provisions on the subject of appeals existing in section 39(1) of the Punjab Courts Act. That sub section at that time clearly showed that appeals of the value of Rs. 5,000/ must be filed before the District Court but appeals above Rs. 5 '000/must be filed before the High Court. The High Court also felt that the learned counsel persisted in pursuing his own theory by willing a revision. It is on this account that time was denied to the present appellant in the appeal. The only question is whether the decision of the High Court can be accepted. The law is settled that mistake of counsel may in certain circumstances be taken into account in condoning delay although there is no general proposition that mistake of counsel by itself is always a sufficient ground. It is always a question whether the mistake was bona fide or was merely device to cover an ulterior purpose such as laches on the part of the litigant or an attempt to save limitation in an underhand way. The High Court unfortunately never considered the matter from this angle. If it had, it would have seen quite clearly that there was no attempt to avoid the Limitation Act but rather to follow it albeit on a wrong reading of the situation. It is quite clear that the limitation for the appeal to the High Court was three times as much as it was for the District Court. When the appeal was filed, litigant had as much as two months 93 in hand to file the same in the High Court. Further he did not attempt to save court fee on the appeal but paid the same courtfee which would have been payable in the High Court. It does not appear that he had an underhand motive for filing the appeal in the District Court. Therefore, the filing of the appeal must be attributed entirely to the advice of the counsel. Here again, the counsel did not suppress anything. As has been stated earlier, he put down both the valuations in the forefront of his memorandum of appeal, that is to say, the valuation of the suit in the original court and the valuation of the appeal. No doubt the counsel was one with some experience and ought to have known that an appeal above Rs. 5,000/ must be filed in the High Court and not the District Court and therefore, we have to see whether he was genuinely under a mistake or not. Here there is proof that he adhered to this view, because not only he filed the appeal but also took a revision from the order of the District Court to the High Court, still labouring under the same mistaken view. Further he, seems to have been misled by a rule, i.e.r. 4 in Ch. 3B of Vol. 1 of the rules and orders of the High Court which read as follows: "In a suit for the amount found to be due after taking into accounts, it is not the tentative valuation of the plaintiff, but the amount found to be due and decreed by the court that determines the forum of appeal. " This rule is applicable in a case in which the amount decreed is larger than the amount for which the original suit was brought. Now it is well known that in a suit for accounts, the plaintiff is not obliged to state the exact amount which would result after the taking of accounts. He may do so if he is able to; but if he is not, he can put a tentative valuation upon his suit for accounts taking care that the valuation is adequate and reasonable in all the circumstances of the case. But the rule also obtains that if the amount which is found is larger than the amount at which he stated his tentative valuation, he must file the appeal against the larger amount and in the forum before which an appeal of that valuation can go. This rule does not apply where the amount decreed is below the valuation in the original court. Here the original valuation holds good both to find the forum and to put a valuation. After the amendment of the valuation on account of ejectment the total claim was Rs. 5,930/ and that determined the court of lowest denomination before which the appeal from the suit had to go. That according to the other rule which we have cited was the High Court. The second rule, which we have later cited, does not cut across the first rule. This appears to be the error which was committed by Mr. Raizada and we do not 94 find anything in the case to show that this error was tainted by any mala fide motive on the part of the counsel for the litigant. In the circumstances we think that the High Court would have been justified in extending time under section 5 of the Limitation Act and the reasoning of the High Court unfortunately started from a wrong angle. We accordingly set aside the order of the High Court and remit the appeal for hearing and disposal according to law. The appellant will however pay all the costs of the respondent which have been incurred till today irrespective of the result. We may mention that there are two appeals pending before us. The other appeal is from the revisional order of the High Court and we think that there is no need to pronounce any decision in that appeal, because it becomes infructuous by reason of our decision in this appeal. As the appeal before. the High Court is an old one, we hope that the High Court will be able to give it priority. Appeal remitted.

The appellant 's suit against the respondent for rendition of account and other reliefs was valued at Rs. 5,930/ for purposes of court fee and jurisdiction. The suit was decreed in part and the amount decreed was less. than the amount at which he stated his tentative valuation. He filed an appeal to the District Court stating the valuation for purposes of appeal at Rs. 4,880 '/ . The memorandum of appeal showed the valuation in the original suit and the court fee paid was the same amount as in the trial court. The District Court returned the memorandum of appeal for presentation to the proper court because, under section 39 '(1) of the Punjab Courts Act appeals above the value of Rs. 5,000/ had to filed before the High Court. The appeal was filed in the High Court the same day, but it was out of time. The appellant also filed a revision against the order of the District Court. His counsel placed reliance on r. 4 in Ch. 3 B of Vol. 1 of the Rules of the High Court which states that "in a suit for the amount found due after taking accounts it is not the tentative valuation of the plaintiff but the amount found to be due and decreed by the court that determines the forum of appeal. " The High .Court held that there was no ground for extending time under section 5 of the Limitation Act and dismissed the appeal and also the revision. In appeal to this Court, HELD: The High Court should have extended time under section 5 of the Limitation Act. [9 '4 A B] (i) The appellant did not have any underhand motive in filing the appeal before the District Court, the filing had to be attributed entirely to the advice of his counsel. [93 A B] There is no general proposition that mistake of counsel by itself is always a sufficient ground for condoning delay. It is always a question whether the mistake was bona fide or was merely a device to cover an ulterior purpose. [92 F G] In the present case the original valuation determined the court of lowest denomination before which the appeal from the suit had to go and that forum was the High Court. The counsel seems to have been misled by r. 4 in Ch. 3 B of Vol. 1 of the Rules and Orders of the High Court. This rule is applicable in a case where the amount decreed is larger than the amount for which the original suit was brought. It does not apply where the amount decreed is below the valuation in the original court. There is nothing in the case to show that the error committed by the counsel was tainted by any mala fide motive. [93 C F; 94 A]

Civil Appeal Nos. 1233 1237 of 1973. Appeals from the Judgment and order dated the 5th May, 1972 of the Patna High Court in Tax Cases Nos. 64 to 68 of 1967 G.C; Sharma, B. B. Ahuja & Miss A. Subhashini for the Appellant. 628 P.K. Chatterjee and Rathin Dass for the Respondent. The Judgment of the Court was delivered by SABYASACHI MUKHARJI, J. These appeals from the judgment of the High Court of Patna have come to this Court by certificates granted under Section 29 of the Wealth Tax Act, 1957. The questions upon which the certificates of fitness of appeal to this Court have been granted are question Nos. (2), (3) and (4) in Tax Cases Nos. 64 to 68 of 1467. The questions are as follows: "QUESTION No. 2. Whether, in the facts and circumstances of the case, the decrees obtained by the assessee against Shri A.H. Lal and Shri D.D. Tulsi for Rs. 1,11,747 and Rs. 51,525 respectively, have been valued under the Wealth Tax Act, 1957, by correctly applying the provisions of section 9 of the Act for the purpose of including their values in the net wealth of the assessee? Question No. 3 Whether, the sum of Rs. 32,266, the amount of Agricultural income tax due from the asessee, falls for deduction in hands of the assessee in arriving at his total wealth for the years 1957 58, 1958 59, 1959 60 and 1960 61? Question No. 4 Whether, the sums of Rs. 597909 due from Tikait Girja Prasad Singh, Rs. 40001 due from Sri Gangeshwar Prasad Singh, Rs. 64000 due from Mahanth Mahabir Das, Rs. 37773 due from Sri Lakshmi Narain Singh, Rs. 2600 due from Sri Jamuna Prasad Missir, Rs. 1250 due from Sri Sarjug Kumar, Rs. 15344 due from Sri Nandkishore Singh, and Rs. 388760 due from Raja Prithivichand Lal Chaughury under claim decrees obtained against them by the assessee under the Bihar Land Reforms Act are assets of the assessee within the meaning of Wealth Tax Act, 1957, and have been valued under the said Act by correctly applying, the provisions of section 7 of the Act for the purpose of including their values in the net wealth of the assessee ' ? 629 Regarding Question No. 3 which is the question whether, the A amount of agricultural income tax dues from the assessee is a factor which has to be taken into account for valuing the compensation payable to the assessee, we have held that agricultural income tax dues from the assessee which are deductible from the compensation under Section 4 (c) of the Bihar Land Reforms Act, 1950, if the same has not been deducted before the issue of the compensation bond, then the possibility and the hazard of its being deducted from the compensation involved is a factor which has to be taken into account in estimating the value of the right of compensation for the purpose of estimating the net wealth of the assessee on the valuation date under the Wealth Tax Act. The arrears of agricultural income tax is not to be deducted from the net wealth as such but is a factor which a willing C purchaser will take into consideration in estimating the value of these assets and that is a factor which should be taken into consideration. The point has been discussed by this Court in the case of Commissioner of Wealth Tax, Bihar, patna vs Maharaja Kumar Kamal Singh (Civil Appeal Nos. 1238 to 1240 (NT) of 1973). The question, is, therefore answered as the answerer given in the said appeals and the Tribunal will estimate the value by taking into consideration the possibility for deduction on account of the liability of the assessee on account of agricultural income tax if it had not been already deducted in accordance with the provisions of the Act and determine the net value of the assets of the assessee, accordingly. These questions are for the wealth tax assessments of the assessee for the assessment years 1957 58, 1958 59, 1959 60, 1960 61 and 1961 62. The assessments involved were for those years in which the relevant valuation dates were 20th September, 1956, 21st March, 1958, 21st March, 1959, 21st March 1960 and 20th March 1961 respectively. In the first year the assessee had filed return of wealth for Rs. 447065. The Wealth Tax officer, however, determined the total wealth of the assessee at Rs. 1608863. The Wealth Tax officer included in the net wealth of the assessee, various amounts of money due under the decrees which the assessee had obtained against certain debtors, as well as the compensation payable to him under the Bihar Land Reforms Act after valuing the bonds. It may be mentioned that the assessee had appealed to the Appellate Assistant Commissioner and thereafter he had carried appeals to the Tribunal also and had obtained some relief in the process. For the subsequent assessment years of 1958 59, 1959 60, 1960 61 and 1961 62, similar considerations had come up before the Wealth Tax officer, on the assessee filing separate returns and similar results were followed. In each year 630 the assessee had claimed certain deductions, including an amount of Rs. 32266 due as agricultural income tax. The later sum has been consistently disallowed. This point we have disposed of in terms of the decision of this Court in Civil Appeal Nos. 1238 to 1,240 (NT) of 1973. So far as Question No. 2 is concerned, while computing the net wealth, the Wealth Tax Officer had included the sums of Rs. 8000 and Rs. 13011 for the year 1957 58, due from Sri A.K.Hazra and Sri N. Sahay respectively, on the basis of usfructuary mortgage in favour of the assessee as his assets. On the last point the assessee has obtained relief from the Appellate Tribunal for the year 1957 58 and for that reason these two sums were excluded from the net wealth of the assessee for the subsequent assessment years and that point had given rise to the reference in Tax Cases Nos. 23 to 271 of 1966. On the other questions raise(l by the assesses, reference in Tax Cases Nos. 64 to 68 of 1967 had arisen. Now the facts material for question No. 2 are as follows: The assessee had obtained civil court decrees for Rs. 111747. and Rs. 51525 against Sri A.H. Lal and Shri D.D. Tulsi. The decrees are still pending execution. In the books of the assessee these two decretal amounts were shown as tstill outstanding. So far as the decree obtained against Shri D.D. Tulsi, the position seems to be that Tulsi owed a decree to the assessee and the assessee owed money to the bank. In connection with the decree obtained against D.D. Tulsi, it had been contended before the Tribunal that at the instance of the official Liquidator, the Calcutta High Court had issued a Garnishi order on 13th January, 1960 for setting of the assessee 's liability to the Pacific Bank and, therefore, the decree did not represent wealth which could be valued under the Act. lt was recorded by the Tribunal that the order Of the Calcutta High Court had been passed after the relevant dates of the first three assessment years and it held that even for the assessment years 1960 61 and 1961 62, the order of attachment could not indicate that the value of the decree was 'nil ', as was the assesses case. Hence, the decree against Sri Tulsi was valued by the Wealth Tax officer at Rs. 51525. As regards the decree against Sri A.H. Lal, the attachment order passed by the Calcutta High Court was on 21st June, 1961, that is to say, even after the valuation date for the 631 assessment year 1961 62. The decree was therefore valued by the Wealth Tax Officer at the figure of Rs. 111747. It was the contention of the assessee that the two decrees had been erroneously valued and the principles for valuation under Section 7 (1) had not been followed. On the other hand it was contended on behalf of the revenue that decrees had. been correctly valued under Section 7 (2) (a) Of the Act. The High Court held and in our opinion rightly that two decrees had not been valued under Section 7 (2) of the Act at all and had been valued under Section 7 (1) of the Act. We are in agreement with the High Court that merely because the assessee had shown the full decretal amounts in his books as still due, would not ipso facto lead to the conclusion that they would be valued at those sums without taking into consideration the hazards of realisation of the decrees. These decrees had not been executed and in the process of execution, there may be hazards and the Wealth Tax officer must estimate the price of the decree by anticipating what a willing purchaser would have. paid for those decrees taking the hazards into consideration in open market on the valuation date and should estimate the price of the asset in question accordingly. The High Court answered this question in the negative. We are of the opinion that in view of the well settled principles which we have discussed in the case of Commissioner of Wealth Tax Bihar, Patna vs Maharaja Kumar Kamal Singh (Civil Appeal Nos. 1238 to 1240 (NT) of 1973, the High Court was right in its decision. So far as the Question No. 3 is concerned, the same question would have to be answered in the manner indicated above and the High Court has done the same and we affirm the said decision in view of the decision of this Court in Civil Appeal Nos. 1238 to 1240 (NT) of 1973. The facts regarding question No. 4 after taking into consideration statement of this case as also the supplementary statement of the case sent to the High Court pursuant to its directions are as follows: In respect of sums due from Tikait Girja Prasad Singh, the High Court has observed that assessee was entitled in respect of the zamindari compensation of Tikait Girja Prasad Singh which had. vested in the Government and the value of the compensation had been estimated at 75 per cent of certain figure. The High Court directed that when assessee had a claim decree against its debtor, the Wealth Tax officer should ascertain the price that a reasonable person would have paid for it on the relevant date, valuation 632 in open market considering that this claim decree can only be satisfied wholly or partly from the compensation which the debtor would receive under the Bihar Land Reforms Act, 1950. The claim decree was an asset, the High Court held, but it was wrongly valued by the authorities and directed to be valued by estimating that it would fetch in the open market on the valuation date taking into consideration all the hazards. On the same principle, the other decrees mentioned in the questions have been disposed of by the High Court. We are of the opinion that in view of the principles discussed by this Court in the case of Commissioner of Wealth Tax Bihar, Patna vs Maharaja Kumar Kamal Singh the High Court was right in its conclusion. Indeed this question was not seriously pressed before us separately. We may reiterate that learned counsel for the revenue urged b before us certain propositions, namely: (1) For the purposes of computation of net wealth of an assessee each asset belonging to him and each debt owed by him has to be valued separately. (2) The difference. between the aggregate value of the assets and the aggregate value of the debts represents his net wealth. (3) In determining the market value of an asset (or the residue of the asset diminished by an over riding title on the asset itself), any liability or debt incurred in relation to it has to be ignored as the debt or liability has to be separately evaluated: (4) What is the market value of a certain asset (or the residue asset as referred to above, is a question of fact, to be deter mined finally by the Income tax Appellate Tribunal taking into account the relevant evidence and considerations put foreward by both the sides anthem High Court cannot in 633 terfere with such a finding of fact unless it is found to be based on irrelevant consideration or is arrived at by ignoring relevant evidence, (5) When the debt is represented as an asset, its market value has to be determined in. the same manner as the market value of any other asset irrespective of the fact whether such an asset debt is encumbered by another debt owed from the assessee, because the later mentioned debt can qualify for deduction at its market value independently. About proposition No. (I) and (2) above, there cannot be any dispute. But as regards Proposition No. (3), as this Court has discussed in Commissioner of Wealth Tax, Bihar Patna vs Maharaja Kumar Kamal singh, if there is an asset which is subject to certain hazards . including the liability of certain debts to be deducted from the said asset, then that factor would be relevant factor diminishing the market value of the asset in open market and has to be estimated taking into consideration that factor. Regarding Proposition No. (4), it may be stated that while it is a question of fact but if the Tribunal has arrived at the conclusion by taking wrong principles into consideration, then such a finding would not bind the High Court. Regarding Proposition No. (5), it may be stated that (debts may be deducted from the value ' of assets but the valuation of an asset has to be done in terms of Section 7 (l) talking into considerations all the hazards including the possibility of an amount on account of debt being deducted from the value of the asset is a factor which will influence a prospective buyer in the open market, depending upon the facts and circumstances of each case. In the aforesaid view of the matter, we affirm the decision of the High Court in all these points and dismiss these appeals with costs. S.R. Appeals dismissed.

The assessee is an individual and his estate stood vested in the State of Bihar under the Bihar Land Reforms Act, 1950 as and from 1st of July 1952, and he is entitled to receive compensation under the Act from the Government. The assessors during the relevant assessment years had obtained two monetary decrees from his debtors, but the amounts receivable by the assessee were attached by two garnishee orders issued by the Calcutta High Court on 13th January 1960 and 21st June 1961. The assessee also had some claim decrees but as they were not yet executed, they were shown in his book of accounts as still outstanding. The assessee had to pay Agricultural Income Tax to the Government and this debt has to be deducted from the compensation receivable by the assessee. In these five appeals by certificate of fitness, question arose as to whether the answers of the High Court of Patna given in the Tax references on the question of correctness of valuation of the "net wealth" under section 7 of the Wealth Tax Act, 1957 are correct. The Revenue urged the following five propositions: (l) For the purposes of computation of net wealth of an assessee each Asset belonging to him and each debt owed by him has to be valued separately. (2) The difference between the aggregate value of the assets and the aggregate value of the debts represents his net wealth. 626 (3) In determining the market value of an asset (or the residue of the asset diminished by an over riding title on the asset itself), any liability or debt incurred in relation to it has to be ignored as the debt or liability has to he separately evaluated. (4) What is the market value of a certain asset or the residue asset as referred to above, is a question of fact, to be determined finally by the Income tax Appellate Tribunal taking into account the relevant evidence and considerations put forward by both the sides and the High Court cannot interfere with such a fielding of fact unless it is found to be based on irrelevant consideration or is arrived at by ignoring , relevant evidence (5) When the debt is represented as an asset, its market value has to be determined in the same manner as the market value of any other asset irrespective of the fact whether such an asset debt is encumbered by another debt owed from the assessee, because the later mentioned debt can qualify for deduction at its market value independently. Dismissing the appeals the. Court, ^ HELD: 1.1 Section 7 and 2(M} of the Wealth Tax Act, 1957, though must be read harmoniously, apply at two different stages. Section 7 deals with the estimation of the market value of the asset, while section 2(M) enjoins that from the same, the debt owned by the assessee to be deducted. The debts may be deducted from the value of assets but the valuation of an asset has to he done in terms of Section 7(1) taking into consideration all the hazards including the possibility of an amount on account of debt being deducted from the value of the asset is a factor which will influence a prospective buyer in the open market, depending upon the facts and circumstances of each case. [633 EF 1.2. Agricultural income tax dues from the assessee which are deductible from the compensation under Section 4(c) of the Bihar Land Reforms Act. 1950, if the same has not been deducted before the issue of the compensation bond, then the possibility and the hazard of its being deducted from the compensation involved is a factor which has to be taken into account in estimating the value of the right of compensation for the purpose of estimating the net wealth of the assessee on the valuation date under the Wealth Tax Act. The arrears of agricultural income tax is not to be deducted from the net wealth as such but is a factor which willing purchaser will take into consideration in estimating the value of these ' assets and that is a factor which should be taken into consideration. The Tribunal will estimate the values taking into consideration the possibility of deduction on account of the liability of the assessee on account of agricultural income tax if it had not been already deducted in accordance with the provisions of the Act and determine the net value of the assets of the assessee, accordingly. [629A D] 627 kumar Kamal Singh (Civil Appeal Nos. 1238 to 1240 (NT)/1973 decided on 20 2 84 relied on. If there is an asset which is subject to certain hazards including, the liability of certain debt to be deducted from the said asset, then that factor would be a relevant factor diminishing the market value of the asset in open market and has to be estimated taking into consideration that factor. [633D] B 2.2. Merely because the assessee had shown the full decretal amounts in his books as still due, would not upso facto lead to the conclusion that they 'should be valued at those slums without taking into consideration the lizards of realisation of the decrees. These decrees had not been executed and in the process of execution there may be hazards and the Wealth Tax officer must estimate the price of the decree by anticipating what a willing purchaser would have paid for those decrees taking the hazards into consideration in open market on the valuation date and should estimate the price of the asset in question accordingly. [631C D] 2.3 When assesses had a claim decree against its debtor, the Wealth Tax officer should ascertain the price that a reasonable person would have paid ' for it on the relevant date, and value in open market considering that this claim decree can only be satisfied, wholly opartly from the compensation which the debtor would receive under the Bihar Land Reforms Act, 1950. The claim decree is an asset, but it should be valued by estimating that it would fetch in the open market on the valuation date taking into consideration all the hazards. [631H, 632A] 3.1. For the purposes of computation of net wealth of an assessee each asset belonging to him and each debt owed by him has to be valued separatly. [632E] 3.2. The difference between the aggregate value of the assets an the aggregate value of the debts represents his net wealth [632F]

Appeal No. 697 of 1962. Appeal by special leave from the judgment and order dated March 21, 1962, of the Madras High Court in Writ Appeal No. 154 of 1960. B. Sen, Ravinder Narain, O. C. Mathur and J.B. Dadachanji, for the appellant. A. V. Visvanatha Sastri, and R. Gopalakrishnan, for respondent 1. A. Ranganadham Chetty and A. V. Rangam, for respondent Nos. 2 and 3. 1963. February 6. The judgment of the Court was delivered by 811 SUBBA RAO J. This appeal by special leave is directed against the judgment of a division Bench of the High Court of judicature for Madras confirming that a single judge of that Court allowing. the petition filed by the respondent under article 226 of the constitution and quashing the order made by the State Transport Appellate Tribunal granting a stage carriage permit to the appellant for the route Tanjore Mannargudi via Vaduvoor. The facts relevant to the question raised may be briefly stated. The Regional Transport Authority, Tanjore, called for applications in respect of the issuing of a stage carriage permit for the route Tanjore Mannargudi via Vaduvoor. 11 persons applied for the permit. The Regional Transport Authority, adopting the marking system prescribed in ' G.O. Ms. No. 1298 (Home) dated April 28,1956, awarded marks to different applicants : the appellant of the highest number of Marks, viz., 7, and the first respondent got only 4 1/4 marks, with the result the appellant was preferred to the respondent and a permit was issued to him. It is not necessary to notice the marks secured by the other applicants before the Regional Transport Authority, for they are not before us. Total of the said marks secured by each of the said two parties was arrived at by gadding the marks given under the following heads: Viable Work Resi Experi Special To Unit shop dence ence circums tal tances. 1 2 3 4 5 K.M.S 4 1 1 1/2 1/4 7 S.R.V.S. 1 1 1 1 1/4 4 It would be seen from the said table of marks that if the 4 marks secured by the appellant under the 812 first column "Viable Unit" were excluded from his total, he would have got only a total of 3 marks under the remaining heads and the first respondent would have got a total of 41 marks under the said heads. Under the said G.O., as interpreted by this Court, the marks under the first column, i.e., those given under the head "Viable Unit", would be counted only if other things were equal; that is to say, if the total number of marks obtained by the said two applicants under Cols.2 to 5 were equal. It is, therefore, obvious that on the marks given the Regional Transport Authority went wrong in issuing, a permit in favour of the appellant, as he should not have taken into consideration the 4 marks given under the 1st Column since the total marks secured by him under Cols. 2 to 5 were less than those secured by the first respondent. Aggrieved by the said order, the first respondent preferred an appeal to the State Transport Appellate Tribunal, hereinafter called the Appellate Tribunal. The said Appellate Tribunal recast the marks in respect of the said two .parties in the following manner: Viable Work Resi Experi Special To Unit shop dence ence circums tal tances 1 2 3 4 5 K.M.S. 4 2 1 3/4 1/4 8 S.R.V.S. 2 1 1 4 It would be seen from the marks given by the Appellate Tribunal that the total of the marks secured by the appellant under Cols. 2 to 5 is equal to that secured by the first respondent under the said columns, each of them securing 4 marks. It was contended before the Appellate Tribunal that the first respondent was entitled to some mark under the column "Residence or place of business" on the ground 813 that it had the places of business at Tanjore and Mannargudi and that the Regional Transport Authority had given one mark to the first respondent under the said column ; but the Appellate Tribunal rejected that contention on the ground that the first respondent had a branch office at Kumbakonam and, therefore, the office at Tanjore or Mannargudi could not be treated as a branch office. Aggrieved by that order, the first respondent filed a petition before the High Court under article 226 of the Constitution for setting aside that order. Ramachandra lyer, J., who heard the said application allowed it. The main reason given by the learned judge for allowing the petition was that the Appellate Tribunal omitted to give any mark in respect of residential qualification, which amounted to refusal to take into consi deration the admitted fact, namely, the existence of a workshop at Mannargudi and therefore, it amounted to a breach of section 47 (1) (a) and (c) of the Motor Vehicles Act. The same idea was expressed by the learned judge in a different way thus: It. . in regard to residential qualification, it (the Appellate Tribunal) declined to consider whether the office workshop at Mannargudi are sufficient to entitle the petitioner to any marks under head for the mere reason that it was a branch of a branch office." He held that the said refusal was an error apparent on the face of the record; and he accordingly quashed the order and at the same time indicated that the result 'was that the State Transport Appellate Tribunal would have to dispose of the appeal afresh. The Letters Patent appeal filed by the appellant was heard by a division Bench consisting of Anantanarayanan and Venkatadri, jj. The learned judges dismissed the appeal and the reason of their decision is found in the following remarks "In essence, the judgment really proceeds on the basis that with regard to the claim of the 814 respondent to some valuation under Col. 3, arising from the existence of an alleged branch office at Mannargudi there has been no judicial disposal of the claim. " They also observed "The Tribunal is, of course, at liberty to adopt its own criteria for the valuation under Col. 2, provided they are consistently applied, and based upon some principle." In dismissing the appeal the learned judges concluded ". . we desire to make it clear that we are not in any way fettering the discretion of the State Transport Appellate Tribunal to arrive at its own conclusion on the claims of the two parties irrespective of any observations that might have been incidentally made by this Court on those claims. " The appellant has preferred the present appeal by special leave against the said order. It will be seen from the aforesaid narration of facts that the High Court issued the writ as it was satisfied that there was a clear error apparent on the face of the record, namely, that the Appellate Tribunal refused to take into consideration the existence of the branch office at Mannargudi for awarding marks under the head "residence" on the ground that there was another office of the first respondent at Kumbakonam. While it gave marks to the appe llant for his residence, it refused to give marks to the first respondent for its office on the aforesaid ground. Mr. Sen, learned counsel for the appellant, raised before us the following points (1) The. Court has no jurisdiction to issue a writ of certiorari under 816 article 226 of the Constitution to quash an order of a Tribunal on the ground that there is an apparent error of fact on the face or the record, however gross it may be, and that, in the instant case, if there was an error, it was only one of fact; (2) this Court has held that directions given under section 43 of the Motor Vehicles Act are only administrative in character and that an order made by a Tribunal in breach thereof does not confer a right on a party affected and, therefore, the Appellate Tribunal 's order made in derogation of the said directions could not be a subject matter of a writ. The argument of Mr. Viswanatha Sastri, learned counsel for the first respondent, may be summarized thus : The petitioner (appellant herein) has a fundamental right to carry on business in transport. The Motor Vehicles Act is a law imposing reasonable restrictions in public interest on such right. The Appellate Tribunal can decide, on the material placed before it, whether public interest would be better served if the permit was given to the appellant or the first respondent within the meaning of section 47 of the said Act. The Government, in exercise its powers under section 43 of the said Act, gave administrative directions embodying some principles for enabling the Tribunal to come to a conclusion on the said point. The Tribunal had jurisdiction to decide the said question on the basis of the principles so laid down or dehors them. In either view, it only decides the said question. The first respondent raised before the Tribunal that public interest would be better served if a permit was issued to it as it had a well equipped branch office at Mannargudi. The said question was relevant. in an inquiry under section 47 of the said Act, whether the Tribunal followed the instructions given by the Government or ignored them. In coming to a conclusion on the said 816 question, the Tribunal made a clear error of law inasmuch as it held that in the case of the first respondent, as it had a branch at Kumbakonam, its other branch at Mannargudi should be ignored. This, the learned counsel contends, is an error apparent on the face of the record. He further contends that the scope of an inquiry under article 226 'is wide and that it enables the court to issue an appropriate direction even in a case of an error of fact apparent on the face of the record. It is not necessary to express our opinion on the wider question in regard to the scope and amplitude of article 226 of the Constitution, namely, whether the jurisdiction of the High Court under the said Article to quash the orders of Administrative tribunals is confined only to circumstances under which the High Court of England can issue a writ of certiorari or is much Wider than the said power, for this appeal can satisfactorily and effectively be disposed of within the narrow limits of the ambit of the English Court 's jurisdiction to issue a writ of certiorari as understood by this Court. If it was necessary to tackle the larger question, we would have referred the matter to a Bench of 5 judges as it involved a substantial question of law as to the interpretation of the Constitution; and under article 145 thereof such a question can be heard only by a Bench of at least 5 judges. In the circumstances a reference to the decisions of this Court cited at the Bar, which are alleged to have expressed conflicting views thereon, is not called for. We shall therefore, confine ourselves to the narrow question. Adverting to the scope of a writ of certiorari in common law, this Court, in Hari Vishnu Kamath vs Syed Ahmed Ishaque(1) laid down the following propositions: (1) Certiorari will be issued for correcting errors of jurisdiction, as when an inferior (1) ; ,1121, 1123. 817 Court or Tribunal acts without jurisdiction or in excess of it, or fails to exercise it. (2) Certiorari will also be issued when the Court or Tribunal acts illegally in the exer cise of its undoubted jurisdiction, as when it decides without giving an opportunity to the parties to be heard, or violates the principles of natural justice. (3) The Court issuing a writ of certiorari acts in exercise of a supervisory and not appellate jurisdiction. One consequence of this is that the Court will not review findings of fact reached by the inferior Court or Tribunal, even if they be erroneous. (4) An error in the decision or determination itself may also be amenable to a writ of certiorari but it must be a manifest error apparent on the face of the proceedings e.g., when it is based on clear ignorance or disregard of the provisions of law. This view was followed in Nagendra Nath Bora, vs The Commissioner Hills Division and Appeals, Assam (1), Satyanarayan vs Mallikarjun (2) Shri Ambica Mills Co. vs section B. Bhutt (3) and in Provincial Transport Services vs State Industrial Court, Nagpur (4 ). But the more difficult question is, what is the precise meaning of the expression " 'manifest error Apparent on the face of the proceedings ?" Venkatarama Ayyar, J., attempted to define the said expression in Hari Vishnu Kamath 's Case (5) thus "Mr. Pathak for the first respondent contended on the strength of certain observations of Chagla, C. J., in Botuk K. Vyas vs Surat Municipality (1), that no error could be said to be apparent on the face of the record if it was (1) ; (2) [1960] 1 S.C.R. 8140 (3) (4) [1963] 3 S.C.R. 650. (5) ; ,1121, 1123 (6) A.I.R. 1953 Bom. 133. 818 not self evident, and if it required an examination or argument to establish it. This test might afford a satisfactory basis for decision in the majority of cases. But there must be cases in which even this test might break down, because judicial opinions also differ, and an error that might be considered by one judge as self evident might not be so considered by another. The fact is that what is an error apparent on the face of the record cannot be defined precisely or exhaustively, there being an element of indefiniteness inherent in its very nature, and it must be left to be determined judicially on the facts of each case. " It would be seen from the said remarks that the learned judge could not lay down an objective test, for the concept necessarily involves a subjective element. Sinha,J., as he then was speaking for the Court in Nagendra Nath Bora 's Case (1), attempted to elucidate the point further and proceeded to observe at p. 1269 70 thus : " 'It is clear from an examination of the authorities of this Court as also of the courts in England, that one of the grounds on which the jurisdiction of the High Court on certiorari may be invoked is an error of law apparent on the face of the record and every error either of law or fact, which can be corrected by a superior court, in exercise of its statutory powers as a court of appeal or revision. " This decision assumes that the scope of a. writ in the nature of certiorari or an order or direction to set aside the order of an inferior tribunal under article 226 of the Constitution is the same as that of a common law writ of certiorari in England we do not express any opinion on this in this case. This decision practically accepts the opinion expressed (1) ; 819 by this Court in Hari Vishnu Kamath 's Case (1). The only addition it introduces is the anti thesis it made between " 'error of law and error of fact" and "error of law apparent on the face of the record. " But the question still remains in each case whether an error is one of law or of fact and that falls to be decided on the facts of each case. Das Gupta, J., makes yet another attempt to define the expression when he says in Satyanarayan vs Mallikarjun (2), at p. 141 thus : "An error which has to be established by a long drawn process of reasoning on points where there may conceivably be two opinions can hardly be said to be an error apparent on the face of record. As the above discussion of the rival contentions show the alleged error in the present case is far from self evident and if it can be established, it has. to be established, by lengthy and complicated arguments. " The learned judge here lays down the complex nature of the arguments as a test of apparent error of law. This test also may break, for what is complex to one judicial mind may be clear and obvious to another : it depends upon the equipment of a particular judge. In the ultimate analysis the said concept is comprised of many imponderables : it is not capable of precise definition, as no objective criterion can be laid down, the apparent nature of the error, to a large extent, being dependent upon the subjective element. So too, in some cases the boundary between error of law and error of fact is rather thin. A tribunal may hold that 500 multiplied by 10,000 is 5 lakhs (instead of 50 lakhs); another tribunal may hold that a particular claim is barred by limitation by calculating the period of time from 1956 instead of 1961 ; and a third tribunal may make an obvious error deciding a mixed question of fact and law. The question whether the said errors are errors of (1) ; ,1121, 1123. (2) [1960] 1 S.C.R. 890. 820 law or fact cannot be posited on a priori reasoning., but falls to be decided in each case. We do not,, therefore, propose to define with any precision the concept of "error of law apparent on the face of the record"; but it should be left, as it has always been done, to be decided in each case. The only question therefore, is whether the State Transport Appellate Tribunal committed an error of law apparent on the face of the record. A look at the provisions of section 47 and section 43 of the , as amended by the Madras Legislature, will facilitate the appreciation of the problem. Under section 47, a Regional Transport Authority in considering an application for a stage carriage permit is enjoined to have regard, inter alia, to the interests of the public generally. Section 43 A, introduced by the Madras Legislature by the Motor Vehicles (Madras Amendment) Act, 1948, says that the State Government may issue such orders and directions of a general character as it may consider necessary in respect of any matter relevant to road transport to the State Transport Authority or to a Regional Transport Authority and such Transport Authority shall give effect to all such orders and directions. It has been held by this Court in M/s. Raman & Raman Ltd. vs The State of Madras (1), that section 43A conferred a power on the State Government to issue administrative directions, and that any direction issued thereunder was not a law regulating rights of parties. It was also pointed out that the order made and the directions issued under section 43 A of the Act cannot obviously add to, or subtract from, the consideration prescribed under section 47 thereof on the basis of which the tribunal is empowered to issue or refuse to issue a permit, as the case may be. It is, therefore clear that any direction given under section 43A for the purpose of considering conflicting claims for a permit by applicants can only be to enable the Regional Transport (1) [1959] Supp. 2 S.C.R. 227. 821 Authority to discharge its duties, under section 47 of the Act more satisfactorily, efficiently and impartially. To put it differently,the directions so given cannot enlarge or restrict the jurisdiction of the said tribunal or authority but only afford a reasonable guide for exercising the said jurisdiction. Concretely stated, an applicant in advancing his claim for a permit may place before the Authority an important circumstance in his favour, namely, that he has a branch office on the route in respect whereof he seeks for a permit. He may contend that he has an office on the route, and that the interests of the public will be better served, as the necessary amenities or help to meet any even tuality in the course of a trip will be within his easy reach. The Government also under section 43A may issue instructions to the Regional Transport Authority that the existence of an office of a particular applicant on the route would be in the interests of the public and, therefore, the said applicant should be given a preferential treatment if other things are equal. The issue of such an instruction only emphasizes a relevant fact which an authority has to take into consideration even if such an instruction was not given. But if the Authority under a manifest error of law ignores the said relevant consideration, it not only disobeys the administrative directions given by the Government, but also transgresses the provisions of section 47 of the Act. The disobedience of the instructions which are administrative in nature may not afford a cause of action to an aggrieved party, but the transgression of the statutory law certainly does. What is the position in the present. case ? The Government issued G. O. No. 1298 (Home), dated April 28, 1956, introducing a marking system for assessing the merits of applicants for stage carriage permits. Column 3 reads thus "Location of residence or place of business of the applicant on the route or at the terminal : 822 This qualification not only is in favour of local enterprise but also secures that the owner will pay prompt and frequent attention to the service entrusted to him. One mark may be assigned to this qualification. " Under this instruction the location of the residence or the place of business is considered to be in the interests of the public, for whose benefit the service is entrusted to a permit holder. The first respondent contended before the Regional Transport Authority that he had branch offices at Tanjore and mannargudi and therefore that fact should be taken into consideration and a mark should be given to him thereunder. The Regional Transport Authority gave one mark to the appellant and also one mark to the first respondent under that column. But the Appellate Tribunal refused to give any mark under that column to the first respondent for the following reasons : "On behalf of the other appellants and the Respondent it is contended that appellant No. 1 (1st respondent before the Supreme Court) is a Private Ltd. Company having its registered office at Madras, that their offices at Kumba konam is only a branch office, that the offices, if any at Tanjore or at Mannargudi cannot be treated as branch offices, and that, as such they are not entitled to any mark in column 3 of the mark list. This contention is a valid one." In regard to the Tanjore office the said appellate Tribunal has given an additional reason by holding on the facts that it was not an office at all. We can, therefore, ignore the Tanjore office for the purpose of this appeal. So far as the mannargudi office is concerned, the decision of the Appellate Tribunal was based upon an obvious error. It took the view that if a company bad a branch office at 823 one particular place, it could not have in law any other branch office though it had one in fact. Whatever conflict there may be, on which we do not express any opinion, in a tax law or the company law, in the context of the marking system and the evaluation of an amenity in the interest of the public, it is obviously an untenable proposition to hold that even if a company has a well equipped office on a route in respect of which a permit is applied for, it shall be ignored if the company has some other branch somewhere unconnected with that route. That was what the Appellate Tribunal held and in our view it is an error apparent on the face of the record. On that erroneous view, the Appellate Tribunal did Dot decide the relevant question raised, namely, whether the respondent has any such office at mannargudi. Both Ramachandra Iyer, J., at the first insta nce, and Anantanarayanan and Venkatadri, jj., in 'appeal, rightly pointed out this error. As this is an error apparent on the face of the record, they quashed the order of the Appellate Tribunal and left the question open for decision by it. In our view, the conclusion arrived at by the High Court is correct. It remains only to notice the decisions on which strong reliance is placed by learned counsel for the appellant in support of his contention. In M/s. Raman and Raman Ltd. vs The State of Madras (1), the relevant facts were : the appellant and the 4th respondent therein, along with others, were applicants for a stage carriage permit. The Regional Transport Authority granted the permit to the appellant on the basis of instructions issued by the State Government under section 43A of the ; on appeal, the Central Road Traffic Board set aside that order on the footing of fresh instructions issued by the Government; and a division Bench of the Madras High Court dismissed the writ petition filed by the appellant. It was, (1) [1959] Supp. 2 S.C.R. 227. 824 inter alia, contended before this Court that the ins tructions given under section 43A being law regulating rights of parties, the appellate authority could not ignore that law and set aside the order of the Regional Transport Authority on. the basis of subsequent instructions. The contention was rejected on the ground that instructions under section 43A were not law, but were only administrative directions and that the fact that the appellate tribunal ignored them would not affect its jurisdiction if it had come to a decision having regard to the considerations laid down in section 47 of the Act. The question before the tribunal was whether a small unit or a large one would be viable or would be in the interest of the public. There was scope, for taking different views on the question, and the appellate tribunal, contrary to the earlier directions, came to the conclusion that smaller units would be more in the interest of the public than larger ones. This judgment, therefore, is an authority only for the position that a tribunal in issuing or refusing to issue a permit to an applicant would be acting within its jurisdiction notwithstanding the fact that it ignored the administrative directions given by the Government under section 43A of the Act, provided it had come to a decision on the relevant considerations laid down in section 47 of the Act. In Abdulla Rowther vs The State Transport Appellate Tribunal, Madras (1), the Regional Transport Authority issued a permit each to the appellant therein and to one Gopalan Nair. On appeal, the Appellate Tribunal set aside that order and gave the permits to respondents, 3 and 4. Both the Regional Transport Authority and the Appellate Tribunal considered the applications on the basis of G.O. No. 1298 issued by the Government of Madras on April, 28, 1956. The Regional Transport Authority gave 4 marks each to the appellant and Gopalan Nair under Col. 1, which dealt with the building (1) A.I.R. 1959 S.C. 896. 825 strength to viable units, and refused, to give any marks to respondents 3 and 4 under the said column on the ground that they were fleet owners; with the result that the appellant and Gopalan Nair secured more marks than respondents 3 and 4 and were, therefore, given the permits. But the Appellate Tribunal held that the appellant and Gopalan Nair were not entitled to claim the benefit of the marks under Col. 1, as they had secured less marks than respondents 3 and 4 under Cols. 3 to 5, for they held, on a fair obstruction of the said G.O., that it was only when the marks obtained by applicants under Cols. 2 to 5 were equal, recourse could be had to 'Col. 1. On that basis, the Appellate Tribunal quashed the order of the Regional Transport Authority and gave the permits to respondents 3 and 4. The appellant challenged the said order by an application under article 226 of the Constitution for a writ of certiorari in the High Court of Madras. Rajagopalan, J., dismissed the application on two grounds, namely, (1) that the construction of the G.O. was not shown to be wrong and (2) that even if the G. O. was misconstrued, it would not justify the issue of a writ of certiorari, as the said G. O. embodied only administrative directions. The Letters Patent Appeal filed against the said order was dismissed. The appeal filed to this Court was also dismissed. This Court followed the decision in M/s. Raman and Raman Ltd. vs The State of Madras (1), and held that the instructions given under section 43 A of the were only administrative directions and that, therefore, even if the rule as to the assignment of marks was infringed, it was not an error of law at all. This decision only follows the earlier decision and lays down that instructions given under section 43A of the are only administrative directions and that a wrong construction of the said instructions would not enable the party affected to apply for a writ of certiorari. The instructions laid down a method of evaluation (1)[1959] Supp. 2 S.C.R. 227. 826 of the respective claims vis a vis 'the considerations laid down in section 47 of the Act. The Regional Transport Authority and the Appellate Tribunal have borne in mind the said considerations, in deciding upon the rival claims, though they may have wrongly interpreted one of the instructions. It may be pointed out that in that case the interpretation put upon the instructions was a correct one, though this Court proceeded on the assumption also that they might have been wrongly interpreted. But the decision cannot obviously be an authority for the position that on a wrong interpretation of the administrative directions or dehors the said directions, a tribunal can ignore the relevant considerations laid down in section 47 of the. Act or on the basis of an error of law apparent on the record wrongly refuse to decide on any of such considerations. To the same effect is the decision of this Court in Ayyaswami Gounder vs M/s. Soudambigai Motor Service (1). There, the Regional Transport Authority followed the marking system as laid down by the Government of Madras and gave to the appellant (therein) 5 marks and to the respondent 6 marks. Though the respondent got 6 marks, he was not given the permit, as in the view of the said Authority he was guilty of misconduct. As between the other applicants, the appellant having secured the highest number of marks, he was given a permit. But on appeal the Appellate Tribunal reallotted the marks and under the reallotment the appellant got the highest number of marks; and because of that fact and also for the reason that he was a small operator of two buses, who should be given an opportunity to build up a viable unit as quickly as possible, he was given the permit by the Appellate Tribunal upholding the order of the Regional Transport Authority. One of the question raised there was whether the appellant was entitled to marks under Col. 2 for repair and maintenance, facilities at Dharapuram the (1) Civil Appeal No. 198 of 1962 (decided on 17 9 1962). 827 Appellate Tribunal found that he had such facilities. The appellant filed a writ in the High Court and the learned single judge thought that some mistakes had been committed by the Appellate Tribunal in the allotment of marks and that it acted in contravention of the directions given by the Government under the said G. O., but dismiss the petition on the ground that, as the said instructions are Only executive directions, their contravention did not confer any right on the parties before the tribunal. On Letters Patent Appeal a Division Bench of that Court set aside that order on the ground that the Appellate Tribunal had taken into consi deration the following two irrelevant considerations: (i) the appellant 's claim should suffer because of the punishment for his past misconduct, and (ii) the third respondent being a small operator, he would be entitled to better Consideration than the appellant who was a monopolist. On appeal, this court followed the decision in M/s. Raman and Raman Ltd. vs The State of Madras (1) and Abdullah Rowther vs The State Transport Appellate Tribunal (2) and held that under the said G. O. the Government issued only administrative directions and that the failure of the transport authorities to follow them would not entitle the respondents to a writ. As regards the two reasons given by the High Court, this Court came to the conclusion that they were not irrelevant considerations, but were considerations germane in the matter of issue of permits. In the result this Court allowed the appeal. This decision accepts two propositions, namely, (1) misconstruction or even disregard of the instructions, given by the Government does not confer a right upon an aggrieved party to file a writ, for the said instructions are only administrative directions, and (2) the decision implies that if the Tribunal decides on irrelevant considerations, the Court can issue a writ. But in that case it came to the conclusion that no such irrelevant considerations weighed with the Tribunal. (1) [1959] Supp. 2 S.C.R. 227 (2) A.I.R. 1959 S.C. 896. 828 The last of the cases relied upon is that in Sankara Ayyer vs Narayanaswami Naidu (1). There too. , the Regional Transport Authority and the State Transport Appellate Tribunal considered the applications for the grant of a permit for anew route on the basis of the administrative directions given by the State Government. The regional Transport Authority gave the appellant 3 marks on the basis that he was a small operator, but the Appellate Tribunal came to the conclusion that he was not entitled to any marks as a small operator. A single judge of the High Court set aside the order of the Appellate Tribunal on the ground that it misconstrued the directions contained in the Government Order relating to small operators. But a division Bench of that Court in Letters Patent appeal held, relying upon the earlier decision of this Court, that the said directions were only administrative in nature and that they did not confer any legal rights and in that view allowed the appeal. This Court again following the earlier decisions dismissed the appeal holding that by construing the administrative directions the Tribunal did not take irrelevant consi derations or refused to take relevant considerations in the matter of issue of permits. It is always a controversial question whether the issue of a permit to a small operator or to a big operator would be in the interest of the public and a Tribunal is certainly entitled to take either view. It will be seen from the aforesaid decisions that this Court only laid down that the instructions given under section 43A of the were only administrative directions and that the infringement of those instructions by the Tribunal did not confer any right on a party to apply to a High Court for a writ under article 226 of the Constitution. In all those cases the Tribunal either ignored the instructions or misconstrued them, but nonetheless decided the question of issue of permits on considerations relevant (1) Civil Appeal No. 213 of 1960 (decided on 10 10 1960). 829 under section 47 of the Act. They are not authorities on the question whether a writ of certiorari, would lie, where a Tribunal had on an obviously wrong view of law refused to decide or wrongly decided on a consideration relevant under section 47 of the Act, whether or not it was covered by the instructions given under section 43 A. For if on the basis of such an error of law, it refuses to decide a relevant question, the fact that the Government also issued instructions to the Tribunal to apply some objective standards in deciding such a question does not make the said question anytheless a relevant consideration under section 47 of the Act. That is the position in the present case. As we have already indicated, on the basis of an error manifest on the record, namely, that a company cannot have a branch office on the route in question, if it has another branch elsewhere, it refused to take into consideration a relevant fact, namely, whether the respondent has an office on the said route. The High Court, therefore, was right in quashing the order of the Appellate Tribunal and giving an opportunity to the Tribunal to decide that question on merits. In the result, the appeal fails and is dismissed with costs. Appeal dismissed.

On applications for permits made to it the Regional Transport Authority, applying the markinig system prescribed by the Government order issued under section 43A of the Motor Vehicles Act, granted the permit to the appellant. On appeal by the first respondent, the State Transport Appellate Tribunal recast the marks but in doing so did not allot any mark to the first respondent under the head of "residence or place of business" and thereby treating the appellant and the first respondent as equal, gave the appellant the further advantage of four marks under the head "viable unit". The first respondent challenged the order of the Appellate Tribunal before the High Court under article 226 on the ground that the Appellate Tribunal had failed to allot him any mark in respect of his admitted residential qualification and had thereby committed a breach of section 47 (1) (a) and (c) of the Motor Vehicles Act. This contention was accepted by the learned single judge of the High Court who quashed the order of the Appellate Tribunal and directed it to proceed according to law. On appeal the Division Bench confirmed the issue of the writ. On appeal by special leave by the appellant it was contended in this Court that the High Court has no jurisdiction to issue a writ of certiorari, as the error, if any, was one of fact and that the directions issued by the Government under section 43A of the Motor Vehicles Act being only administrative in character, order made in breach thereof did not give rise to an error of law which could be the subject matter of a writ. Held, that the question whether or not there was such an error apparent on the face of the record as to enable the High Court to interfere under article 226 of the Constitution was one to be determined in each case and no particular test can or need be laid down as a general rule. 810 Hari Vishnu Kamath vs Syed Ahmad Ishaque, [1955] 1 section C. R. 1104, Nagendra Nath Bora vs Commissioner of Hills Division and Appeals, Assam ; , Satya narayan vs Mallikarjun, [1960] 1 section C. R. 890, Shri Ambica Mills Co. vs section B. Bhatt, ; , Provincial Transport Service vs State Industrial Court [1963] 3 section C. R. 650, Batuk Vyas vs Surat Municipality, A. I. R. 1953 Bom. 133 and M/s. Raman & Raman Ltd. vs The State of Madras, [1959] Supp. 2 section C. R. 227, referred to. Held, further, that though the directions issued under section 43A of the Act were administrative, they were intended to facilitate an objective, judgment of the considerations laid down in section 47 of the Motor Vehicles Act and if applying the directions to a given case result in the breach of section 47, namely, ignoring a relevant consideration, it must give rise to a manifest error of law and furnish a ground for interference under article 226 of the Constitution. M/s. Raman & Baman Ltd. vs State of Madras [1959] Supp. 2 section C. R. 227, Abdulla Rowther vs State Transport Appellate Tribunal, Madras, A. 1. R. , Ayyasswani Gounder vs M/s. Soudambigai Motor Service C. A. No. 198 of 1962 decided on 17 9 62 and Sankara Ayyar vs Marayanaswami Naidu, C. A. No. 213 of 1960 decided on 10 10 60, distinguished.

Civil No. 1134 of 1986. 503 (Under Article 32 of the Constitution of India) Petitioner in person and Mohan Pandey for the Petitioners. K. Madhava Reddy, P.P. Rao, R.N. Keshwani and H.S. Parihar for the Respondents. The Judgment of the Court was delivered by SAWANT, J. The petitioners who are employees of respond ent No. 1 National Bank for Agriculture and Rural Develop ment (hereinafter referred to as the Bank) request for a direction to the Bank to give them fitment benefits which were given to their counter parts who were in the Bank 's service prior to 1st February 1984. The admitted facts are that on 1st February 1984, petitioner No. 1 was in the Bank 's service as a 'Grade B ' Officer land was promoted to 'Grade C ' Officer 's.cadre on March 7, 1984. Petitioners 2 to 4 were not in the service of the Bank on 1st February 1984. Petitioner No. 2 was appoint ed as a 'Grade C ' Officer and Petitioners 3 and 4 were appointed as 'Grade B ' Officers, on various dates in March 1984. Petitioners 5 and 6 were in the Bank 's service in Clerical Grade prior to 1st February 1984 and were appointed as Officers 'Grade A ' after the said date. The first respondent Bank came into existence on July 12, 1982 under an Act of Parliament, viz National Bank for Agriculture and Rural Development Act, 1981. The initial staff of the Bank consisted of the employees of the Reserve Bank of India and of those recruited by the Reserve Bank of India exclusively to serve the erstwhile Agriculture Refi nance and Development Corporation which was taken over by the 1st respondent Bank. On February 24, 1986, the Bank revised pay scales of all its Officers as a result of a settlement on the charter of demands submitted by the Bank 's Officers ' Association called NABARD Officers ' Association. One of the demands of the Association was that the revision in the scales of their pay should be on the same basis as of the revision of the Officers in the Reserve Bank of India. It appears that the NABARD Officers Association had submit ted its charter of demands on November 30, 1984 which was on the same lines as the charter of demands submitted by the Officers Association of the Reserve Bank of India to the Reserve Bank of India. On October 9, 1985, the Reserve Bank of India revised the pay scales of its Officers w.e.f 1st February 1984. As a result, the 1st respondent Bank 504 also revised the pay scales of its Officers, as stated earlier, on February 24, 1986, and to bring it on parity with the pay scales of the Reserve Bank of India, gave effect to them also from 1st February, 1984. Hence the importance of the date February 1, 1984. Incidentally it may be stated that the revision of pay scales of the Officers in the entire Banking Industry was brought into effect from that date. The said date is thus not arbitrarily fixed by the respondent Bank for giving effect to the revision of pay scales. Since the revision of pay scales was given effect to from February 1, 1984, it was necessary to fit the pay of the employees in service prior to February 1, 1984 in the revised pay scales. Hence it was necessary to evolve some uniform formula for the fitments. The Reserve Bank of India had already prepared a refixation chart for the purpose. The respondent Bank also prepared its refixation chart for the purpose. This chart was also approved of by the NABARD Officers Association. The Association at the relevant time had 2284 members and except the present six petitioners nobody has made a grievance against the said chart. By the present Petition what is in effect, challenged is the said refixation chart. The refixation chart which is an Annexure to the Petition gives effect to the terms of settlement between the Bank and its Officers, which as stated above, is a part of the general settlement in the Banking Industry. The said chart is made applicable to all the Officers who were in the service of the Bank holding either probationary, permanent or temporary appointments and its benefit is given from 1st February 1984. The chart is no more than a device for fit ting the pay of the concerned Officers in the revised pay scales. Since the revised pay scales were given retrospec tive effect from 1st February 1984 it was necessary, as a first step. to fit the pay in the old scales into the new scales on and from 1st February 1984. Such a fitment was necessary only in the case of those who were in service prior to February 1, 1984. The entrants in service after that date would automatically be treated as being employed on the new scales from the date of their entry. There was therefore, no need, as indeed there could not be, of making fitment adjustments in their case. There is further no dispute that the employees like the petitioners who were appointed either for the first time, or promoted to the higher post, after February 1, 1984, were given all the benefits of the revised pay scales including the arrears in salary, treating them as if they were appointed initially in the new scales. 505 6. The refixation chart under challenge, therefore, contained a table of fitment of salaries of those employees who were in service prior to 1st February 1984. It is common knowledge that such fitment has to be made not by reducing the existing pay of the employees but fixing it into the nearest higher stage in the new scale. The table incorporat ed in the chart therefore contained fitment increments for the employees in service prior to 1st February 1984 (herein after referred to as the old employees) to avoid reduction and anomalies which would otherwise result. These increments were to merge in the new scales in course of time, when the concerned employees reached the appropriate stage in the new scale. The increments given were not designed to grant higher emoluments to the old employees for all time to come. As has been pointed out by the respondent Bank, there was a possibility of reduction in salary in some cases and of anomalies in other cases if a stage to stage adjustment was made in their salaries. Hence the table was so prepared that the fitments avoid the said consequences. The said fitment adjustments in the salaries of the old employees resulted in temporary increases in their pay packets, although, as stated earlier these fitment increments were to merge in future increments in the new scales. The grievance of the petitioners in this petition is directed precisely against these fitment increments given to the old employees. It is their case that these increments give undue benefit to the old employees as against them, and since they occupy the same posts they are also entitled to the same fitment bene fits. That is the main relief which they have claimed in the petition by prayer (a). The other reliefs are declaratory in nature and incidental to it. In support of their claim they have invoked the theory of Equal Pay for Equal Work and Articles 14 and 16 of the Constitution by alleging discrimi nation between them and the old employees. They have also pressed certain decisions in support of their case. As will be obvious from what we have stated earlier, the whole basis of the petitioners ' case is misconceived. It proceeds on wrong presumptions and unwarranted premises. The present is not a case of discrimination between employees belonging to the same class or of granting different scales of pay to them. The present is a case of adjusting and fitting the salaries of the old employees belonging to the same class into the new scales of pay which are made avail able to both the new and the old employees. If in effecting such adjustments, it becomes necessary to give fitment increments to the old employees, it is to work out the equities and to do justice to them. Their past service in fact merits it. To deny them such adjustment is to treat them unequally by ignoring their past service and placing them on par with 506 the new entrants. For this purpose, however limited it may be, the old employees in the present case stand in a differ ent class from that of the new. The classification for the purpose is not only justified but necessary. The revision of pay scales is always effected with a particular date pro spectively or retrospectively. Whatever the date from which it is effected, it necessarily involves fitment of the salaries of the existing employees in the new scales. A retrospective operation of the new scales therefore in volves, for the same purpose, a classification of employees into two categories, viz. those who were in service prior to the retrospective date and those who entered the service thereafter. If the benefit of the revised pay scales is to be conferred equitably on the old and the new employees, the fitment of salaries is inevitable. To avoid it is to deny the equal benefit of the revised scales to the employees in service prior to the date from which the new scales come into effect. The service jurisprudence, therefore, makes it imperative to grant such fitments in the emoluments of the old employees. The fitment/adjustment in the new scales further, as stated above, has to be done by revising the salaries upward. This sometimes necessarily involves fitment in a higher stage in the pay scale than what the employee would be entitled to by a strict application of the stage to stage adjustment. The provision is also, therefore, some times made to treat the additional benefit as a personal pay till it gets merged in the next higher increment. This is a known practice of equitable adjustment of the old pay scales to the new pay scales. There is no other way of effecting the just and required adjustment. Thus, it is not a case of giving undue benefits to one section of the employees be longing to the same class, but is a case of conferring equitable benefits on the old employees and effecting a just adjustment between the salaries of the old and new employ ees, as necessitated by the new pay scales. As stated above, there is no dispute in the present case that the petitioners were either appointed to the higher post or they came in the service of the Bank, for the first time after February. 1, 1984. Those who were appointed to the higher post after February 1, 1984 and who were therefore necessarily in the lower post prior to that date, get the benefit of fitment into the new scales in theft earlier lower post according to the very same refixation chart and received arrears of salary on account of such refixation. What they claim now is that notwithstanding the benefit of the refixation they got in theft lower post, they should also get the said benefit in the higher post, as if they were promoted to the higher post prior to February 1, 1984. Similarly, those of the petitioners who entered the Bank 's service for the first time after February 1, 1984, want the benefit of refixation as if they 507 were in service prior to February 1, 1984. The claim of the petitioners is thus on the face of it both unreasonable and unsustainable in law. We may now examine the authorities cited before us. K.N. Ananda & Ors. vs The Karnataka State Financial Corpora tion, Bangalore & Anr., [1985] Labour & Industrial Cases Vol. was not a case of fitment of the salaries of the old employees into the revised scales of pay. In that case, what the respondent Karnataka State Financial Corpora tion had, instead done was to prepare a conversion table and give the old employees salaries in the revised scale accord ing to the said table. The pay given to,the old employees according to the table had apparently no relation to the stages in the revised pay scale at which the salaries of the old employees had to be fitted. The Corporation also could not explain the basis on which the said table was worked out. In fact, as is apparent from paragraph 16 of the judg ment, the learned counsel for the Corporation being unable to furnish the basis of the differentiation in the salaries, submitted before the court that in fact the Corporation wanted to protect the total emoluments and to allow the new employees, who were petitioners in that case, to earn incre ments over and above the pay, as enacted in the Corpora tion 's resolution of 30th March 1978 which was reproduced in the judgment. But the State Government did not agree. It is for this reason that the High Court there held that the conversion table insofar as it was made applicable to the old employees only, was discriminatory in nature and therefore invalid. It will thus be seen that the facts in that case were different and hence the ratio of the said decision is not applicable to the present case. P. Savita S/o. Shri PL Savita vs Union of India, Minis try of Defence (Deptt. of Defence Production) New Delhi & Ors., ; was again not a case of fit ment of the salaries of the old employees into a new pay scale. In fact, what was done in that case was to prescribe two separate pay scales for Senior Draftsmen by dividing them artificially into seniors and juniors, and awarding Senior Draftsmen new scales while keeping the Junior Drafts men on the old scale. The Court, therefore, struck down the classification. D.S. Nakara & Ors. vs Union of India 's case ; was a case of dividing the same class of individu als, namely, the pensioners on the basis of an artificial date, and giving benefit of pension calculated on a new basis to those employees only who had retired after 31st March 1979. while denying the benefit of the same 508 computation to those who had retired before that date. The classification made of the pensioners into two categories on the basis of their retirement date had no nexus to the object which was sought to be achieved, namely to mitigate the hardship of the fixed income group, on account of the ever rising prices, and of the lowering of the value of the rupee. In fact, it was pointed out by the Court in that case that by extending the benefit to those employees who had retired prior to March 1979 the Court was not making liber alisation of the pension retroactive. It was only giving the benefit of the same basis of computation to all the pension ers whether they had retired before or after that date. The Court also pointed out in that context that retroactiveness is implicit in the theory of wages. When revised pay scales are introduced from a certain date, all existing employees are brought on to the revised scales adopting a theory of fitments and increments for the past service. The benefit of the revised scales is not limited to those who enter service subsequent to the date fixed for introducing the revised scales but is extended also to those in service prior to that date. These observations would also make it clear that it is a general practice recognized even by this Court that when new pay scales are introduced, the salaries of the old employees have to be adjusted and fitted into the new scales by adopting some formula of fitments and increments for past service. In fact, if such fitment is not made, the old employees would get no benefit for the service rendered by them in the past, and they would be placed on par with those who enter the service after the date of the revision of scales. That would be a case of unequals being treated equally. It is, therefore, an absence of fitments and ad justments and not their application which results in dis crimination. In State Government Pensioners ' Association & Ors. vs State of Andhra Pradesh. [1986] 3 SCC 501, the Government Order dated 26th March 1980 providing for higher gratuity to the employees who had retired after 1st April 1978 was challenged by the Pensioners ' Association on the ground that the benefit of the said higher gratuity was not made avail able to them. The Court held that the provision of payment of gratuity on stepped up basis prospectively from a speci fied date of retirement, was not unconstitutional. In Kanpur Suraksha Karamchari Union vs Union of India, the Government of India by its Order of 25th July 1981 accorded sanction to treat employees of canteens established in Defence Industrial Installation under Section 46 of the Factories Act as the Government employees with immediate effect. By an amend 509 ment, the said Govt. Order was given effect to from 22nd October 1980. The question which was raised in the case was whether the employees who were recognised as Government employees w.e.f. 22nd October 1980, were entitled to calcu late the service rendered by them prior to 22nd October 1980 for the purpose of their pension, and the Court held that the period of service rendered by the employees prior to that date has to be counted for the said benefit. This was thus in effect giving benefit to the old employees of their past service. In Reserve Bank of India & Ors. vs C.N. Sahasaranaman & Ors., 1, what was challenged was the com bined seniority and scheme of promotions for cadres of Officers and non Officers in the Reserve Bank of India. In the past, there was a separate departmentwise and grade wise seniority, and the promotions to the cadres of Officers and non Officers were effected on the basis of such seniority. In September 1962, a need was felt for the maintenance of a combined seniority list at each centre for the purposes of promotions as recommended by the National Industrial Tribu nal presided over by Justice Desai. These recommendations for centre wise combined list were approved by this Court in 1966. In 1970, the supervisory staff in Class1 was upgraded to staff officers in Class 1 pursuant to the settlement between the employees and the Bank on January 9, 1970 sub ject to certain conditions. On 6th June 1970, a circular was issued for introduction of written examination for depart mental promotions of clerks grade I/Assistants etc. to the post of Staff Officers Grade II in all the groups. The circular was not, however, enforced. On May 7, 1972 the Bank took several steps towards equalising promotional opportuni ties of employees by introducing what was known as Optee Scheme of 1965 and the Optee Scheme of 1966, and finally by entering into a settlement with the Association of the employees on May 7, 1972. The Association by that settlement accepted the principle of maintenance of a combined seniori ty list at a centre. On the same date, the Bank formulated a Scheme for promotions of staff officer Grade I1 after giving full opportunity to the Association to make its suggestions. On that occasion, tile Bank and the Association further agreed by exchange of correspondence that the ratio of direct recruits to the promotees in the total strength of officers staff Grade II should be 17.5%: 82.5%. On 13th May, 1972, the Bank introduced administrative circular No. 8 which was binding on all employees of the Bank. On the same date, the Bank introduced another circular No. 9 on "Scheme of Combined Seniority List and switch over from clerical to non clerical" w.e.f. May 7, 1972 which was also binding on all employees. The constitutional validity of this Scheme also was upheld by this Court. 510 On May 22, 1974 the Bank took a decision based on the recommendations of the Cadre Review Committee, and issued administrative circular No. 15 to prepare a common seniority list and to provide for another group mobility at the lowest level of officers in Grade A w.e.f. January 1, 1970. On January 7, 1978 the Bank took further decision based on the recommendations of two Committees, and issued circular No. 8 to combine the seniority of all officers in Grade B and above, w.e.f. May 22, 1974, with a view to equalise the opportunity for promotion among officers. Three employees who were Grade II clerks working at the Nagpur branch of the Bank ever since their employment, variously between 1962 to 1965, challenged clauses (II)(a)(i) of the Administrative Circular No. 8 of May 13, 1972 dealing with "the Scheme for promotion from staff officer Grade 1I" (later designated as Grade A) before the Nagpur Bench of the Bombay High Court. This clause provided for the number of candidates who will be qualified to appear in the test at the written examina tion. The clause stated that an estimate of the vacancies to occur in each office during the panel year, i.e. 1st Septem ber to 31st August, will be declared by the Bank in advance, and the number of candidates in that office will not exceed twice the number of such vacancies subject to other clauses in the Scheme. The grievance of the petitioners was that the said clause was violative of their rights under Articles 14 and 16 of the Constitution since the chance to appear in the examination depended not on relative merits but merely on the fortuitous circumstance, namely, the number of vacancies occurring in the particular centre in a panel year which had no nexus with the purpose of promotion, namely, to secure a fresh cadre of staff officers, and therefore, the Scheme was bad in law. The High Court found force in the submission and struck down the said clause. In allowing the appeal filed by the Bank, this Court there held, among others, that: "In service jurisprudence there cannot be any service rule which would satisfy each and every employee and its constitution ality has to be judged by considering whether it is fair, reasonable and does justice to the majority of the employees and fortunes of some individuals is not the touch stone. Further, whether there has been denial of equality of the view of promotion or any constitutional right infringed or not cannot be judged, where interest of large number of people are con cerned, in the abstract." 3.2 "The reference held pursuant to the orders of this Court dated 2nd May, 1984 undoubtedly indicates that 511 majority of the employees are in favour of acceptance of the modified settlement. In matters of service conditions it is difficult to evolve as ideal set of norms governing various conditions of services and in grey area where service rules operated, if more than one view is possible without sacrificing either reasons or commonsense the ultimate choice has necessarily to be conditioned by several considerations ensuring justice to as many as possible and injustice to as few. These principles, however, significant do not authorise the majority of the employees to trample upon the constitutional guarantees or rights of the individuals or minority employ ees. Majority cannot thwart or barter away the constitutional rights of the minorities. The constitutional guarantees are to protect this very danger. But in judging the content of the constitutional rights, the entire perspective of the equality of opportunity here and denial of equal right in public employment have to be viewed in a fair, reasonable and just perspec tive. Viewed in that light, it is true there may be individual instances exemplifying injustices by postponing or delaying the chances of promotions of the contesting re spondents yet that does not deny them their constitutional right in its proper measure, and the considerations that have weighed with the making of the modified scheme and in light of the other considerations it must be ob served that with whatever care and objectivity or foresight any rule is framed, some hard ship, inconvenience or injustice might to result but the paramount consideration is the reconciliation of the conflicting claims of two important constituents of service one which brings fresh clerical employees and the other mature experience. There has been a happy merger of these two considerations in the scheme proposed and in that merger, no violation of the guaranteed rights of the opposing respondents have occurred. " The observations have much bearing on the present case. As has been pointed out hereinabove, in the present case also refixation chart of the salaries of the employees was worked out with the approval of the Association of the Bank Officers concerned. The employees involved were further large in number. Any chart evolved to fit the salaries of the old employees who had entered the service during the whole span of the period prior to 1st February 1984, was bound to result in some employees getting slightly more and others getting 512 slightly less. It is not possible in such circumstances to satisfy all employees to the same degree. Hence, as contend ed by the petitioners, if in some cases. the employees have received some excessive benefit, the chart cannot be faulted on that account. The chart as applied is a uniform one and is designed to adjust the old salaries in the new scale. In a large organisation with a large number of employees in volved in the exercise, a few marginal cases of excessive benefits cannot be relied upon to invalidate the entire chart, for no adjustment chart in such cases can be free from some defects. In Tarsem Lal Gautam & Anr. vs State Bank of Patiala & Ors., AIR 1989 SC 30 and in C.R. Seshan & Anr. vs State of Maharashtra & Ors., AIR 1989 SC 1287 this Court has, in fact, held that a higher category in the same class of employees on the basis of seniority cummerit can be carried out and a higher pay scale can be given to such higher category and that it is neither arbitrary nor unconstitu tional to do so. The aforesaid review of the authorities shows that none of them supports the proposition advanced by the peti tioners, namely, that the salaries of the old employees cannot be brought on to the new or revised pay scales by giving them fitment increments as is done in the present case. In fact, in such a case to refuse to fit the salaries of the old employees in the new scales of pay by denying them the necessary fitment or adjustment increments, is to deny them the equality of treatment. That amounts to ignor ing their past service and to treating them on par with the new entrants which would be unjust in itself. The adjustment increments granted to the old employees on such occasions automatically achieve the dual purpose of rewarding them for their past service and of adjusting their salaries in the new scale. The adjustment fitment and increments are there fore not discriminatory but eminently just and valid. In the circumstances, we find no merit in this petition and dismiss the same. There will, however, be no order as to costs. Y. Lal Petition dismissed.

In response to the charter of demands concerning the revision of pay scales, submitted by the officers of the Respondent Bank, called "NABARD Officers ' Association", the bank on 9.10.85 revised the pay scales of all its officers as per settlement with the Association and gave the said revision retrospective operation w.e.f. 1st February 1984, following the same date as was done in the Reserve Bank of India. In order to fix the salaries of the employees, who were in employment of the Bank of 1 2 1984, the Respondent Bank prepared a refixation chart which was duly approved by the NABARD Officers ' Association. The chart was made ap plicable to all the officers who were in service of the Bank on 1.2.1984. The chart was a device to fit the salaries of the concerned officers in the new revised pay scales. Thus it contained fitment increments for the employees in service prior to 1.2.84 to avoid reduction in emoluments and anamo lies which would otherwise have resulted. These increments were to merge in the new scales in the course of time as they were not designed to grant higher emoluments to the old employees for all time to come but to avoid anamolies re sulting from refixation of salaries into new scales. The Petitioners challenged the fitment increments granted to old employees. It was their case that these increments gave undue benefit to the old employees as against them, and since they occupied the same posts they were also entitled to the same fitment increments. They also invoked the theory the 'Equal pay for Equal work ' by alleging discrimination between them and the old employees. It may be mentioned that the Association had 2284 members and except the present petitioners no body had made a grievance against the refixa tion chart. Dismissing the Petition, this Court, 502 HELD: The revision of pay is always effected with a particular date prospectively or retrospectively. Whatever the date from which it is effected, it necessarily involves fitment of the salaries of the existing employees in the new scales. A retrospective operation of the new scales there fore involves, for the same purpose, a classification of employees into two categories viz., those who were in serv ice prior to the retrospective date, and those who entered the service thereafter. If the benefit of the revised pay scales is to be conferred equitably on the old and the new employees, the fitment of salaries is in evitable. To avoid it is to deny the equal benefit of the revised scales to the employees in service prior to the date from which the new sales came into effect.[506B C]. The fitment/adjustment in the new scales further, has to be done by revising the salaries upward. This sometimes necessarily involves fitment in a higher stage in the pay scale than what the employee would be entitled to by a strict application of the stage to stage adjustment. Some times the additional benefit is treated as personal pay till it gets merged in the next higher increment. This is a known practice of equitable adjustment of the old pay scales to the new pay scales. There is not other way of effecting the just and required adjustment. [506D E] The adjustment increments granted to the old employees on such occasions automatically achieve the dual purpose of rewarding them for their past service and of adjusting their salaries in the new scale. The adjustment, fitment incre ments are therefore not discriminatory but eminently just and valid. [512F] K.N. Ananda & Ors. vs The Karnataka State Financial Corporation, Bangalore & Anr., [1985] Labour & Industrial Cases Vol. 18 p. 1079; P. Savita S/o Shri P.L. Savita vs Union of India, Ministry of Defence (Deptt. of Defence Production) New Delhi & Ors., ; ; D.S. Nakara & Ors vs Union of India, ; ; State Government Pensioners Association & Ors. vs State of Andhra Pradesh, [1986] 3 SCC 501; Kanpur Suraksha Karamchari Union vs Union of India, ; Reserve Bank of India & Ors. vs C.N. Sahasaranaman & Ors., ; ; Tarsem Lal Gautam & Anr. vs State Bank of Patiala & Ors., AIR 1989 SC 30; C.R. Seshan & Anr. vs State of Maharashtra & Ors. , AIR 1989 SC 1287, referred to.

ppeal No. 39 of 1959. Appeal by special leave from the judgment and order dated November 26, 1957, of the Bombay High Court at Rajkot in Special Civil Application No. 119 of 1956. A. V. Viswanatha Sastri, section P. Mehta, J. B. Dadachanji, section N. Andley and Rameshwar Nath, for the appellants. M. C. Setalvad, Attorney General for India, R. Ganapathy Iyer and D. Gupta, for the respondent. April 14. The Judgment of the Court was delivered by KAPUR, J. This is an appeal by special leave against the judgment and order of the High Court of Judicature at Bombay dismissing the appellant 's petition under article 226. The appellant before us is a private limited company carrying on the business of manufacturing and selling textiles and the respondent is the Income tax Officer of Porbander. Previous to the year 1949, in Porbander which became a part of the State of Saurashtra, there was no income tax. In 1949 the Saurashtra Income tax Ordinance (hereinafter termed the Ordinance) was promulgated which was applicable to the State of Saurashtra. By that Ordinance income tax became leviable and from 1950 onwards when Saurashtra became part of the Union of India the Indian Income tax Act (hereinafter referred to as the Act) became applicable by reason of the Finance Act of 1950 (Act XXV of 1950). 550 The appellant 'Was taxed for the accounting year 1949, i.e., the assessment year 1950 51. In that year the amount of depreciation allowed under section 10(2)(vi) of the Act was Rs. 3,43,869. The appellant continued to be assessed to income tax in the assessment years 1952 53 and 1953 54 and the present appeal relates to the assessment of year 1953 54. According to the assessment order dated June 30, 1965, the amount of depreciation allowed for the assessment year 1953 54 was Rs. 3,48,105. On August 8, 1955, the appellant made an application for rectification under section 35 of the Act. In this application he pointed out several mistakes in calculations in regard to the depreciation amount. By his order of February 27, 1956, the Income tax Officer corrected the Written Down Value of the different properties of the appellant and determined the total allowable depreciation to be Rs. 1,94,074. The order of the Income tax Officer was as follows: " To arrive at the Written Down Value of the assets it was necessary to maintain depreciation record. This being not done so far, is done now and working attached. Depreciation allowance as per rules is worked out at Rs. 1,94,074 as per working sheet attached. The correct computation of income is as under: Income before allowing depreciation as per original assessment order:Rs.1,00,674 Less charity disallowed wrongly written Rs. 21,889 instead of Rs. 20,124: Rs.1,765 Income Rs.98,909 Less depreciation Rs.1,94,074 Rs.95,165 Less Dividend income as per origi nal assessment order: Rs.11,870 Loss. Rs.83,295 Loss on account of depreciation to be carried forward. Declared N. A. " 551 And thus the unabsorbed depreciation amount which under the assessment order of June 30, 1955, was Rs. 2,31,944 was reduced to Rs. 83.,295 and this was set off against the appellant 's income of the assessment year 1954 55. On February 29, 1956, the Income tax Officer passed two provisional assessment( orders for the years 1954 55 and 1955 56. In both these orders he calculated the depreciation amounts on the basis of the same Written Down Value as he had determined for the year 1953 54. The reasons for calculating them on the new basis were set out by the Income tax Officer in his order dated May 18, 1956, and they were: " Less Depreciation. The depreciation of the Company has not been properly calculated by arriving at, Written Down Value as per the Saurashtra Income Tax Ordinance and also as per Indian Income tax Act. The assessee Company was being assessed regularly even as per Indian Income tax Act. So Written Down Value of all assets are arrived at by working out the depreciation as per above Ordinance as well as Income Tax Act. The depreciation is worked out as per separate statement keeping in view the following: (i) Definition of " assessee " as per Indian Income tax Act. (ii) The exact meaning of W.D. V. as per Income tax Act. (iii) The meaning of W. D. V. as per the Saurashtra Income tax Ordinance, 1949 and Rules (Page 20, para. 13 5 A). (iv) 1. T. R. Volume 25, 558. Decision of Calcutta High Court as regards C. I. T., West Bengal,M/s. Karnani Industrial Bank Ltd. (v) Views expressed by Taxation Enquiry Commissioner, 1953 54, Volume II, page 84, para. (vi) Taxation Laws (Part 'B ' State) (Removal of Difficulties Order, 1950. The depreciation thus worked out as per separate statement". On August 8,1955,the appllant made an application under section 35 for certain corrections in the calculations and the order thereon was passed on February 552 27, 1956, but no written notice of the intended rectifi cation of the Written Down Value and the depreciation amount was given by the Income tax Officer to the appellant under s, 35 read with section 63 of the Act. On March 9, 1956, the appellant wrote to the Income tax Officer protesting against the order: " You have exercised powers not vested in you under the said Section, and you have gone beyond the purview of the Act by preparing statements and records which are prejudicial to the rights of the Company ". The appellant requested the Income tax Officer to cancel his previous order and to pass a fresh order correcting onlv those mistakes which had been pointed out by it ' On the same day the appellant sent another letter asking for the cancellation of the provisional assessment order for 1954 55 and requested for a revised assessment order on the basis of the return filed by it. The reply of the Income tax Officer of the same date was that the order was correct and a similar order was made on the second application in regard to the assessment of 1954 55. On April 16, 1956, the appellant filed a petition in the High Court of Bombay under articles 226 and 227 in which it alleged that the Income tax Officer had: " exceeded the limits of jurisdiction vested in him and exercised illegally jurisdiction not vested in him by law under Section 35 and passed orders, inter alia, and suo motu and without giving any prior notice and altered the entire procedure and basis of calculating depreciation on the written down value of buildings and machinery of the petitioners The appellant prayed that the order made under section 35 of the Act be quashed and an injunction issued restraining the Income tax Officer from recovering the assessed tax. The High Court dismissed this petition on the ground that it contained misstatements of fact ; that " The advantage of this jurisdiction is not available to the subject when adequate and efficacious remedy is available to him under the ordinary law " ; that the appellant could, under section 33A of the Act, 553 have gone in revision to the Commissioner. The High Court also held against the appellant on merits. The appellant has come to this Court by special leave and three questions were raised (1) that no notice as required under section 35 was given to the appellant; (2) that there was no record on the basis of which the rectifica. tion in the Written Down Value of the property could be made and (3) that there was no mistake apparent from the record. The learned Attorney General contended in the first instance that the remedy available under article 226 is a discretionary one and if the High Court had exercised its discretion no appeal was competent and in support of his contention he relied upon the judgment of this Court in K. section Rashid & Son vs Income tax Investigation Commission, etc. (1), where Mukherjee, J., (as he then was) said: For purpose of this case it is enough to state that the remedy provided for in article 226 of the Constitution is a discretionary remedy and the High Court has always the discretion to refuse to grant any writ if it is satisfied that the aggrieved party can have an adequate or suitable relief elsewhere ". It is not necessary to decide in this case whether the order passed under article 226 is of a discretionary nature and therefore in appeal this Court would not interfere with the exercise of discretion, because in our opinion, the case can be decided on other grounds of substance. The first question is that of notice under section 35 of the Act. The affidavit of the Income tax Officer shows that the correctness of the figures for determining the depreciation was discussed with the appellant 's Secretary. The Income tax Officer stated that: " The depreciation which was calculated in the assessment order of 1953 54 was as per the statement given by the petitioner. On submission of the said application the petitioner (Shri Ganatra, the Secretary of the Mills) was told that the depreciation will be given after rectifying mistakes. The petitioner had (1) ; , 747. 70 554 agreed to the same. There being no record of the working out from the first available record in the Assessment order for the Assessment year 1943 44, the petitioner was also supplied with the copy of the working of the depreciation along with the necessary rules and regulation for calculating the same ". He also stated that the order of rectification was passed "almost at the end of the financial year, after explaining and discussing all the above calculation along with the relevant rules and regulation of the calculated depreciation " ; that the order was not passed without giving a reasonable opportunity to the appellant; that the matter was discussed with its representative more than once; thattheassessment for the year 1954 55 was made final after calculatitig the depreciation; that the point of depreciation was notraised by the applicantat any hearingand that even though no written notice was given, the represen tative of the appellant was given notice of the intended determination of the Written Down Values. He also stated : " Thus though no written notice is given, applicant is given notice of the intention of calculating depreciation on record basis and is also allowed a reasonable opportunity of being heard inasmuch as he was given the calculation of depreciation on 21 2 1956 ". The orders placed on the record show that the Income tax Officer made calculation for the purpose of determining the depreciation amount and after giving deductions allowed by the Act and the Rules made thereunder arrived at the corrected figure of Rs. 1,94,074 for the assessment year 1953 54. Apart from the fact that the petition of the appellant does not set out clearly all the facts which should have been set out, there is the affidavit of the respondent that the matter was discussed with the representative of the appellant although no written notice was given. In this connection the learned Attorney General has further submitted (1) that the order determining the depreciation amount allowable was not final; (2) that the effect of the order making the rectification 555 was not of enhancing the assessment or reducing the refund; and (3) that the question of depreciation could be raised at the time of assessment in any subsequent year. The object of the provision as to notice in section 35 is that no order should be passed to the detriment of an assessee without affording him an opportunity but it cannot be said that the Rule is so rigid that if, as a matter of fact, the assessee knows of the proceedings and the matter has been discussed with him then an adverse order would be invalid merely because no notice under section 63 was given. Of course this postulates that a reasonable opportunity has been given to show cause. Secondly this provision is applicable only where the assessment is enhanced or refund is reduced. Neither of those contingencies has arisen in the present case. The depreciation allowed to the appellant in the year of assessment 1943 44 when the appellant was assessed as a non resident, was Rs. 1,91,224. In the year 1944 45 there was no asssessable income in British India and so also in 1945 46. In the year 1946 47 there was a loss. In the year 1947 48 as in the preceding years the sales were effected at Porbander and there was no collection made in British India. The total tax due was calculated at Rs. 43 11As. In 1948 49 the sales were Rs. 38,656 and they were assessed to income tax on a total income of Rs. 9,326. For the accounting year 1948, i.e., the assessment year 1949 50 when the Ordinance came into force the total depreciation amount allowed was Rs. 3,66,925 which was much more than what was allowable on the Written Down Values determined in accordance with the provisions of the Ordinance which defined Written Down Value: Written Down Value means (a) In the case of assets acquired in the previous year, the actual cost to the assessee; (b) In the case of assets acquired before the previous year the actual cost to the assessee less all depreciation actually allowed to him under this Ordinance or allowed under any Act repealed hereby or 556 which would have been allowed to him if the Indian Income tax Act, 1922, was in force in past ". On the basis of this Ordinance and the other Statutes and Rules mentioned in his affidavit, which have been set out above, the Income tax Officer made the various calculations and determined the depreciation amounts which have given rise to the controversy before us. These calculations were based on the Written Down Values for the successive assessment years up to the year of assessment 1953 54. But it was argued by counsel for the appellant that according to section 10(5)(b) of the Act the Written Down Value in the case of assets acquired before the previous year mean the actual cost to the assessee less all depreciation actually allowed to him under the Act or under any Act repealed thereby and therefore the provisions of the Saurashtra Ordinance which came to an end when the Act became applicable cannot form the basis of determining the Written Down Value for the purposes of assessment of the years 1950 51 onwards. In reply it was submitted that the Written Down Values were calculated and depreciation deter mined for the year 1943 44 and should in subsequent years have been calculated in accordance with the provisions of the Ordinance and they could not become higher for purposes of section 10(5)(b) of the Act merely because the Ordinance was replaced by the Act. In this connection reference was made to section 12 of the Finance Act, 1950, section 12 of which empowered the Central Government to make provision for the removal of difficulties in giving effect to the provisions of any of the Acts, Rules or Orders extended by section 3 or section 11 of that Act, i. e., Finance Act, 1950. Under that section (section 12) the Taxation Laws (Part B States) Removal of Difficulties Order, 1950, was promulgated on December 2, 1950, and by cl. 2 of this Order provision was made for computation of aggregate depreciation allowance and Written Down Values. To this Order the following explanation was added on March 9, 1953: (Notification No. section R. 0. 477): " For the purposes of this paragraph, the expression " all depreciation actually allowed under any 557 laws or rules of a Part B State " means and shall be deemed to have always meant the aggregate allowance for depreciation taken into account in computing the Written Down Value under any laws or rules of a Part B State or carried forward under the said laws or rules. But the appellant 's counsel contended that this explanation is ultra vires because it was promulgated under section 60 A of the Act and that section was inapplicable to the Order made under section 12 of the Finance Act, 1950. He relied on two cases decided by the Hyderabad High Court in section V. Naik vs Commissioner of Income tax (1) and Commissioner of Income tax vs D. B. R. Mills Ltd. (2) but we are informed that one of those judgments is under appeal to this Court and we therefore do not wish to express any opinion upon the cor rectness or otherwise of this contention raised by the appellant. It was next argued by the learned Attorney General that the Written Down Values determined under section 35 are not final and can be redetermined in the following assessment years and in support he referred to Karnani Industrial Bank vs Commissioner of Income tax (3) where the original cost of the machinery purchased ]Rs. 3,40,000 was accepted in the successive assessment years till it was doubted in the assessment order 1946 47 and was determined at Rs. 2,80,000 and it was contended that the Income tax Officer had to take the Written Down Value of the previous year as correct. Thus the question there raised was whether the Income tax Officer was entitled in law to go behind the original cost accepted by his predecessor ever since the assessment year 1939 40. It was held that neither the principle of res judicata nor estoppel nor the terms of section 10 (2) (vi) of the Act prevented the Income tax Officer from determining. for himself ' what the actual cost of the machinery had been and that depreciation had to be calculated for every year and it was open to the Income tax Officer not merely to perform " a mathematical operation on (1) (2) , (3) 558 the basis of the Written Down Value of the previous year, but one of determining the Written Down Value himself ". The limit to which the Income tax Officer can go back does not stop at the Written Down Value of the previous year but extends up to the figure of the original cost, and the method enjoined by section 10(5)(b) is not that the Income tax Officer should merely scale down the Written Down Value of the previous year, but that he should take into consideration the actual cost, determining it for himself, if necessary, take also into consideration the allowances granted in the past and then make his own computation as to the Written Down Value for the assessment year with which be is concerned. Thus it cannot be said that merely because under section 35 some Written Down Value and the depreciation amount have been determined they are a final determination binding for all times to come nor does the determination operate as estoppel or resjudicata for the following years. Therefore it cannot be said that there is no other efficacious and adequate remedy open to the appellant to challenge the depreciation amount determined under section 35. Counsel for the appellant contended that the provision under which the Income tax Officer acted, i. e., 35 was not meant for the purpose of making corrections in Written Down Values; and that for the purpose the appropriate and correct provision was section 34 which specifically refers to excessive depreciation. There are two sections under which an Income tax Officer can act, i. e., sections 34 and 35 and the question for decision that arises is whether section 35 was open to him. Section 35 provides: " The Commissioner or Appellate Assistant Commissioner may, at any time within four years from the date of any order passed by him in appeal or, in the case of the Commissioner, in revision under section 33A and the Income tax Officer may, at any time within four years from the date of any assessment order or refund order passed by him on his own motion rectify any mistake apparent from the record of the appeal, revision, assessment or refund as the case may be, and shall within the like period rectify any such mistake which has been brought to his notice by an assessee ". The question therefore is was it a mistake apparent from the record which the Income tax Officer has rectified. It was submitted that recalculation is not rectifying a mistake which is apparent from the record. The words used in the section are " apparent from the record " and the record does not mean only the order of assessment but it comprises all proceedings on which the assessment order is based and the Income tax Officer is entitled for the purpose of exercising his jurisdiction under section 35 to look into the whole evidence and the law applicable to ascertain whether there was an error. If he doubts the Written Down Value of the previous year it is open to him to check up the previous calculations and if he finds any mistake it is open to him to make fresh calculations in accordance with the law applicable including the rules made thereunder. The Privy Council in Commissioner of Income tax vs Khem Chand Ramdas(1) held section 35 to be applicable where the facts were that the assessee did not produce books of account and an assessment was made by the Income tax Officer to the best of his judgment. An application for the registration of the firm was however allowed and it was registered on January 17, 1927. On the same day assessment was made under section 23(4). As it was a registered firm no super tax was assessed. The Commissioner called for the record under section 33 and cancelled the registration on January 28, and ordered the Income tax Officer to take necessary con sequential action. The result of that was that the assessee became liable to super tax. Consequently an order for super tax was made on May 4, 1929, and three days later notice of demand was issued. The Privy Council held that as the fresh action taken by the Income tax Officer was hopelessly out of time the demand for super tax was illegal because after the final assessment the Income tax Officer could not go on making fresh computations and issuing fresh notices of demand to the end of all time but it was held that (1) (1938) L. R. 65 I.A. 236. 560 the provisions of sections 34 and 35 prescribed the only circumstances in which fresh assessment could be made and fresh notice of demand could be issued. At p. 426 Lord Romer observed: " In the present case it is a debatable question r whether the circumstances were such as to bring it within the provisions of Section 34. It is not necessary to determine that question inasmuch, as, in. their lordship 's opinion, the case clearly would have fallen within the provisions of section 35 had the Income tax Officer exercised his powers under the section within one year from the date on which the earlier demand was served upon the respondents. For, looking at the record of the assessments made upon them as it stood after the cancellation of the respondent 's registration and the order affecting the cancellation would have formed part of that record it would be apparent that a mistake had been made in stating that no super tax was leviable ". Thus the order effecting the cancellation of the regis tration of the assessee 's firm was considered to have formed part of the record of the case. In Sidhramappa Andannappa Manvi vs Commis. sioner of Income tax (1) the facts were that a debt belonging to a joint family fell on partition to the share of the assessee. This debt was held not to be recoverable by a judgment of the Bombay High Court dated September 29, 1941. Holding it to be within the accounting year the Appellate Tribunal allowed this sum to be taken into consideration for the purpose of the accounting year. It subsequently corrected the error. It was held that under section 35 the Tribunal was entitled to rectify the mistake and was competent to pass a consequential order dismissing the appeal instead of allowing it. The power under section 35 is no doubt limited to rectification of mistakes which are apparent from the record. A mistake contemplated by this section is not one which is to be discovered as a result of an argument but it is open to the Income tax Officer to examine the record including the evidence and if he discovers any (I) (2) S.C.R. SUPREME COURT REPORTS 561 mistake he is entitled to rectify the error provided that if the result is enhancement of assessment or reducing the refund then notice has to be given to the assessee and he should be allowed a reasonable opportunity of being heard. The scope and effect of the expression "mistake apparent from the record " and the extent of the powers of the Income tax Officer under section 35 of the Act were discussed by this Court in M. K. Venkatachalam vs Bombay Dyeing and Manufacturing Co. Ltd. (1) where the facts were these: A sum of Rs. 50,063 being interest on tax paid in advance was given credit for under section 18A(5) of the Act. Subsequently there was an amendment of the Act by which the interest became allowable only on the difference between the amount of tax paid and what was actually determined. As a consequence of this the Income tax Officer purporting to act under section 35 of the Act rectified the mistake and reduced the amount of interest credited to Rs. 21,157 and issued a demand for the difference. The assessee obtained a writ of prohibition against the Income tax Officer on the ground that the mistake contemplated under that provision had to be apparent on the face of the Order and it was not contemplated to cover a mistake resulting from an amendment of the law even though it was retrospective in its effect. The Revenue appealed to this Court. Thus the question for decision in that case was whether ail order proper and valid when made could be said to disclose a mistake apparent from the record merely because it became erroneous as a result of a subsequent amendment of the law which was retrospective in its operation. In delivering the judgment of the Court Gajendragadkar, J., said: " At the time when the Income tax Officer applied his mind to the question of rectifying the alleged mistake, there can be no doubt that he had to read the principal Act as containing the inserted proviso as from April 1, 1952. If that be the true position then the order which he made, giving credit to the (1) ; 7I 562 respondent for Rs. 50,603 15 0 is plainly and obviously inconsistent with a specific and clear provision of the statute and that must inevitably be treated as a mistake of law apparent from the record. If a mistake of fact apparent from the record of the assessment order can be rectified under section 35 we see no reason why a mistake of law which is glaring and obvious cannot be similarly rectified ". The decision of the Privy Council in Commissioner of Income tax vs Khem Chand Ram Chand (1) was referred,to. Counsel for the appellant sought to distinguish both these cases; Venkatachalam 's case (2) and Khem Chand 's case(1) on the ground that the record there considered was the assessment record of that year and the Income tax Officer did not have to go to the records of the previous year. That is a distinction without a difference. If, for instance, the Income. tax Officer had found that in the assessment year 1952 53 there was an apparent arithmetical mistake in the account of the Written Down Value of the pro. parties which resulted in a corresponding mistake in the assessment of the year in controversy could he not take the corrected figure for the purposes of the assessment and could it be said that the mistake was not apparent from the record. A fortiori if lie discovered that the very basis of the different assessments was erroneous because of an initial mistake in determining the Written Down Value could it be said that this would not be a mistake apparent from the record. And if in order to determine the correct Written Down Value the Income tax Officer makes correct calculations, can it be said that is not rectifying a mistake apparent from the record but is dehors it. In our opinion this appeal is without force and we would therefore dismiss it with costs. Appeal dismissed. (1) (1938) L.R. 65.1.A. 236.

Sub section (1) Of section 35 of the Indian Income tax Act, 1922, provided: the Income tax officer may on his own motion rectify any mistake apparent from the record and shall rectify any such mistake which has been brought to his notice by an assesses : Provided that no such rectification shall be made, having the effect of enhancing or reducing a 548 refund unless. the Income tax Officer. has given notice to the assessee of his. intention so to do and has allowed him a reasonable opportunity of being heard. " The appellant, a private limited company, was assessed to income tax for the assessment year 1953 54 under the provisions of the Indian Income tax Act, 1922, and as per the assessment order dated June 30, 1955, the amount of depreciation allowed under section 10(2)(vi) of the Act was Rs. 3,48,1O5. On August 8, 1955, the appellant made an application before the Income tax Officer for rectification of the order under section 35 of the Act, pointing out certain mistakes in calculation in regard to the depreciation amount. By his order of February 27, 1956, the Income tax Officer corrected the written down value of the different properties of the appellant and determined the total allowable depreciation to be Rs. 1,94,074. The appellant challenged the order dated February 27, 1956, on the grounds, inter alia, (1) that he was not given a written notice of the intended rectification of the written down value, (2) that the provisions under which the Income tax Officer acted, i.e., section 35 of the Act, was not meant for the purpose of making corrections in written down values, the correct provision being section 34 which specifically refers to excessive depreciation, and (3) that, in any case, he had exceeded his jurisdiction under section 35 of the Act in calculating the depreciation on the written down value of the buildings and machinery of the appellant acting suo motu, and that he could correct only those mistakes which had been pointed out by it. It was found that notice was given to the appellant of the intended determination of the written down value, though it was not a written notice, and that the matter was discussed with its representative. Held : (i) that the object of the provision as to notice under section 35 Of the Indian Income tax Act, 1922, is that no order should be passed to the detriment of an assessee without affording him an opportunity for being heard and that if, as a matter of fact,the assessee knew of the proceedings and the matter had been discussed with him, an adverse order would not be invalid merely because no written notice was given. (2) that the word " record " used in the phrase " mistake apparent from the record" in section 35(I) of the Act refers not only to the order of assessment but comprises all proceedings on which the assessment order is based and the Income tax Officer is entitled for the purpose of exercising his jurisdiction under section 35 to look into the whole evidence and the law applicable to ascertain whether there was an error. If he doubts the written down value of the previous year it is open to him to check up the previous calculations and, if he finds any mistake, to make fresh calculations in accordance with the law applicable including the rules made thereunder. A mistake contemplated by this section is not one which is 549 to be discovered as a result of an argument but it is open to the Income tax Officer to examine the record including the evidence and if he discovers any mistake he is entitled to rectify the error provided that if the result is enhancement of assessment or reducing the refund, then notice has to be given to the assessee and he should be allowed a reasonable opportunity of being heard. Venkatachalam vs Bombay Dyeing & Mfg. Co., Ltd., ; , Commissioner of Income tax vs Khemchand Ramdas, [1938] L.R. 65 I.A. 236 and Sidhramappa Andannappa Manviv. Commissioner of Income tax, , relied on.

Appeal No. 219 of 1962. 384 Appeal from the judgment and decree dated August 31, 1960 of the Patna High Court in Appeal from Original decree No. 7 of 1955. B. Sen, J. B. Dadachanji, O. C. Mathur and Ravinder Narain, for the appellants. B. R. L. Iyengar, section K. Mehta and K. L. Mehta, for the respondents. April 25. The Judgment of the Court was delivered by GAJENDRAGADKAR J. This appeal arises out of proceedings under the Land Acquisition Act, 1894 (No. 1 of 1894) (hereinafter called 'the Act '). The respondents owned an area of 0.12 acre of land in village Bermo No. 18 in the district of Hazaribagh. This land was required for the construction 'of Aerial Rope way for Bokaro Thermal Power Plant, and so, in order to acquire the said land, a declaration under section 4 of the Act was made on August 9, 1952. The property of the respondents which stands on this plot consists of two buildings, one is the main structure and the other is made up of out houses together with an open space of land in front of these structures. The notification showed that the Government thought it necessary, to acquire a space of 50 fit in width for the electric wire to run over and this included a portion of open space as also the out houses of the respondents. Under the proceedings taken under the relevant provisions of the Act, the Land Acquisition Officer fixed the compensation to be paid to the respondents at Rs. 4,4511516; according to him, the said amount represented a fair and reasonable compensation for the land together with the out houses under acquisition. The respondents were not satisfied with this award, and so, ' they applied for reference under section 18 385 of the Act. One of the grounds taken by the respondents in para I (d) of their petition for reference was that the other lands and buildings contiguous to the land and building acquired which belonged to them had not been acquired, and in consequence, they had to suffer a huge loss; the rope line passes close to the rest of the property, and so, it could not be used for fear of its being dangerous for human habitation. On this basis, the respondents alleged that they were entitled to recover as compensation amount Rs. 21,765/8/ which they had spent on the construction of the principal building. Besides, they urged that the monthly rent of Rs. 160/ which they were receiving from the tenants in respect of the said principal building would also be lost and they were entitled to adequate compensation on that account. In other words, one of the grounds raised by the respondents in their petition was referrable to section 23 (3) of the Act. The Deputy Commissioner of Hazaribagh then proceeded to make the reference as claimed by the respondents. In his letter of reference, he stated that the respondents were claiming additional compensation on the ground that the other lands and buildings contiguous to the land and building acquired which they owned had not been acquired and thereby they had to suffer a huge loss. On reference, the District judge of Hazaribagh heard the matter. It appears that before the District judge, Kundan Singh, respondent No. 1, gave evidence and stated that on October 22, 1952, he had put in an application that the other quarters belonging to him which had not been acquired should also be acquired, because the said quarters were contiguous to the land acquired and had become useless to the respondents. The learned District judge considered the point raised by the respondents and held that since only a narrow 386 strip of land had been left in front of the larger building, it had affected the utility of the said building and the other unacquired land of the respondents, and so, he directed that in addition to the amount of Rs. 4 451/5/6 which had been determined as the amount of compensation by the Land Acquisition Officer, Rs. 1000/ should be paid to the respondents. In his opinion, the amounts determined by the Acquisition Officer for the property actually acquired was quite appropriate and all that was needed to be done was to award an additional amount of Rs. 1,000/ on the ground that the unacquired property was adversely affected by the acquisition in question. The respondents then preferred an appeal before the High Court of Patna under section 54 of the Act. In their appeal, the only ground which they urged was that the rope way having completely spoiled the main building, the Land Acquisition Officer could not acquire the out houses without acquiring the main building. Accordingly, they claimed a declaration that the Land Acquisition Officer should acquire the main building along with the other properties under acqiuisition. When this plea was raised before the High Court, the appellants, the State of Bihar and the Deputy Commissioner, Hazaribagh, contended that it was not open to the respondents to claim a declaration for the acquisition of other properties in their appeal, because the said appeal arose out of a reference under section 18 of the Act and a plea like the one raised by the respondents which could be made under section 49 of the Act, was foreign to the present enquiry. It was also contended that this point had not been taken by the respondents either before the Land Acquisition Officer or before the District judge. These arguments were rejected by the High Court and a direction has been issued by the High Court calling upon the Land Acquisition Officer to takeover the remaining area 387 and the building and assess the compensation thereon in due course according to law. The High Court has ordered that when the said assessment is thus determined, the additional compensation of Rs. 1,000/which has been allowed by the District judge should be deducted and the balance paid to the respondents. It is against this order that the appellants have come to this Court with a certificate issued by the High Court; and the principal question which has been raised before us by Mr. Sen on behalf of the appellants is that the High Court was in error is allowing section 49 to be invoked in the appeal before it. The first point which must be considered in dealing with the appellants ' argument is whether the respondents had made an application to the Land Acquisition Officer under section 49 of the Act as alleged by respondent No. I in his evidence before the District judge. We have already noticed that respondent No. I stated in his evidence that on October 22, 1952 he had put in an application that the other quarters should also be acquired. In other words, his plea was that the said application had been made invoking the provisions of section 49 of the Act after the date of the notification and before the award was made on November 27, 1952. The judgment of the District judge shows that he did not accept this plea, and so, he proceeded to deal with the case on the basis that the respondents were claiming additional compensation either under the third or the fourth clause of section 23 (1) of the Act. If he had held that an application had been made by the respondents under section 49 of the Act before the award was made and they were asking for relief under that provision, he would, undoubtedly, have considered the matter and recorded his conclusion on it. Therefore, it would not be unreasonable to assume that the District judge did not attach any importance to the statement made by respondent No. I that he had put in an application under section 49, or it may be that the 388 respondents merely pressed their claim for additional compensation under section 23 before the learned District judge. When the matter was argued before the High Court, the appellants seriously disputed the allegation of the respondents that an application had been made to the Land Acquisition Officer under section 49. It is true that the statement of respondent No. 1 that he had made such an application was not challenged in cross examination, but it is remarkable that the said statement does not appear to have been pressed before the District judge and when it was attempted to be pressed before the High Court, the application alleged to have been made by respondent No. I was not produced before or shown to the High Court at all. In fact, no such application has been printed in the paper book prepared for this Court in the present appeal. The High Court also does not appear to have made any definite finding that the statement of respondent No. I could be accepted. It has, however, held that the claim made by the respondents when they asked for reference under s.18 showed that they were asking for protection under s.49 of the Act and it is on the basis of the said claim contained in para. I (d) of the respondents ' petition under section 18 of the Act that the High Court came to the conclusion that the respondents had relied upon section 49 before the Land Acquisition Officer. We have already referred to the ground taken by the respondents in para I (d) of their petition and have noticed that the claim made under the said ground was under section 23 of the Act and not at all under section 49; and so, we are not prepared to accept Mr. Iyenger 's argument that the present appeal should be dealt with on the basis that the respondents had made an application to the Land Acquisition Officer under section 49 of the Act before he pronounced his award. By their application for 'reference, the respondents merely claimed additional compensation under section 23(1) and 389 that is how their claim was considered and decided by the learned District Judge. It is in the light of this, finding that we have to determine the question as to whether the High Court could have entertained the respondents ' plea under section 49 in the appeal preferred before it by the respondents against the decision of the District Judge in reference proceedings taken before him under section 18 of the Act. In determining the question about the scope of the enquiry under section 18, it is necessary to consider the relevant provisions of the Act. Section 4 of the Act deals with the publication of a preliminary notification in regard to the acquisition proceedings proposed to be taken. Section 5 A deals with the hearing of objections. Section 6 provides for the declaration that a particular land is required for a public purpose. Section 9 requires notice to be given to the persons interested in the said property. Section 11 prescribes the manner of the enquiry and provides for the making of the award by the Collector. Section 12 lays down that the award, when made, shall be filed in the Collector 's office and shall be final, as therein prescribed ' Section 16 empowers the Collector to take possession of the property acquired, ' and section 18 deals with reference to Court. In dealing with the claim for compensation made by the owner of the property, the Court has to consider the matters specified in section 23. The third clause of section 23 (1) provides that in determining the amount of compensation, the Court shall take into account the damage (if any), sustained by the person interested, at the time of the Collector 's taking possession of the land , by reason of severing such land from his other land and the fourth clause requires the Court to take into account the damage (if any), sustained by the person interested, at the time of the Collector 's taking possession of the land, by reason of the acquisition injuriously affecting his other property, movable or immovable, in any other manner, or his earnings. 390 Section 18 (1) provides that any person interested who has not accepted the award may, by written application to the Collector,require that the matter be referred by the Collector or the determination of the Court, whether his objection be to the measurement of the land, the amount of the compensation, the persons to whom it is payable, or the apportionment of the compensation among the persons interested. ' It is thus clear that the scope of the enquiry under section 18 (1) is specifically indicated by the section itself. The objections which the Court can consider on a reference made to it under section 18 may be either in respect of the measurement of the land, the amount of compensation, the persons to whom it is payable, and the apportionment of the compensation among different persons. In dealing with the ' question about the amount of Compensation, the Court may have to take into account the matters specified in s.23. As was observed by the Privy Council in Pramatha Nath Mullick vs Secretary of State for India (1), the section clearly specifies four different grounds of objection which can be the subject matter of an enquiry in reference proceedings. Therefore, it is very difficult to accede to Mr. Iyengers ' argument that in dealing with the reference proceedings under section 18 (1), the Court can also consider the pleas raised by the owner of the property under section 49 of the Act. It does appear that the owner of property under acquisition may claim additional compensation on the ground that the portion of the property acquired so materially affects the value or the utility of his other property not acquired as to justify a claim for additional compensation under section 23, and if such a claim is made, it would legitimately form the subject matter of an enquiry in a reference under section 18 (1), but if the owner of the property wants to claim 'that the whole of his property should be acquired, and in that connection relies on the provisions of section 49, that cannot be introduced in an enquiry under section 18 (1) (1929) L. R. 57 I. A. 100. 391 such a claim must form the subject matter of different proceedings taken by the owner under section 49 itself. That takes us to section 49. Section 49 reads thus " (1) The Provisions of this Act shall not be put in force for the purpose of acquiring a part only of any house, manufactory or other building, if the owner desires that the whole of such house, manufactory or building shall be so acquired Provided that the owner may, at any time before the Collector has made his award under section 1 1, by notice in writing, withdraw or modify his expressed desire that the whole of such house, manufactory or building shall be so acquired : Provided also that, if any question shall arise as to whether any land proposed to be taken under this Act does or does not form part of a house, manufactory or building within the meaning of this section the Collector shall refer the determination of such question to the Court and shall not take possession of such land until after the question has been determined. In deciding on such a reference the Court shall have regard to the question whether the land proposed to be taken is reasonably required for the full and unimpaired use of the house, manufactory or building. (2) If, in the case of any claim under section 23, sub section (1), thirdly, by a person interested, on account of the severing of the land to be acquired from his other land, the (appropriate Government) is of opinion that the claim is unreasonable or excessive, it may, at 392 any time before the Collector has made his award, order the acquisition of the whole of the land of which the land first sought to be acquired forms a part. (3) In the case last hereinbefore provided for, no fresh declaration or other proceedings under sections 6 to 10, both inclusive, shall be necessary ; but the Collector shall without delay furnish a copy of the order of the (appropriate Government) to the person inter ested, and shall thereafter proceed to make his award under section 11. The provisions of section 49 (1) prescribe, inter alia, a definite prohibition against putting in force any of the provisions of the Act for the purpose of acquiring a part only of any house, if the owner desires that the whole of such house shall be acquired. This prohibition unambiguously indicates that if the owner expresses his desire that the whole of the house should be acquired, Do action can be taken in respect of a part of the house under any provision of the Act, and this suggests that where a part of the house is proposed to be acquired and a notification is issued in that behalf, the owner must make up his mind as to whether he wants to allow the acquisition of a part of his house or not. If he wants to allow the partial acquisition, proceedings would be taken under the relevant provisions of the Act and an award directing the payment of adequate compensation would be made and would be followed by the taking of possession of the property acquired. If, on the other hand, the owner desires that the whole of the house should be acquired, he should indicate his desire to the Land Acquisition officer and all further proceedings under the relevant provisions of the Act must stop. This provision thus seems to suggest that if an objection is intended to be raised to the acquisition of a part of the house, it must be 393 made before an award is made under section 11. In fact, it should be made soon after the initial notification is published under section 4 ; otherwise, if the proceedings under the relevant provisions of the Act are allowed to be taken and an award is made, it would create unnecessary confusion and complications if the owner at that stage indicates that he objects to the acquisition of a part of his house ; at that stage, it would no doubt be open to him to claim adequate compensation in the light of the material provisions of section 23 of the Act, but that is another matter. The first proviso to section 49 (1) also leads to the same conclusion. If the owner has made his objection to the acquisition of a part of his house, it is open to him to withdraw or modify his objection before an award is made under section 11 ; and if he withdraws 'his objection, further proceedings will follow and if he modifies his objection, steps will have to be taken as indicated in the other provisions of section 49. This proviso, therefore, suggests that the objection of the owner to acquisition of a part of his house has to be considered and dealt with before an award is made under section 11. It would be noticed that if an objection is made by the owner under section 49 (1), the Collector may decide to accept the objection and accede to the desire of the owner to acquire the whole of the house. In that case, further proceedings will be taken on the basis that the whole of the house is being acquired. In some cases, the Collector may decide to withdraw acquisition proceedings altogether, because it may be thought not worthwhile to acquire the whole of the house ; in that case again nothing further remains to be done and the notification issued has merely to be withdrawn or cancelled. But cases may arise where the Collector may not accept the claim of the owner that what is being acquired is a part of the house ; in that case, the matter in dispute has to be 394 judicially determined, and that is provided for by the second proviso to section 49 (1). Under this proviso, the Collector is under an obligation to refer the matter to the Court and he shall not take possession of the land under acquisition until the question is determined by the Court. In dealing with this matter, the Court has to have regard to the question as to whether the land proposed to be taken is reasonably required for the full and unimpaired use of the house. Sub section (2) of section 49 seems to contemplate that where land is acquired and it is shown to form part of a house, it would be open to award to the owner of the house additional compensation under the third clause of section 23, and I so, this sub section deals with cases where the claim made by the owner of the house under the third clause of section 23 is excessive or unreasonable, and provides that the appropriate Government may decide to acquire the whole of the land of which the land first sought to be acquired forms a part rather than agree to pay an unreasonable or excessive amount of compensation as claimed by the owner. This provision also emphasises the fact that where land is acquired and it results in the acquisition of a part of the house connected with the land, the owner can make a claim for additional compensation under section 23, or he may require, before the acquisition has taken place, that the whole of the house should be acquired. These are two alternative remedies available to the owner ; if he wants to avail himself of the first remedy under section 23, he may make a claim for additional compensation in that behalf and such a claim would form the subject matter of an enquiry under section 18 ; if, on the other hand, he claims the other alternative remedy provided by section 49 (1), that must form the subject matter of another proceeding which has to be dealt with under section 49 itself. It is true that in cases of dispute, this matter also goes to the same Court for its decision on a 395 reference by the Collector; but though the Court is the same the proceedings taken are different and separate and must be adopted as such. A claim under section 49 which can be properly tried by the Court on a reference made to it by the Collector under the second proviso to section 49 (1), cannot be mixed up with a claim which can be made in reference proceedings sent to the Court under section 18 by the Collector. Section 49 (3) merely dispenses with the necessity of issuing a further fresh declaration or adopting other proceedings under sections 6 to 10 in regard to cases falling under section 49 (2). Thus, it would be seen that the scheme of section 49 is that the owner has to express his desire that the whole of his house should be acquired before the award is made, and once such a desire is expressed, the procedure prescribed by section 49 has to be followed. This procedure is distinct and separate from the procedure which has to be followed in making a reference under section 18 of the Act. In the present case, the respondents have taken no steps to express their desire that the whole of their house should be acquired, and so, it was not open to the High Court to allow them to raise this point in appeal which arose from the order passed by the District judge on a reference under section 18. That being our view, we do not think necessary to consider the respondents ' contention that what is acquired in the present proceedings attracts the provisions of section 49 (1). It now remains to consider two relevant decisions which were cited before us. In the Secretary of State for India in Council vs Narayanaswamy Chettier (1), the Madras High Court appears to have taken the view that there is nothing in section 49 requiring the claimant to put forward his particular claim, viz., that the whole of his house should be acquired, at any particular stage of the proceedings. Referring (1) Mad. 391 396 to section 49 (1), Ramesam off. C. J., observed that the said clause cannot imply that the claims covered by it should be made before the Collector makes his award. Cornish J., who delivered a concurrent judgment agreed with this view. It appears that in coming to this conclusion, both the learned judges referred to the special circumstances under which the claimant made his claim under section 49 on September, 29, that is to say, after the award. and those special circumstances clearly showed that the claimant was not to blame for the delay made by him in expressing his desire under section 49 (1). In our opinion, however, the scheme of section 49 is clear. Section 49 (1) has imposed a ban on taking any further action under any of the provisions of the Act where the owner expresses a desire that the whole of his house should be acquired, and that clearly indicates that after the relevant notifications are issued under sections 4 and 6, if it appears to the owner of the land under acquisition that a part of his house is being acquired, he has to express his desire before an award is made under section 11 ; otherwise if the owner allows. proceedings to be taken under the provisions of the Act and an award follows, it would lead to unnecessary complications if the owner is allowed to express his desire under section 49 (1) and the reference is then required to be made under the second proviso to section 49 (1). Logically, if an enquiry has to be made as contemplated by section 49, it must precede any further action under the other provisions of the Act, and that is the main basis of the mandatory prohibition prescribed by section 49 (1). The said prohibition coupled with the first proviso to section 49 (1) leads to the conclusion that the owner cannot take recourse to section 49 after an award is made under section 1 1 of the Act. In our opinion, therefore, the High Court did not correctly interpret the effect of section 49 (1) when it held that the said section did not require the claimant to put forward his claim before the award was made. 397 In Krishna Das Roy vs The Land Acquisition Collector of Pabna (1), the Calcutta High Court, on the other hand, seems to have taken the view and we think, rightly, that if the owner wants to make an application expressing his desire under section 49 (1), he has to make that application some time before the award is actually made. The result is, the appeal is allowed, the order passed by the High Court is set aside and that of the District judge restored. There will be no order as to costs. Appeal allowed.

The appellant acquired a plot of land on which the respondent 's property stands, consisting of the main house and an outhouse with an open space in front of them. The land acquired covered a space 50 ft. in width for the electric wire to run over and this included a portion of the open space as also the outhouse. The Land Acquisition Officer fixed a compensation of Rs. 4,451/5/6. Not being satisfied with this award the respondents appealed under section 18 of the Land Acquisition Act, 1894. One of the grounds taken in the petition for reference was that the other lands and buildings contiguous to the land and building acquired which belonged to them had not been acquired, they had to suffer a huge loss, the electric rope line passed close to the rest of the property and so it could not be used as it might be dangerous for human habitation. On this basis compensation of about Rs. 21,765/8/which had been spent in the constructions of the principal house was claimed Before the District Judge, on reference, Respondent No. I gave evidence that he had made I an application before the award was given for the payment of the higher compensation on the above stated ground. The District judge considered this ground and held that since only a narrow strip of land was left in front of the main building its utility was diminished and awarded an additional compensation of Rs. 1,000/ . The respondents preferred an appeal to the High Court in which they prayed for a declaration that the Land Acquisition Officer should acquire the main building along with the other properties acquired. The present appellant contended that the respondents should not be allowed to raise this contention 383 because this plea could have been raised by them only under section 49 of the Act and the plea was foreign to the scope of the reference out of which the appeal arose. It was also contended that his plea was not taken before the Land Acquisition Officer. The High Court rejected these contentions of the Appellants and granted the declaration as prayed for by the respondents. The present appeal is by way of a certificate granted by the High Court. Substantially the same contentions as were raised before the High Court were raised in this appeal before this Court. Held that the claim was made by the respondents under section 23 of the Act and not under section 49 and what they have in fact done is to claim additional compensation under section 23 (1). It is clear that the scope of the enquiry under section 18 (1) is specifically indicated by the section itself and the grounds on which objection can be taken. The Court cannot consider the pleas raised by the owner of the property under section 49 in an enquiry under section 18 (1). The scheme of section 49 is that the owner has to express his desire that the whole of his house should be acquired before the award is made and once such a desire is expressed the procedure prescribed by section 49 has to be followed. This procedure is distinct and separate from the procedure which has to be followed in making a reference under section 18. In the present case the respondents have not taken any steps to express their desire that the whole of their house should be acquired and it was not open to the High Court to allow them to raise this point in appeal which Arose out of an order passed by the District Judge under section 18. Case law reviewed. Pramatha Nath Mullick vs Secretary of State for India in Council, (1929) L. R. 57 I. A. 100. The Secretary of State for India in Council V. R. Narayanaswami Chettiar, Mad. 391, distinguished. Krishna Das Roy vs The Land Acquisition Collector of Pabna,

iminal Appeal No. 18 of 1955. Appeal from the judgment and order dated December 1, 1954, of the Calcutta High Court in Criminal Appeal No. 322 of 1953, arising out of the judgment and order dated November 20, 1953, of the West Bengal First Special Court at Alipore in Case No. 3 of 1953. N. C. Chatterjee and D. N. Mukherjee, for the appellant. B. Sen and P. K. Ghosh (for P. K. Bose), for the respondent. November 26. The following Judgment of the Court was delivered by IMAM J. The High Court of Calcutta certified under article 134(1)(c) of the Constitution that the case before us was a fit one for appeal to this Court. The 127 1000 ground for the granting of the certificate, as stated by the High Court, will be considered in due course. The appellant was convicted under section 5(2) of the Prevention of Corruption Act, 1947 (II of 1947), hereinafter referred to as the Act, and under section 161 of the Indian Penal Code by a Special Judge who sentenced him under section 161, to undergo rigorous imprisonment for three months and to pay a fine of Rs. 500 in default to suffer further rigorous imprisonment for one month. No separate sentence was passed under section 5(2) of the Act. He unsuccessfully appealed to the High Court against his conviction and sentence. The charge framed against the appellant under section 161 of the Indian Penal Code, in substance, stated that on or about May 12, 1952,he had accepted Rs. 100 as illegal gratification from V. section Doraiswamy as a motive or reward for doing an official act and showing in the exercise of his official functions favour to Doraiswamy in seeing that a speedy and favourable settlement of the claim cases preferred by him against the Bengal Nagpur Railway, subsequently the Eastern Railway. The charge under section 5(2) of the Act which related to the same transaction stated that the appellant had accepted the aforesaid sum of Rs. 100 by corrupt or illegal means or by otherwise abusing his position as a public servant. It is unnecessary to set out in any great detail the story of the prosecution as to how Doraiswamy and the appellant came into contact and how the process of giving bribe to the appellant began. They met in 1950. Rs. 10 was paid to the appellant in October, 1951, and Rs. 15 in January, 1952, as the result of the appellant asking Doraiswamy for some gratification for speedy and favourable disposal of his claim cases. The appellant was at that time Assistant Supervisor of Claim Cases of the Bengal Nagpur Railway of the Vizianagram Section. On some secret information, the Deputy Superintendent of Police, Special Police Establishment at Puri directed Inspector G. N. Brahma to contact Doraiswamy in connection with a report of alleged dishonesty by railway officials. Brahma met Doraiswamy and asked him to meet him again at 1001 Calcutta on May 10, 1952, after the latter had filed a complaint along with some letters said to have been written by the appellant. Permission was obtained from the Chief Presidency Magistrate, Calcutta to investigate the case. Thereafter Doraiswamy met the appellant in Calcutta and it was settled that the former would pay the latter Rs. 100 on May 12, 1952, at 6 p. m. at the India Coffee House. Doraiswamy informed the police of the arrangement. Marked tenrupee currency notes were given to Doraiswamy. The appellant and Doraiswamy met at the India Coffee House as arranged. There was a talk between them about expediting the claim cases which were being dealt with by the appellant and a list of them was given to him. This list and the bundle of marked currency notes which Doraiswamy gave him were put in the left upper pocket of his shirt by the appellant. The Inspectors H. K. Mukherjee and section B. Mitra along with G. N. Gosh, an Assistant Director of Postal Ser vices and Brahma came up to the appellant. He was accused by the police of having received 10 ten rupee currency notes as bribe from Doraiswamy and was asked to produce them. After some hesitation the appellant produced the currency notes as well as the list given to him by Doraiswamy. The number of the currency notes were checked and found to tally with the previously noted numbers of the currency notes given to Doraiswamy for handing them over to the appellant. The case of the prosecution was found to have been proved by both the courts below and the appellant was convicted and sentenced as stated above. It may be stated at the outset that the concurrent findings of fact arrived at by the courts below were not questioned before us. The only question canvassed before us was whether there had been a valid sanction given under section 6 of the Act without which no court could take cognizance of the offences alleged to have been committed by the appellant. In order to appreciate the submission made by Mr. Chatterjee in this connection, a few facts have to be stated and some reference to the evidence of 1002 Mr. Bokil, P.W. 5, Chief Commercial Superintendent of the Eastern Railway at Calcutta will be necessary. The appellant as Assistant Supervisor of Claim Cases of the then Bengal Nagpur Railway (later the Eastern Railway) had the power to deal finally with claims up to Rs. 75 and for claims in excess of that sum to make a recommendation to his superior officer, the Assistant Commercial Superintendent. Doraiswamy was working on behalf of several persons who had made claims against the Railway. These cases were numerous. All these cases had to be dealt with by the appellant either by passing final orders himself, if the value in each case was Rs. 75 or less, or by recommending to his superior officer the cases where the value of the claim, in each case, was more than Rs. 75. The appellant, therefore, being incharge of all the claim cases played an important part in their disposal either by passing final orders himself or by making recommendations. When the appellant was paid Rs. 100 at the India Coffee House on May 12, 1952, he was found in possession of the marked currency notes and the list of cases, in which claims had been made, which had been given to him by Doraiswamy. Sanction for the prosecution of the appellant was sought from the Chief Commercial Superintendent Mr. Bokil, P.W. 5. There is no dispute that Mr. Bokil was competent to grant the sanction. He had stated in his evidence that before according the sanction he went through all the relevant papers and was satisfied that in the interests of justice the appellant should be prosecuted. He, accordingly, gave the sanction in writing and this document was marked as exhibit 6. Exhibit 6 clearly states that the appellant had demanded on May 12, 1952, as bribe the sum of Rs. 100 from Doraiswamy and had accepted the sum as a motive or reward for speedy and favourable settlement of the claim cases, that Mr. Bokil had applied his mind to the facts and the circumstances of the case and was satisfied that in the interests of justice, the appellant should be put on his trial in a Court of competent jurisdiction for offences under section 161 of the Indian Penal Code and section 5(2) of the Act alleged to have been 1003 committed by him. He, accordingly, under the provisions of section 6 of the Act, accorded his sanction that the appellant be prosecuted in a competent court of law for the offence of having accepted illegal gratification as a motive or reward for showing favour to Doraiswamy in respect of the claim cases filed against the Vizianagram Section of the Railway. Exhibit 6 on the face of it and the evidence of Mr. Bokil in examination in chief clearly establish that a valid sanction had been accorded by Mr. Bokil. It was, however, urged before the Special Judge, as it was urged in the High Court, that certain statements made by Mr. Bokil in cross examination clearly showed that he had not applied his mind to the facts and circumstances of the case and the sanction accorded by him was not a valid one. The Special Judge rejected this contention and was satisfied that exhibit 6 on the face of it disclosed a valid sanction for the prosecution of the appellant. The learned Judges of the High Court who heard the appeal were also satisfied that Mr. Bokil had, in fact, applied his mind to the facts and circumstances of the case. Regarding the statements made by Mr. Bokil in cross examination they were of the opinion that they did not show that he did not apply his mind to the facts of the case. These statements merely showed that he did not investigate the truth of the case presented against the appellant. An application was filed in the High Court under article 134 of the Constitution for the granting of a certificate that the case was a fit one for appeal to this Court. The order granting the certificate shows that the learned Judges who heard the application were of the opinion that the sanction accorded in this case was not a valid sanction. The learned Judges were of the opinion that the question whether or not there was a proper sanction in the case was a question serious enough to justify the granting of a certificate. It is necessary therefore to decide whether the sanction accorded in this case was a valid sanction. The substance of the sanction has already been stated but in order that there may be no misunderstanding we quote the very words of the sanction itself: 1004 " Whereas a complaint was made against Shri Indu Bhusan Chatterjee, Assistant Supervisor, Claims, of the B. N. Railway (now Eastern Railway) Garden Reach, Calcutta, who looked after the claims cases against the Railway of the Vizianagram Section, that the said Indu Bhusan Chatterjee had demanded and on 12th May, 1952, accepted a bribe of Rs. 100 (Rupees one hundred only) from Shri V. section Doraiswamy of the Commercial Claims Bureau, Vizianagram as a motive or reward for speedy and favourable settlement of the claims cases of the Commercial Claims Bureau and thereby having committed an offence punishable under Section 161 1. P. C. and also the offence of criminal misconduct by the illegal and corrupt use of his official position as a public servant to obtain a pecuniary advantage for himself punishable under Section 5(2) read with Section 5(1), clause (d) of the Prevention of Corruption Act II of 1947, 1, R. K. Bokil, Chief Commercial Superintendent, Eastern Railway, Calcutta, having applied my mind to the facts and circumstances of the case, am satisfied, and am of the opinion that in the interests of justice, Shri Indu Bhusan Chatterjee, Assistant Supervisor, Claims, Eastern Railway, Garden Reach, Calcutta, be put on his trial in a Court of competent jurisdiction for the offences alleged against him. That as Shri Indu Bhusan Chatterjee, Assistant Supervisor, Claims, Eastern Railway, Garden Reach, Calcutta, is removable from his office by me; I therefore by virtue of the powers vested in me by Section 6(c) of the Prevention of Corruption Act II of 1947, do hereby accord sanction that Shri Indu Bhusan Chatterjee be prosecuted in a competent Court of law for the offence of having accepted an illegal gratification as a motive or reward for showing favour to Shri V.S. Doraiswamy, in his official functions viz., the settlement of the cases of the Vizianagram Section of Eastern Railway, punishable under Section 161 I.P.C. and for the offence of criminal misconduct for the corrupt and illegal use of his official position to obtain a pecuniary advantage for himself punishable under Section 5(2) of the Prevention of Corruption Act (Act II of 1947)." 1005 In our opinion, this sanction clearly states all the facts which concern the prosecution case alleged against the the appellant with reference to his acceptance of Rs. 100 from Doraiswamy on May 12,1952, in circumstances which, if established, would constitute offences under section 161, Indian Penal Code and section 5(2) of the Act. The sanction also clearly states that Mr. Bokil had applied his mind and was of the opinion that in the interests of justice the appellant should be prosecuted. The charge framed against the appellant at his trial was with reference to this very incident and none other. What more facts were required to be stated in the sanction itself we are unable to understand. Mr. Bokil in his examination in chief stated " On the prayer of the police, I accorded sanction to the prosecution of one Shri I. B. Chatterjee who was the Assistant Supervisor of Claims. Before according sanction I went through all relevant papers and was satisfied that in the interest of justice, Sri I.B. Chatterjee should be prosecuted. This is the sanction marked exhibit 6 ". In cross examination, however, he made the following statement: " This sanction exhibit 6 was prepared by the police and it was put before me by the personnel branch of my office. I did not call for any record in connection with this matter from my office. I did not call for the connected claim cases nor did I enquire about the position of those claim cases. " The learned Judges in granting the certificate, apparently, were impressed by the statement of Mr. Bokil that exhibit 6 was prepared by the police and put before him by the personnel branch of his office, because the learned Chief Justice observed, "I can hardly imagine the duty of granting the proper sanction being properly discharged by merely putting one 's signature on a ready made sanction presented by the police. " It seems to us that Mr. Bokil 's statement does not prove that he merely put his signature on a readymade sanction presented by the police. It is true that he did not himself dictate or draft the sanction, but Mr. Bokil has stated in the clearest terms, in his examination in chief, that before be accorded sanction he went through all the relevant papers. There is no 1006 reason to distrust this statement of Mr. Bokil, nor has the High Court, while granting the certificate of fitness, done so. He was an officer of high rank in the Railway and must have been fully aware that the responsibility of according the sanction against an official of the Railway subordinate to him lay upon him. It is inconceivable that an officer of the rank of Mr. Bokil would blindly sign a ready made sanc tion prepared by the police. Apparently, the sanction already drafted contained all the material facts upon which the prosecution was to be launched, if at all, concerning the acceptance of the bribe by the appellant on May 12, 1952. When exhibit 6 was placed before Mr. Bokil other relevant papers were also placed before him. It is significant that Mr. Bokil was not crossexamined as to what the other relevant papers were and in the absence of any question being put to Mr. Bokil we must accept his statement that the papers placed before him were relevant to the only question before him whether he should or should not accord his sanction to the prosecution of the appellant. Mr. Bokil said, and we see no reason to distrust his statement, that before he accorded his sanction lie went through all these papers and after being satisfied that sanction should be given he accorded his sanction. It is true that he did not call for any record in connection with the matter from his office nor did he call for the connected claim cases or find out as to how they stood. It was not for Mr. Bokil to judge the truth of the allegations made against the appellant by calling for the records of the connected claim cases or other records in connection with the matter from his office. The papers which were placed before him apparently gave him the necessary material upon which he decided that it was necessary in the ends of justice to accord his sanction. Reliance was placed on the case of Gokulchand Dwarkadas Morarka vs The King(1) and other cases, to which it is unnecessary to refer, in support of the submission on behalf of the appellant that the sanction accorded was not a valid sanction. A careful reading, (1) (1948) L.R. 75 I.A. 30. 1007 however, of Morarka 's case (1) satisfies us that the sanction accorded in this case in no way conflicts with the observations of their Lordships of the Judicial Committee. On the contrary, in our opinion, it is in keeping with them. None of the other cases cited by the learned Counsel for the appellant assist us in the matter. When the sanction itself and the evidence of Mr. Bokil are carefully scrutinized and read together there can be little doubt that the sanction accorded was a valid sanction. The only point which had been argued before us and which was the expressed reason for the granting of the certificate having failed, the appeal must be dismissed and the decision of the High Court in upholding the conviction and sentence of the appellant must be upheld. Appeal dismissed.

The appellant, a public servant, was convicted under section 5(2) of the Prevention of Corruption Act, 1947, and under section 161 of the Indian Penal Code on a charge of accepting a sum of Rs. 100 as illegal gratification. It was contended for the appellant that the conviction was bad on the ground that the sanction for his prosecution was not valid because the officer competent to sanction the prosecution (1) had not applied his mind to the facts and circumstances of the case but merely perused the draft prepared by the Police and (2) did not investigate the truth of the offence ' The evidence, however, showed that he went through all the papers placed before him which gave him the necessary material upon which he decided that it was necessary in the ends of justice to accord his sanction : Held, that the essentials of a valid sanction were present in the case and that the conviction was valid. Gokulchand Dwarkadas Morarka vs The King, (1948) L.R. 75 I.A. 30, referred to.

Appeal No. 46 of 1950. Appeal by special leave from a judgment of the High Court of Judicature at Bombay dated 23rd March, 1948, (Chagla C.J. and Tendolkar J.) in Income Tax Reference No. 16 of 1947. M.C. Setalvad, Attorney General for India (Gopal Singh, with him) for the appellant. N.C. Chatterjee (B. Sen, with him)for the respondent. 1951. September 18. The Judgment of the Court was deliv ered by MAHAJAN J. The sole controversy in this appeal centres round the point as to whether or not excess profits tax is payable on the sum of Rs. 20,005 received by the respondent from Messrs Parakh & Co. by way of rent for the dyeing plant let out to them during the chargeable accounting period. The respondent (Sri Lakshmi Silk Mills Ltd.) is a manu facturer of silk cloth, and as a part of its business it installed a plant for dyeing silk yarn. During the charge able accounting period (1st January, 1943, to 31st December, 1943) owing to difficulty in obtaining silk yarn on account of the war it could make no use of this plant and it re mained idle for some time. On the 20th August, 1943, it was let out to Messrs E. Parakh & Co. on a rent of Rs. 4,001 per month. The Excess Profits Tax Officer by his assessment order dated 11th June, 1945, included the sum of Rs. 20,005 realized as rent for five months, in the profits of the business of the respondent and held that excess profits tax was payable on this amount. This order was confirmed on appeal by the Appellate Assistant Commissioner and on fur ther appeal by the Income tax Tribunal. The Tribunal, however, on being asked referred the following question of law to the High Court for its opinion: "Whether in the circumstances of the case, the asses see 's income of Rs. 20,005 is profits from business 3 within the meaning of section 2 (5) of the Excess Profits Tax Act and therefore or otherwise liable to pay excess profits tax ?" The High Court answered the question in the negative. This is an appeal by special leave from this decision. It was contended on behalf of the Commissioner before the High Court that the dyeing plant was a commercial asset of the assessee 's business for the purpose of earning profit and if this commercial asset yielded income to him in any particular manner, it was income from the assessee 's busi ness for the purpose of the Excess Profits Tax Act. It was said that it was immaterial whether a commercial asset yields income by use of the assessee himself or its being used by someone else. This contention was disposed of by the learned Chief Justice in these words : "Mr. Joshi seems to be right but with this qualification that the commercial asset must be at the time it was let out in a condition to be used as a commercial asset by the assessee. If it has ceased to be a commercial asset, if its use as a commercial asset has been discontinued, then if the assessee lets it out, he is not putting to use something which is a commercial asset at the time. "Now, on the facts found by the Tribunal, it is clear that when the assessee let out this dyeing plant, it had remained idle for some time. He could not obtain silk yarn on account of the war and therefore it was not possible to make use of it as a commercial asset as far as the assessee himself was concerned and it was only for that reason that he let it out to Messrs E. Parakh & Co. I can understand the principle for which Mr. Joshi is contending that it makes no difference what an assessee does with a commercial asset belonging to him. He may use it as he likes. So long as it yields income it is the income of his business. Var ious cases have been cited at the Bar and I think that those cases though apparently conflicting are reconcilable if we accept this principle to be the correct principle 4 and apply this ratio as the ratio emerging from these cases and I will state the principle and the ratio again that if an assessee derives income from a commercial asset which is capable at the time of being used as a commercial asset, then it is income from his business, whether he uses that commercial asset himself or lets it out to somebody else to be used. But if the commercial asset is not capable of being used as such, then its being let out does not result in an income which is the income of the business." Mr. Justice Tendolkar concurred in this view and ob served as follows : "The ratio of all these cases to my mind is that if there is a commercial asset which is capable of being worked by the assessee himself for the purpose of earning profits and the assessee instead of doing so, either voluntarily allows someone else to use it on payment of a certain sum or is compelled by law to allow it to be used in such manner, then what he receives is income from business. But if the commercial asset has ceased to be a commercial asset in the hands of the assessee and thereafter he gets what he can out of it by letting it out to be used by others, then the rent he receives is not income from any business that he carries on. " The learned Attorney General pointed out that the nature of a commercial asset is not changed because a par ticular person is unable to use it. The inability of the assessee to make use of it in certain circumstances does not in any way ' affect the nature of the asset and cause an infirmity in the asset itself. It was contended that when the dyeing plant became idle for a short time during the chargeable accounting period it did not cease to be a com mercial asset of the respondent for it had no other busi ness; that all the assets of the respondent including the dyeing plant were the assets of the business, that whatever income was derived by the use of these assets including the income that an asset fetched by its being let out was the business income of the assessee, and that there was no warrant 5 in law for the proposition that a commercial asset which yields income must be used as an asset by the respondent himself before its income becomes chargeable to tax. The learned counsel for the respondent urged that as soon as the assessee found difficulty in obtaining yarn the dyeing plant became redundant for its business and ceased to be an asset of its business and any income derived from the rent by letting out this asset was income received by the assessee from other sources and therefore was not charge able to excess profits tax. In our opinion, the contention raised by the learned Attorney General is sound. The High Court was in error in engrafting a proviso on the rule deduced by it from the authorities considered by it, to the effect that a commer cial asset of a business concern which yields income must at the time it was let out be in a condition to be used as a commercial asset by the assessee himself. We respectfully concur in the opinion of the learned Chief Justice that if the commercial asset is not capable of being used as such, then its being let out to others does not result in an income which is the income of the business, but we cannot accept the view that an asset which was acquired and used for the purpose of the business ceased to be a commercial asset of that business as soon as it was temporarily put out of use or let out to another person for use in his business or trade. The yield of income by a commercial asset is the profit of the business irrespective of the manner in which. that asset is exploited by the owner of the business. He is entitled to exploit it to his best advantage and he may do so either by using it himself personally or by letting it out to somebody else. Suppose, for instance, in a manufac turing concern the use of its plant and machinery can advan tageously be made owing to paucity of raw materials only for six hours in a working day, and in order to get the best yield out of it, another person who has got the requisite raw materials is allowed to use it as a licensee on payment of certain 6 consideration for three hours; can it be said in such a situation with any justification that ' the amount realized from the licensee is not a part of the business income of the licensor. In this case the company was incorporated purely as a manufacturing concern with the object of making profit. It installed plant and machinery for the purpose of its business, and it was open to it if at any time it found that any part of its plant "for the time being" could not be advantageously employed for earning profit by the company itself, to earn profit by leasing it to somebody else. It is difficult to hold that the income thus earned by the commer cial asset is not income from the business of the company that has been solely incorporated for the purpose of doing business and earning profits. There is no material whatever for taking the view that the assessee company was incorpo rated with any other object than of carrying on business or trade. Owning properties and letting them was not a purpose for which it was formed and that being so, the disputed income cannot be said to fall under any section of the Indian Income tax Act other than section 10. Cases of undertakings of this nature stand on an entirely different footing and are distinguishable from cases of individuals or companies acquiring lands or buildings and making income by letting them on hire. These latter cases may legitimately fall under the specific provisions of section 9 or section 12, though the High Courts in this country are by no means unanimous on this subject; but for the purpose of this case it is unnecessary to resolve that conflict. It may be observed that no general principle can be laid down which is applicable to all cases, and each case has to be decided on its own circumstances. Decisions of the Eng lish courts given under the Finance Acts, the scheme of which is different from the Indian Income tax statutes, are not always very helpful in dealing with matters arising under the Indian law and analogies and inferences drawn from those decisions are at times misleading. We, however, are in respectful agreement with the observations of Lord 7 President Strathclyde in Sutherland vs The Commissioners of Inland Revenue(1) that if a commercial asset is susceptible of being put to a variety of different uses in which gain might be acquired, whichever of these uses it was put to by the appellant, the profit earned was a user of the asset of the same business. A mere substituted use of the commercial asset does not change or alter the nature of that asset. Whatever the commercial asset produces is income of the business of which it is an asset, the process by which the asset makes the income being immaterial. Mr. Chatterjee for the respondent stressed the point that as the dyeing plant in the present case could not be made use of by the assessee in its manufacturing business owing to the non availability of yarn, it ceased to be a commercial asset of the business of the assessee and became redundant to that business and that being so, any income earned by this asset which had ceased to be a commercial asset was not an income of the business but must be held to have been derived from a source other than business and fell within the ambit of section 12 of the Indian Income tax Act, and on this income excess profits tax was not payable. He contended that the facts of this case were analogous to the case of Inland Revenue Commissioners vs lies(2) and it should be similarly decided. In that case the taxpayer carried on the business of sand and gravel merchant on certain land and at the same time he granted licences to three firms to enter his land and win gravel for themselves in return for which he received from them a royalty for each cubic yard of gravel taken away. It was held that the royalties were not part of the profits of the business because, in granting the licences, the taxpayer was exploit ing his rights of ownership in the land and was not carrying on his business of a sand and gravel merchant. The income was held taxable as an income from an investment and did not fall under Schedule D which concerns profits earned from a trade. Mr. Chatterjee also laid emphasis on the observations of Lord (1) (2) [1947] 1 A.E.R. 798. 8 Greene M.R. in Croft vs Sywell Aerodrome Ltd. (1), wherein the learned Master of the Rolls observed as fol lows: "I cannot myself see that a person who leases the land to others, or grants licences to others to come upon it, is doing anything more than exploiting his own rights of property, even if the tenant or licensee is, by the terms of the lease or licence, entitled himself to carry on a trade on the land. " It was urged that what the assessee was doing in this case was exploiting his rights of property by letting the dyeing plant to other persons precisely in the same manner as the owner of land in the case cited above was exploiting his own rights to property by granting a licence to another to come on his land. The argument, in our opinion, though attractive, is fallacious. The analogy between the case of land and of a dyeing plant for the purpose of taxing stat utes is inappropriate. The distinction becomes apparent from the following passage which occurs in Atkinson J. 's judgment in I les 's case(2) : "Then it was suggested by counsel for the Crown that the case was like the Desoutter case(3), where it was held that, if you make use of a patent in your business and also receive royalties from the use of the patent by others licensed to use it, those royalties cannot be regarded as receipts from an investment. In other words, the door has to be either open or shut. A patent is either an investment or it is not. The suggestion was that freehold land is in the same position, and if you carry on business on part of it, whatever you do with the rest by way of licensing or letting cannot be regarded as producing income from investment. That, however, is dead in the teeth of the judgment in the Broadway Car Co. case(4). The same argument was tried there, but Tucker L.J. said he thought the Desoutter case(3) had very little to do with it, as there was a great difference between land (1) (3) (2) (4) 9 and a patent, and he did not think the Desoutter case(1) threw any light on the matter . A patent is quite different from freehold land." These observations appositely apply to the case of a company incorporated for the purpose of doing business and earning profit by the process of manufacture. Letting out a part of its machinery in a certain situation in order to make the business advantageous as a whole does not alter the nature of the income. The case of an owner of land letting out his land and carrying on exploitation of part of that land by selling gravel out of it, as at present advised, in our opinion, would fall under section 9 of the Indian In come tax Act, as income earned, no matter by whatever meth od, from land, and specifically dealt with by that section. The observations therefore made in I les 's case(2) can have no apposite application to the case of a manufacturing concern letting out a part of its machinery temporarily which it cannot advantageously use itself. Mr. Chatterjee also laid stress on the decision of the Court of Appeal in Inland Revenue Commissioners vs Broadway Car Co. Ltd.(3). In this case the company carried on the business of motor car agents and repairers on land held on lease from 1935 to 1956 at an annual rent of pound 750. By 1940 the company 's business had dwindled under war condi tions to such an extent that no more than one third of the land was required. In those circumstances the remainder was sublet for fourteen years at an annual rent of pound 1,150. The general commissioners of income tax decided that the difference of pound 400 between the outgoing of pound 750 for the land retained and the incoming of pound 1,150 for the land disposed of was "income received from an invest ment," and, the business not being one within the special categories mentioned in the Finance Act, 1939, that pound 400 was not taxable. It was held that the word "investment" must be construed in the ordinary, popular sense of the word as used by businessmen and not as a (1) [1946] 1 A.E.R.58. (3) [1946] 2 A.E.R. 609. (2) 2 10 term of art having a defined or technical meaning and that it was impossible to say that the commissioners had erred in law in coming to the conclusion that the transaction result ed in an investment. Scott L.J. in delivering his judgment laid emphasis on the point that after the business of the company had dwindled, it partitioned part of the land from the rest and sublet it by installing a heating apparatus for the sub lessee. It was found that war conditions had reduced the company 's business to very small proportions and they cut their loss by going out of business in respect of the major part of their land and put it out of their power for 14 years to resume business there. In this situation it was observed that in that case they were dealing with part of the property of the company which had come redundant and was sublet purely to produce income a transaction. quite apart from the ordinary business activities of the company. It was pointed out that the question whether a particular source of income was income or not must be decided, as it could be, according to ordinary commonsense principles. The short question to decide in this case is whether on the facts found, it could be said reasonably that the dyeing plant had become redundant for its business as a silk manu facturing concern, simply by the circumstance that for the time being it could not be used by it personally for the purpose of dyeing silk yarn owing to the non availability of yarn. It is difficult to conceive that the company would not have immediately started dyeing yarn as soon as it became available. Instead of dyeing yarn, another person was allowed to dye jute (we are told), the assessee company making income out of its use as a commercial asset. In this situation it is not possible to hold that the income thus earned was not a part of the income of the business and was not earned for the business by its commercial asset or that this commercial asset had become redundant to the company 's business of manufacture of silk. The analogy of Broadway Car Co. Ltd. (1) therefore does not hold good for the decision of the present matter, (1) 11 We are therefore of the opinion that it was a part of the normal activities of the assessee 's business to earn money by making use of its machinery by either employing it in its own manufacturing concern or temporarily letting it to others for making profit for that business when for the time being it could not itself run it. The High Court therefore was in error in holding that the dyeing plant had ceased to be a commercial asset of the assessee and the income earned by it and received from the lessee, Messrs Parakh & Co., was not chargeable to excess profits tax. The result therefore is that we hold that the answer returned by the High Court to the question referred to it by the Tribu nal was wrong and that the correct answer to the question would be in the affirmative and not in the negative. The appeal is allowed, but in the circumstances of the case we make no order as to costs. We have not thought it necessary to refer to all the cases cited at the Bar as none of them really is in point on the short question that we were called upon to decide and analogies drawn from them would not be helpful in arriving at our decision. Appeal allowed. Agent for the appellant. P.A. Mehta.

The respondent, a company formed for the purpose of manufacturing silk cloth, installed a plant for dyeing silk yarn as a part of its Business. During the chargeable accounting period (last January, 1943, to 31st December, 1943) owing to difficulty in obtaining silk yarn on account of the war, it could make no use of this plant and it re mained idle for some time. In August, 1943, the plant was let out to another company on a monthly rent. The question being whether the income received by the respondent company in the year 1948 by way of rent of this plant was income from business and assessable to excess profits tax, the High Court of Bombay held that, as the assessee was not able to use the plant as a commercial asset, it had ceased to be a commercial asset in the assessee 's hands and the rent re ceived was not income from business. On appeal: Held, that an asset which was acquired and used for the purpose of the business by a company formed for carrying on business and earning profits, does not cease to be a commer cial asset of that business as soon as it is temporarily put out of use or let out to another person for use in his business or trade; the income from the asset would be profit of the business irrespective of the manner in which that asset is exploited by the owner, and the rent in question was therefore income from business and assessable to excess profits tax. No general principle, however, can be laid down which is applicable to all cases. Each ease has to be decid ed on its own circumstances. Sutherland vs Commissioners of Inland Revenue relied on. Inland Revenue Commissioners vs lies [1947] 1 A.E.R. 798, Croft vs Sywell Aerodrome Co., Ltd. [1942] 1 A.E.R. 110, Inland Revenue Commissioners vs Broadway Car Co., Ltd. [1946] 2A.E.R. 609 distinguished. Judgment of the Bombay High Court reversed.

N: Civil Appeal Nos. 1629 to 1631 of 1968. Appeals from the judgment and order dated January 29, 1965 of the Calcutta High Court in Wealth Tax Matter No. 372 of 1961. B. Sen, T.A. Ramachandran, R.N. Sachthey and B.D. Sharma, for the appellant (in 'all the appeals). M.C. Chagla, R.K. Choudhury and B.P. Maheshwari, for the respondent (in all the appeals). The Judgment of the Court was delivered by Ramaswami, J. This appeal is brought by certificate granted under section 29(1) of the Wealth Tax Act,1957 (hereinafter referred to as the Act) against the judgment of the Calcutta High Court dated January 29, 1965 in Wealth Tax Matter No. 372 of 1961. The respondent is a company which is assessed to wealthtax for the assessment years 1957 58,1958 59 and 1959 60. In computing the net wealth of the respondent on the respective valuation dates the Wealth Tax Officer proceeded under section 7(2)(a) of the Act and included the full value of the fixed assets as shown by the respondent in the respective balance sheets without any adjustment, after rejecting its contention that the fixed assets should be assessed at their written down value as computed for the purposes of income tax. In the assessment order 791 for 1957 58 the Wealth tax Officer gave his reasons as follows : "The assessee claimed that since the full amount of depreciation which was admissible under the Incometax Act was not provided in the balance sheet the amount of depreciation not provided for earlier should now be deducted from the value of the assets in order to arrive at the net wealth. This contention can hardly be accepted. The depreciation allowable under the Income tax Act does not determine the market value of the assets. The object of allowing depreciation in the income tax assess ment is quite different For the purpose of the wealth tax assessment the value of the assets as estimated by the assessee itself in its balance sheet has been accepted". Similarly in his assessment order for 1958 59 the Wealth tax Officer stated as follows : "Excluding the value of land, the total value of the fixed assets as per balance sheet amounts to Rs. 60,53,811 whereas the assessee has shown in its return the value of the same at Rs. 7,69,435. These values have been shown by the assessee on the basis of income tax written down value and not on the basis of the balance sheet values as required under the global system of valuation. It is common knowledge that the values of the imported machinery has increased considerably during the last few years and, on the valuation date, I do not think that their value should be less than that provided for in the balance sheet". On appeal the Appellate Assistant Commissioner confirmed the valuation of the fixed assets. On further appeal the Income tax Appellate Tribunal held that it would be fair in the circumstances of the case to adopt the written down value of the assets as value thereof for all the years under appeal. In the course of its order the Appellate Tribunal said: "The income tax assessment depreciation is calculated upon the original cost in a scientific and systematic manner with due regard to the nature of the asset. Therefore, the written down value as determined in the income tax assessment may be taken as the fair index of the net value of the business assets in most cases . . It cannot however be laid down as an inflexible rule of law that in every case the written down value must be taken to be the net 792 value of the business assets. If that were so. the Legislature would have said so in clear terms instead of indulging in the circumlocution in section 7(2)(a). In this particular case, it appears, the assessee did not make any reserve for depreciation and the assets are old dating back from the inception of the business long ago. In these circumstances, in our opinion, it would be fair to adopt the written down value of the assets as the value thereof for all the years under appeal . " At the instance of the Commissioner of Income tax the Appellate Tribunal stated a case to the High Court under section 27(1) of the Act on the following question of law : "Whether on the facts and in the circumstances of the case, for the purpose of determining the net value of the assets of the assessee under section 7(2) of the the Tribunal was right in directing that the written down value of the fixed assets of the assessee should be adopted as the value thereof, instead of their balance sheet value ?" By its judgment dated January 29, 1965 the High Court answered the question in the affirmative and in favour of the respondent. Section 7 of the Act stood as follows at the material time : "(1) The value of any asset, other than cash, for the purposes of this Act, shall be estimated to be the price which in the opinion of the Wealth tax Officer it would fetch if sold in the open market on the valuation date. (2) Notwithstanding anything contained in subsection (1), (a) where the assessee is carrying on a business for which accounts are maintained by him regularly, the Wealth tax Officer may, instead of determining separately the value of each asset held by the assessee in such business, determine the net value of the assets of the business as a whole having regard to the balance sheet of such business as on the valuation date and making such adjustments therein as the circumstances of the case may require. 793 In Kesoram Industries & Cotton Mills Ltd. vs Commissioner of Wealth Tax, (Central) Calcutta(1) the appellant company had shown in its balance sheet for the period ending March 31, 19.57, the appreciated value on revaluation of its assets, after making certain adjustments, at Rs. 2,60,52,357 and had introduced in the capital reserve surplus a corresponding balancing figure of Rs. 1,45,87,000 representing the increase in the value of the assets upon re valuation. For the purposes of wealth tax the officer took the sum of Rs. 2,60,52,357 as the value of the assets, whereas the company contended that an adjustment ought to be made in view of the increase in the value shown in the balance sheet on re valuation. It was held by this Court that as no one could know better the value of the assets than the assessee himself, the Wealth tax Officer was justified in accepting the value of the assets at the vigour shown by the appellant company itself. It was open to the appellant company to convince the authorities that that figure was inflated for acceptable reasons; but it did not make any such attempt. It was also open to the Wealth tax Officer to reject the figure given by the appellant company and to adopt another figure if he was, for sufficient reasons, satisfied that the figure given by the appellant was wrong. It is argued on behalf of the appellant in the present case that the High Court was not right in holding that the principle laid down by this Court in Kesoram Industries(1) case is not applicable. In our opinion there is justification for this argument. Under sub section (1 ) of section 7 of the Act the Wealth tax Officer is authorised to estimate for the purpose of determining the value of any asset, the price which it would fetch, if sold in the open market on the valuation date. But this rule in the case of a running business may often be inconvenient and may not yield a true estimate of the net value of the total assets of the business. The legislature has, therefore, provided in sub section (2) (a) that where the assessee is carrying on a business for which accounts are maintained by him regularly, the Wealth tax Officer may determine the not value of the assets of the business as a whole, having regard to the balancesheet of such business as on the valuation date and make such adjustments therein as the circumstances of the case may require. The power conferred upon the tax officer to make adjustments as the circumstances of the case may require is also for the purpose of arriving at the true value of the assets of the business. It is of course open to the assessee in any particular case to establish after producing relevant materials that the value given of the fixed as.sets in the balance sheet is artificially (1) ; 794 inflated. It is also open to the assessee to establish by acceptable reasons that the written down value of any particular asset represents the proper value of the asset on the relevant valuation date. In the absence of any material produced by the assessee to demonstrate that the written down value is the real value, the Wealth tax Officer would be justified in a normal case in taking the value given by the assessee itself to its fixed assets in its balance sheet for the relevant year as the real value of the assets for the purposes of the wealth tax. It is a question of fact in each case as to whether the depreciation has to be taken into account in ascertaining the true value of the assets. The onus of proof is on the assessee who must produce reliable material to show that the written down value of the assets and not the balance sheet value is the true value. If, therefore, the assessee merely claims that the written down value of the assets should be adopted but fails to produce any material to show that the written down value is the true value, the Wealth tax Officer is justified in rejecting the claims and adopting the values shown by the assessee himself in his balance sheet as the true value of his assets. In our opinion the High Court should have based its decision on the principle of Kesoram Industries(1) case and the question of law should be answered in the manner stated by us in this judgment. But it is necessary to give certain effective directions in this case. Section 27(6) of the Act requires the Tribunal on receiving a copy of the judgment of the Supreme Court or the High Court as the case may be to pass such orders as are necessary to dispose of the case conformably to such judgment. This clearly imposes an obligation upon the Tribunal to dispose of the appeal in the light and conformably with the judgment of the Supreme Court. Before the Tribunal passes an order disposing of the appeal there would normally be a hearing. The scope of the hearing must of course depend upon the nature of the order passed by the Supreme Court. If the Supreme Court agrees with the view of the Tribunal the appeal may be disposed of by a formal order. But if the Supreme Court disagrees with the Tribunal on a question of law, the Tribunal must modify its order in the light of the order of the Supreme Court. If the Supreme Court has held that the judgment of the Tribunal is vitiated because it is based on no evidence or because the judgment proceeds upon a misconstruction of the statute, the Tribunal would be under a duty to dispose of the case conformably with the opinion of the Supreme Court and on the merits of the dispute and re hear the appeal. In all cases, however, opportunity must be afforded to the parties of being heard. In Income(l) ; 795 tax Appellate Tribunal, Bombay vs S.C. Cambatta & Co. Ltd.(1) the Bombay High Court has explained the procedure followed in the disposal of an appeal conformably to the judgment of the High Court. Chagla C.J. in delivering the judgment .of the Court observed : ". . when a reference is made to the High Court e her under section 66(1) or section 66(2) the decision of the Appellate Tribunal cannot be looked upon as final; in other words, the appeal is not finally disposed of. It is only when the High Court decided the case, exercises its advisory jurisdiction, and gives directions to the Tribunal on questions of law, and the Tribunal reconsiders the matter and decides it, that the appeal finally disposed of . . it is clear that what the Appellate Tribunal is doing after the High Court has heard the case is to exercise its appellate powers under section 33 . The shape that the appeal would ultimately take and the decision that the Appellate Tribunal would ultimately give would entirely depend upon the view taken by the High Court. " This passage was quoted with approval by this Court in Esthuri Aswathiah vs Commissioner of Income tax(2). In the present case, therefore, the answer we have furnished to the question in the reference means that the Appellate Tribunal must now, in conformity with the judgment of this Court, act under section 27(6) of the Act, that is to say, dispose of the case after rehearing the respondent company and the Commissioner in the light of the evidence and according to law. There will be no order as to costs. G.C. (1) , 120.

The respondent company was assessed to wealth tax for the assessment years 1957 58, 1958 59 and 1959 60. In computing the net wealth of the respondent on the respective valuation dates the Wealth Tax Officer proceeded under section 7(2)(a) of the Act and included the full value of the fixed assets as shown by the respondent in the respective balance sheets without any adjustment, after rejecting` its contention that the fixed assets should be assessed at their written down value as computed for the purposes of income tax. The Appellate Assistant Commissioner confirmed the valuation but the Income tax Appellate Tribunal held that it would be fair in the circumstances of the case to adopt the written down value of the asset 's as value thereof for all the years under appeal. On reference being made to it under section 27(1) of the Wealth Tax Act the High Court held in 'favour of the respondent. The Revenue appealed, HELD: The rule of valuation on the basis of market value under section 7(1) of the Act may not yield a true estimate of the net value of the total assets in the case of a running business. The legislature has therefore provided in sub section (2)(a) that when the assessee is carrying on a business for which accounts are maintained by him 'regularly, the Wealth Tax Officer may determine the net value of the business as a whole, having regard to the balance sheet of such business as on the valuation date and make such adjustments therein as the circumstances of the case may require. The power conferred upon the tax officer to make adjustments as the circumstances of the case may require is also for the purpose of arriving at the true value of the assets of the business. It is of course open to the assessee in any particular case to establish after producing relevant materials that the value given of the fixed assets in the balance sheet is artificially inflated. It is also open to the assessee to establish by acceptable reasons that the written down value of any particular asset represents the proper value of the asset on the relevant valuation date. In the absence of any material produced by the assessee to demonstrate that the written down value is the real value the Wealth tax Officer would be justified in a normal case in taking the value given by the assessee itself to its fixed assets in the balance sheet for the relevant year as the real value of the assets for the purposes of the Wealth tax. It is a question of fact in each case as to whether the depreciation has to be taken into account in ascertaining the true value of the assets. The onus of proof is on the assessee who must produce reliable material to show that the written down value of the assets and not the balance sheet value is the true value. [793 E 794 C] 790 If, therefore, the assessee merely claims that the written down of the assets should be adopted but fails to produce any material to show that written down value is the true value, the Wealth tax Officer is justified in rejecting the claims and adopting the values shown by the assessee himself in his balance sheet as the true value of his assets. [794 C D] Kesoram Industries & Cotton Mills Ltd. vs Commissioner of Wealthtax (Central) Calcutta, ; , applied. (ii) Section 27(6) of the Act requires the Tribunal on receiving a copy of the judgment of the Supreme Court or the High Court as the ease may be to pass such orders as are necessary to dispose of the case conformably to such judgment. [794 E] If the Supreme Court agrees with the view of the Tribunal the appeal may be disposed of by a formal order. But if the Supreme Court disagrees with the Tribunal on a question of law, the Tribunal must modify its order in the light of the order of the Supreme Court. If the Supreme Court has held that the judgment of the Tribunal is vitiated because it is based on no evidence or because the judgment proceeds upon a misconstruction of the statute, the Tribunal would be under a duty to dispose of the case conformably with the opinion of the Supreme Court and on the merits of the dispute and re hear the appeal. In all cases, however, opportunity must be afforded to the parties of being heard. [794 F H] Income tax Appellate Tribunal, Bombay, vs S.C. Cambatta vs Commissioner of Income tax, , applied.

ivil Appeal Nos. 1331/79 and 426 of 1980. Appeals by Special Leave from the Judgment and order dated 16 4 1979 of the Delhi High Court in W.P. No. 489/76. M. C. Bhandare, A. C. Gulati, G. section Chatterjee and B. B. Sawhney for the Appellants in CA No. 1331/79 and for Respondent in CA 4261 80. Lal Narain Sinha, Att. and Miss A. Subhashini for the Appellants in CA No. 426 and Respondents in CA No. 1331/79. The Judgment of the Court was delivered by SEN J. These appeals by special leave from a judgment of the Delhi High Court. involve interpretation of section 2(h) of the , ]973, as amended by the Coal Mines Nationalisation Laws (Amendment) Act, 1978, as well as of sub section (2) of section 18 read with sub sections (3) and (4) of section 19 of the Act. The importance of this case in its legal aspect consists in the question as to whether the Central Government has the power under sub section (3) of section 19 of the Act to receive up to the specified date, i.e., June 30, 1975 any money due to a coal mine notwithstanding that 411 the realisation pertains to a period prior to that date. even though A such amounts may not be the "current assets", by reason of Explanation to section 2(h)(xii), and to apply such realisations under sub section (4) thereof to discharge the liabilities of such coal mine which could not be discharged by the appointed day, i.e., May 1. 1973. The facts of the case are as follows: Messrs Shethia Mining & Manufacturing Corporation, Calcutta apparently owned three non coking coal mines, two in the State of West Bengal viz., New Satgram and New Jamuria coal mines, and one in the State of Maharashtra viz. New Majri coal mine. The concern also owned a workshop called the New Satgram Engineering Works. in short, "Engineering Unit", built on a plot adjacent to the New Satgram coal mine in 1964. Outside the mining area, but adjacent to it, it had constructed a building known as the Technical Director 's Bungalow built somewhere in 1957 58. In or about 1960 61, it had constructed another building on the same plot of land, namely, the Guest House used for the residence of officers and staff of the mines. The management of the aforesaid coal mines was first taken over under the Coal Mines (Taking over of Management) ordinance. 1973 pending nationalisation of such mines and vested in the Central Government from the appointed day i.e., January 31, 1973. The ordinance was replaced by the Coal Mines (Taking over of Management Act, 1973, hereinafter referred to as the "Management Act". Thereafter, Parliament enacted the Coal Mines (Nationalisation) Acts 1973, hereinafter referred to as the 'Nationalisation Act ', providing for the acquisition and transfer of the rights, title and interest of the owners in respect of the coal mines specified in the Schedule with a view to re organising and reconstructing such coal mines so as to ensure the rational. co ordinated and scientific development and utilisation of coal resources consistent with the growing requirements of the country. The Nationalisation Act provides by sub section (1) of section 3 that the right, title and interest of the owners in relation to the coal mines specified in the Schedule shall stand transferred to, and vest absolutely in, the Central Government free from all incumbrances with effect from the appointed day, i.e., May 1. 1973. The mines in question were nationalised and have been mentioned at serial Nos. 383, 577 and 601 in the Schedule. The right, title and interest of Messrs Shethia Mining & Manufacturing Corporation consequently vested in the Central Government and subsequently by a notification in the Government Company, i.e., the Coal (India) Ltd. 412 The management of the New Satgram Engineering (hereinafter called the petitioners) Works tried at first, to challenge the validity of the Coal Mines (Taking over of Management) ordinance, 1973 by a petition in this Court under article 32 of the Constitution being Writ Petition No. 81 of 1973. On February 12, 1973 they obtained rule nisi and an interim order restraining the taking over of the Engineering Unit. On May 4, 1973 the Court made the stay absolute. Between the making of the two orders, the Coal Mines (Taking Over of Management) Act, 1973 was enacted on March 31, 1973 with retrospective effect from January 31, 1973. On May 17, 1973, the Central Government took over possession of the Technical Director 's Bungalow and the Guest House. On May 30, 1973 the was enacted and came into force with retrospective effect from May 1. On August 30, 1973 the Management filed another petition under article 32 of the Constitution being Writ Petition No. 1673 No. 1973 challenging the validity of the Act. On September 19, 1473 the Court issued rule nisi and an ad interim order in terms of the earlier order. On August 10, 1975 the Management Act and the Nationalisation Act were both placed in the Ninth Schedule, by the Constitution (Thirtyninth Amendment) Act being item Nos. 98 and 99 thereof on April 1, 1976 the petitioners withdrew their Writ Petitions Nos. 81 and 1673 of 1973 but two days after, i.e., on April 3, 1976 they presented a petition under article 226 of the Constitution before the Delhi High Court being Writ Petition No. 489 which has given rise to these appeals. It is not unworthy of mention here that the main relief, if rot the only substantial relief, sought by the petitioners in their petition under article 226 of the Constitution, was for the issue of a writ or direction in the nature of Mandamus in regard to the New Satgram Engineering Works, but it appears that at the hearing in the High Court the submissions ranged over a much wider field. The petitioners alleged that until April 30, 1973, i.e., prior to the appointed day, Messrs Shethia Mining & Manufacturing Corporation were the owners of the two coal mines i.e., New Satgram and New Majri, and as on that day. the outstanding dues from sundry debtors were Rs. 68.74 lacs, further that from January 31, 1973 to April 30, 1973 i.e., during the period of management, the Central Government had despatched coal from the aforesaid two mines worth Rs. 53.22 lacs and that a sum of Rs. 7,28,342.54 was still outstanding as on April 30, 1973 towards subsidy receivable from the erstwhile Coal Board 413 established under section 4 of the Coal Mines (Conservation and Safety) Act, 1952 on account of hard rock mining and stowing operations. It was also asserted that between the years 1962 and 1967 the petitioners had advanced a sum of Rs. 2,51,597.24 to the Eastern Railways for the construction of a railway siding, but the project having been abandoned on January 18, 1973 the amount had become due, although no such claim was made in the writ petition. The High Court partly allowed the writ petition. It declined to go into the question as to whether the Engineering Unit. together with Shethia Bhavan and all its assets etc. , the Technical Director 's Bungalow. and the Guest House, were or were not covered by the definition of 'mine ' in B. 2(h)(vi), (vii) and (xi) of the Nationalisation Act, but declared that the subsidy amounting to Rs. 7,28,342.54 receivable from the erstwhile Coal Board and outstanding as on May 1, 1973 did not vest in the Central Government under sub section (1) of section 3 being impressed with trust. It further held that any amount which could not be realised until June 30, 1975, i.e., the specified date, under sub section (3) of section 19 of the Act, would be realisable by the erstwhile owners of the coal mines. As regards the amount of Rs. 2,51,597.74 advanced by the petitioners to the Eastern Railways for construction of a railway siding, it held that no such claim having been made in the writ petition, they cannot be permitted to raise it. In these appeals, three questions arise; (1) whether the High Court having held that there was no special machinery provided in the Act for determining the question whether a particular asset fell within the definition of 'mine ' contained in section 2(h) of the Act, it ought to have, on the facts and circumstances of the present case, decided the said question in the exercise of its jurisdiction under article 226 of the Constitution? (2) Whether on a true construction of sub section (3) of section 19 of the Act, the Central Government was entitled, to the exclusion of all other persons, to receive up to the specified date, any money due to the coal mines in question, realised after the appointed day, i.e., May 1, 1973 notwithstanding that the realisation pertained to a period prior to that day, and under sub section (4) thereof to discharge the liabilities of the coal mines which could not be discharged by the appointed day, from out of such realisation up to the specified date, i.e., June 30, 1975? If that be so, whether any amount which could not be realised until the specified date, i.e., June 30, 1975 would be realisable by the erstwhile coal mine owners directly? (3) Whether the amount of subsidy receivable from the Coal Board established under section 4 of the Coal Mines (Conservation and Safety) Act, 1952 with respect to any period before the appointed day did not fall within the purview 414 of the definition of 'mine ' contained in section 2(h)(xii), being excluded from the expression 'current assets ' by reason of the Explanation thereto. It will be convenient in the first instance to deal with the first point which involves a mixed question of Law and fact. The facts have still to be investigated but the parties seek a declaration of the Law in the light of which the issues may be determined. The contains no provision for determining the question whether a particular asset falls within the definition of 'mine ' as defined in section 2(h) of the Act or not. In the Nationalisation Act, 'mine ' in section 2(h) is defined, except What is immaterial, in the following terms: "2. Definitions. In this Act, unless the context otherwise requires, XXX XXX XXX (h) 'mine ' means any excavation where any operation for the purpose of searching for or obtaining minerals has been or is being carried on, and includes (vi) all lands, buildings, works, adits, levels, planes, machinery and equipments, instruments, stores, vehicles, railways, tramways and siding in, or adjacent to, a mine and used for the purposes of the mine; (vii) all workshops (including buildings, machinery, instruments, stores, equipment of such workshops and the lands on which such workshops stand), in, or adjacent to, a mine and used substantially for the purposes of the mine or a number of mines under the same management; XXX XXX XXX (xi) all lands and buildings other than those referred to in sub cl. (x), wherever situated, if solely used for the location of the management, sale or liaison offices, or for the residence of officers and staff, of the mine: (xii) all other fixed assets. movable and immovable, belonging to the owner of a mine, wherever situate, and current assets, belonging to a mine, whether within its premises or outside. Explanation. The expression 'current assets ' does not include, (a) dues representing the sale of coal and coal products effected at any time before the appointed day and outstanding immediately before the said day; 415 (b) dues from the Coal Board, established under section 4 of the , prior to the repeal of the said Act with respect to any period before the appointed day; (c) dues from sundry debtors, loans and advances to other parties and investments, not being investments in the coal mines;" It will be seen that there is a difference in the language used in section 2(h)(vii) and (xi). Sub clause (vii) uses the words "in, or adjacent to, a mine" and "used substantially" for the purposes of the mine or a number of mines under the same management, in relation to workshops. The use of the word 'and ' makes both the conditions conjunctive. Sub clause (xi) uses the words "if solely used" for the location of the management, sale or liaison offices, or for the residence of officers and staff, of the mine, in relation to lands and buildings. The difference in language between the two expressions "used substantially" and "solely used" is obvious. It is, therefore, possible to contend that lands and buildings appurtenant to a coal mine, if not exclusively used for purposes of the colliery business, would not come within the definition of mine in section 2(h), i.e., it would depend upon the nature of user, and that the crucial date is the date of vesting. We are inclined to think that the distinction though apparent may not be real in the facts and circumstances of a particular case. A workshop or a building constructed initially for the purpose of a coal mine cannot by its being diverted to other purposes cease to belong to the mine. What is of the essence is whether the workshop or the building originally formed a part and parcel of the coal mine. The subsequent user may not, in our opinion, be very material. To illustrate, a workshops which has come into existence for and because of the mine but which also comes to be used for purposes other than of the mine does not on that account alone cease to be a workshop used substantially for the purposes of the mine. Again, a building which is constructed to locate the management offices of the mine but which is used to accommodate some other concern because of the availability of space does not on that account alone cease to be solely used for locating the management offices of the mine. By reason of sub section (1) of section 3 of the Act the right, title and interest of the owners in relation to the coal mines specified in the Schedule stand transferred to, and vest absolutely in the Central Government free from all incumbrances. Parliament instead of providing that the word 'mine ' shall have the meaning assigned to it in the has given an enlarged definition of 'mine ' in section 2(h) so that 416 not merely the colliery but everything connected with the mining industry should vest in the Central Government, i.e., not only that part of the industry which consisted of raising, winning and getting coal but also that part of it which consisted in the sale of coal and its supply to customers both of which are a part of an integrated activity. This is manifested by sub clauses (i) to (xii) of clause (h) of section 2, i.e., all the assets belonging to a mine vest in the Central Government. As against this, the liabilities are not taken over. Section 7 of the Act provides that every liability of the owner, agent, manager or managing contractor of a coal mine, in respect of any period prior to the appointed day shall be the liability of such owner, agent, manager or managing contractor, as the case may be, and shall be enforceable against him and not against the Central Government or the Government Company. Thus, there was no question of setting up a Tribunal for adjudication of title to the properties vested. Parliament by an enlarged definition of mine as contained in section 2(h) of the Act has indicated the nature of the properties that vest, and the question whether a particular asset is taken within the sweep of section 2(h) depends on whether it answers the description given therein. Where there is a dispute as to whether a particular property vests or not, the dispute undoubtedly is a civil dispute and must, therefore, be resolved by a suit. It was contended that the High Court should have gone into the question of title of the parties with respect to the properties in dispute particularly when sufficient documentary evidence was placed on record, as reflected in the judgment. We are afraid the matter is not as simple as is suggested. The documents on record merely tend to show that the engineering unit though adjacent to, was situate on a different plot, and there was an attempt to show that it was not a workshop in, or adjacent to, a mine. We are of the view that this hardly matters. Merely because the land on which a workshop of a coal mine is located bears a different plot number, or even if there is a compound wall between the main office of the coal mine and the workshop, it would not cease to be part of the mine. The question in such cases will always be whether the workshop is 'located in, or adjacent to, a mine ', and was 'used substantially for the purposes of the mine under the same management '. These are but essentially questions of fact to be deter mined according to the facts and circumstances of each particular case. When the facts themselves are seriously controverted, the High Court was justified in observing that the dispute relating to the properties in question raised a 'serious question of title ' and the parties must get their rights adjudicated upon in a civil court. 417 It was pressed upon the High Court that the two businesses of Messrs Shethia Mining & Manufacturing Corporation viz., the colliery business and the engineering business were two separate and distinct businesses, for they were governed by two different sets of laws. It was alleged that there were separate accounts kept, with a separate profit and loss account and a separate balance sheet with respect to each. According to the management, therefore, the colliery business on the one hand and the engineering business on the other were treated severally for all purposes. It was alleged that between the years 1968 and 1971, the total sales billed by the engineering unit were to the magnitude of Rs. 50,79,675. As against this, the sales to the New Satgram Coal Mines were only to the tune of Rs. 3,71,384 representing the costs of light structurals supplied. With respect to the remaining sum of Rs. 47,08,391 received by the engineering unit it was alleged to represent sales of light and medium structural works, for which no licence under the Industries (Development and Regulation) Act, 1951 was required, to various public sector undertakings like Hindustan Steel Construction Co. for Bokaro steel plant, Fertilizers & Chemicals Travancore for Durgapur Fertilizer Project, Hindustan Cables, Kapper India, Government of Nagaland etc. viz., to parties altogether unconnected with the coal industry. The question whether a workshop is 'substantially ' used for the purposes of a mine necessarily involves an enquiry as to whether it pertains to, or in substance is, part of the mine. The value of jobs executed for the mine as against those for others is not really determinative of the question. If a workshop is, in fact, a part of a coal mine, it does not cease to be so merely because its utilisation Lies in the production of materials supplied to third parties. While a workshop may form part of a mine and is substantially used as such, it may be utilised for turning out other products; it all depends upon the circumstances of each case, whether it forms part of a mine or not. The Union of India has joined issue by contending that not only the mine in question but also the workshop has vested in the Central Government. The assertions made by the management with regard to workshop are all denied. It is pleaded that the relationship and nexus of the said workshop is established by its being adjacent to the New Satgram Colliery and by the fact that the workshop was used substantially for the purposes of that mine and other mines under the same management as required by section 2(h)(vii) of the Nationalisation Act. It is asserted that the management has rested their case on a bald statement that the workshop is not situate in, or adjacent to, a mine, with out supporting it with any documentary proof. It is alleged that as soon as information regarding passing of the law vesting management 418 of the mine was derived, the management deliberately removed all the relevant books including the books of accounts which could have contradicted their present claim. Obviously the claim of the appellant that the workshop was not substantially used for purposes of the mine is only an afterthought. With regard to the Technical Director 's Bungalow, it is submitted by the Union of India that the said bungalow, wherever situate, is included in sub clause (xi) of clause (h) of section 2. It is urged that merely because that the land under such building is not 'one falling within the mining area ' is wholly immaterial. Even otherwise, the said bungalow, in any case, falls under sub clause (xii) of cl. (h) of section 2 of the Act. The said bungalow being a fixed asset belonging to the owners of the mine, forms part of the mine as defined in section 2(h)(xii). As such, even assuming that the said bungalow was not used solely for the purpose of the residence of officers. it would still be included in the definition of mine under the Nationalisation Act. Reliance is also placed on the admission made by the management in para 11 of the writ petition that the workshop was 'closed down in July 1970 '. The Management Act and the Nationalisation Act came into force in 1973. The said workshop was, therefore, admittedly closed down about 3 years earlier. As such, it is urged that there could be no question of the Technical Director of the coal mine being in charge of the said workshop at the relevant time so as to justify the plea raised by the management. It is pointed out that the management have themselves admitted that the building in question was constructed in 1957 58 for the residence of the Technical Director, whereas the workshop was 'constructed in 1964 ', as stated in para 9 of the petition. As regards the Guest House also, it is urged by the Union of India that for similar reasons it would be covered by sub cl. (xi) or (xii) of cl. (h) of section 2 of the Act. The question whether the engineering unit was 'situate in, or adjacent to ', the New Satgram coal mine and was 'substantially ' used for purposes of the mine as well as the question whether the Technical Director 's Bungalow and the Guest House were 'solely ' used for the residence of officers and staff of the mine and, therefore, fall within the definition of 'mine ' as contained in section 2(h) of the Nationalisation Act, cannot obviously be decided in proceedings under article 226 of the Constitution. The proper remedy is by way of a suit, as rightly observed by the High Court. 419 It is, however, urged that the filling of a suit would involve the parties into protracted litigation and inordinate delay in settling their claims. The parties request that their dispute with respect to the New Satgram Engineering Works including Shethia Bhawan together with its all assets, Technical Director 's Bungalow and the Guest House be referred to arbitration. This brings us to the main question, namely, as to the scope and effect of sub sections (3) and (4) of section 19 of the Nationalisation Act. On a construction of these provisions, the High Court was of the view that the Central Government, upto the specified day, i.e., June 30, 1975 were entitled to receive to the exclusion of all other persons. any money due to the coal mine, after the appointed day, notwithstanding that realizations pertained to the period prior to that day: but with respect to any amounts which could not be realised until June 30, 1975 it held that they would be realizable by the erstwhile owners of the coal mines directly. For a proper appreciation of the point involved, it is necessary to set out the provisions of section 19 which read as follows: "19. Statement of accounts in respect of the period of management by the Central Government, etc. (1) The Central Government or the Government Company, as the case may be, shall cause the books in relation to each coal mine, the management of which has vested in it under the Coal Mines (Taking over of Management) Act, 1973, to be closed and balanced as on the date immediately before the appointed day, and shall cause a statement of accounts, as on that day, to be prepared, wishing such time, in such form and in such manner as may be prescribed, in relation to each such mine in respect of the transaction effected by it during the period for which the management of such coal mine remained vested in it: Provided that where two or more coal mines were owned, before the commencement of this Act, by the same owner, a consolidated statement of accounts may be Prepared for all the coal mines owned by such owner. (2) All amounts received by the Central Government or the Government company after the closure of such accounts shall where such accounts relate to transactions effected before the appointed day, be included in the said statement of accounts in respect of the coal mine to which the said receipt relates. (3) The Central Government or the Government company in which the right, title and interest of coal mine stand vested shall 420 be entitled to receive, up to the specified date, to the exclusion of all other persons any money, due to the coal mine. realised after the appointed day notwithstanding that the realizations pertain to a period prior to the appointed day. Provided that where such realizations have not been included in the statement of accounts as on the day immediately before the appointed day, a supplementary statement of accounts shall be prepared and furnished, at such intervals as may be prescribed, by the Central Government or the Government company to the owner of the coal mine. (4) The liabilities of the coal mine (not being liabilities arising out of advances made by the Central Government or the Government company), which could not be discharged by the appointed day, may be discharged by the Central Government or the Government company up to the specified date, and every payment so made shall be included in the statement of accounts as on the day immediately before the appointed day, indicating therein the period in relation to which the payments were made: Provided that the liabilities in relation to the period prior to the appointed day, which have not been discharged on or before The specified date, shall be the liabilities of the owner of the coal mine. " x x x x x In this context, the provisions of sub section (2) of section 18 may also be read. It runs thus: "18. Payment by the Central Government to the Commissioner. x x x x x (2) In relation to the sum referred to in sub section (1), the Central Government shall pay, in cash, to the Commissioner such amount as may become due to the owner of a coal mine in relation to the period during which the management of the coal mine remains vested in The Central Government. " It was said that by reason of the Explanation to section 2(h) inserted by the Coal Mines Nationalisation Laws (Amendment) Act, ]978, the expression 'current assets ' used in sub cl.(xii) does not include (a) dues representing the sale of coal and coal products effected at any time before the appointed day and outstanding immediately before the said date, and (b) dues from the Coal Board, established under s.4 of the prior to the repeal of the said Act, with respect to any period before the 421 appointed day. It was, accordingly, urged that these two items do not fall within the purview of the definition of 'mine ' as defined in s.2(h)(xii). and, therefore, they did not vest in the Central Government under sub s.(1) of s.3 of the Act. It was urged that the erstwhile owners of coal mines and not the Central Government were entitled to deal with these assets, as they belong to The owners of the coal mines and not to the Central Government. The submission proceeds on a complete misconception of the scheme of the Act. The learned Attorney General contends that according to the provisions of sub ss.(3) and (4) of section 19, the Central Government or the Government company was exclusively entitled to receive the moneys in question to the exclusion of other persons upto the specified date and to utilities the same in discharge of the liabilities of the coal mine which could not be discharged by the appointed day. It is urged that sub sections (3) and (4) are part of an integrated scheme and must be read along with sub s.(2) of s.18. We are clearly of the opinion that the contention advanced by the learned Attorney General accords with the real legislative intent. Under the scheme of the Act, the owner of the coal mine which has vested in the Central Government under sub s.(1) of s.3 is entitled to receive, besides the compensation amount as determined under s.8, additional compensation amount under sub s.(1) of s.9, simple interest thereon at 4% per annum for the period specified therein, together with 'such amount as may become due ' to the owner of the coal mine in relation to the period during which the management of the coal mine remained vested in the Central Government as provided by sub s.(2) of s.18. To understand the correlation of sub sections (3) and (4) of section 19 with sub s.(2) of s.18 of the Act. it is necessary to refer to the provisions of Chapter VI entitled 'Commissioner of Payments ' which provides for the computation of the amount of compensation and other amounts payable to the erstwhile owners of coal mines, and for matters connected therewith or incidental thereto. The provisions of Chapter VI are brought into operation by the appointment of a Commissioner of Payments by the Central Government under sub s.(1) of s.17. There is a statutory duty cast on the Central Government under sub s.(1) of s.18 that it shall, within 30 days from the specified date, pay, in cash, to the Commissioner for payment to the owner of the coal mine an amount equal to the amounts specified against the coal mine in the Schedule and shall also pay to the Commissioner such sums as may be due to the owner of a coal mine under section 9. (2) of section 18 quoted above enjoins that, 422 in addition to the sum referred to in sub s.(1), the Central Government shall pay, in cash to the Commissioner 'such amount as may become due to the owner of a coal mine ' in relation to the period during which the management of the coal mine remained vested in the Central Government. It is then provided by sub s.(3) of s.18 that a deposit account shall be opened by the Central Government in favour of the Commissioner, in the Public Account of India, and every amount paid under this Act to the Commissioner shall be deposited by him to the credit of the said deposit account, and thereafter the said deposit account shall be operated by the Commissioner. Separate records are required to be maintained by the Commissioner under sub s.(4) of s.18 in respect of each coal mine in relation to which payments have been made by him under the Act. Under sub s.(5) of section 18, interest accruing on the amounts standing to the credit of the deposit account referred to in sub s.(3) shall inure to the benefit of the owners of coal mines. Section 19 of the Act provides for the preparation by the Central Government of a statement of account in respect of the period of management. The Central Government is required under sub section (1) of s.19 to cause the books of accounts in relation to each coal mine, the management of which has vested in it under the Coal Mines (Taking over of Management) Act, 1973 to be closed and balanced as on the date immediately before the appointed day, i.e., April 30, 1973, and to cause a statement of accounts as on that date, to be prepared in relation to each such mine in respect of the transactions effected by it during the period for which the management of such coal mine remained vested in it. Under sub s.(2) of s.19, all amounts received by the Central Government or the Government company after the closure of such accounts where such accounts relate to transactions effected before the appointed day, to be included in the said statement of accounts, in respect of the coal mine to which such receipts relate. Under sub s.(3) of s.19, the Central Government is conferred power to receive up to the specified date, i.e., June 30, 1975 any amount due to the coal mine, to the exclusion of all other persons, realised after the appointed day notwithstanding that the realizations pertained to a period prior to the appointed day. Proviso to sub s.(3) enjoins that where such realizations have not been included in the statement of accounts as on the day immediately before the appointed day, a supplementary statement of accounts shall be prepared and furnished, at such intervals, as may be prescribed by the Central Government or the Government company to the owner of the coal mine. By sub section (4) of section 19, a duty is cast on the Central Government to discharge. 423 the liabilities of the coal mine, which could not be discharged upto the specified date, i.e., June 30, 1975 and every payment so made is to be included in the statement of accounts as on the day immediately before the appointed day, indicating the period in relation to which the payments were made. It is plain on a reading of these provisions, that unless the requirements of s.19 are fulfilled there can be no ascertainment of 'such amount as may become due ' to the owner of a coal mine, in relation to the period during which the management of the coal mine remained vested in the Central Government, as required under sub s.(2) of section 18. Any other construction would render sub section (2) of section 18 entirely otiose. The amounts collected on behalf of the erstwhile owners of coal mines, represent the money of such owners without distinction and whether they were sale proceeds of coal or realizations from debtors, the amounts were liable to be spent not only in the discharge of liabilities of the coal mine which could not be discharged by the appointed day, but also were liable to be spent for the purposes of management. All the rights and liabilities arise from the provisions of the Acts, and the net balance in relation to the management period means the difference between authorized collections and legitimate liabilities of the erstwhile owners. It is necessarily this balance which 'becomes due in relation to the period during which the management of the coal mines remained vested in the Central Government ' within the meaning of sub s.(2) of s.18. It would, therefore, be obvious that the various steps provided by s.19 are to be taken for the compliance of the requirements of s.18. When there is payment made by the Central Government under s.18. the provisions of ss.20 27 become attracted. Every person having a. claim against the owner of a coal mine has to prefer such claim under sub s.(1) of s.20 before the Commissioner of Payments within 30 days from the specified date. Proviso to sub s.(1) confers powers on the Commissioner of Payments to entertain such claim within a further period of 30 days but not thereafter, on being satisfied that the claimant was prevented by sufficient cause from preferring the claim within the specified period. Under sub s.(2) of s.20 claims in relation to a Provident Fund, Pension Fund, Gratuity, etc., established for the welfare of the persons employed by the owner of a coal mine may be filed on behalf of the persons so empowered by the Coal Mines Provident Fund Commissioner appointed by the Central Government, under s.3C of the Coal Mines Provident Fund, Family Pension and Bonus Schemes Act, 1948. By sub s.(3) of s.20 the Commissioner of Payments is empowered to entertain claims, not being a claim which was time barred on January 31, 1973, but was rejected merely on the 424 ground that such claim was time barred, and such claim should be deemed not to have been rejected and shall be restored on his file and shall be dealt with in the manner specified in s.23. Section 21 provides for priority of claims in relation to arrears of Provident Fund, Pension, Gratuity, etc. Section 22 provides for priority of certain debts in relation to every other claim, viz. (a) all sums due to the State Government including royalty and dead rent, (b) all amounts due in respect of any compensation or liability for compensation under the Workmen Compensation Act, 1923 etc. , (c) all sums deducted by the employer from the salary or wages of any workman or any other employee for credit to any Provident Fund, or any other fund established for the welfare of the employees, but not deposited to the credit of such fund. Sub section (3) of s.22 provides that the debts specified in sub s.(2) shall rank equally among themselves and be paid in full, unless the assets are insufficient to meet them, in which case they shall abate in equal proportion and be paid accordingly. Admission or rejection of claims by the Commissioner of Payments is provided fol by section 23 disbursement of amounts by him to the claimants by section 24 payment of interest on admitted claims by s.24A, recovery of amounts advanced by the Central Government by s.25. It is after meeting all these liabilities that the Commissioner of Payments is required to serve a notice on the owners of the coal mines, the managing contractors, and the owners of any machinery, equipment or other property which has vested in the Central Government or a Government company under the Act and which does not belong to the owners of the coal mines, may apply to him for payment. Under the scheme of the Act the owner of a coal mine is entitled to the payment by the Commissioner of Payments under s.26, of the balance, if any, out of the total amount of money credited to the account of a coal mine ', after he has gone through all the stages provided for in Chapter VI. Sub s.(1) of s.26 of the Act reads: "26. Disbursement of amounts to the owners of coal mines. (1) If out of the monies paid to him in relation to a coal mine or group of coal mines specified, in the second column of the Schedule, there is a balance left after meeting the liabilities of all the secured and unsecured creditors, the Commissioner shall disburse such balance to the owner of such coal mine or group of coal mines. " Such being the scheme, there is no question of the owner of a coal mine, who is divested of his right, title and interest under sub s.(1) of s.3 to realise from The Central Government any amount due to a coal 425 mine, which remained to be realised until the specified date, i.e., June 30, 1975. The Commissioner of Payments is, therefore, required under s.26 to pay to the owner of such coal mine the balance left, if there is any, out of the monies paid to him in relation to a coal mine, after meeting the liabilities of all the secured and unsecured creditors. Sub section (5) of s.26 makes a provision for apportionment of such amount between the owner of the coal mine and the owner of machinery, equipment and other property which does not belong to the owner of the coal mine. Any amount which remains undisbursed or unclaimed for a period of three years has to be transferred by the Commissioner of Payments to the General Revenue Account of the Central Government under s.27. In view of all these provisions of ss.20 to 27 of the Act, and particularly of sub s.(1) of s.26, we fail to see the propriety of the claim made by the petitioners. The petitioners are certainly not entitled to recover any definite or ascertained sum. All that they are entitled to under sub s.(5) of s.19 is that they should be furnished with a copy of each statement of accounts prepared under s.19, to its being audited under sub s.(6) and to the audit being conducted in such manner as the Central Government may direct under sub s.(7), and to the payment under sub s.(1) of s.26 of the balance if any, out of the total amount of money credited to the account of a coal mine after all the liabilities have been discharged. The learned Attorney General makes a statement that this has all been done before a Commissioner of Payments was appointed under sub s.(1) of s.17. Nevertheless, the petitioners assert that the Central Government has not accounted for the realisation, if any, and the disbursement of two amounts of Rs. 68.74 lakhs and Rs. 58.22 lakhs, representing the outstanding dues from sundry debtors as on the appointed day, i.e., January 31, 1973 and the value of coal despatched from the mines in question during the period of management, i.e., from January 31, 1973 and April 30, 1973 respectively. In view of this assertion, we direct the Central Government to appoint a Commissioner of Payments under sub s.(1) of section 17 of the to go into the dispute as to these items. There still remains the question whether the powers of the Central Government under sub ss.(3) and (4) of s.19 of the Act extend only up to the specified date, that is, up to June 30, 1975. In dealing with the question, the High Court having regard to the provisions of ss.20 to 27 of the Act rightly observes that the Nationalisation Act 426 provides for claims to be preferred and for disbursement after adjudication of such claims, and if any balance is left after meeting the liabilities, it is only then that the Commissioner of Payments can under sub s.(1) of s.26 disburse it to the owner of the coal mine. It then goes on to say: "however, any amount which could not be realised until June 30, 1975 would be realisable by the erstwhile coal mine owners directly. " To put it conversely, there is no duty cast on the Central Government to make realisation of any money due to a coal mine if it pertains to a period prior to the appointed day, and to discharge the liabilities of the coal mine beyond the specified date, that is, June 30, 1975. To understand the implications of this it is necessary to briefly deal with the different stages by which nationalisation of coal mines was brought about. There are three dates. 'Appointed day ' under s.2(1) of the Management Act was January 31, 1973; that under the Nationalisation Act was May 1, 1973 while the 'specified date ' for purposes of sub ss.(3) and (4) of s.19 was June 30, 1975. All that vested in the Central Government under sub s.(1) of s.3 of the Management Act was the management of all coal mines, as defined in s.2(g) of the Act, which included sundry debts etc. , pending nationalisation of such mines, with effect from the appointed day, i.e., January 31, 1973. But this was only for the purposes of management, the title all the time remaining in the erstwhile owners of the coal mines. In the course of management under that Act, all the collections belonged to the owners; and the liabilities also in relation to the mines were the liabilities of the owners. The Custodian appointed by the Central Government under s.6 of the Management Act was liable for the net balance in relation to the management period. He had the right to collect and also the right to incur expenditure in relation to the management by reason of the provisions of that Act. The Nationalisation Act received the assent of the President on May 30, 1973 but the provisions of sub s.(1) of section 3 were brought into force with retrospective effect, that is, with effect from the appointed day i.e., May 1, 1973. It follows that although there was a complete extinction of all the rights, title and interest of the owners of coal mines with effect from May 1, 1973, there was a fictional extension of the period of management under the Management Act from May 1 to May 30, 1973. There is, therefore, provision made in s.9 that apart from the amount of compensation provided for by s.8, as 427 mentioned in the Schedule, the owners of every coal mine shall be entitled to receive additional compensation under sub s.(1) thereof. This was to be an amount equal to the amount which would have been, but for the provisions of sections 3, 4 and 5 payable to such owner for the period commencing on May 1, 1973 and ending on the date on which the Act received the assent of the President, that is, May 30, 1973. Under sub s.(1) of s.11 the Central Government is entitled to exercise all such powers and to do all such things as the owner of the coal mine was authorised to do. The conferral of power upon the Central Government under sub ss.(3) and (4) of s.19 to make realisation of monies due to the coal mines and from such realisations to discharge the liabilities as well as to incur expenses in relation to the management thereof, was a necessary concomitant of the vesting of such coal mines under sub s.(1) of s.3 of the Act. Sub section (1) of s.3 provides that the right, title and interest of the owners in relation to the coal mines shall vest in the Central Government free from all incumbrances. As set out above, the definition of coal mine in s.2(h)(xii) includes the current assets belonging to a mine, but by reason of the Explanation inserted by the Goal Mines Nationalisation Laws (Amendment) Act, 1978, the expression "current assets" appearing therein does not include amounts which had become due before the appointed day, i.e., May 1, 1973. Thus, these dues did not vest in the Central Government. This exclusion of sundry debts under the Nationalisation Act does not apply to the Management Act because there was no similar explanation to s.2(g)(xii). The Management Act was to be followed by the Nationalisation Act and, therefore, the accountability of the Central Government in regard to the management period was provided for in s.19 of the Nationalisation Act. Although there was vesting of the coal mines in the Central Government under sub s.(1) of s.3 of the Act, the accounts had still to be settled. Sub sections (3) and (4) of s.19 therefore, extended the period during which the Central Government was authorised to collect monies due to the coal mines and to discharge the liabilities of such coal mines which could not be discharged by the appointed day, that is, May 1, 1973, till the specified date i.e., June 30, 1975. As we have stated, the liabilities of the coal mines were not taken over. Section 7 of the Act, in terms, provides that every liability of the owner, agent, manager or managing contractor of a coal mine in respect of any period prior to the appointed day shall be the liability of the owner, agent, manager or managing contractor, as the case may 428 be, and shall be enforceable against him and not against the Central Government or the Government company. It logically follows that after the specified date, i.e., June 30, 1975 the erstwhile owners of coal mines would have to meet all their liabilities which could not be discharged before the appointed day. It must result in the inevitable consequence, as a necessary corollary that any amount which could not be realised by the Central Government until the specified date, would be realisable by them directly in order to meet their pre existing liabilities. In Industrial Supplies Pvt. Ltd. & Anr. vs The Union of India & Ors. we have by our Judgment delivered on August 7, 1980 held that the subsidy receivable from the erstwhile Coal Board, established under s.4 of the Coal Mines (Conservation and Safety) Act, 1952, being a payment "by way of reimbursement" was like any other dues, and, therefore, must be treated as 'any money due to the coking coal mine ' within the meaning of sub s.(3) of 9.22 of the , and, therefore, it could be utilised for the discharge of liabilities of such coking coal mines under sub s.(4) thereof, which provisions are in pari materia with sub sections (3) and (4) of s.19 of the . We accordingly, set aside the direction made by the High Court requiring the Union of India to pay to the petitioners Rs. 7,28,342.54 which it had recovered from the erstwhile Coal Board as subsidy. If the Commissioner of Payments finds that these two items of Rs. 68.74 lakhs and Rs. 58.22 lakhs and the subsidy amount of Rs. 7,28,342.54 have been duly accounted for, nothing further need be done. Obviously, the Commissioner of Payments cannot make an award, he can only enquire into the question and make the necessary directions, if any. The parties will have their remedy of an appeal under sub s.(7) of s.23 of the Act. The result, therefore, is that the appeal of the Union of India must succeed and is allowed and that of the New Satgram Engineering Works fails and is dismissed, with costs throughout. The judgment and order of the High Court is, accordingly modified by directing the appointment of a Commissioner of Payments under sub s.(1) of s.17 of the , who shall proceed to adjudicate upon the disputes between the parties, with advertence to the observations made above. In accordance with our order dated May 9, 1980, we direct the Central Government to appoint Sri Salil Kumar Datta, a retired Judge 429 of the Calcutta High Court, as a Commissioner of Payments under sub s.(1) of s.17 of the . Sri Datta will also act as an Arbitrator to adjudicate upon the disputes as indicated in our judgment delivered today with advertence to the observations made therein. Sri Datta as a Commissioner of Payment cum Arbitrator shall be entitled to draw his last pay as a Judge of the Calcutta High Court. This order is made by consent of the parties. The learned Attorney General stated at the hearing that a retired Judge of the Calcutta High Court should be appointed as a Commissioner of Payments and he should also act as an Arbitrator. The learned counsel for the opposite party agreed to this course being adopted. They left the choice of the person to be appointed to the Court. Due to inadvertence, certain typographical errors have crept in our order dated May 9, 1980. We direct that the clerical errors be corrected. At p.2, in the 5th line, for the words and figures "April 3, 1973", the words and figures "April 30, 1973" be substituted. In the 6th line on that page, for the words and figures "June 30, 1976", the words and figures "June 30, 1975" be inserted. It is regrettable that certain other errors have also crept in, which we have rectified in our judgment delivered today. The order dated May 9, 1980 stands corrected accordingly. It shall be read in the light of the judgment pronounced by us in these appeals. S.R. C.A. 1331/79 dismissed. C.A. 426/80 allowed.

M/s. Shethia Mining and Manufacturing Corporation, Calcutta owned three non coking coal mines one of which was New Satgram Coal Mines. besides a workshop called the New Satgram Engineering Works built on a plot adjacent to the New Satgram Coal Mines in 1964, a building known as the Technical Director 's Bungalow, built somewhere in 1957 58 outside the mining area but adjacent to it, and another building constructed in 1960 61 on the same plot of land, namely the Guest House used for the residence of officers and staff of mines. The management of the New Satgram Coal Mines along with two other coal mines was taken over by the Central Government under the Coal Mines. (Taking over of Management) Act, 1973, with effect from January 31, 1973. Thereafter the was passed and by virtue of section 3(1) thereof, the right title and interest of M/s. Shethia Mining and Manufacturing Corporation vested in the Central Government with effect from May 1973 and subsequently by a notification in the Government company that is, the Coal (India) Ltd. On May 17, 1973, the Central Government took over possession of the Technical Director 's Bungalow and the Guest House. The. appellants who had filed two writ petitions challenging the taking over and the Nationalisation Act in the Supreme Court withdrew them and filed a petition under Article 226 of the Constitution in the Delhi High Court for the issuance of a writ or direction in the nature of mandamus in regard to the taking over of New. Satgram Engineering Works and the dues pertaining to the New Satgram Coal Mines and New Majri Coal Mines. The High Court partly allowed the petition but declined to go into the question as to whether the Engineering Unit, together with Shethia Bhavan and all its assets etc the Technical Director 's Bungalow and Guest House were or not covered by the definition. of the term "mine" in section 2(h)(vi), (vii) & (xi) of the Nationalisation Act. Hence the appeals by special leave one by New Satgram Engineering Works and the other by the Union of India. Allowing the Government 's appeal and dismissing the appeal of the Engineering Works, the Court ^ HELD: (1) When the facts themselves are seriously controverted, the dispute relating to the properties in question raise a "serious question of title" and the parties must get their rights adjudicated upon in a civil court and not 407 under article 226 of the Constitution. The question whether the engineering unit, was "situate in, or adjacent to" the new Satgram Coal Mines and was "substantially" used for the purposes of the mine as well as the question whether the Technical Director 's Bungalow and the Guest House were "solely" used for the residence of officers and staff of the mine and! therefore. fell within the definition of 'mine ' as contained in section 2(h) of the Nationalisation Act, cannot be decided in proceedings under article 226 of the Constitution. The proper remedy is by way of a suit. [416H; 418G H] (2) Parliament instead of providing that the word 'mine ' shall have the meaning assigned to it in the , has given an enlarged definition of 'mine ' in section 2(h) so that not merely the colliery but everything connected with the mining industry should vest in the Central Government, that is, not only that part of the industry which consisted of raising, winning and getting coal but also that part of it which consisted in the sale of coal and its supply to customers both of which are a part of an integrated activity. Parliament by an enlarged definition of mine as contained in section 2(h) of the Act has indicated the nature of the properties that vest, and the question whether a particular asset is taken within the sweep of i. 2(h) depends on whether it answers the description given therein. [415 H, 416 A D] (3) The language used in section 2(h)(vii) and (xi) of the are different. Sub clause (vii) used the words "in, or adjacent to, a mine" and "used substantially" for the purposes of the mine or a number of mines under the same management, in relation to workshops. The use of the word 'and ' makes both the conditions conjunctive. Sub Clause (xi) used the words "if solely used" for the location of the management, sale or liaison offices, or for the residence of officers and staff of the mine, in relation to lands and buildings. The difference in language between the two expressions "used substantially" and "solely used" is clear. A workshop cr a building constructed initially for the purpose of a coal mine cannot by its being diverted to other purposes cease to belong to the mine. What is of the essence is whether the workshop or the building originally formed a part and parcel of the coal mine. The subsequent user may not b. very material. [415 B E] (4) Merely because the land on which a workshop of a coal mine is located bears a different plot number, or even if there is a compound wall between the main office of the coal mine and the workshop, it would not cease to be part of the mine. The question in such cases will always be whether the workshop is "located in, or adjacent to, a mine" and was "used substantially for the purposes of the mine under the same management". Further the question whether a workshop is "substantially" used for the purposes of a mine necessarily involves an enquiry as to whether it pertains to, or in substance is, part of the mine. The value of jobs executed for the mine as against those for others is not really determinative of the question. If a workshop is, in fact a part of a coal mine, it does not cease to be so merely because its utilisation lies in the production of materials supplied to third parties. While a workshop may form part of a mine and is substantially used as such, it may be utilised for turning out other products; it all depends upon the circumstances of each case, whether it forms part of a mine or not. [416F G, 417 D F] (5) Sub sections (3) and (4) of section 19 of the Act are part of an integrated scheme and must be read with sub section (2) of section 18. According to the provisions of sub sections (3) and (4) of section 19 the Central 408 Government, or the Government company was exclusively entitled to receive monies in question to the exclusion of other persons up to the specified ate and to utilise the same in discharge of the liabilities of the coal mine which could not be discharged by the appointed day. Under the scheme of the Act, the owner of the coal mine which has vested in the Central Government under sub section (1) of section 3 is entitled to receive, besides the compensation amount as determined under section 8, additional compensation amount under sub section (1) of section 9, simple interest thereon at 40% per annum for the period specified therein, together with "such amount as may become due" to tho owner of the coal mine in relation to the period during which the management of the coal mine remained vested in the Central Government 35 provided by sub section (2) of section 18. [421 C E] Provisions in sections 8, 9, 18 and 19 make it clear that unless the requirements of section 19 are fulfilled there can be no ascertainment of "such amount as may become due" to the owner of a coal mine, in relation to the period during which the management of the coal mine remained vested in the Central Government, as required under sub section (2) of section 18. Anr other construction would render sub section (2) of section 18 entirely otiose. The amounts collected on behalf of the erstwhile owners of coal mines, represent the money of such owners without distinction, and whether they were sale proceeds of coal or realisations from debtors. the amounts were liable to be spent not only in the discharge of liabilities of the coal mine which could not be discharged by the appointed day, but also were liable to be spent for the purposes of management. All the rights and liabilities arise from the provisions of the Acts, and the net balance in relation to the management period, means the difference between authorised collections and legitimate liabilities of the erstwhile owners. It is necessarily this balance which "becomes due in relation to the period during which the management of the coal mines remained vested the Central Government" within the meaning of sub section (2) of section 18. [423 B E] When there is a payment made by the Central Government under subs. (2) of section 18, the elaborate procedure provided under sections 20 27 have to be followed. The owner of a coal mine is entitled to the payment by the Commissioner of Payments, under section 26 of "the balance, if any out of the total amount of money credited to the account of the coal mine" after he has gone through all the stages provided for in Chapter VI. Such being the scheme, there is no question of the owner of a coal mine, who is divested of his right, title and interest under sub section (1) of section 3 to realise from the Central Government any amount due to a coal mine, which remained to be realised until the specified date, that is, June 30, 1975. In the instant case, in view of all these provisions of sections 20 to 27 of the Act and particularly, of sub section (1) of section 26 the claims made by the appellants Engineering Works are not proper. They are certainly not entitled to recover any definite or ascertained sum. All that they are entitled to under sub section (5) of section 19 is that they should be furnished with a copy of each statement of accounts prepared under section 19, to its being audited under sub section (6) and to the audit being conducted in such manner as the Central Government may direct under sub section (7), and to the payment under sub section (1) of section 26 of the balance, if any, out of the total amount of money credited to the account of a coal mine after all the liabilities have been discharged. [423F, 424F H, 425A, D E] (6) There is no duty cast on the Central Government to make realisations 409 of any money due to a coal mine if it pertains to a period prior to the appointed, day, and to discharge the liabilities of the coal mine beyond the specified dated that is, June 30, 1975. The 'appointed day ' under section 2(a) of the Management Act under the Nationalisation Act was January 31, 1973 and May 1, 1973 respectively; while the 'specified date ' for purposes of sub sections (3) & (4) of section 19 was June 30, 1975. All that vested in the Central Government under sub section (I) of section 3 of the Management Act was the management of all coal mines, as defined in section 2(g) of The Act, which included sundry debts etc. , pending nationalisation of such mines, with effect from the appointed day, that is, January 31, 1973. But this was only for the purposes of management, the title all the time remaining in the erstwhile owners of the coal mines. In the course of management under that Act, all the collections belonged to the owners, and the liabilities also in relation to the mines were the liabilities of the owners. 'The Custodian appointed by the Central Government under section 6 of the Management Act was liable for, the net balance in relation to the management period. He had the right to collect and also the right to incur expenditure in relation to the management by reason of the provisions of that Act. [426 C F] (7) The conferral of power upon the Central Government under subsections (3) and (4) of section 19 to make realisation of monies due to the coal mines and from such realisation to discharge the liabilities as well as to incur expenses in relation to the management thereof, was a necessary concomitant of the vesting of such coal mines under sub section (I) of section 3 of the Act. The Nationalisation Act received the assent of the President on May 30, 1973 but the provisions of sub section (I) of section 3 were brought into force with retrospective effect, that is, with effect from the appointed day, that is, May 1, 1973. It follows that, although there was a complete extinction of all the rights, title and interest of the owners of coal mines with effect from May 1. ; 1973, there was a fictional extension of the period of management under the Management Act from May 1 to May 30, 1973. There is, therefore, provision made in section 9 that apart from the amount of compensation provided for by section 8, as mentioned in the Schedule, the owners of every coal mine shall be entitled to receive additional compensation under sub section (I) thereof. This was to be an amount equal to the amount which would have been, but for the provisions of sections 3, 4 and S payable to such owner for the period commencing on May 1, 1973 and ending on the date on which the Act received P the assent of the President that is, May 30, 1973. Under sub section (1) of section 11 the Central Government is entitled to exercise all such things as the owner of the coal mine was authorised to do. [427C, 426G 427B] (8) The definitions of coal mine in section 2(h)(xii) includes the current assets belonging to a mine. but by reason of the explanation inserted by the Coal Mines Nationalisation (Amendment) Act, 1978, the expression "current assets" appearing therein does not include amounts which had become due before the appointed day, that is, May 1, 1973. Thus these dues did not vest in the Central Government. This exclusion of sundry debts under the Nationalisation Act does not apply to the Management Act because there was no similar explanation to section 2(g)(xii) of that Act. [427 D E] (9) The Management Act was to be followed by the Nationalisation Act and, therefore, the accountability of the Central Government in regard to the management period was provided for in section 19 of the Nationalisation Act. Although there was vesting of the coal mines in the Central Government under 410 sub section (1) of section 3 of the Act, the accounts had still to be settled Sub sections (3) and (4) of section 19, therefore, extended the period during which the Central Government was authorised to collect monies due to the coal mines and to discharge the liabilities of such coal mines which could not be discharged by the appointed day, that is, May 1, 1973 till the specified date, that is, June 30, 1975. The liabilities of the coal mines were not taken over under the Management Act. Section 7 of the Nationalisation Act implies that after the specified date, that is, June 30, 1975 the erstwhile owners of coal mines would have to meet all their liabilities which could not be discharged before the appointed day. It must result in the inevitable consequence, as a necessary corollary that any amount which could not be realised by the Central Government until the specified date, would be realisable by the owners directly in order to meet their pre existing liabilities. [427 F 428 B] (10) Provisions of sub section (4) of section 19 of the are in part materia with sub section (3) of section 22 of the . The subsidy receivable from the erstwhile Coal Board established under section 4 of the Coal Mines (Conservation and Safety) Act, 1952, being a payment "by way of reimbursement" was like any other dues, and, therefore, must be treated as 'any money due to the coking coal mine '. Therefore, the directions made by the Court requiring the Union of India to pay to the Satgram Engineering Works Rs. 7,28,342 54 which is to be recovered by the erstwhile Coal Board as subsidy, is incorrect. [428C D] Industrial Supplies Pvt. Ltd., & Anr. vs The Union of India & Ors. [1981] 1 SCR p. 375, followed.

vil Appeal Nos. 18083 of 1985. From the Judgment and Order dated 12.9.1983 of the Rajasthan High Court in D.B. (Civil) Spl. Appeal Nos. 35 of 1982, 76, 268 and 270 of 1983. S.K. Bagga for the Appellants. B.D. Sharma for the Respondents. The Order of the Court was delivered by 247 VENKATARAMIAH, CJ. In these appeals the appellants have questioned the validity of Section 15 (as amended) of the Rajasthan Imposition of Ceiling on Agricultural Holdings Act, 1973. It is not disputed that this Act was enacted by the Rajasthan Legislature for bringing about Agrarian Re forms in the State of Rajasthan. The validity of some of the provisions of the Act came up for consideration before this Court in Bansidhar vs State of Rajasthan, ; before a Constitution Bench of this Court and this Court made declaration that the Rajasthan Imposition of Ceiling Agricultural Holdings Act, 1973 was a legislation which was made for the purpose of bringing out Agrarian Reform. In view of the above finding, it is clear that the provisions including section 15 (as amended) contained therein are protected by Article 31(A)(1)(a) of the Constitution notwithstanding the fact that some of these provisions contravened Articles 14 and 19. The Grounds urged in respect of the appeal are that Section 15 (as amended) in question was violative of Article 14. Since the provisions of the Act as already stated are protected by Article 31(A)(1)(a), the attack does not sur vive. The High Court was therefore right in upholding the validity of Section 15 of the Act. Therefore, there is no ground to interfere with the Judgment of the High Court. These appeals fail and are dismissed. Interim orders passed if any, in these cases stand vacated. T.N.A. Appeals dis missed.

In these appeals on the question: whether section 15 (as amended) of the Rajasthan Imposition of Ceiling on Agricul tural Holdings Act, 1973 was violative of Article 14 of the Constitution of India. Dismissing the appeals, this Court, HELD: Rajasthan Imposition of Ceiling on Agricultural Holdings Act, 1973 was a legislation which was made for the purpose of bringing about agrarian reforms. The provisions of the Act including section 15 (as amended) are protected by Article 31(A)(1)(a) of the Constitution. Therefore, the attack that section 15 of the Act was violative of Article 14 of the Constitution does not survive. The High Court was right in upholding the validity of section 15 of the Act. [247B; C D] Bansidhar vs State of Rajasthan, ; , followed.

Appeal No. 1718 of 1984. From the Order dated 17.11.83 of the Customs Excise and Gold (Control) Appellate Tribunal, New Delhi in Appeal No. ED (SB) (T) 338/78 D (Order No. 698/83 D). A.K. Ganguli, B. Sen, A.K. Chitale, B.R.L. Iyengar J. Ramamurti, Mrs. Radha Rangaswami, P. Parmeswaran, C.V. Subba Rao, C. Ramesh, Virender Kaushal, Praveen Kumar, Vivek Gambhir, S.K. Gambhir, P.H. Parekh, B.N. Agarwal, A.V. Phadnis, Kh. Nobin Singh, M. Veerappa, Ashok Sagar, Ravinder Narain, D.N. Misra (For JBD & Co.,) E.C. Vidyasagar for L.R. Singh, R. Vaigai and R.K. Maheshwari for the appearing parties. The Judgment of the Court was delivered by B.P. JEEVAN REDDY, J. With a view to induce the Sugar Factories in the country to produce more and also to commence their operations early in the year, the Government of India have been issuing notifications, from time to time, providing for rebate in the Excise Duty in certain circumstances. These notifications were issued by the Central Government 763 in exercise of the power conferred by Sub Rule (1) of Rule 8 of the Central Excise Rules, 1944. We are concerned in these appeals with four such notifications namely (1) the Notification dated 28.9.72 (applicable to the Sugar Year 1972 73), (2) Notification dated 4.10.73 (applicable to the Sugar Year 1973 74), (3) Notification dated 12.10.74 (applicable to the Sugar Year 1974 75) and (4) the Notification dated 30.9.76 (applicable to the Sugar Year 1976 77). 'Sugar year ' means the year commencing on and with 1st October and ending with the 30th of September of the following year. The interpretation of these notifications is involved in this batch of appeals. In so far as it is material, the notification dated 28.9.72 and the notification dated 4.10.73 are similar. So are the notifications dated 12.10.74 and 30.9.76. It would be appropriate if we set out the notification dated 28.9.72 in its entirety "Notification No. 203172 dated 28.9.1972 In exercise of the powers conferred by sub rule (1) of rule 8 of the Central Excise Rules, 1944, the Central Government hereby exempts sugar, described in column(2) of the Table below and failing under sub item (1) of Item No.1 of the First Schedule to the (1 of 1944), from so much of the duty of excise leviable thereon as is specified in the corresponding entry in column (3) of the said Table. TABLE section No. Description of Sugar Duty of Excise (1) (2) (3) 1. Sugar produced in a factory during the Rupees period commencing from the 1st day of forty per October, 1972 and ending with the 30th quintal day of November, 1972 which is in excess of the quantity of sugar produced during the corresponding period in 1971. 764 2.Sugar produced in a factory during the period commencing from the 1st day of December, 1972 and ending with the 30th day of April, 1973 Rupees which is in excess of 115% of the quantity twenty of suggar produced during the period commencing per from the 1st day of Decmber, 1971 and ending with quintal the 30th day of April, 1972. 3.Sugar produced in a factory during the period commencing from the 1st day of May, 1973 and Rupees ending with 30th day of June, 1973 which is in twenty excess of the quantity of sugar produced per during the corresponding period in 1972. quintal 4.Sugar produced in factory during the period commencing from the 1st day of July 1973 and ending with the 30th day of September, 1973 Rupees which is in excess of the quantity of sugar twenty produced during the corresponding period in 1972. per quintal Provided that the exemption under this notification shall not be admissible to a factory (a) which did not work during the base period, or (b) which had only a trial run in the base period, or (c) which commences production for the first time on or after the 1st day of October, 1972 : Provided further that in computing the production of sugar during the periods mentioned in column (2) of the said Table, (a) the data, as furnished in Form R.G. 1 prescribed in Appendix I to the Central Excise Rules, 1944, or in such other record as the Collector may prescribed under rule 53 or rule 173G of the said rules, shall be adopted : 765 (b) any sugar obtained from reprocessing of sugarhouse products left over in process at that end of the base period or earlier shall b e taken into account ; and (c) any sugar obtained by refining gur or Khandasari sugar, or any sugar obtained by reprocessing of defective or damaged sugar or brown sugar, if the same has already been included in the quantity of sugar produced, shall not be taken into account. Explanation I A factory shall be deemed to have had a trial run during the base period only if, on first going into production, the period during which actual crushing was done during the base period was less than 40 per cent of the average duration of the season in the State in which the factory is situated. Explanation 11 In this notification, the expression, 'base period ', means the period commencing from the 1st day of October, 1971 and ending with the 30th day of September, 1972. " Though the Sugar Year extends over a period of twelve months commencing from 1st of October, the period commencing with 1st December and ending with 30th April is said to be the peak production period. Most of the sugar factories were commencing their operations only in the month of December. Either with a view to induce these sugar factories to produce more or with a view to induce them to commence their operation early in the sugar year, the rebate provided for producing sugar in the months of October and November in excess of the corresponding period in the previous sugar year was kept relatively high. The scheme of the notification dated 28.9.72 appears to be this (1) If during the months of October and November 1972 (in the Sugar Year 1972 73), a factory produced sugar in excess of the quantity of sugar produced by it during the months of October November 1971, such factory was granted rebate in the Excise Duty at the rate of rupees forty per quintal in so far as the excess production is concerned. (2) Rebate for the period 1st December 1972 to 30th April, 1973 was 766 available at the rate of rupees twenty per quintal provided the production of sugar during the said period was in excess of 115% of the quantity of sugar produced by the said factory during the corresponding period in the previous Sugar Year, in so far as the excess production is concerned. (3) For the months of May and June 1973 rebate at the rate of rupees twenty per quintal was available provided the factory produced more sugar than it produced during the corresponding months in the previous Sugar Year. The said rebate was available again only with respect to the excess production. (4) For the period commencing from 1st July, 1973 and ending with 30th of September, 1973, rebate was available at the rate of rupees twenty per quintal provided the factory produced sugar in excess of the quantity produced during the corresponding period in the previous Sugar Year. This rebate too was confined to the excess production. However, the benefit of the rebate mentioned in any of the clauses aforesaid was not available to a factory which inter alia did not work during the 'base period '. The expression 'base period ' was defined in Explanation 11. It meant the period commencing from the 1st day of october 1971 and ending with the 30th day of September, 1972 (Previous Sugar Year). The sugar factories (concerned with the sugar year 1972 73) did not produce any sugar in one or the other of the four blocks (mentioned in the table contained in the Notification) in the base year (previous sugar year). During the current sugar year, however, they produced certain quantity of sugar during that block period. To be more precise, take factory A. It produced 1000 quintals of sugar in the months of October November, 1972 (Block period (1) but had not produced any sugar whatsoever in the corresponding period (October November, ' 1971) in the base year. The question arose whether in such a situation, Factory A was entitled to the benefit of rebate provided in Clause (1) of the Table contained in the aforesaid notification with respect to the said 1,000 quintals ? The contention of the factory was that it was so entitled, whereas according to the Revenue, it was not. It is brought to our notice that even before the controversy actually arose between the parties, the Committee of the Sugar Mill Owners ' Association addressed a letter to the Ministry of Finance, Government of 767 India seeking a clarification as to the meaning and purport of the aforesaid notification. The letter written by the Committee read as follows "I am to refer to the Notification No. G.S.R. dated 28th September, 1972, issued by the Union Ministry of Finance (Department of Revenue & Insurance), New Delhi, on the above subject (copy enclosed for ready reference). In this connection, the Government had issued a similar Notification on 13th Oct. 1971, on the same subject. On this Notification, in response to an enquiry made by the Committee of the Association, the Board had clarified as per their letter No. F. No.14/33 71/CX. 1 dated 26th November, 1971, that a factory which had worked during the base period i.e. during the period commencing from 1st day of October, 1970 and ending with 30th day of September, 1971, though it had not worked during the period from 1st October, 1970 to 30th November, 1970, and the production during this period was nil, would be entitled to the excise rebate at the notified rate on its entire production achieved during the month of October and November, 1971. As th e Notification issued this year is also on similar lines, the Committee presume that the clarification given by the Board last year will apply to the Notification issued this year also, i.e., where a factory has worked in the base period (1st October, 1971 to 30th September, 1972) it will be entitled to the full rebate on its entire production during the various periods mentioned in the Notification, although during the corresponding periods in the last season, the production may be nil. The Committee shall be glad if you kindly confirm whether their above presumption is correct. Thanking you for a line in reply '. In this letter dated 1st November, 1972 the Ministry of Finance intimated the Committee that the presumption made by the Committee is confirmed in respect of the established factories only. Later on, however, the Government of India revised their opinion which has led to the present controversy. 768 It is brought to our notice that the sugar factories are governed by and follow the procedure prescribed by Rule 173 G of the Central Excise Rules, which rule occurs in Chapter VII A 'Removal of Excisable Goods on Determination of Duty by producers, Manufacturers or Private WareHouse Licencees. " Rule 173 G requires every assessee to keep an accountcurrent with the Collector separately for each excisable goods, in the suc form and manner, as the Collector may require. The rule requires the assessee to make credit periodically in such account current, by cash payment into the treasury, so as to keep the balance in such account cumrent sufrent to cover the duties due on the goods intended to be removed at any time. Every such assessee has to pay the duty determined for each consignment by debit to such account current before removal of goods. The Rules further require every assessee to furnish a monthly return in the prescribed form, on the basis of which, assessment is completed by the appropriate officer. Coming back to the facts of these appeals, the claim for rebate made by these factories was allowed in the first instance but later proceedings were initiated to recover back, or re adjust, as the case may be, the benefit already allowed. This was the phenomenon all over the country. These disputes were carried to High Courts. The main dispute was the same as indicated hereinabove. The factory has produced a certain quantity of sugar in block period (i) (or, for, that matter, any other block period) in the sugar year 1972 73, but had not produced any sugar whatsoever in the corresponding period in the base year (previous sugar year) but has produced some quantity of sugar during the base year as such; whether such factory is entitled to the rebate prescribed in clause (i) (or such other clause, as may be applicable) of the said Notification ? Since the Notifications for 1972 73 and 1973 74 are more or less similar, disputes raised before High Courts pertained to both these years. (Indeed, the said issue is common to the other two notifications concerned herein as well, with some difference, as we shall indicate at the proper stage). It appears that almost all the High Courts except Karnataka have held in favour of the factories. In Patna High Court, there appears to be a conflict of opinion. Karnataka High Court has, however, held in favour of the Union of India. The first of the reported decisions is of the Andhra Pradesh High Court (Chinnappa Reddy, J., as he then was) in Etikoppaka Co operative 769 Agricultural Society vs Union of Inida, The reasoning in the said Judgment has been followed by most of the other High Courts. See ; 1982 (59) E.L.T. 409 (AHahabad) ; & Haryana); and Shri Ganguli, learned counsel for the Union of India contends as follows : Language of the Notifications (pertaining to the year 1972 73 and 1973 74) is quite clear and unambiguous. The benefit of rebate is available only where the "sugar produced in a factory during the period commencing from the 1st day of October, 1972 and ending with the 30th day of November, 1972 which is in excess of the quantity of sugar produced during the corresponding period in 1971" to take clause (i) of the Notification relating to 1972 73. The clause contemplates and is based on the premise that sugar is produced during October November, 1972 as well as October November, 1971. If no sugar was produced during the corresponding period in the previous sugar year (October November, 1971), the very clause is inapplicable. The contention of the factory owners, which has no doubt been accepted by a majority of High Court, does voilence to the plain language of the clause. The interpretation placed by the factoryowners leads to certain absurd consequences. Learned counsel gave more than one illustration to emphasise his submission. Take a. case where a factory has produced one thousand quintals of sugars in October November 1971 and has also produced one thousand quintals in October November 1972. In such a situation the factory would not get any rebate in terms of the notification dated 28.9.72, whereas another factory which may not have produced any sugar whatsoever in October November 1971 but has produced one thousand quintals of sugar in October November 1972, gets the rebate at the rate of rupees forty per quintal. This would really amount to, says the counsel, punishing the first factory more efficient factory for producing the sugar in the previous year And to rewarding the second one the indolent factory which did not produce any sugar during OctoberNovember, 1971. Another illustration given by the learned counsel is this; a factory had produced five thousand quintals of sugar during the period 1st December, 1971 to 30th April, 1972; it produces the very some quantity again during the period 1st December 1972 to 30th April, 1973; such a factory would not be entitled to any rebate under clause (2) of the said notification; but another factory which had produced, say, just 1000 quintals during the period December 1, 1971 to April 30, 1972 but produces 770 five thousand quintals during the period December 1, 1972 to April 30, 1973 would get the benefit of rebate on 4000 quintals. This again amounts to, says the counsel, rewarding the inefficient and indolent and punishing the efficient. The learned counsel seeks to reinforce his argument by referring to clause (2). It relates to the period 1st December 1972 to 30th April 1973. Rebate in the sugar produced during this period is available only if it is in excess of 115 per cent of the quantity of sugar produced during the period December 1, 1971 to April 30, 1972. If the production is nil during the corresponding period in the previous sugar year, asks the counsel, how is one to work out 115% of it. What is 115% of zero ? asks he. For all these reasons counsel says, nil production cannot be equated to "the quantity of sugar produced. . in clause (1). Counsel also says that Clause (1) of the first Proviso in the said notification should be harmonised with the several clauses mentioned in the Table and that no interpretation should be adopted which renders any part of the said notification superfluous. We find ourselves unable to agree with the learned counsel for the Union of India. While we agree that the several clauses in the Notification must be read together, harmonised and reasonably understood, we cannot also ignore the underlying object and purpose of the notification. We Also agree that an interpretation which leads to absurd consequences should be avoided. Even so, we are afraid, we cannot agree with the learned counsel. The object behind the notification was evidently not only to induce the factories to produce more sugar but also to induce them to start their production early in the sugar year. The object appears to be also to induce the factories to keep on producing the sugar all the year round, which they may perhaps not have done otherwise. Running the factories during the off season (we are told, off season means October November period and then again the period from May June to September), may have its own problems which may increase the cost of production. Be that as it may, the main issue is whether the words " the quantity of sugar produced during the corresponding period. . do not take in the case of a factory which has not produced any sugar whatsoever during the relevant corresponding period ? On a consideration of the rival points of view, we are of the opinion that it does take in. Holding otherwise would have this absurd consequence : a factory which has produced, say, just one quintal of sugar during the relevant corresponding period and has produced 1000 quintals during October November, 1972 would qualify for the rebate on 999 quin 771 tals while another factory which has not produced any sugar nil production but has produced 1000 quintals during October November, 1972, would not qualify. How does this interpretation advance the purpose of the notification, is difficult to appreciate. Coming to the second illustration given by the learned counsel, we must say that the idea behind the said notification is to induce the manufacturers to produce more in the current sugar year than what they have produced in the previous sugar year or during the previous corresponding period in the previous sugar year, as the case may be. If this is the object there is nothing absurd in saying that a factory which has produced five thousand tons during December 1, 1971 to April 30, 1972 and produces the. very same quantity during the period December 1, 1972 to April 30, 1973, does not qualify for rebate under clause (2). There is no reason or occasion for granting him any rebate. But where a factory has not produced any sugar or has produced a particular quantity of sugar during the said period in the previous sugar year but produces a larger quantity during the said period in the current sugar year, it must be rewarded. It may be remembered that no manufacturer produces sugar merely for the sake of rebate. Rebate is an inducement, an additional attraction. It is not as if without rebate provided by these notifications, no one would have produced sugar. We are also unable to see any difficulty in operating clause (2) of the said notification. There is no arithmetical difficulty in working out 115% of zero; it is zero. What applies to clause (1) applies equally to clauses (2), (3) and (4). Our understanding is reinforced and supported by clause (a) of the first proviso. It says that the benefit of the said rebate would not be available to a factory 'which did not work during the base period. " Why does it say so? What is its meaning and implication? It is only that the factory need not necessarily have worked during each of the corresponding periods in the base year; it is enough if it has worked in the base year. We may point out that a majority of the High Courts in the country have adopted the very same interpretation as has been placed by us. It is then argued by the learned counsel for the appellant that exemption notifications should be strictly concluded. There is no quarrel with the proposition but there is another equally valid principle that such notifications should be given their due effect, keeping in view the purpose 772 underlying. We must reiterate that no factory owner would keep his factory idle during a particular period only with a view to produce sugar during the same period in the next sugar year and earn rebate in the next year. More particularly, it can not reasonably be expected that a factory owner would deliberately keep his factory idle during the peak production period (December to April) only with a view to produce sugar during that period next year and earn rebate in such next year. It would be unrealistic to say so. Actually these notifications were being issued every year confined to that year. They were being issued just on the eve of the sugar year or a few days after the commencement of the sugar year and there were variations in the relevant clauses from year to year. Construed realistically, we see no room for any absurdity resulting from our interpretation ' The case of October November appears to be rather an exception. Normally, it appears, no factory owner commenced the production of sugar in these months because of several unfavorable factors. Indeed, these unfavorable factors appear to be present to a large extent even during the months June to September. These notifications were evidently meant to compensate the factory owners for producing during these months as well. As stated already, one must proceed on the assumption that every industrialist and businessman would, ordinarily, like to produce as much more as possible, since, normally speaking, more production means more profits. For the above reasons, we are of the opinion that the interpretation placed upon the said notifications by the majority of the High Courts is the correct one. We do not agree with the view taken by the Karnataka High Court in its Judgment under appeal in Civil Appeal Nos. 3831 32 of 1988. For the same reason, we do not also agree with the view taken by the Patna High Court in Civil Writ Jurisdiction Case No. 865 of 1966. Now coming to the Notifications for the years 1974 75 and 1976 77, the concept of base year is not to be found here; otherwise they are similar to those relating to 1972 73 and 1973 74. In the notification dated 12.10.74 (relating to the sugar year 1974 75) the sugar year is divided into two blocks/periods. The first block comprises October and November 1974 whereas the second block takes in December 1974 to September 1975. Here too, the question is identical to that arising in the years 1972 73 and 1973 74. The answer too will naturally be the same. 773 In view of the aforesaid conclusion, it is not necessary for us to go into the other questions raised by the factory owners except the following: There is a minor controversy with respect to the working of Clause (2) in Notification No. 146/74 dated 12.10.74 relating to the sugar year 1974 75. Clause (2) the table contained in the notification reads as follows: TABLE No. Description of Sugar Duty of excise 1 2 Free Sale Levy of Sugar Sugar 3 4 1. . . . . 2. Sugar produced in a factory during the period commencing on the 1st day of December, 1974, and ending with the 30th day of September, 1975 which is in excess of the average production of the corresponding period of the preceding five sugar years, that is, (a) on excess production upto Rs. 20/ per Rs. 5/ per 7.5% quintal quintal (b) on excess production on the Rs. 40/ per Rs. 10/ per next 10% quintal quintal (c) on excess production on the Rs.501 per Rs. 14/ per next 10% quintal quintal (d) on excess production on the Rs.60/ per Rs. 18/ per next 10% quintal quintal (e) on excess production beyond Rs. 82/ per Rs. 22/ per 37.5% quintal quintal ============================================================ Mr. Ganguli, learned counsel for the Union of India says that some of the Courts have applied the percentages mentioned in sub clauses (a) to (e) to the excess production and not to the average production of the preceding five sugar years. We may take an illustration to explain what the learned counsel says. Take a case. where the average production of a factory during the corresponding period (December 1 to September 30) of 774 the preceding five sugar years is 1000 quintals. That factory produces 2,500 quintals during the period December 1, 1974 to September 30, 1975. In such a case, the ascending percentages mentioned in sub clauses (a) to (e) of clause (2) have to be applied for working out the rebate. According to us, it must be done in the following manner, keeping in mind that the basis for these percentages in the average production of the previous five years and not the excess production. Out of 2,500 quintals produced during the said period in the current sugar year (December 1, 1974 to September 30, 1975), the average of the five previous sugar years i.e., 1000 quintals should be deducted first, which means the excess production during the current year is 1500 quintals. 7.5% of 1000 quintals is 75 quintals. On this quantity of 75 quintals, the rate of rebate as per sub clause (a) will be Rs. 20 per quintal in the case of free sale sugar and Rs. 5 per quintal in the case of levy sugar. Next 10% of excess production means 100 quintals which would be eligible for rebate under sub clause (b) at the rate of Rs. 40 per quintal in the case of free sale sugar and Rs. 10 per quintal in the case of levy sugar. The next 100 quintals would be eligible for rebate under sub clause (c) at the rate of Rs.50 per quintal in the case of free sale sugar and Rs. 14 per quintal in the case of levy sugar. Then again the next 100 quintals would be eligible for rebate under sub clause (d) at the rate of Rs. 60 per quintal in the case of free sale sugar and Rs. 18 per quintal in the case of levy sugar. The balance of 1125 quintals would qualify for rebate under sub clause (e) at the rate of Rs. 82 per quintal in the case of free sale sugar and Rs. 22 per quintal in the case of levy sugar. This is the interpretation and understanding contended for by Shri Ganguli and we must say that none of the counsel for the factory owners ' disputed the same. It is accordingly directed that the above method shall be followed in working out clause (2) of the notification dated 12.10.74. Accordingly all the civil appeals except Civil Appeal Nos. 3831 32 of 1988, fail and are dismissed. Civil Appeals No. 3831 32 of 1988 are allowed. The authorities will take action in accordance with this judgment. There will be no order as to costs. V.P.R. CA Nos. 3831 32/88 allowed. Rest of the appeals dismissed.

In a Notification dated 28.9.1972, with a view to induce the sugar factories (respondents) to produce more and also to commence their operations early in the sugar year (the year commencing on and with 1st October and ending with the 30th of September of the following year) a rebate was provided. The scheme of the Notification was (1)If during the months of October and November 1972 (in the Sugar Year 1972 73), a factory produced sugar in excess of the quantity of sugar produced by it during the months of October November 1971, suchfactory was granted rebate in the Excise Duty at the rate of rupees forty per quintal in so far as the excess production is concerned. (2)Rebate for the period 1st December 1972 to 30th April, 1973 was available at the rate of rupees twenty per quintal provided the production of sugar during the said period was in excess of 115% of the quantity of sugar produced by the said factory during the corresponding period in the previous Sugar Year, in so far as the excess production is concerned. (3)For the months of May and June 1973 rebate at the rate of rupees twenty per quintal was available provided the factory produced more sugar than it produced during the corresponding months in the previous Sugar Year. The said rebate was available again only with respect to the excess production. 759 (4)For the period commencing from 1st July, 1973 and ending with 30th of September, 1973, rebate was available at the rate of rupees twently per quintal provided the factory produced sugar in excess of the quantity produced during the corresponding period in the previous Sugar Year. This rebate too was confined to the excess production. However, the benefit of the rebate mentioned in any of the clauses aforesaid was not available to a factory which inter alia did not work during the 'base pariod '. The other three Notifications dated 4.10.73, 12.10.74 and 30.9.76 were similar. All the four Notifications were applicable to the Sugar years 1972 73, 1973 74, 1974 75 and 1976 77, respectively. The respondents sugar factories did not produce any sugar in one or the other of the four blocks (mentioned in the Table contained in the Notification) in the base year (previous sugar year). During the current sugar year, they produced certain quantity of sugar during that block period. The respondents contended that they were entitled to the benefit of rebate provided in clause (1) of the Table contained in the Notification, whereas the Revenue submitted that they were not entitled to the benefit of rebate. The claim for rebate made by the respondnets was allowed in the first instance, but later proceedings were initiated to recover back, or re adjust, the benefit already allowed. These disputes were carried to the High Courts. Almost all the High Courts except Karnataka held in favour of the respondents. In Patna High Court, there was a conflict of opinion. Hence this batch of appeals by the Revenue contending that the benefit of rebate was available only where the "sugar produced in a factory during the period commencing from the 1st day of October, 1972 and ending with the 30th day of November, 1972 which is in excess of the quantity of sugarproduced during the corresponding "period in 1971"; that nil production could not be equated to "the quantity of sugarproduced" in clause (1); that clause (1) of the first proviso in the 1972 Notification has 760 to be harmonised with the several clauses in the table; and that no interpretation should be adopted which rendered any part of the Notification superfluous. Dismissing all. the civil appeals, except Civil Appeal Nos. 3831 32 of 1988, this Court, HELD : 1.01. The several clauses in the Notification must be read together, harmonised and reasonably understood without ignoring the underlying object and purpose of the notification. An interpretation which leads to absurd consequences should be avoided. [770 E] 1.02.The object behind the notification was evidently not only to induce the factories to produce more sugar but also to induce them to start their production early in the sugar year. The object appears to be also to induce the factories to keep on producing the sugar all the year round, which they may perhaps not have done otherwise. Running the factories during the off season (off season means October November period and then again the period from May June to September), may have its own problems which may increase the cost of production. main issue is whether the words "the quantity of sugar produced during the corresponding period. " do not take in the case of a factory which has not produced any sugar whatsoever during the relevant corresponding period? It does take in. Holding otherwise would have this absurd consequence: a factory which has produced, say, just one quintal of sugar during the relevant corresponding period and has produced 1000 quintals during October November, 1972 would qualify for the rebate on 999 quintals while another factory which has not produced any sugar nil production but has produced 1000 quintals during October November, 1972, would not qualify. [770 G H] 1.04.The Idea behind the notification is to induce the manufacturers to produce more in the current sugar year than what they have produced in the previous sugar year or during the previous corresponding period in the previous sugar year, as the case may be. Where a factor; has not produced any sugar or has produced a particular quantity of sugar during the said period in the previous sugar year but produces a larger quantity during the said period in the current sugar year, it must be rewarded. [771 B D] 761 1.05.The case of October November appears to be rather an exception. Normally, it appears, no factory owner commenced the production of sugar in these months because of several unfavorable factors. Indeed, these unfavorable factors appear to be present to a large extent even during the 'months June to September. The notifications were evidently meant to compensate the factory owners for producing during these months as well. 1772 C D] 1.06.One must proceed on the assumption that every industrialist and businessman would, ordinarily, like to produce as much more as possible, since, normally speaking, more production means more profits. [772 E] 1.07.No manufacturer produces sugar merely for the sake of rebate. Rebate is an inducement, an additional attraction. It is not as if without rebate provided by these notifications, no one would have produced sugar. [771 D] 1.08.There is no arithmetical difficulty in working out 115% of zero; it is zero. What applies to clause(1) applies equally to clauses (2), (3) and (4). It is only that the factory need not necessarily have worked during each of the corresponding periods in the base year; it is enough if it has worked in the base year. [771 E F] 1.09.The interpretation placed upon the said notifications by the majority of the High Courts is the correct one. The view taken by the Karnataka High Court in its Judgment under appeal in Civil Appeal Nos. 3831 32 of 1988 and the view taken by the Patna High Court in ill Civil Writ Jurisdiction Case No. 865 of 1966 are not correct. basis for the percentages prescribed in the Notification dated 12th October. 1974 the average production of the previous five years and not the excess production. By way of illustrates, take a factory which produces 2500 tons during the period Dec.1, 1974 to Sept. 30, 1975 as against the average production of 1000 tons during the corresponding periods in the five previous sugar years. Out of 2,500 quintals produced during the said period in the current sugar year (December 1, 1974 to September 30, 1975), the average of the corresponding periods of the five previous sugar years ie., 1000 quintals should be deducted first, which means the excess production during the said period during the current year is 1500 quintals. 7.5% of 1000 quintals is 75 quintals. On this quantity 762 of 75 quintals, the rate of rebate as per sub clause (a) will be Rs. per quintal in the case of free sale sugar and Rs. 5 per quintal in the case of levy Sugar. Next 10% of excess production means 100 quintals which would be eligible for rebate under sub clause (b) at the rate of Rs. 40 per quintal In the case of free sale sugar and Rs. 10 per quintal in the case of levy sugar. The next 100 quintals would be eligible for rebate under sub clause (c) at the rate of Rs. 50 per quintal in the case of free sale sugar and Rs. 14 per quintal in the case of levy sugar. Then again the next 100 quintals would be eligible for rebate under sub clause (d) at the rate of Rs. 60 per quintall in the case of free sale sugar and Rs. 18 per quintal in the case of levy sugr. The balance of 1125 quintals would qualify for rebate under sub clause (e) at the rate of Rs. 82 per quintal in the case of free sale sugar and Rs. 22 per quintal in the case of levy sugar. [774 B E] Etikoppaka Co operative Agricultural Society vs Union of India, ; ; 1982 (59) E.L.T. 409 (Allahabad); & Haryana); and 1987 (30) E.L.T. 260 (Orissa), approved. [768 H, 769 A]

ivil Appeals Nos. 96 to 98 of 1964. Appeals by special leave from the judgments and orders dated September 22, 1960, and December 6, 1960 of the Punjab High Court in Income tax References Nos. 19 of 1958 and 6 of 1959 respectively. S.V. Gupte, Solicitor General, R. Ganapathy Iyer and R.N. Sachthey, for the appellant. Deva Singh Randhawa and Harbans Singh, for the respondent. The Judgment of the Court was delivered by Shah, J. On April 10, 1953 the estate of the joint Hindu family of which the respondent was a member was partitioned, and the respondent was allotted, besides other properties, 400shares of the Simbhaoli Sugar Mills Private Ltd., and was made liable to pay a business debt amounting to Rs. 3,91,875/ due by the family to R.B. Seth Jessa Ram Fateh Chand of Delhi. On April 14, 1953 the respondent executed a deed of trust in respect of 300 out of the shares of the Simbhaoli Sugar Mills which fell of to his share. The following are the material provisions of the deed of trust. "AND WHEREAS on partition, the author was allotted amongst other properties, four hundred shares of the Simbhaoli Sugar Mills Ltd., and fixed with liability for discharge of certain debts of the Joint Hindu Family AND WHEREAS for discharge of the debts detailed in the schedule appearing hereafter, the author now as absolute owner of the said shares has decided to settle on trust three hundred shares numbering 1 to 300 both inclusive, out of the said shares for the benefit of his creditors and other beneficiaries named hereafter and for the objects mentioned hereafter. The author as holder of 300 shares out of the capital of Simbhaoli Sugar Mills Ltd. divesting himself of all proprietary rights in the said shares. hereby declares that the said shares shall from this day be irrevocably held on Trust by the Trustees to be used by them for all or any of the purposes following, that is to say : (a) To pay off the debts as detailed in Schedule 'A ' attached hereto: These debts were incurred for the benefit of the Joint Hindu Family of the author and on disruption of the Joint Hindu Family and partition of properties among its members, made payable by the author. 686 And after his debts are paid off. (b) To provide for the maintenance and education of the children and grand children of the author. (c) To open and run Hospitals and Nursing Homes. (d) To open and run School or SchooLs for the education of boys or girls in scientific and technical subjects. To open and maintain a reading room and a lending library. (f) To provide for the maintenance and education of orphans, widows and poor people and for that to give scholarships for inland and overseas studies to found orphanage. widow houses and poor houses and to do all other things that the trustees may deem fit for carrying out the objects of the Trust. " By el. 3 four persons including the respondent were appointed trustees, and the respondent was to hold the office of Chairman of the Trust during his lifetime. The trust deed then provided: "In the books of the Company, the shares will stand in the name of the Chairman for the time being, who will have the power to operate the Bank accounts of the Trust, to preside at the meetings, exercise the right of th e vote in respect of the shares of the Trust. " Clause 5 provided: "It is hereby declared that the trustees shall have the following powers in addition to the powers and the authorities hereinfore contained: (i) The trustees shall not be entitled to sell the shares except as provided hereafter but they can mortgage or pledge the same for raising funds as they may feel necessary for paying off the debts of the author, provided (ii) . . (iii) . . . (iv) . . Clause 6 provided: "That in carrying out the objects of the trust the trustees shall keep in mind and abide by the following directions: (i) The payment of the debts of the author as detailed in Schedule 'A ' referred to above shall receive the topmost priority and the trustees shall not spend any money out of the trust property or its income 687 in any direction till they have paid off all the debts of the author, provided always if the trustees are unable to pay off the debts, out of the income i.e. dividends, bonuses etc. of the shares within a period of ten years they shall be entitled to sell the same or part of it and thus pay off the debts that may be due at that time. (ii) After debts are discharged the trustees shall spend the income of the trust property. remaining in their hands after full discharge of the debts, on the maintenance of the children and grand children of the author and the remaining 20% on all or any of the other objects of the trust as the Trustees may think best. (iii) . . The respondent claimed before the Income tax Officer, Eward. Amritsar that the dividend received by the trustees in respect of 300 shares of the Simbhaoli Sugar Mills was the income of the Trust and that he had no concern with that income as he had "divested himself irrevocably of the ownership of the shares" and that in any event Rs. 19,856/ being the amount due as interest to R. B. Seth Jessa Ram Fateh Chand should be allowed as a permissible deduction in computing the net income from dividend of the shares. The Income tax Officer rejected the contentions of the respondent, holding that the Trust was a "fictitious transaction". The Appellate Assistant Commissioner held that the respondent had not "irrevocably transferred the 300 shares of the Simbhaoli Sugar Mills" and therefore by virtue of section 16(1)(c) proviso one the respondent could not escape liability to pay tax on the dividend from the share. The respondent appealed to the Income tax Appellate Tribunal. but without success. At the instance of the respondent the Tribunal drew up a statement of the case and referred the following questions to the High Court at Chandigarh: "(1) Whether the dividend income of 300 shares of the Simbhaoli Sugar Mills, Private Ltd. transferred by the assessee to section Raghbir Singh Trust was the income of the assessee liable to tax? (2)Whether the assessee was entitled to claim deduction of Rs. 19,856/ paid as interest to R.B. Seth Jessa Ram Fateh Chand against the dividend income of the aforesaid 300 shares?" The High Court answered the first question in the negative and declined to answer the second question. With special leave. the Commissioner of Income tax has appealed to this Court. Section 2 sub section (15) defines "total income" as meaning total amount of income, profits and gains referred to in sub section (1) of section 4 688 computed in the manner laid down in the Act. Section 16 of the Income tax Act enumerates the exemptions and exclusions admissible in the computation of total income in certain specified cases. The material part of cl. (c) of sub section (1) of section 16 is as follows: "In computing the total income of the assessee (c) all income arising to any person by virtue of a settlement or disposition whether revocable or not, and whether effected before or after the commencement of the Indian Income tax (Amendment) Act, 1939 (VII of 1939), from assets remaining the property of the settlor or disponer, shall be deemed to be income of the settlor or disponer, and all income arising to any person by virtue of a revocable transfer of assets shall be deemed to be income of the transferor: Provided that for the purposes of this clause a settlement, disposition or transfer shall be deemed to be revocable if it contains any provision for the retransfer directly or indirectly of the income or assets to the settlor, disponer or transferor, or in any way gives the settler, disponer or transferor a right to reassume power directly or indirectly over the income or assets: Provided further that the expression 'settlement or disposition ' shall for the purposes of this clause include any disposition, trust, covenant, agreement or arrangement, and the expression 'settlor or disponer ' in relation to a settlement or disposition shall include any person by whom the settlement or disposition was made: Provided further that this clause shall not apply to any income arising to any person by virtue of a settlement or disposition which is not revocable for a period exceeding six years or during the lifetime of the person and from which income the settlor or disponer derives no direct or indirect benefit but that the settlor shall be liable to be assessed. on the said income as and when the power to revoke arises to him." Clause (c) was intended, while seeking to protect a genuine settlement by which the tax payer intends to part with control over property and its income. to circumvent attempts made by him to reduce his liability to pay income tax by the expedient of so arranging a settlement or disposition of property that the income does not accrue to him, but he reserves a power over or interest in the property settled or disposed of, or in the income thereof. By cl. 689 c) income arising to any person by virtue of a settlement or disposition whether revocable or not is deemed to be income of the settlor or disponer if the assets remain the property of the latter. Again income arising to any person by virtue of a revocable transfer of assets is deemed to be the income of the transferor. The first proviso then deems a settlement statutorily revocable, if it contains any provision for retransfer directly or indirectly of the income or assets settled, to the settlor, or where it gives to the settlor a right to reassume power directly or indirectly over the income or assets. By the second proviso the expression "settlement or disposition" includes a disposition, trust, covenant, agreement or arrangement the Legislature has thereby sought to bring within the net, transactions similar to though not strictly within the description of settlements and dispositions. The third proviso carves out from the amplitude of cl. (c) as expounded by the first and the second provisos income arising to any person from a settlement which is not revocable for a period exceeding six years or during the lifetime of the person and from which income the settlor derives no benefit direct or indirect. It was observed in a recent judgment of this Court: Commis sioner of Income tax, Bihar and Orissa vs Rani Bhuwanesliwari Kuer(1) that: "By the first proviso, settlements, dispositions or transfers of the character described therein, are deemed revocable for the purpose of the principal clause. The function of proviso I and proviso 2 is plainly explanatory. The second proviso in terms says that the expression settlement or disposition" is to include any disposition, trust, covenant, agreement or arrangement, and the expression "settlor or disponer" is to include any person by whom the settlement or disposition was made. Similarly the first proviso states that settlements, dispositions or transfers, if they are of the character described, shall for the purpose of the principal clause be revocable transfers. " The terms of section 16(1)(c) first proviso are reasonably plain. A settlement or disposition is deemed to be statutorily revocable if there is a provision therein for retransfer of the income or assets or which confers a right to reassume power over the income or assets. The provision may even be for retransfer indirectly or for conferring power to reassume indirectly over the income or the assets. But the actual retransfer or exercise of the power to reasume is not necessary; if there be a provision of the nature con templated, the proviso operates. The terms of the deed may now be examined. The shares were settled upon trust, and four trustees one of whom was the respondent were appointed. Genuineness of the trust is no longer (1) ,202. 690 in dispute. The direction that the shares are to stand in the name of the Chairman for the time being appears to have been necessitated by section 33 of the Indian Companies Act, 1913 which prevented notice of any trust, expressed, implied or constructive to be entered on the register. The deed recites that the shares are to be held on trust irrevocably by the trustees for all or any of the purposes mentioned therein. The purpose for which the shares are to be held in the first instance is to pay off the debt due to R.B. Seth Jessa Ram Fatch Chand, and it is only after the debt is paid off that the directions in cls. (b) to (f) of cl. 2 come into operation. The deed is in terms expressly irrevocable, but on that account the operation of the first proviso is not excluded. If by the direction for application of the income for satisfaction of the debts due by the respondent, it could be said in law that there is a provision for retransfer directly or indirectly of the income or a right to reassume directly or indirectly power over the income, the settlement would be deemed revocable, recital that it is irrevocable notwithstanding. But the income from the shares since the execution of the deed of settlement arises to the trustees and it is liable to be applied for the purposes mentioned in the deed. The income has to be applied for satisfaction of debts which the settlor was under a obligation to discharge. but that is not to say that there is a provision for retransfer of the income or assets to the settlor, or that the settlor is invested with power to reassume the income or assets. The assets and the income are unmistakably impressed with the obligations arising out of the deed of trust. The settlor it is true obtains benefit from the trust consequent upon satisfaction of his liability, but on that account the first proviso is not attracted. We are unable to accept the argument of counsel for the revenue that by the use of the expression "indirectly" in the first proviso the Legislature sought to bring within the purview of el. (c) cases where the settler was under the guise of a trust seeking to discharge his own liability. The proviso contemplates cases in which there is a provision for retransfer of the income or assets and such provision is for retransfer directly or indirectly. It also contemplates cases where there is a provision which confers a right upon the settlor to reassume power over the income or assets directly or indirectly. It is the provision for retransfer directly or indirectly of income or assets or for reassumption of power directly or indirectly over income or assets which brings the case within the first proviso. Cases in which there is a settlement, but there is no provision in the settlement for retransfer or right to reassume power do not fail within the proviso, even if as a result of the settlement, the settler obtains a benefit. It has been held in two cases decided by the High Court of Bombay that a person under an obligation arising out of his status 691 may execute a trust to discharge his own obligation without attracting the operation of section 15(1)(c). In Ramji Keshavji vs Commissioner of Income tax, Bombay(1) under a consent decree. the assessee executed a deed of trust conveying certain properties for the benefit of his wife. to the trustees. The deed provided that the net income from the properties shall be paid to the assessee 's wife during her lifetime and that she shall maintain her minor children by the assessee anal "run the household". It was held by the High Court that the income derived from the trust property and payable to the assessee 's wife during her lifetime could not be deemed to be the assessee 's income, for the direction in the deed did not amount to a provision for retransfer of the income or assets or for reassumption of power directly or indirectly over income or assets within the meaning of the first proviso to section 16(1)(c). In D.R. Shahapure vs Commissioner of Income tax, Bombay(2) the assessee with the object of making a provision for his wife made an entry in his business books of account crediting Rs. 20,000/ , and endorsed against the entry. "The capital supplied to you will remain entirely mine but you will get the income over it up to the end of your life. This capital I will not take back up to the end of your life but I will do business for you on this capital and see that you get Rs. 600 per annum for you". No specific assets were set apart to. meet the sum of Rs. 20,000/ and there were no other entries in the books with regard to it. The High Court held that the entry was an irrevocable covenant to pay the income accruing on Rs. 20,000/ with a guarantee that it shall be Rs. 600 a year, and therefore the case was covered by the third proviso to section 16(1) (c) of the Act and the income which was paid to the wife under the covenant could not be deemed to be the income of the assessee under the first part of section 16(1)(c). In our view these cases were correctly decided. The appeals fail and are dismissed with costs. One hearing fee. Appeals dismissed. (1) (1945)13 I.T.R.105.

The respondent executed a deed of trust in respect of certain shares owned by him in a company. The deed directed the trustees to apply the income and property of the trust in the first instance for paying off the settlor 's debts, and thereafter for other purposes of the trust. In proceedings under the Indian Income tax Act, 1922 it was held by the Income tax Officer that the trust was a fictitious transaction. The Appellate Assistant Commissioner held that the transfer of the shares for the purpose of the trust was not irrevocable and therefore under the proviso to section 16(1)(c) the respondent could not escape liability. The Tribunal upheld the order of the Assistant Commissioner but referred to the High Court, inter alia, the question whether the income from the trust property could be taxed in the hands of the assessee. The High Court answered the question in the negative. The Commissioner of Income tax, appealed to this Court. HELD: After the execution of the deed of settlement the income from the shares arose to the trustees and was liable to be applied for the purposes mentioned in the de.ed. The income had first to be applied for satisfaction of debts which the settlor was under an obligation to pay, but this did not amount to a re transfer of the income or assets to the settlor, nor did it invest the settlor with a power to re assume the income or assets. The assests and the income were unmistakably impressed with the obligations arising out of the trust. The settlor certainly obtained a benefit from the trust consequent upon the satisfaction of his liability but on that account the first proviso to section 16(1) was not attracted. [690D F] The proviso contemplates cases in which there is a provision for retransfer of the income or assets and such provision is for retransfer directly or indirectly. It also contemplates cases where there is a provision which confers a right upon the settler to reassume power over the income or assets directly or indirectly. It is the provision for retransfer directly or indirectly of income or assets or for reassumption of power directly, or indirectly over income or assets which brings the case within the proviso. Cases in which there is a settlement, but there is no provision in the settlement for retransfer or right to reassume power do not fall within the proviso, even if as a result of the settlement, the settler obtains some benefit. 1[690G, H] Ramji, Keshavji vs C.I.T. Bombay, and D.R. Shahapura vs C.I.T., Bombay approved.

l Appeal No. 1041 of 1965. Appeal from the judgment and decree dated August 9, 1962 of the Bombav High Court, Nagpur Bench, in Letters Patent Appeal No. 12 of 1961. section V. Natu and A. G. Ratnaparkhi, for the appellant. S.N. Kherdekar and M.R.K. Pillai, for the respondent. The Judgment of the Court was delivered by Sikri, J. This appeal by certificate granted under article 133 (1)(a) and (b) of the Constitution is directed against the judgment of the High Court of Judicature at Bombay, Nagpur Bench, in a Letters Patent appeal allowing the appeal and restoring the decree made in favour of the plaintiff Ganpatlal respondent before us and hereinafter called the respondent by the Trial Court as confirmed by the District Court. The facts relevant for the determination of the points raised before us are as follows: The respondent, Ganpatlal, was the owner of Field Survey No. 56, measuring 25 acres 4 gunthas, in Yeotmal District. It appears that the respondent used to lease the land to the defendant Dewaji appellant before us and hereillafter called the appellant on yearly lease. For the year 1950 51 he gave the land to the appellant on the condition that at the end of the year the lease will stand determined and the appellant will hand over possession. On May 7, 1951, the respondent served a notice on the appellant requiting him to vacate the land in suit. The appellant however, continued to remain in possession. Thereupon the respondent filed a suit on September 17, 1951. praying for possession, damages and mesne profits, On November 15, 1951, the Berar Regulation of Agricultural 575 Leases Act, 1951 (Madhya Pradesh No. XXIV of 1951) hereinafter called the 1951 Act came into force, section 16 of which provides as follows: "Except as otherwise provid.ed in this Act, no Civil Court shall entertain any suit instituted, or application made, to obtain a decision or order on any matter which a Revenue Officer is by or under this Act, empowered to determine, decide or dispose of. " One of the pleas which the appellant took was that he had been recorded as a 'protected tenant ' under the 1951 Act and that the Civil Courts had no jurisdiction to eject him in view of 8 of that Act. The Trial Court held that the appellant was not a protected tenant under section 3(3) of the 1951 Act and the Civil Court had , jurisdiction. The appellant then appealed to the District Judge and the Additional District Judge held that the Civil Court had jurisdiction. He observed that "there is nothing in this section (section 16 of the 1951 Act) to suggest that the powers of the Civil Court were in any way curtailed in regard to the question whether a particular person was a tenant or not under section 3 of the Act. Moreover, there is nothing in that Act to show that it was intended to apply to suits which were pending at the date when this Act came into force. " By the time the appeal was heard by the Additional District Judge, section 16 of the 1951 Act had been substituted by sections 16. I6 A and 16 B by the Berar Regulation of Agricultural Leases (Amendment) Act, 1953 hereinafter called the i953 Act. These. sections run as follows: "16(1) Whenever any question arises whether any transaction between a landholder and a person claiming to be his lessee is a lease within the meaning of this Act, such question shall be decided by the Revenue Officer. (2) In deciding the question referred to in subsection (1) the Revenue Officer shall, notwithstanding anything contained in section 92 of the , or in section 49 of the Indian . or in any other law for the time being in force, have power to inquire into and determine the real nature of the transaction and shall be at liberty, notwithstanding anything contained in any law as aforesaid to admit evidence of any oral agreement or a statement or unregistered document with a view to such determination. (3) Any decision of the Revenue Officer under this section shall be binding on the parties to the proceedings and persons claiming through them. 576 16 A (1 ) Whenever any question as is referred to in section 16 arises before a Civil Court in any suit or proceeding, the Court shall, unless such question has already been determined by a Revenue Officer, refer the question to the Revenue Officer for decision and shall stay the suit or proceeding so far as it relates to the decision of such question. (2) The Civil Court shall accept the decision of the Revenue Officer on the question and decide the suit or proceeding before it accordingly. 16 B: Except as otherwise provided in this Act, no Civil Court shah entertain any suit instituted, or application made, to obtain a decision or order on any matter which a Revenue Officer is by or under this Act, empowered to determine, decide or dispose of. " Before the Additional District Judge the appellant relied on these sections and asserted that the determination of the question whether a person is a tenant or not was, under the 1953 Act, a matter entirely within the jurisdiction of the Revenue Courts and the jurisdiction of the Civil Courts had been ousted. The learned Additional District Judge repelled the argument and held that the 1953 Act did not affect pending proceedings. The learned Additional District Judge thereupon dismissed the appeal. The appellant then appealed to the High Court. The appeal first came up for hearing before Vyas, J. By an order dated August 21, 1957, he held that in view of the amendments made by the 1953 Act, "it is not for the Civil Court to ' decide but for the Revenue Officer to determine whether in the year 1951 52 also the defendant was paying to his landlord every week by way of rent one third share in the produce of the garden and was his lessee for that year also." He further observed that "if the answer to this question is in the affrmative, the defendant would be entitled to all the benefits of a protected tenancy, as observed by the learned Chief Justice in Paika vs Rajeshwar(1). ' ' In the result he set aside the judgment and decree passed by the learned Additional District Judge and directed "that the record and proceedings in this case be sent to the Revenue Officer that is, the SubDivisional Officer, Yeotmal, and the said Revenue Officer is directed to decide whether the defendant 's averment is right or otherwise, namely, that even after the expiry of the year 1950 51, that is, even after 31st March, 1951, the defendant used to pay to his landlord, the plaintiff, every week by way of rent one third share F in the produce of the garden. The decision of the Revenue Officer (1) 577 shall be subject to the usual course of appeal and revision, and. when the question which is referred to the Revenue Officer by this judgment is finally decided by the highest Revenue Authority, the finding shall be communicated to this Court. Until such time that this Court receives a finding upon the question mentioned above from the highest Revenue Authority, this appeal shall stand stayed. It shall be disposed of by this Court after the finding of the highest Revenue Authority is received by it." The Revenue Court then remitted the finding. The Commissioner, which was the last Revenue Court, gave a finding confirming the one as given by the Sub Divisional Officer that the appellant was paying rent to the respondent for the year 1951 52. The appeal was then heard by Badkas, J. It was argued before him that Vyas, J., should not have referred the issue to the Revenue Officer for decision under section 16 of the 1951 Act, but Badkas, J., held that it would not be appropriate for him to sit in judgment over the decision given by Vyas, J., and that the reference made by Vyas, J., under section 16 of the 1951 Act had to be accepted. Accepting the finding of ,the Revenue Courts, Badkas, J., held that the respondent was not entitled to eject the appellant. He further held that it was not necessary to decide whether the 1951 Act was retrospective or not as the 1951 Act came into force during the.year in which the defendant held survey numbers in question as lessee. He accordingly allowed the appeal. Having obtained leave, the respondent appealed under the Letters Patent. It was urged before the Letters Patent Bench on behalf of the appellant that the Bench could not deal with the question whether the 1953 Act applied to pending proceedings on the ground that this point had not been argued before the learned Single Judge. The Bench found no substance in this contention as the point had been raised before the learned Single Judges. The Bench further held that there was no bar to the question of applicability of the 1953 Act being allowed to be raised. Dealing with the merits, the Bench held that "taking the scheme of the Act into account and the fact that there is no section in the Act which makes the Act applicable to pending proceedings, it is at once clear that it was not intended to affect pending proceedings. Pending proceedings must continue unaffected by the provision of the Act and whatever quest.ions arose in those proceedings must be decided by the Civil Courts. " The Bench then accepting the finding of the Civil Courts, held that there was no defence to the suit and the suit must succeed. The Bench also repelled the argument that it was not open to R to consider the entire merits of the Second Appeal as the leave had 578 been given by Badkas, J., and not by Vyas, J. The Bench observed that there was no substance in the contention since the judgment of Vyas, J., was never open to the appeal it being an interlocutory judgment. The learned counsel for the appellant contends that sections 16, 16A and 16B, as substituted by the 1953 Act, had clearly ousted the jurisdiction of the Civil Courts and Vyas, J, was right in sending the case to Revenue Courts for decision on the question whether the appellant was a tenant in the year 1951 52 or not. He stresses the word "whenever" appearing in section 16 and says that this is a wide word and no limitation can be placed on it. In our view there is no substance in this contention. The first point to be noticed in this connection is that the 1953 Act came into force after the Trial Court had decreed the suit and an appeal was pending before the District Judge. It cannot be disputed that if the Legislature intends to oust the jurisdiction of Civil Courts, it must say so expressly or by necessary implication. We cannot find any words in sections 16, 16A and 16B which can lead to the necessary inference that these provisions were intended to apply to appeals pending when the 1953 Act came into force. It is true that the word "whenever" is wide but section 16A uses the words "suit or proceeding" and these words do not ordinarily indicate appellate proceedings. Further, section 16B uses the word "entertain" and not the words "entertain or try any suit" as contained in section 15 (2) of the 1951 Act. If the intention was to affect pending proceedings, the word "try" alongwith the word "entertain" would have been ' used in section 16B of the 1953 Act. It seems to us that the intention was not to apply the 1953 Act to pending appeals. If sections 16A and 16B do not bar the jurisdiction of the Civil Courts in this case the Letters Patent Bench was right in accepting the findings given by the Trial Court and the District Court in holding that the appellant was not a tenant for the year 1951 52. The learned counsel then contends that it was not open to the Letters Patent Bench to decide .this question of the applicability of sections 16, 16A and 16B because Vyas, J., had decided to the contrary and had not given leave to appeal against his order. It seems to us that the order of Vyas, J, was interlocutory and it was not necessary for the respondent to obtain separate leave to appeal against this order. It was open to the Letters Patent Bench to decide all points decided by Vyas, J., in the interlocutory 'order dated August 21, 1957. At any rate the same point was raised before Badkas, J. Further as held by this Court in Satyadhyan Ghosal vs Sm. Deorajin Devi(1), "an interlocutory order which did not terminate the proceedings and which had not been appealed from either because no appeal lay or even though an appeal lay an appeal was not taken, could be challenged in an appeal from (1) ; 579 the final decree or order." Section 105(2), C.P.C., does not apply in this case, and therefore, the Letters Patent Bench was entitled to go into the validity of the order passed by Vyas, J. The learned counsel then urges that this was a new point and the Letters Patent Bench should not have allowed it to be taken. But we agree with the Bench that the point had been raised before the learned Single Judges. In view of this it is not necessary to decide whether a new point can be taken up in a Letters Patent appeal or not. In the result the appeal fails and is dismissed with costs. V.P.S. Appeal dismissed.

The respondent leased his land to the appellant on yearly lease for the year 1950 51. As the appellant did not vacate at the end of the year the respondent filed a suit for his eviction. Pending the suit, the Bera Regulation of Agricultural Leases Act, 1951, came into force and the appellant contended that he continued to be a tenant for the year 1951 52, that he was a 'protected tenant ', and that the civil court had no jurisdiction to eject him. The trial court rejected the contentions. The appellant appealed and while the appeal was pending the Act was amended by the 1953 Act. Sections 16A and 16B of the Act as amended provided, that whenever any question as to whether a transaction between a landholder and a person claiming to be his lessee was a lease, arose in any suit or proceeding, it should be referred to the revenue officer that the revenue officer 's decision shall be accepted by the civil court; and that no civil court shall entertain any suit to obtain a decision on a matter which the revenue officer was empowered to determine. The appellant contended in the appellate court that the determination of the question whether he was the respondent 's tenant was a matter entirely within the jurisdiction of the revenue courts only. The appellate court held that the 1953 Act did not affect pending proceedings, that the appellant was not the respondent 's tenant for the year 1951 52, and dismissed the appeal. In second appeal, a single Judge of the High Court held that in view of the 1953 amendments, it was for the revenue courts to decide whether the appellant was the respondent 's lessee for the year 1951 52 and referred the matter to the revenue courts. The revenue courts held that the appellant was paying rent to the respondent for the year 1951 52, and remitted the finding to the .High Court. Another Single Judge of the High Court, before whom the matter came up for final disposal, accepted the finding and held that. the respondent was not entitled to eject the appellant. He also rejected the respondent"s contentions that the 1953 amendments were not applicable and that the matter should never have been referred to the revenue courts. The respondent thereupon appealed under Letters Patent. The Bench held that sections 16, 16A and 16B of the Act were not intended to affect pending proceedings, that the civil court could decide the question whether the appellant was the respondent 's tenant in 1951 52, and allowed the appeal accepting the findings of the trial court and the first appellate court that the appellant was not the respondent 's tenant for the year 1951 52. In appeal to this Court. HELD: (1) It was open to the Letters Patent Bench to decide all points decided by the single Judges even though no appeal was filed against the order referring the matter to the revenue courts, as that order 574 was only an interlocutory one to which section 105(2) C.P.C.; was not applicable. [578H; 579A B.] Satyadhyan Ghosal vs Smt. Deorajin Devi, [1960] 3 S.C.R. 590, (2) The intention of the Legislature was not to apply the 1953 Act to pending proceedings and therefore sections 16, 16A and 16B did not bar the jurisdiction of the civil.courts in the present case. The 1953 Act came into force after the trial court decreed the suit and an appeal was pending in the first appellate Court. The words 'suit or proceeding in section 16A do not ordinarily, indicate appllate proceedings and there is nothing in sections 16, 16A or 16B which can lead to the necessary inference that these provisions were intended to apply to appeals pending when the 1953 Act came into force. Further, the words used in section 16B are 'entertain ' and not 'entertain and try. '. If the intention was to affect pending proceedings the word 'try. ' would have been in the section along with the word 'entertain '. [578 C El

Civil Appeal No. 230 of 1978. From the Judgment and Order dated 19th January, 1978 of the 31 High Court of Judicature at Allahabad in Civil Misc. Writ No. 355 of 1977. Yogeshwar Prasad and Mrs. Rani Chabbra, for the Appellant J.P. Goyal, Rajesh and S.K. Jain for the Respondents. The Judgment of the Court was delivered by MISRA, J. The present appeal by special leave is directed against the judgment dated 19th of January, 1978 of the Allahabad High Court. The short question for consideration in this appeal is whether a sub tenant is entitled to the protection of the fourth proviso to s.21 of the Uttar Pradesh Urban Buildings (Regulation of Letting, Rent and Eviction) Act, 1972. The material facts to bring out the point for consideration lie in a narrow compass. One Murari Lal was the owner of the disputed shop. During his lifetime a partition took place between him and the other members of his family in 1937. The shop in dispute fell to the share of Murari Lal and Narendra Mohan, his eldest son. After the death of Murari Lal in 1960 his interest devolved upon his sons Rajendra Kumar and Brijendra Kumar along with their brother Narendra Mohan. It appears that the shop in suit had been let out to one Krishan Kumar. He in his turn inducted Shyam Babu, the present appellant, as his sub tenant in 1962. Rajendra Kumar and Brijendra Kumar filed a suit No. 181 of 1968 in the Court of Munsif for the eviction of the original tenant as well as the sub tenant, on the ground of illegal subletting as also for the recovery of arrears of rent. That suit was contested by the tenant as well as the sub tenant on the ground that the sub tenancy had been created with the consent of the then landlord and therefore subletting was legal. The learned Munsif dismissed the suit by his order dated 24th April, 1973 holding that the sub tenancy created by Krishan Kumar in favour of the appellant Shyam Babu was with the consent of the landlord and as such neither Krishan Kumar nor Shyam Babu was liable to eviction on that ground. It appears that during the pendency of the suit the U.P. Urban Building (Regulation of Letting, Rent and Eviction) Act, 1972 32 (hereinafter referred to as the new Act) came into force on 15th July, 1972. Rajendra Kumar and Brijendra Kumar, the landlords, moved an application under s.21 of the new Act for the release of the premises in occupation of the appellant and Krishan Kumar on the ground that the same is bonafide required for their personal use. The application was resisted by the tenant as well as the sub tenant. They denied that the need of the landlords was genuine. They also set up their own needs and contended that they would suffer greater hardship if the application for release was allowed. The prescribed authority allowed the application with respect to the portion in occupation of the appellant Shyam Babu but dismissed the same as against the original tenant Krishan Kumar. Feeling aggrieved the landlords as well as the sub tenant filed two separate appeals before the District Judge to the extent the order went against them. The landlords were aggrieved by the order insofar as their application was rejected against Krishan Kumar, the original tenant, while the appellant challenged the release of the premises granted to the landlords against him. Both the appeals were disposed of by a common judgment of the District Judge on 24th March, 1977 confirming the order passed by the prescribed authority. The landlords submitted to the order passed by the District Judge. The appellant, however, sought to challenge the order of the District Judge by filing a writ petition in the High Court. The contention raised by the appellant was that the prescribed authority as well as the Appellate Court committed a manifest error of law in allowing the application for release of the premises in favour of the landlords without considering the comparative hardship likely to be caused to the appellant or to the respondent land lords by the order of release or refusal to release the premises within the meaning of fourth proviso to s.21 of the new Act. In the opinion of the High Court the proviso contemplated the consideration of the likely hardship of the tenant or the landlord and as the appellant was only a sub tenant the proviso did not obligate the authority to consider his hardship. It will be appropriate at this stage to read the relevant proviso to s.21 as the decision of the case hinges on the construction of the proviso: "Provided also that the prescribed authority shall, except in cases provided for in the Explanation, take into 33 account the likely hardship to the tenant from the grant of the application as against the likely hardship to the landlord from the refusal of the application and for that purpose shall have regard to such factors as may be prescribed. " It may be recalled that in the earlier suit No. 181 of 1968 filed by the landlords it was found as a fact that the appellant Shyam Babu was inducted as a sub tenant by the tenant in chief with the consent of the landlords. It was on this ground that the landlords ' suit was dismissed against the tenant in chief as well as the sub tenant. A feeble attempt was made before the High Court on behalf of the landlords to challenge that finding but that was rejected and we think rightly. Even an erroneous finding of fact between the parties will be binding on them. The landlords, therefore, cannot possibly urge that the sub letting was not with the consent of the landlords. If once it is accepted that the sub tenancy created by the tenant in chief in favour of the appellant was with the consent of the landlords his possession cannot be said to be illegal. In this view of the matter we see no reason why he should be deprived of the protection of the fourth proviso to s.21 of the new Act. It is true that the new Act was intended to give relief to the tenant. 'Landlord ' and 'tenant ' are defined terms in the Act. Clause(j) of s.3 defines 'landlord ' thus: "(j) "landlord", in relation to a building, means a person to whom its rent is or if the building were let would be, payable, and includes, except in clause (g), the agent or attorney, or such person:" Section 3 (a) defines tenant as; "(a) "Tenant" in relation to a building, means a person by whom its rent is payable,. . " The appellant who is a sub tenant pays rent to the tenant in chief and the tenant in chief in his turn pays rent to the landlord. Between the appellant and the tenant in chief the tenant in chief would be the landlord and the appellant, the sub tenant, would be the tenant. All that the relevant proviso to s.21 requires is that the comparative hardship of the tenant as also that of the landlord shall be taken into account before passing any order of release or refusal to release. If the sub tenancy had been created without the consent 34 of the landlord the position might have been different. The sub tenant for the purposes of the fourth proviso to s.21 would virtually be a tenant inasmuch as rent is payable by him to the tenant in chief, who to all intents and purposes will be a landlord qua the sub tenant. To interpret the section in the way as the High Court has interpreted would be defeating the very salutary purpose of the new Act. A similar question came up for consideration before a Division Bench of the Allahabad High Court in Bhullan Singh vs Babu Ram based on cl. (g) of s.2 of the U.P. (Temporary Control of Rent and Eviction Act, 1947. The High Court took the view that the term 'tenant ' as defined in cl. (g) of s.2 of the Act includes a sub tenant. Having considered the argument of the counsel for the parties we are of the firm view that the appellant was entitled to the protection of the fourth proviso to s.21 and the comparative hardship of the appellant as well as that of the landlords should have been taken into account before disposing of an application under s.21 of the new Act. The Court below in our opinion have failed to exercise jurisdiction vested in them in not considering the likely hardship of the appellant. For the reasons given above the appeal must succeed. It is accordingly allowed and the impugned judgment of the High Court and those of the District Judge as well as of the prescribed authority on the question of comparative hardship are set aside. The case is remanded to the District Judge who will send it to the prescribed authority under the new Rent Act to dispose of the application under s.21 in the light of the observations made above after considering the likely hardship of the appellant and that of the landlord respondents. In the circumstances of the case, we direct the parties to bear their costs. H.S.K. Appeal allowed.

The respondent landlords had let out a shop to a tenant who had, with the consent of the landlords, sub let the same to the appellant. The landlords moved an application under section 21 of the Uttar Pradesh Urban Buildings (Regulation of Letting, Rent and Eviction) Act, 1972 against the tenant and the sub tenant for release of the premises on the ground of bonafide requirement. The prescribed authority allowed the application against the appellant and dismissed against the tenant. In appeal the District judge confirmed the order of the prescribed authority. In a writ petition the appellant challenged the order of the District Judge. The High Court dismissed the writ petition observing that the fourth proviso to s.21 contemplated the consideration of the likely hardship of the tenant or the landlord only and not of the sub tenant. Hence this appeal. Allowing the appeal, ^ HELD: All that the relevant proviso to s.21 requires is that the comparative hardship of the tenant as also that of the landlord shall be taken into account before passing any order of release or refusal to release. If the sub tenancy had been created without the consent of the landlord the position might have been different. The sub tenant for the purposes of the fourth proviso to s.21 would virtually be a tenant inasmuch as rent is payable by him to the tenant in chief, who to all intents and purposes will be a landlord qua the sub tenant: To interpret the section in the way as the High Court has interpreted would be defeating the very salutary purpose of the Act. [33 H; 34 A B] Bhullan Singh vs Babu Ram referred to. In the instant case, the appellant was entitled to the protection of the fourth proviso to section 21 and the comparative hardship of the appellant as well as that of the landlords should have been taken into account before disposing of an application under s.21 of the Act. The Courts below have failed to exercise jurisdiction vested in them in not considering the likely hardship of the appellant. [34 C D]

s Nos. 76, 217 to 228 of 1960. Petitions under Article 32 of the Constitution of India for enforcement of Fundamental Rights. A. V. Viswanatha Sastri and T. V. R. Tatachari, for the petitioners (In petitions Nos. 76, 87, 93 104 and 217 228 of 1960). T. V. R. Tatachari, for the petitioners (In petitions Nos. 72 and 229 233 of 1960). D. Narasaraju, Advocate General for the State of Andhra Pradesh, P. R. Ramchandra Rao and T. M. Sen, for the respondents (In all the petitions). September 8. The Judgment of the Court was delivered by SUBBA RAO J. These petitions are filed under article 32 of the Constitution for the enforcement of the petitioners ' fundamental right to carry on the business of motor transport in West Godavari District in 645 the State of Andhra Pradesh by the issuance of writs of certiorari or any other appropriate writs, orders or directions to quash the schemes of road transport services as finally approved by the Government of Andhra Pradesh on March 21, 1960, and for other incidental reliefs. In exercise of the powers conferred by section 68C of the (IV of 1939), as amended by the Central Act 100 of 1956, (hereinafter called the Act), Shri Guru Pershad, the Chief Executive Officer, Andhra Pradesh State Road Transport Corporation, (hereinafter called the Transport Corporation) published seven proposals dated December 7, 1959, in the Andhra Pradesh Gazette dated December 17, 1959, propounding seven schemes for the nationalization of the road transport in respect of different parts of West Godavari District in that State. Under that notification objections from the public and affected parties were invited to be filed within 30 days of the publication thereof More than 3000 objections were received by the Government against the said schemes. After considering the objections, the Government issued notices to the objectors or their representatives and the representatives of the Transport Corporation informing them of the time, place and the dates of hearing. On the notified dates, namely, March 10, 11 and 12, 1960, 200 objectors were present and most of them were represented by Advocates. The Transport Corporation was also represented by its Chief Executive Officer and its legal advisers. The Minister in charge of the portfolio of transport held an enquiry, considered the conflicting arguments advanced, gave definite findings on the points urged, rejected all the objections but one and approved the schemes with a slight modification. The seven schemes were directed to be put in force from different dates which were given in the order made by the Minister. The aggrieved operators who were not satisfied with the order of the Minister filed the present petitions for the said reliefs. Shri A. V. Viswanatha Sastri, learned counsel for the petitioners, raised before us the following points. 646 (1)The provisions of Ch. IVA of the Act are ultra vires the powers of Parliament because they are within the exclusive legislative field of the States. (2) The provisions of Ch. IVA of the Act infringe the fundamental rights of the petitioners under article 19(1)(g) of the Constitution and are not saved by el. (6) of the said Article. (3) The provisions of Ch. IVA are also violative of article 14 of the Constitution. (4) The order of the Government confirming the schemes is vitiated by the doctrine of bias and, therefore, void. (5) Though in fact seven schemes are framed, in effect they are component parts of one scheme and that device has been adopted to circumvent the judgment of this Court in Srinivasa Reddy vs The State of Mysore (1). (6) The schemes are void inasmuch as they area prepared and published by the Chief Executive Officer who was not one of the persons who could act on behalf of the Transport Corporation under section 13 of the Road Transport Corporations Act. (7) The schemes as propounded by the Transport Corporation did not give the number of vehicles proposed to be operated in each route as it should have given under r. 4 of the Andhra Pradesh Motor Vehicles Rules (hereinafter called the rules) and the modification made by the Minister directing the Transport Corporation to do so does not also comply with the requirements of the said rule. (8) In exercise of the power conferred under r. 5 of the Rules, the State Transport Under, taking conferred upon itself power to vary the fre quency of the services and that rule and the note made pursuant thereto are inconsistent with the provisions of the Act and, therefore, void. (9) The proposed schemes include three new routes and that is illegal as the said Transport Undertaking has no power to include any new routes in a scheme proposed by it. Though many other questions are raised in the petitions, they are not pressed before us. Learned Advocate General for the State of Andhra Pradesh sought to sustain the schemes as approved by the Minister in their entirety. (1) (1960] 2 S.C.R. 130. 647 We shall now proceed to deal with the contentions in the order they were raised. (1) : The first contention does not now merit a detailed consideration as it has been considered and rejected by this Court in H. C. Narayanappa vs The State of Mysore (1). In that case, after considering the question, Shah, J., speaking for this Court, observed: "We are therefore of the view that Chapter IVA could competently be enacted by the Parliament under entry No. 21 read with entry No. 35 of the Concurrent List." Nothing further Deed be said on this point. With respect we accept and follow the said decision. (2): The next contention is based upon article 19 of the Constitution. The question is whether Ch. IVA of the Act is saved by article 19(6) of the Constitution. If Chiva, which provides for the nationalization of road transport services in the manner prescribed, thereunder is not a permissible legislation covered by article 19(6), it would certainly offend against the fundamental right of the petitioners to do business in motor transport. The constitutional validity of Ch. IVA of the Act was raised in Gullapalli Nageswara Rao vs Andhra Pradesh Road Transport Corporation (2). There it was argued that Ch. IVA of the Act was a piece of colourable legislation whose real object was to take over the business of the petitioners therein under the cover of cancellation of permits in contravention of article 31 of the Constitution and that plea was rejected by this Court. But no attack was made on the validity of Ch. IVA of the Act on the ground that it infringed the provisions of article 19(1)(g) of the Constitution and was not saved by cl. (6) of the Article. That point is now raised before us. Under article 19(1)(g), all citizens shall have the right to carry on trade or business. The material part of (6) of article 19, as amended by the Constitution (First Amendment) Act, 1951,reads: " Nothing in sub clause (g) of the said clause. shall affect the operation of any existing law in so far (1) ; (2) [1959] Supp. 1 S.C.R. 319. 83 648 as it relates to, or prevent the State from making any law relating to. . the carrying on by the State, or by a corporation owned or controlled by the State, of any trade, business, industry or service, whether to the exclusion, complete or partial, of citizens or otherwise. " The only question is, how far and to what extent article 19(6) secures the validity of Ch. IVA of the Act from attack that it offends against article 19(1)(g) ? Learned counsel for the Petitioners contends that article 19(6)(ii) provides only for partial exclusion of citizens, that is, the exclusion of a certain class of persons as a whole and not for partial exclusion of some among the same class. As section 68C, the argument proceeds, enables the State Transport Undertaking to frame a scheme for excluding some among the same class, the said provision is not saved by article 19(6) of the Constitution. Relevant portions of section 68C of the Act read: " Where any State transport undertaking is of opinion that. . . it is necessary in the public interest that road transport services in general or any particular class of such service in relation to any area or route or portion thereof should be run and operated by the State transport undertaking, whether to the exclusion, complete, or partial, of other persons or otherwise. " Under this section a scheme may be framed in respect of road transport service in general or in respect of a particular class of such service empowering the State Transport Undertaking to run the said service ; it may be in relation to any area or route or a portion thereof; it may also be to the exclusion of all or some of the persons running the said service in general or a particular class of it. The section enables the State to take over particular class of a service, say, the bus service, and exclude all or some of the persons doing business in that class of service. Learned counsel says that this section confers a wide power beyond the permissible limits of article 19(6)(ii) of the Constitution. To state it differently, the argument is that while article 19(6)(ii) does not enable a partial exclusion 649 of some among the same class of service, section 68C permits the said exclusion. The answer to this argument depends upon the true meaning of the provisions of the said Article. Under sub cl. (ii) of article 19(6), the State can make a law relating to the carrying on by the State or by a corporation owned or controlled by the State, of any particular business, industry or service, whether to the exclusion, complete or partial, of citizens or otherwise. Article 19(6) is only a saving provision and the law made empowering the State to carry on a business is secured from attack on the ground of infringement of the fundamental rights of a citizen to the extent it does not exceed the limits of the scope of the said provision. Sub clause (ii) is couched in very wide terms. Under it the State can make law for carrying on a business or service to the exclusion, complete or partial, of citizens or otherwise. The law, therefore, can provide for carrying on a service to the exclusion of all the citizens; it may, exclude some of the citizens only; it may do business in the entire State or a portion of the State, in a specified route or a part thereof The word " service " is wide enough to take in not only the general motor service but all the species of motor service. There are, therefore, no limitations on the State 's power to make laws conferring monopoly on it in respect of an area, and person or persons to be excluded. In this view, it must be held that section 68C does not exceed the limits prescribed by article 19(6)(ii) of the Constitution. (3): The next contention is that the provisions of Ch. IVA of the Act, and particularly those of section 68C thereof, offend against article 14 of the Constitution. The argument is that Ch. IVA enables the State to make a discrimination between the State Road Transport Corporation on the one hand and private operators and private transport undertakings on the other, and also to make a similar discrimination between the private operators or the private transport undertakings, and that this discrimination is left to the arbitrary discretion of the Transport Corporation. It is true that the provisions of this Chapter 650 enable a scheme to be framed conferring a monopoly on the State in respect of transport services to the partial or complete exclusion of other persons. However, the provisions of the scheme do not make any distinction between individuals operating a transport service and private transport undertakings; they are all treated as one class and the classification is only made between the State Transport Undertaking and private transport undertakings, whether the business is carried on by individuals or firms or companies. The only question, therefore, is whether such a classification offends against the equality clause of the Constitution. Article 14 says: " The State shall not deny to any person equality before the law or the equal protection of the laws within the territory of India." This doctrine of equality has been so frequently considered by this Court that it does not require any further consideration. It has been held that this Article does not prohibit reasonable classification for the purpose of legislation, but such a classification cannot be arbitrary but must be based upon differences which have rational relation to the object sought to be achieved. Doubtless in the present case, the Legislature placed the State Transport Undertaking in a class different from other undertakings. The question is whether the classification made in Ch. IVA of the Act is just and has reasonable relation to the object of the legislation. The object of Ch. IVA, as disclosed by the provisions of section 68C, is to provide in the interest of the public an efficient, adequate, economical and properly coordinated road transport service. To achieve that object section 68C confers a power on the State Transport Undertaking to prepare a scheme to run the service, whether to the exclusion, complete or partial, of other persons or otherwise. The classification has certainly reasonable nexus to the object sought to be achieved. Ordinarily a State Transport Undertaking, compared with per. sons or private undertakings, should be in a better Position than others to carry on the said services for the benefit of the public administratively, financially 651 and technically it can be expected to be in a far better position than others. It can provide more well equipped buses, give better amenities to the travelling public, keep regular timings, repair or replace the buses in emergencies. It may also employ efficient supervisory staff to keep things going at an appreciably high standard. We are not suggesting that there are no individuals or private companies who can efficiently run the service. But the State, compared with individuals, should certainly be in a better position to achieve the object, namely, to improve the road transport service in all its diverse aspects. In such a situation, when the legislature, which must be presumed to understand and correctly appreciate the needs of its own people, makes a classification between a State Transport Undertaking and others carrying On the business of transport services, we cannot say that there is no reasonable basis for such a classification. But it is said that section 68C of the Act and other provisions of Ch. IVA thereof confer an arbitrary power upon the State Transport Undertaking to discriminate between individuals and the said Undertaking between individuals and private undertakings, and between individuals and individuals. But the scheme of Ch. IVA, which has been considered by this Court in Gullapalli Nageswara Rao vs Andhra Pradesh State Road Transport Corporation (1), evolves a machinery for keeping the State Transport Undertaking within bounds and from acting in an arbitrary manner, for section 68C lays down the legislative policy in clear and understandable terms and the State Transport Undertaking can initiate a scheme only for providing an efficient, adequate, economical and properly coordinated road transport service. Another condition which it lays down is that the scheme is necessary in the public interest. The scheme so framed is published, with all necessary particulars, in the official Gazette and also in such manner as the State Government may direct; persons affected by the scheme may file objections within the prescribed time ; the State Government, after considering the objections and (1) [1959] Supp. 1 S.C.R. 319. 652 giving an opportunity to the objectors or their representatives and the representatives of the State Transport Undertaking to be beard in the matter, may approve or modify the scheme; the scheme so approved or modified is published. The rules framed under the Act provide for personal hearing. If the State Transport Undertaking seeks to modify a scheme, it will have to follow the same procedure before doing so: see as. 68C, 68D and 68E of the Act. It will be seen from the provisions of Ch. IVA of the Act that the State Transport Undertaking, before propounding a scheme, arrives at the decision on objective criteria. The parties affected and the public are given every opportunity to place their objections before the Government, and the Government, after following the prescribed quasi judicial procedure, confirms or modifies the scheme. The scheme, before it is finalised, is subjected to public gaze and scrutiny and the validity and appropriateness of the provisions are tested by a quasi judicial process. The Government cannot be equated to a Court; but the procedure prescribed accords with the principles of natural justice. It is said that the State Transport Undertaking is either the State Government or a corporation, owned or controlled by the State, and as such the entire quasi judicial procedure prescribed is only a cloak to screen the exercise of an absolute and arbitrary power on the part of the Government. We cannot say that Ch. IVA is such a device. The Legislature made a sincere attempt to protect as far as possible individual rights from the arbitrary acts of the executive. Once it is conceded that Ch. IVA of the Act is constitutionally good and that the Legislature can validly make law for nationalization of the road transport service, the procedure laid down for implementing the said policy cannot, in our view, be said to be unreasonable. If in any particular case the mala fides of the authorities concerned and collusion between the State Transport Undertaking and the State Government to deprive particular persons of their right to do road transport business or to drive out particular persons from the trade on extraneous 653 considerations, are established, that may be a ground for striking down that particular scheme. But the provisions of Ch. IVA cannot be struck down on the ground that they confer an arbitrary power on the State Transport Undertaking and on the State Government to discriminate between individuals and the State Transport Undertaking, between individuals and private undertakings, and between individuals and individuals. This question was raised in Saghir Ahmad vs The State of U. P. (1). That case dealt with the provisions of the U. P. Road Transport Act, 1951 (U. P. Act II of 1951). Under section 42(3) of that Act the Government was exempt from taking permits for its own vehicles and it could run any number of buses as it liked without the necessity of taking out permits ' for them. In furtherance of the State policy to establish a complete State monopoly in respect of road transport business, the transport authorities began not only to cancel the permits already issued to private operators but also refused to issue permits to others, who would other. wise be entitled to them. The constitutional validity of that section was questioned. It may also be mentioned that though that decision was given after the Constitution (First Amendment) Act, 1951, it was not based upon that amendment, as the Constitution before the amendment governed the rights of the parties therein. In that situation, adverting to the argument based upon article 14 of the Constitution, Mukherjea, J., as he then was, made the following observations at p. 731: " There is no doubt that classification is inherent in the concept of a monopoly; and if the object of legislation is to create monopoly in favour of the State with regard to a particular business, obviously, the State cannot but be differentiated from ordinary citizens and placed in a separate category so far as the running of the business is concerned and this classification would have a perfectly rational relation to the object of the statute.", Section 3 of that Act provided that " where the State (1) ; 654 Government is satisfied that it is necessary, in the interest of general public and for subserving the common good, so to direct, it may declare that the Road Transport Services in general, or any particular class of such service on any route or portion thereof, shall be run and operated by the State Government exclusively or by the State Government in conjunction with railway or partly by the State Government and partly by others in accordance with the provisions of this Act It was contended therein that, as the State could choose any and every person it liked for the purpose of being associated with the transport service and as there were no rules to guide its discretion, that provision would offend against article 14 of the Constitution. It was pointed out on behalf of the State that the discretion under section 3 of that Act was not uncontrolled as that could Only be done by granting of permits in accordance with the provisions of the . Accepting the construction suggested, this Court held that the discretion to be exercised by the State would be a, regulated discretion guided by statutory rules. But in the instant case, no liberal construction of the provisions need be resorted to, for Ch. IVA of the Act in specific terms provides a complete and, in the circumstances, satisfactory machinery for reasonably regulating the exclusion of all or some of the private operators from the notified area or route. We, therefore, hold that the provisions of Ch. IVA of the Act do not infringe the equality clause enshrined in Art 14 of the Constitution. (4): By the next contention the learned counsel attacks the validity of the scheme on the ground that the Government is actuated by bias against the private operators of buses in West Godavari District, and indeed had predetermined the issue. In the petitions it was alleged that the Government had complete control over the Road Transport Corporation that the entire administration and control over such road transport undertaking vested in the Government, that the Chief Secretary to the Government of Andhra Pradesh was its chairman and that, therefore, the 655 entire scheme, from its inception to its final approval, was really the act of the Government. On this hypothesis it was contended that the Government itself was made a judge in its own cause and that, therefore, its decision was vitiated by legal bias. That apart, it was also pleaded that a sub committee, consisting of Ministers, Secretaries and officers of connected departments and presided over by the Minister in charge of transport, decided in its meeting of January 28, 1960, that under the scheme of nationalization of bus service, the State Government would take over the bus services in West Godavari District and Guntur District before the end of that year and, therefore, the Minister in charge of the portfolio of transport, he having predetermined the issue, disqualified himself to decide the dispute between the State Transport Undertaking and the petitioners. The self same questions were raised in Gullapalli Nagestvara Rao vs The State of Andhra Pradesh(1). There, as in this case, it was contended that the Chief Minister, who was in charge of the portfolio of transport, could not be a judge in his own cause, as he was biased against the private operators. This Court pointed out the distinction between official bias of an authority which is inherent in a statutory duty imposed on it and personal bias of the said authority in favour of, or against, one of the parties. In dealing with official bias this Court, after considering the relevant English decisions, observed at p. 587 thus: "These decisions show that in England a statutory invasion of the common law objection on the ground of bias is tolerated by decisions, but the invasion is confined strictly to the limits of the statutory exception. It is not out of place here to notice that in England the Parliament is supreme and therefore a statutory law, however repugnant to the principles of natural justice, is valid ; whereas in India the law made by Parliament or a State Legislature should stand the test of fundamental rights declared in Part III of the Constitution." (1) ; 84 656 Then this Court proceeded to state that the provisions of the Act did not sanction any dereliction of the principles of natural justice, for the Act visualized in case of conflict between the undertaking and the operators of private buses that the State Government should sit in judgment and resolve the conflict. Much to the same effect has been stated by Shah, J., in H. C. Narayanappa vs The State of Mysore (1) though in slightly different phraseology. The learned Judge stated : " It is also true that the Government on whom the duty to decide the dispute rests, is substantially a party to the dispute but if the Government or the ,authority to whom the power is delegated acts judicially in approving or modifying the scheme, the approval or modification is not open to challenge on a presumption of bias. The Minister or the officer of the Government who is invested with the power to hear objections to the scheme is acting in his official capacity and unless there is reliable evidence to show that he is biased, his decision will not be liable to be called in question, merely because he is a limb of the Government. " In the above cases the transport department of the Government was the transport undertaking, but here the State Road Transport Corporation, which is a body corporate having a perpetual succession and common seal, is the transport authority. Though under the provisions of the Act, the State Government has some control, it, cannot be said either legally or factually that the said Corporation is a department of the State Government. The State Government, therefore, in deciding the dispute between the said undertaking and the operators of private buses is only discharging its statutory functions. This objection, therefore, has no merits. Nor can we say that it has been established that the Minister in charge of the portfolio of transport has been actuated by personal bias. The fact that he presided over the sub committee constituted to implement the scheme of nationalization of bus services in the West Godavari District does not in (1) ; 657 itself establish any such bias. Indeed, in the counter affidavit filed on behalf of the first respondent the con tents and authenticity of the reports of the proceedings of the sub committee published in the Telu daily "Andhra Pradesh " were not admitted. Even if the sub committee came to such a decision, it is not possible to hold that it was a final and ' irrevocable decision in derogation of the provisions of the Act. it was only a policy decision and in the circumstances could only mean that the sub committee advised the State Government to implement the policy of nationalization of bus services in that particular district. The said decision could not either expressly or by necessary implication involve a predetermination of the issue: it can only mean that the policy would be implemented subject to the provisions of the Act. It is not suggested that the Minister in charge of the concerned portfolio has any personal bias against the operators of private buses or any of them. We, therefore, hold that it has not been established that the Minister in charge of the portfolio of transport bad personal bias against the operators of private buses and, therefore, disqualified himself from hearing the objections under Ch. IVA of the Act. (5): The next contention is based upon the observations of this Court in Shrinivasa Reddy vs The State of Mysore (1). After elaborating on the scope of section 68C of the Act, Wanchoo, J., observed at p. 136 thus: "Therefore, the scheme to be framed must be ,such as is capable of being carried out all at once and that is why the Undertaking has been given the power to frame a scheme for an area or route or even a portion thereof. . If the Undertaking at that stage has the power to carry it out piecemeal, it would be possible for it to abuse the power of implementation and to discriminate against some operators and in favour of others included in the scheme and also to break up the integrity of the scheme and in a sense modify it against the terms of section 68E." Based on these observations it is contended that the State Government intended to frame only one scheme (1) ; 658 for the entire district though it was not in a position to implement the scheme in the entire district at one and the same time, but to circumvent the observations of this Court it had split up one scheme into seven schemes. The first respondent in its counter affidavit met this allegation in the following way: "Having regard to the resources of the Undertaking in men, material and money, each scheme has been so framed that it is capable of being carried out all at once, and in full, without breaking its integrity ' The State Transport Undertaking will carry out each of the published schemes on a date fixed by the State Government for the implementation of each scheme". The Minister in his order also adverted to this aspect and observed: " In this case, seven different schemes have been framed. Each scheme is a separate and independent scheme by itself In terms of the notification, each scheme after approval will come into force only from a date to be, fixed by the Government. Though different dates may be fixed for each scheme, each scheme will be implemented in its entirety. No piecemeal implementation of any one scheme will be done ". Indeed the order of the Minister fixed specific dates from which each of the schemes shall come into force. This Court did not lay down that there cannot be any phased programme in the nationalization of transport services in a State or in a district; nor did it hold that there cannot be more than one scheme for a district or a part of a district. The observations of this Court in regard to the implementation of a scheme piecemeal were aimed at to prevent an abuse of power by discriminating against some operators and in favour of others in respect of a single scheme. In the present case, seven schemes were framed not to circumvent the observations of this Court, but only to avoid the vice inherent in piecemeal implementation. Not only seven separate schemes were framed in respect of separate areas of the district, but also the Government made it clear that each scheme should be implemented in its entirety commencing from different dates. We do not, therefore, see any legitimate objection to the framing of seven separate, schemes. 659 Re. (6): This contention questions the validity of the schemes on the ground that the Chief Executive Officer of the Andhra Pradesh Road Transport Corporation is not empowered to publish the schemes and, therefore, the schemes were not validly published. In exercise of the powers conferred by section 68C of the Act, the Andhra Pradesh State Road Transport Corporation proposed the schemes and published them in the Andhra Pradesh Gazette, Part 11, p. 1310. The proposed schemes were signed by Guru Pershad, Chief Executive Officer, State Transport Undertaking, Andhra Pradesh Road Transport Corporation, The relevant provisions of the (Act LXIV of 1950) may be noticed at this stage. Under section 4 of the said Act, " Every Corporation shall be a body corporate by the name notified under section 3 having perpetual succession and a common seal, and shall by the said name sue and be sued ". Relevant portions of section 12 read: " A Corporation may from time to time by resolution passed at a meeting. . authorize the Chief Executive Officer or General Manager, or any other officer of the Corporation subject to such conditions and limitations if any as may be specified in the resolution to exercise such powers and perform such duties as it may deem necessary for the efficient day to day administration of its business". Section 13 says: " All orders and decisions of a Corporation shall be authenticated by the signature of the Chairman or any other member authorized by the Corporation in this behalf and all other instruments issued by a Corporation shall be authenticated by the signature of the Chief Executive Officer or General Manager or any other officer of the Corporation authorized in like manner in this behalf". Relying upon the said provisions, learned counsel for the petitioners contends that the preparation and publication of the schemes in question under section 68C of the Act are orders or decisions of the Corporation and, therefore, should be authenticated by the signature of the Chairman or any other member duly authorized under section 13 of the and not by the Chief Executive Officer. The first 660 respondent in its counter affidavit attempted to meet this contention by stating that the Corporation by resolution authorized the Chief Executive Officer to exercise such powers and perform such duties as it may deem necessary for the efficient day to day administration of its business and the Chief Executive Officer in exercise of such authorization published the schemes in the Gazette. The first respondent relied upon section 12 of the and not on section 13 thereof to sustain the power of the Chief Executive Officer to publish the schemes. We have no reason not to accept the statement of the first respondent that there was a resolution passed by the Corporation in terms of section 12 (c) of the . If so, the only question is whether the act of publishing the proposed schemes framed by the Corporation in the Gazette pertains to the day to day administration of the Corporation 's business. The Chief Executive Officer has no power under the Act to frame a scheme. Section 68C empowers only the State Transport Undertaking to prepare a scheme and cause every such scheme to be published in the official Gazette and also in such other manner as the State Government may direct. The scheme, therefore, need not be directly published by the Corporation, but it may cause it to be published in the official Gazette. The act of publishing in the official Gazette is a ministerial act. It does not involve any exercise of discretion. It is only a mechanical one to be carried out in the course of day to day administration. So understood, there cannot be any difficulty in holding that it was purely a ministerial act which the Chief Executive Officer by reason of the aforesaid resolution can discharge under section 12(c) of the . It must be presumed for the purpose of this case that the Corporation decided the terms of the proposed schemes and the said decision must have been duly authenticated by the Chairman or any other member authorized by the Corporation in this behalf and the Chief Executive Officer did nothing more than publish the said scheme in exercise of its administrative functions. We, 661 therefore,, hold that the Chief Executive Officer was well within his rights in publishing the said proposed schemes in the Andhra Pradesh Gazette. (7): The next argument turns upon the provisions of r. 4 of the Andhra Pradesh Motor Vehicles Rules. The relevant part of the rule reads: " The scheme or approved scheme to be published in the official Gazette as required under section 68C or 68D as the case may be, shall contain the following particulars: (i). . (ii) the number of vehicles proposed to be operated on each route ". In certain schemes the number of vehicles to be operated on each route was not specified, and one number was mentioned against two or more routes bracketing them. When an objection was taken before the Government in regard to this matter, the Minister accepted it and directed that the scheme might be modified so as to indicate the number of vehicles to be operated on each route separately. The schemes were accordingly ' modified by indicating the number of vehicles to be operated on each route separately and the approved schemes with the said modification were duly published in the Gazette dated March 21, 1960. The approved schemes, therefore, satisfy rule 4(2),of the Rules, for the approved schemes, as duly modified, contain the number of vehicles proposed to be operated on each route. But the point sought to be made is that the Minister himself should have fixed the number of vehicles proposed to be operated on each route and should not have merely directed the appropriate modification to be made in the approved schemes. It does not appear from the record that there was any dispute before the Minister as regards the apportionment of the number of vehicles shown against two or more routes to each of the routes; but the only contention raised was that the bracketing of the number of vehicles between two or more routes contravened the provisions of r. 4. Though the order of the Minister only contains a direction, the apportionment of the vehicles, between the routes was not made by the State Transport Authority, but only by the Government, for the approved schemes were published not by the Chief Executive Officer but 662 by the State Government. It must be presumed that the allocation also must have been made with the approval of the Minister. There are no merits in this objection either. (8): The next contention is that r. 5 framed by the State Government in exercise of the power conferred on it under section 68(1) is inconsistent with the provisions of section 68B of the Act and, therefore, is void. The schemes prepared by the State Transport Authority contain the following note: " The frequency of services on any of the notified routes or within any notified area shall, if necessary, be varied having regard to the traffic needs during any period ". In deed the said note was practically a reproduction of a note appended to r. 5. The only question is whether r. 5 and the note made pursuant thereto come into conflict with section 68E of the Act. Section 68E reads: " Any scheme published under sub section (3) of section 68D may at any time be cancelled or modified by the State transport undertaking and the procedure laid down in section 68C and section 68D shall, so far as it can be made applicable, be followed in every case where the scheme is proposed to be modified as if the modification proposed were a separate scheme". The short question that arises is whether the variation of frequency of service by the State Transport Undertaking amounts to a modification of a scheme within the meaning of section 68E of the Act. The rule is not so innocuous as the learned Advocate General of the Andhra Pradesh contends. Under that rule the State Transport Undertaking, having regard to the needs of traffic during any period, may increase or decrease the number of trips of the existing buses or vary the frequency by increasing or decreasing the number of buses. This can be done without any reference to the public or without hearing any repre sentations from them. This increase or decrease, as the case may be, 'Can only be for the purpose of providing an efficient, adequate, economical transport service in relation to a particular route within the meaning of section 68C. At the time the original schemes are proposed, the persons affected by them may file 663 objections to the effect that the number of buses should be increased or decreased on a particular route from that proposed in the schemes. The Government may accept such suggestions and modify the schemes; but under this rule the authority may, without reference to the public or the Government, modify the schemes. Learned counsel contends that the note only provides for an emergency. But the rule and the note are comprehensive enough to take in not only an emergency but also a modification of the scheme for any period which may extend, to any length of time. We are, therefore, definitely of opinion that the rule confers power on the State Transport Undertaking to modify substantially the scheme in one respect, though that power can only be exercised under section 68E of the Act in the manner prescribed thereunder. This rule is void and, therefore, the said note was illegally inserted in the schemes. But on that ground, as the learned counsel contends, we cannot hold that the schemes are void. The note is easily severable from the scheme,% without in any way affecting their structure. Without the note the schemes are self contained ones and it is impossible to hold that the schemes would not have been framed in the manner they were made if this note was not allowed to be included therein. We, therefore, hold that the note should be deleted from the schemes and the schemes are otherwise good. (9): The last of the arguments attacks the schemes in so far as they include new routes. The new routes included in the schemes are Eluru to Kovvur, and Nidadavol to Jeelugumilli. It is argued that the provisions of section 68C are concerned with the existing routes only. Support is sought to be drawn for this contention from the provisions of section 68C of the Act. The relevant part of that section says: " Where any State transport undertaking is of opinion that. . it is necessary in the public interest that road transport services in general or any particular class of such service in relation to any area or route or portion thereof should be run and operated by the State 85 664 transport undertaking. . the State transport undertaking may propose a scheme. . ". Now the contention is that the word " route " in that section refers to a preexisting route, for it is said that the words " route or portion thereof " in the section clearly indicate that the route is an existing route, for a scheme cannot be framed in respect of a portion of a proposed route. We do not see any force in this contention. Under section 68C of the Act the scheme may be framed in respect of any area or a route or a portion of any area or a portion of a route. There is no inherent inconsistency between an " area " and a " route ". The proposed route is also an area limited to the route proposed. The scheme may as well propose to operate a transport service in respect of a new route from point A to point B and that route would certainly be an area within the meaning of section 68C. We, therefore, hold that section 68C certainly empowers the State Transport Undertaking to propose a scheme to include new routes. Though some other points were raised in the affidavits filed before us, they were not pressed. In the result we hold that the note relating to the frequency of the services appended to the schemes must be deleted and that in other respects the petitions fail; and accordingly they are dismissed with costs. One set of hearing fees. Petitions dismissed.

These petitions by certain stage carriage permit holders for appropriate writs quashing seven schemes for nationalisation of road transport services in West Godavari District, approved and enforced from different dates by the Government of Andhra Pradesh, called in question the constitutional validity of Ch. IVA of the , as amended by Act 100 of 1956, and the validity of r. 5 of the Andhra Pradesh Motor Vehicles Rules framed by the State Government under section 68(1) of the Act and the note in terms of the said rule appended to the schemes which was said to be inconsistent with the Act and was as follows: "The frequency of services of any of the notified routes or within any notified area shall, if necessary, be varied having regard to the traffic needs during any period. " Held, that in view of the decision of this Court in H. C. 643 Narayanappa vs The State of Mysore, it was no longer open to the petitioners to contend that the provisions of Ch. IVA of the (IV of 1939), as amended by the Central Act 100 of 1956, were ultra vires the powers of the Parliament. H. C. Narayanappa vs The State of Mysore, [1960] 3 S.C.R. 742, followed. Nor was it correct to contend that Ch. IVA of the Act was invalid on the ground that it infringed article 19(i)(g) of the Constitution and was not saved by article 19(6) as the powers conferred on the State by section 68C of the Act exceeded the limits of article 19(6)(ii) of the Constitution. Article 19(6)(ii) is couched in very wide terms, the word 'service ' used by it is wide enough to include all species of motor service and it does not in any way limit the States ' power to confer on itself a monopoly in respect any area in exclusion of any person or persons. The only classification that Ch. IVA of the Act makes is between the State Transport Undertaking and private transport undertakings, whether carried on by individuals or firms or companies, and that classification is reasonably connected with the object it has in view. It was not, therefore, correct to say that it contravenes article 14 of the Constitution. That Chapter does not confer any arbitrary and discriminatory power upon the State Transport Undertaking nor does the quasi judicial procedure prescribed by it seek to cover such power. Any mala fide or collusive exercise of the power, therefore, in deprivation of an individual 's rights can only be a ground for quashing a particular scheme alone but not for declaring the chapter void. Since that chapter provides a complete and satisfactory machinery for reasonably regulating the exclusion of all or some of the private operators from a notified area or route it requires no liberal construction. Gullapalli Nageswara Rao vs Andhra Pradesh Road Transport Corporation, [1959] SUPP. 1 S.C.R. 319, referred to. Saghir Ahmad vs The State of U. P., ; , considered. Official bias inherent in the discharge of a statutory duty, as has been pointed out by this Court, is distinct from personal bias for or against any of the parties. Since in the instant case, the State Road Transport Corporation was neither legally nor factually a department of the State Government and the State Government in deciding the dispute between the said undertaking and the operators of private buses was only discharging its statutory function, no question of official bias could arise. Gullapalli Nageswara Rao vs The State of Andhra Pradesh, ; and H. C. Narayanappa vs The State of Mysore, ; , considered. 644 The observations made by this Court in Srinivasa Reddy vs The State of Mysore, in regard to piecemeal implementation of a scheme were directed against any abuse of power by way of discrimination as between operators and operators in respect of a single scheme. Since the seven schemes in question were intended to avoid the vice inherent in piecemeal implementation of a single scheme and were meant to be implementated in their entirety from different dates, those observations did not apply to them. Srinivasa Reddy vs The State of Mysore, ; , explained. There can be no doubt that r. 5 of the Andhra Pradesh Motor Vehicles Rules in conferring on the State Transport Undertaking the power to vary the frequency of services, gave it the power to effect a substantial modification in the scheme permissible only under section 68E of the Act, and as such the rule must be declared void. But since the note appended to the schemes in pursuance of the rule is severable from the schemes, it should be deleted and the schemes must be declared valid. The word 'route ' in section 68C of the Act does not refer to a preexisting route. It is permissible under that section to frame a scheme in respect of any area or route or any portions thereof, or a new route, since there is no inherent inconsistency between an 'area ' and a 'route '.

: Criminal Appeal No 188 of 1971. Appeal by special leave from the judgment and order dated the 29 9 1970 of the Gujarat High Court in Criminal Appeal No. 410 304 D. Mookherjee, section K. Dholakia and M. N. Shroff, for the appellant. K. J. Shethna and Vimal Dave and Miss Kailash Mehta, for the respondent. The Judgment of the Court was delivered by GOSWAMl, J. The accused Haidarali Kalubhai was convicted by the Sessions Judge, Mehsana, under section 304 Part II, Indian Penal Code, and was sentenced to rigorous imprisonment for seven years for causing death of Mahomadali Kasamali. He was also convicted under sections 326 and 323 I.P.C. and sentenced to rigorous imprisonment for two years and to three months respectively in connection with injuries to two other persons. On appeal to the High Court conviction was altered to one under section 304 A.I.P.C. Only and the accused was sentenced to rigorous imprisonment for eighteen months and to a fine of Rs. 500/ , in default rigorous imprisonment for six months. Briefly the facts are as Follows: It was usual for the deceased Mahomadali Kasamali, who was the sarpanch of village Nandasan, to spend some hours of the night from 8.00 P.M. to 11.P.M. near the Hotel Shanker Vijay which is situated by the side of the highway from Mehsana to Ahmedabad. There is a big open space in front of the hotel towards the north and a kutcha road branches off from the highway towards Dangarwa. This kutcha road is almost in the centre of the open space in front of the hotel measuring about 80 feet. It is said that the portion immediately in front of the hotel is about two feet higher in elevation from the kutcha road. On August 23, 1969, the accused came in a tractor and stopped the same on the highway. He saw truck No. G.T.F. 904 which Was parked opposite to the aforesaid hotel of Vasudev (P.W. 7). The owner of the truck had gone to the village leaving his conductor Usman Imamali (P.W. 11) in the truck. It is said that the accused used to drive this truck earlier with permission of the truck owner. This time he used the key of his tractor to start the truck and he drove the same by the open field in front of the hotel. He drove the truck with the head lights on in full speed straight on the steel cot on which The deceased was resting with the result that the truck dashed against the cot and the deceased was thrown away to a distance of about ten feet from the cot. Head Constable Revajit (PW 3) was sitting on the same cot with the deceased and he was also thrown away. There was another wooden cot nearby where Constable Dalpat Singh (PW 4) and Vavdinmiya (PW 5) were sitting. The Head Constable with the other Constable came to meet the Sarpanch in connection with the investigation of a certain case. Since there was enmity between the accused and the deceased on account of Panchayat elections the prosecution case is that the accused willfully and deliberately drove the vehicle towards the cot with the intention of causing death to the A deceased Sarpanch. The accused was originally charged under section 302 IPC and under section 326 and 323 IPC with the result mentioned above. Hence this appeal by the State by special leave against the judgment of the High Court. The question that arises for consideration is whether the facts that `are established against the accused fulfil the ingredients of section 304 305 Part II as submitted by Mr. Debabrata Mukherjee on behalf of the State. According to the learned counsel this is a clear case under section 304 Part II and conviction under section 304A is unsustainable. Section 304A carves out a specific offence where death is caused by doing a rash or negligent act and that act does not amount to culpable homicide under section 299 IPC or murder under section 300 IPC. If a person willfully drives a motor vehicle into the midst of a crowd and thereby causes death to some person, it will not be a case of mere rash and negligent driving and the act will amount to culpable homicide. Each case will, therefore, depend upon the particular facts established against the accused. The prosecution in this case wanted to establish a motive for committing the offence against the Sarpanch. It was sought to be established that there was enmity between the Sarpanch and the accused ` and his relations on account of Panchayat elections. Some evidence was led in order to prove that the accused and his relations were gunning against the Sarpanch for some time after the latter 's election as Sarpanch. Even an anonymous letter was received by the Sarpanch threatening his life which was handed over to the police by the Sarpanch. Both the Sessions Judge as well as the High Court did not accept the evidence appertaining to motive. Mr. Mukherjee, therefore, rightly and very fairly did not address us with regard to that part of the case. Even so, the learned counsel submits that the act per se and the manner in which the vehicle was driven clearly brought the case under section 304 Part II IPC. The following facts are established. The accused drove the truck at great speed with lights on. He had the conductor with him in the truck. Some time before driving the truck the accused had seen the Constables talking with the Sarpanch at the spot in question. There is no evidence that the accused had a licence to drive the truck. It, however appears from it. 70, which is a complaint in criminal case No. 160 of 1969 dated January 17, 1969 that the accused "had no licence. while driving his truck No. GTF 704. " While the two Constables jumped from the cot and escaped the deceased could not do so in spite of being alerted by the Head Constable as he was in a Lying posture on the cot. It appears from the map of the scene Ext. 9 that the truck while being driven by the field was trying to turn towards the kutcha road at a point near the cot shown in the map. This would go to show that the accused was unable to control the vehicle in high speed while taking a turn to get into the kutcha road from the open field and in this process hit the cot throwing the deceased out of the cot by the impact resulting in injuries which ultimately led to his death. Even the Constables, who jumped from the cot, received injuries. There was no direct impact of the persons with the vehicle in speed. The accused in his statement under section 342, Criminal Procedure Code, stated as follows: "I took the truck in reverse first and as there were other trucks lying round about, I took out my truck from the available way. 306 The accilator (sic) stuck down and hence the truck went in full speed and did not remain in control. One truck was coming from opposite side with full light. While driving with (sic) this way, I heard some noise, and the conductor Usman told me that the truck had struck with something then I heard some shouts and realised that some persons were injured but I did not stop the truck through fear of assault . truck through fear of assault . . I presented myself at the Police Station". Now this version is supported by Usman (PW 11) who, however, has been declared hostile by the prosecution. He was cross examined by the prosecution in order to show that he made a wrong statement in the examination in chief when he stated that the accused drove the truck with the key of the truck whereas he had stated before the police that the accused came on his tractor and started the truck with his key. He was also cross examined about a truck coming from the opposite side with full light that he had not stated to the police to that effect. We do not think that the omission to mention before the police about another truck coming from the opposite direction can be a contradiction within the meaning of section 162, Criminal Procedure Code. We also do not give much importance as to whether the accused drove the truck with his key or with the key of the tractor. That has not much relevance in view of the fact that the accused admitted to have driven the truck. Besides, it is admitted by the prosecution witnesses (PWs ' 2 and 6) that the conductor (PW 11 ) was in the truck when the accused drove the same. PW11 is, therefore, a natural witness and we do not find any reason to disbelieve him when he stated that a truck was coming from the opposite direction with full lights on. Besides, the owner of the truck having not found the truck in the place where he had parked had already telephoned to the Police Station about someone taking away the truck. PW11, who is an employee of the truck owner, was, therefore, not even obliged to speak in favour of the accused. The facts disclosed in the prosecution evidence, therefore, do not make out a case of any wilful or deliberate act on the part of the accused in order to cause the death of the Sarpanch by driving the truck in the way he did. Besides, the presence of the Head Constable and another Constable with the deceased whom the accused had himself seen prior to his driving the truck would run counter to a theory of wilful and deliberate act on the part of the accused to cause the death not only of the Sarpanch but necessarily also of the Constables. Section 304A by its own definition totally excludes the ingredients of section 299 or section 300 IPC. Doing an act with the intent to kill a person or knowledge that doing of an act was likely to cause a person 's death are ingredients of the offence of culpable homicide. When intent or knowledge as described above is the direct motivating force of the act complained of, section 304 A has to make room for the graver 307 and more serious charge of culpable homicide. Does this happen in A this case ? The tangential track of the speeding truck coming in contact with the corner of the steel cot throwing it over the wooden cot and thereby throwing the deceased out of it resulting in fatal injuries would not reveal the accused intention or any deliberate act with the requisite knowledge for an offence of culpable homicide. The facts and circumstances disclosed in this case fit in more reasonably with the theory of loss of control by the accused of the vehicle in high speed trying to take a turn for the kutcha road. There is, therefore, no error committed by the High Court in holding that the falls under section 304A IPC and not under 304 Part II IPC. The appeal is accordingly dismissed. C S.R. Appeal dismissed.

On August 23, 1969, the respondent accused came in a tractor and stopped it on the highway. Seeing the parked truck GTF 904 which he used to drive previously, the accused used the key of his tractor to start the same and drove it with the head lights on in full speed. The conductor of the truck owner was also in the tractor at that time. The tractor while being driven by the field and while he was trying to turn towards the kutcha road hit against the cot in which the village Sarpanch who was resting on it and taking with three policemen. The policemen jumped from the cot and sustained injuries, while the Sarpanch who was thrown away by the impact of the tractor to a distance of about ten feet from the cot, had grievous injuries to which he succumbed later. Since there was enmity between the deceased and the accused over the Panchayat elections, the prosecution put up a case of deliberate and willful driving of the vehicle towards the cot with the intention of causing death of the deceased Sarpanch. The Sessions Judge convicted the accused (i) under section 304 Part IT, I.P.C. for causing the death of the Sarpanch and (ii) under section 326 and 323, I.P.C. for causing injuries to the two other persons and sentenced him for rigorous imprisonment for seven years and two years respectively for the said offences. On appeal to the High Court the conviction was altered to one under section 304A only and the respondent was sentenced to rigorous imprisonment for 18 months and to a fine of Rs. 500/ . Dismissing the State 's appeal by special leave, the Court, ^ HELD . (1) Section 304A carves out a specific offence where death is caused by doing a rash or negligent act and that act does not amount to culpable homicide under section 299, I.P.C. or murder under section 300 I.P.C. Each case will depend on the particular facts established against the accused. [305A B] (2) Section 304A, by its own definition totally excludes the ingredients of section 299 or section 300, I.P.C. Doing an act with the intent to kill a person or knowledge that doing of an act is likely to cause a person 's death are ingredients of the offence of culpable homicide. When intent or knowledge is the direct motivating force of the act complained of, section 304A has to make room for the graver and more serious charge of culpable homicide. [306 GH, 307A] (3) In the instant case, the tangential track of the speeding truck coming in contact with the corner of the steel cot throwing it over the wooden cot and thereby throwing tho deceased out of it resulting in fatal injuries, would not reveal the accused 's intention or any deliberate act with the requisite knowledge for an offence of culpable homicide. The facts and circumstances disclosed in this case fit in more reasonably with the theory of loss of control by the accused of the vehicle in high speed trying to take a turn for the kutcha road. The case falls under section 304A, I.P.C. and not under 3. 304 Part 11, I.P.C. [307 A C]

tition No.369 of 1989. (Under Article 32 of the Constitution of India). K. Madhava Reddy, B. Rajeswar Mehta Dave and Ms. Neelam for the Petitioners. M.K. Ramamurthi, M.A. Krishnamurthy, Mrs. C. Ramamurthy, GVS Surayanarayana Raju in person TVSN Chari, Jagan Rao, DRK. Reddy, GVS Surayanarayana for the Respondents. The Judgment of the Court was delivered by RANGANATH MISRA, J. Promotee Engineers of the Roads & Buildings Wing of the Andhra Pradesh Engineering Service are the petitioners in this application under article 32 of the Constitution and challenge is to the Government circular of 12.8.1988 (Annexure A) fixing the guideline for the drawing up of the seniority list pursuant to a direction issued by this Court in a batch of writ petitions, decision whereof is reported in Siva Reddy & Ors. vs State of Andhra Pradesh & Ors. While petitioners are promotees, the respondents are direct recruits. Petitioners allege that they had put in continuous service of 6 7 years by 1982 and their services having been regularised in the post of Deputy Executive Engineer in the year 1974 75, direct recruits appointed in the year 1982 cannot under any law be placed above them. As noticed in Siva Reddy 's case (supra), substantive vacancies in the category of Assistant Engineers had to be filled up from two sources 37 1/2% by direct recruitment and the remaining 62 1/2% by transfer of Supervisors and Draughtsmen and by promotion of Junior Engineers. Direct recruits had complained that notwithstanding this prescrip tion, there had been no recruitment of Assistant Engineers and the promotees from the other two modes had come into the cadre far in excess of the limit provided by the Rules. The Chief Engineer by his order dated June 8, 1984 regularised the temporary service of promotees of the years 1972 73, 1973 74 and 1974 75 in the cadre of 142 Assistant Engineers (later designated as Deputy Executive Engineers). They had, therefore, asked the quashing of the regularisation and drawing up of a seniority list on the basis of the ratio fixed under r. 3(1) of the Special Rules. This Court in paragraph 5 of the judgment stated: "Reopening of the question of inter se senior ity on the basis of non enforcement of the rules from the very beginning may create hardship and that would be difficult to miti gate but we see no justification as to why the benefit of the scheme under the rules should not be made available to direct recruits at least from 1982. When the State Government by rules duly framed prescribed the method of re cruitment and put the scheme into operation it had the obligation to comply with it. The explanation offered by the State Government for non compliance of the 'requirements of the rules does not at all impress us. We there fore, direct that as on December 31, 1982, the State Government must ascertain the exact substantive vacancies in the category of Assistant Engineers in the service. On the basis that 37 1/2 per cent of such vacancies were to be filled up by direct recruitment, the position should be worked out. Promotees should be confined to 62 1/2 per cent of the substantive vacancies and in regard to 37 1/2 per cent of the vacancies the shortfall should be filled up by direct recruitment. General Rules shall not be applied to the posts within the limits of 37 1/2 per cent of the substan tive vacancies and even if promotees are placed in those posts, no seniority shall be counted. The State Government shall take steps to make recruitment of the shortfall in the direct recruitment vacancies within the limit of 37 1/2 per cent of the total substantive vacancies up to December 31, 1987 within four months from today by following the normal method of recruitment for direct recruits. The seniority list in the cadre of Assistant Engineers shall be redrawn up, as directed by the Tribunal by the end of September 1988, keeping the directions referred to above in view . " With a view to implementing this direction the State Govern ment came out with the impugned order dated 12.8.1988 marked Annexure 'A '. In Siva Reddy 's case this Court found that promotees had exceeded the quota and even got regularised in respect of the posts in 143 excess of the limit. Taking into consideration the fact that regularisation had been done after the promotees had put in some years of service and disturbing regularisation would considerably affect the officers concerned, regularisation was not interfered with. This Court 's intention obviously was not to take away the benefit of regularisation in re spect of the officers belonging to the promotee group in excess of their quota but the Court did not intend to allow such regularised officers in excess of the quota to also have the benefit of such service for purposes of seniority. A reading of the judgment in Siva Reddy 's case clearly indicates that this Court intended what the Government have laid down by way of guideline. We see no justification to interfere with the Government direction. A draft seniority list on the basis of such direction has already been drawn up and has been circulated. We are told that objections have been received and would be dealt with in usual course by the appropriate authorities. This writ petition had been enter tained in view of the allegation that the Government direc tion was on a misconception of what was indicated in the judgment and in case there was any such mistake the same should be rectified at the earliest. Now that we have found that the Government order is in accord with the Court direc tion, this writ petition must be dismissed and individual grievances, if any, against the draft seniority list would, we hope, be considered on the basis of objections filed by the competent authority. There shall be no order as to costs. N.P.V. Petition dismissed.

Pursuant to this Court 's direction in K. Siva Reddy & Ors. vs State of Andhra Pradesh & Ors. , ; , the State Government issued Circular dated 12.8.1988, fixing the guideline for drawing up of inter se seniority list of direct recruit and promotee Deputy Executive Engi neers in Andhra Pradesh Engineering Service. This Circular was challenged by the petitioners. Promotee Engineers, in a Writ Petition filed in this Court, contending that since they had put in continuous service of 6 to 7 years by 1982 and their services had been regularised in the post of Deputy Executive Engineer in the year 1974 75, direct re cruits appointed in the year 1982 could not, under any law, be placed above them. Dismissing the writ petition, this Court, HELD: Promotees had exceeded the quota and even got regularised in respect of the posts in excess of the limit. Taking into consideration the fact that regularisation had been done after the promotees had put in some years of service and disturbing regularisation would considerably affect the officers concerned, regularisation was not inter fered with. This Court 's intention was not to take away the benefit of regularisation in respect of the officers belong ing to the promotee group in excess of their quota but the Court did not intend to allow such regularised officers in excess of the quota to also have the benefit of such service for purposes of seniority. [142 H; 143A B] A reading of the judgment in Siva Reddy 's case clearly indicates that this Court intended what the Government have laid down by way of guideline. Therefore, there is no justi fication to interfere with the Government direction. [143B] 141 K. Siva Reddy & Ors. vs State of Andhra Pradesh & Ors. , ; , referred to.

Appeal No. 207 of 1954. Appeal by special leave from the Judgment and Order dated the 31st day of August 1953 of the Labour Appellate Tribunal of India, Lucknow, in Appeal No. III 57 of 1953. A. section R. Chari (Bawa Shiv Charan ' Singh and M. R. Krishna pillai, with him), for the appellant. Achhru Ram (Naunit Lal, with him), for the respondent. March 15. The Judgment of the Court was delivered by SINHA J. This is an appeal by special leave against the orders of the Lucknow Bench of the Labour Appellate Tribunal of India (hereinafter to be referred to as "The Appellate Tribunal") dated the 31st August 1953, setting aside the award dated the 13th October 1952 made by the Chairman, Central Government Industrial Tribunal, Calcutta (herein after to be referred to as "The Tribunal") reinstating the appellant as the head cashier with back salary under the Punjab National Bank (hereinafter called "The Bank"). The facts leading up to this appeal may shortly be stated. The appellant started his service as the head cashier in the Una Branch of the Bank on the 18th June 1949. The Cash Department of the Bank is in charge of Treasurers. The relation between the Bank and the Treasurers is evidenced by an agreement dated the 1st May 1944 (exhibit 1) which will be noticed in detail hereinafter. That was an agreement between the Bank and "Messrs Rai Bahadur Karam Chand Puri & Bros". That firm was appointed the Treasurers at the head office of the Bank and other places in and outside the Punjab. On the 28th September 1951 the District Manager of the Northern Circle of the. Bank wrote a letter (exhibit 4) to the Treasurers informing 1420 them that it had been decided to close the Una office of the Bank with effect from the close of business on the 3rd November 1951. In pursuance of that letter the Treasurers intimated by a letter dated 2nd October 1951 enclosing a copy of exhibit 4 to the appellant that the Una Branch of the Bank will cease to function from the close of business on the 3rd November 1951 and that his services will not be required after that date. The Punjab National Bank Em ployees ' Union (Punjab) took up the cause of the appellant as also that of other employees and made representations to the Government of India. The Government of India by a notification No. SRO 432 dated the 8th March 1952 published in the Gazette of India, Part II Sec. 3, in exercise of its powers under section 10 of the Industrial Disputes Act XIV of 1947 (hereinafter called the Act) referred the industrial dispute between the Bank and its workmen named in schedule 2 (concerning workers dismissed) and schedule 3 (relating to workers transferred) for adjudication to the Industrial Tribunal at Calcutta constituted under section 7 of the Act. Schedule 1 in so far as it is necessary for purposes of this case contains the following points of dispute between the employer and the workmen: "1. Wrongful dismissal of the workmen mentioned in schedule II and their reinstatement. In the event of any order for reinstatement payment of wages and other allowances from the date of dismissal to the date of reinstatement". The appellant is No. 5 in schedule 2 aforesaid. The 'Tribunal gave its award on the 13th October 1952 in respect of a number of employees whose cases were actually in controversy before it. It is only necessary to refer to the award in so far as it concerned the appellant. After overruling the preliminary objection of the Bank that the Union bad no locus standi to represent the appellant the Tribunal formulated the following point for its decision: "On merits the main point involved is as to whether the services of an employee of the Cash 1430 Department can be terminated on a change made in the services of the Contractor Cashier". It answered this point in these words: "This point has been agitated in more than one case and I have also held in Reference No. 3 of 1951 as Chairman of Industrial Tribunal (P. N. Bank dispute) relating to 5 cashiers that the employees of the Cash Department are the employees of the Bank and not the nominees of the Contractor Cashiers so far service conditions are concerned, and I think it will serve no useful purpose to discuss all the legal precedents cited, more especially when the point has been set at rest by their Lordships of the Supreme Court in Civil Appeal No. 66 of 1952 in the matter of United Commercial Bank Ltd. vs Secretary, U. P. Bank EmPloyees ' Union and Others. I am of the opinion that the dismissal of Shri Sharma was wrongful and liable to be set aside. Now the normal remedy is reinstatement and I have no hesitation in allowing the same. He will also be paid his back salary an allowance from the date of dismissal to the date of reinstatement". Whatever may be the merits of the answer given to the question propounded by the Tribunal, there is no doubt that the question posed had been wrongly framed. The discharge or dismissal of the appellant had nothing to do with the change in the personnel of the Treasurers. The appellant 's services were dispensed with on the ground that the Una Branch where he was employed as head cashier being an un economic unit had to be closed and that therefore the appellant 's services were no more required. The res pondent 's case appears to have been that the firm. known as Messrs R. B. Karam Chand Puri & Bros. have been contractors for the Cash Department of the Bank at the head office and some of the other offices in the Punjab and beyond; that from time to time agreements were executed between the Bank and the aforesaid firm; that the last agreement was executed on the 1st May 1954 (exhibit 1); that the appellant according to the respondent Bank was the nominee of the said firm, and that his services had been dispensed 1431 with by the said firm whose employee he was and not by the Bank which had nothing directly to do with the employment of cashiers and other workers in the Cash Department which was in charge of the Treasurers described as "Contractor Treasurers". Hence the main question in controversy between the parties was whether the appellant was an employee of the Bank or of the said "Contractor Treasurers", whom we shall call the "Treasurers" for the sake of brevity. The Tribunal did not address itself to the determination of that question. This Court also did not discuss and decide the matter in Civil Appeal No. 66 of 1952, but assumed that cashiers of the Bank were its employees. If that question had been decided by this Court, as the Tribunal erroneously thought this Court had, in Civil Appeal No. 66 of 1952, the controversy would have been at an end. Therefore when the respondent preferred an appeal to the Appellate Tribunal, the Bank at the forefront of its attack against the award of the Tribunal raised the ground that the Tribunal had not determined the basic question which could have given jurisdiction to the Tribunal to decide the dispute whether the head cashier was an employee of the Bank or was a nominee of the "Treasurer" as contended on behalf of the Bank. The Bank relied very strongly before the Appellate Tribunal on the memorandum of agreement (exhibit 1) and the correspondence that passed between the Bank and the "Treasurers" on the one hand and the latter and the appellant before us on the other (Exs. 2, 3, 4 and 5). The Appellate Tribunal rightly remarked that the Tribunal had recorded no finding on that basic question and had assumed that the respondent before it was an employee of the Bank. The Appellate Tribunal took the view that the agreement (exhibit 1) was decisive of that question. After referring in great detail to the terms of the agreement the Appellate Tribunal came to the conclusion that the cashier was not an employee of the Bank but of the Treasurers and that therefore the Tribunal had no jurisdiction to give any relief to the complainant before it. The 183 1432 award by the Tribunal was, in the result, set aside and the Bank 's appeal allowed. The appellant in this Court through his counsel Shri Chari, argued that the Appellate Tribunal had misinterpreted the provisions of the Industrial Disputes Act in coming to the conclusion that the Tribunal had no jurisdiction to entertain the dispute simply on the ground that one of the parties to the dispute bad successfully denied the relationship of employer and employee; that the Appellate Tribunal misconceived its functions by basing its findings on the interpretation of the written agreement between the Bank and its Treasurers when it should have gone into all the relevant facts to determine the substance of the matter; and finally, that the Appellate Tribunal misdirected itself on the question of the interpretation of the agreement for coming to the conclusion that the appellant was not an employee of the Bank but was a nominee of the "Treasurers". It was further argued on behalf of the appellant that the Tribunal having based its decision on its previous award dated the 16th September 1952 in Reference No. 3 of 1951 between persons more or less in the same position as the appellant and the respondent Bank, in the background. of the decision of the previous Tribunals, e.g., the award of the Conciliation Board presided over by Mr. Justice Bind Basni Prasad of the Allahabad High Court, the award by the Tribunal presided over by Mr ' K. C. Sen, and the award of the All India Industrial Tribunal '(Bank Disputes), presided over by Sri section Panchapagesa Sastri and the award dated the 24th March 1951 in Reference No. 20, the award of the Tribunal was really final. The argument was that the award of the Tribunal was based on considerations of facts and circumstances disclosed in those earlier awards to which the Bank and its cashiers and other employees employed in the Cash Department were parties. It was thus a final finding of fact which was not open to appeal before the Appellate Tribunal. It was therefore contended that the Appellate Tribunal bad no jurisdiction to entertain the appeal and to reverse the award of the Tribunal. 1433 On behalf of the respondent Bank it was contended that no specific grounds had been taken either before the Appellate Tribunal or in the memorandum of appeal to this Court that the Appellate Tribunal had no jurisdiction on the ground now taken by the appellant in this Court, nor was that ground taken in the statement of case. On merits it was contended by the respondent 's counsel that the Tribunal is as much bound by the rules of evidence and procedure as any other Tribunal and as the Tribunal had not addressed itself to the question whether the cashier appellant was an employee of the Bank, the question was open before the Appellate Tribunal which was competent to pronounce on that basic question. Finally it was argued that on a true construction of the provisions of the agreement (exhibit 1) this Court should accept the finding of the Appellate Tribunal that the appellant was not an employee of the Bank and that on that account the Tribunal had no jurisdiction to grant any relief to the appellant. On behalf of the respondent the case was practically rested on the construction of the agreement (exhibit 1). With reference to the terms of the agreement the learned counsel for the respondent argued that the Treasurers were not servants or employees of the Bank but were "independent contractors" and that the appellant and other employees in the Cash Department having been nominees of the "independent contractors" there could not be any relation of employer and employee between the Bank and the appellant. It is therefore necessary to examine in some detail the terms of the agreement aforesaid. We set out below, underlining important words, the terms of the agreement in so far as they are relevant for the determination of the true relation between the Bank and the Treasurers. Though this agreement is dated the 1st May 1944, cl. (1) provides that it will be deemed to have commenced and come into force from the 15th March 1942, the date of the death of R. B. Karam Chand Puri and will take the place of the previous agreement dated the 26th July 1941, thus maintaining the continuity of the relationship between the 1434 Bank and the Treasurers '. The agreement provides that the Treasurers shall diligently and faithfully serve the Bank at the Head Office and its various offices mentioned in schedule A attached to and forming part of the agreement and at other offices where they may hereafter be appointed treasurers and shall in all respects diligently and faithfully obey and observe all lawful orders and instructions of the Bank or the person placed by the Bank in authority over them in relation to the due discharge of their duties as Treasurers. The Treasurers in addition to the duties, liabilities and responsibilities devolving upon them by virtue of the provisions of the agreement shall also be liable to perform such duties and discharge such responsibilities as by custom usually devolve on treasurers in the employ of a bank. The Treasurers shall be paid for their services a remuneration as mentioned in schedule A aforesaid or such remuneration as the General Board of Directors of the Bank may determine from time to time. Out of the remuneration paid to them by 'the Bank the Treasurers shall pay salaries to their nominees employed by them for performing the duties of a cashier in the Bank on their behalf or other functionaries of a similar nature. The salaries of such nominees employed by them will be fixed by the Treasurers themselves but the same will be subject to the approval of the Bank. The remuneration of the Treasurers will be the net amount which will be left to them after paying salaries to their nominees employed by them for working as cashiers, etc. The Treasurers themselves will not be entitled to any kind of allowances besides the net remuneration as aforesaid but their nominees or working cashiers will be entitled to allowances which ,the authorities of the Bank may sanction for members of the staff from time to time. The Treasurers shall employ the number of men at each office as mentioned in schedule A aforesaid. The Board of Directors shall have the power to increase or decrease the number of their nominees for any particular office and the amount of remuneration fixed for that office. The Treasurers shall be responsible for the due safety, both within and outside the premises of the Bank at any 1435 office placed under their charge, of all money, specie, ornaments, bullion, cash, etc. and of other valuable documents received by them for and on behalf of the Bank or from the Bank and shall be answerable to the Bank for all losses occurring either inadvertently or by or through the negligence or misconduct of the Treasurers or any of their nominees. The Treasurers shall be entitled to resign the services of the Bank by giving three calendar months ' notice to the Bank. The Bank shall also be entitled to dispense with the Treasurers ' services on giving three months ' notice In case of gross negligence or misconduct or of any fraud, misappropriation or embezzlement by the Treasurers or any of the nominees in the discharge of ,their duties as such Treasurers, no notice shall be necessary and the Bank shall have the right to dispense with their services forthwith. The Bank shall have the right to take the Treasurers into the service of the Bank after settlement of remuneration with the Treasurers at any other office or offices of the Bank. The Treasurers and their nominees shall obey all the orders, rules and regulations prescribed by the Bank with regard to the discharge of their duties by the cashiers as well as with regard to the amount of balance they are allowed to keep with them. It shall be the duty of the cashiers to inform the manager of the Bank as soon as the balance in hand exceeds the prescribed limit and to ask for orders on the point. The Treasurers shall not engage any person as their assistant or peon about whose character, conduct or reliability the manager of the Board of Directors of the Bank may have any objection. The Treasurers shall also arrange that no person under employment absents himself from duty without the written permission of the manager for the time being. If any such employee is absent without leave, or he is turned out on the objection of the Board or the Manager, the Treasurers shall forthwith appoint a substitute in his place. The Treasurers shall be responsible for the acts and defaults of all their nominees. The Treasurers and their nominees shall be entitled to traveling allowance according to rates sanctioned by the Board 1436 of Directors of the Bank. The Treasurers have deposited security of the value of Rs. 15,000/ on which they shall be entitled to receive interest at the rate of 31 per cent. per annum. As a further security for the due performance of the terms and conditions of the agreement as a cover for loss that may be caused to the Bank by any act or omission of themselves or any one of their nominees, the Treasurers hypothecated properties as per schedule C attached to and forming part of the agreement. Schedule A aforesaid contains the names of the offices, the monthly remuneration of the Treasurers in respect of each one of those offices separately, net savings of the Treasurers after paying the salaries of the total number of men including cashiers, etc., as stated against each one of the offices. Apart from the terms set out above bearing on the relation between the Bank and the Treasurers, some of which apply equally to their nominees, the following terms of the agreement bear directly on the relation between the nominees of the Treasurers, like the appellant, and the Bank. In this connection the agreement provides that the Board of Directors shall have the power to increase or decrease the number of the Treasurers ' nominees for any particular office and the amount of remuneration fixed for that office. Such nominees shall be entitled as servants of the Bank to any bonus which may from time to time be declared for the members of the staff. The bonus of the Treasurers shall be limited to the amount of their own net remuneration and no further. They shall not be entitled to any bonus to which their cashiers are not eligible under the rules of the Bank. The nominees of the Treasurers shall be entitled to participate as ordinary members of the staff in the provident fund constituted by the Bank. Such nominees shall also be entitled to traveling allowance according to rates sanctioned by the Board of Directors of the Bank whenever they are required to go to out stations on bank business. From the terms of the agreement aforesaid set out above almost verbatim omitting such clauses and words as are not relevant to this case, it will appear 1437 that the Treasurers are under the employment of the Bank on a monthly basis for an indefinite term, that is to say, until such time as either party to the agreement terminated it in accordance with the terms quoted above. They are under the complete control and direction of the Bank through its manager or other functionaries. The Treasurers have to take their orders from day to day as regards the cash balance or other cognate matters relating to the safe custody of cash, valuable documents, etc. belonging to the Bank or its constituents. The Treasurers receive in respect of each office under the incharge a certain name sum out of which they have to pay the salary of a stated number of their assistants who may be head cashiers or cashiers or assistant cashiers and other such functionaries. They are entitled to receive bonus on the net amount secured to them as their remuneration, being the lump sum fixed in respect of each office, minus the salary of the assistants. It is true that these Treasurers are not and cannot be expected to be personally present to discharge their onerous duties at each one of the large number of offices spread over the Punjab and outside. Naturally they had to be authorized to engage head cashiers, or assistant cashiers in respect of each of the offices placed in their charge. They had to guarantee the fidelity of the persons so employed as their assistants. Those assistants had to be persons in whose reliability, 'honesty and efficiency both the Bank and the Treasurers had confidence. The Treasurers have the right to nominate those assistants but the Bank had the final words in the choice. The Bank Manager has complete control over such nominees in the matter of leave of absence, discipline and conduct in the discharge of their duties as assistants managing the cash and other valuables in the custody of the Bank. From the very nature of things it bad to be a dual control in the sense that the Treasurers had to nominate the assistants who are to discharge those responsible functions in connection with cash and other valuables of the Bank and the Bank could not abdicate its powers of full control over the day to day working of 1438 the Cash Department. The nominees of the Treasurers are treated on the same footing as the other servants of the Bank in the matter of bonus ' travelling allowance and provident fund, etc. It is true those nominees are to be paid by the, Treasurers but it is out of the money provided by the Bank. It is not always easy to determine whether the relation between two parties, in the present case of the Treasurers vis a vis the Bank, is that of servants to a master or of independent contractors who have undertaken to do a particular job for their employer. The question has generally arisen in connection with the determination of vicarious liability of an employer in respect of acts done by his agent (using a neutral word which includes an independent contractor as also a servant). The distinction between a servant and an independent contractor has been the subject matter of a large volume of case law from which the text book writers on torts have attempted to lay down some general tests. For example, in Pollock 's Law of Torts,* the distinction has thus been brought out: "A master is one who not only prescribes to the workman the end of his work, but directs or at any moment may direct the means also, or, as it has been put, 'retains the power of controlling the work ', a servant is a person subject to the command of his master as to the manner in which he shall do his work. . An independent contractor is one who undertakes to produce a given result but so that in the actual execution of the work he is not under the order or ,control of the person for whom be does it, and may use his own discretion in things not specified before hand. . . . ." Clerk & Lindsell on Torts (11th Edn.) at p. 135 have adopted the description of an independent contractor given by Pollock as quoted above. In the 11th Edn. of Salmond 's Treatise on the Law of Torts, the same distinction has been clearly indicated in the following passage at p. 98 *Pages 62 & 63 of Pollock on Torts, 15th Edn. 1439 "what then, is the test of this distinction between a servant and an independent contractor? The test is the existence of a right of control over the agent in respect of the manner in which his work is to be done. A servant is an agent who works under the supervision and direction of his employer; an in dependent contractor is one who is his own master. A servant is a person engaged to obey his em ployer 's orders from time to time; an independent contractor is a person engaged to do certain work, but to exercise his own discretion as to the mode and time of doing it he is bound by his contract, but not by his employer 's orders". Those learned authors have discussed in great detail cases illustrative of those distinctions, indicating the circumstances in which the general rule has been applied to individual cases with such modifications as the facts and circumstances of a particular case required. We are here not concerned with those nice distinctions which have been drawn in connection with the rule of vicarious liability in torts. We are here concerned only with the question how far the test laid down by the standard authors as quoted above can be applied to determine the present controversy whether the Treasurers of the Bank were its servants as contended on behalf of the appellant or independent contractors as claimed on behalf of the respondent Bank. The agreement between the parties, as summarised above, is a composite transaction constituting the Treasurers agents of the Bank, the former agreeing to indemnify the latter against any loss occasioned to the Bank due to the lack of fidelity and efficiency of the ministerial staff entrusted with the charge of the Bank 's cash and valuable documents. The Treasurers have been charged with the duty of nominating their assistants who are to be responsible in their day to day work to the Bank which all the time has full control over them in the matter of their leave of absence, as to how they shall keep the cash and other valuables and as to how they shall be under the general direction of the Bank 's manager or, some 184 1440 other functionary who may be nominated by the Bank to supervise the work of the Cash Department. The Bank makes itself answerable to the employees thus appointed by the Treasurers with the concurrence of the Bank for their bonus, provident fund and travelling allowance. For those purposes these assistants are to be on the same footing as the other employees of the Bank. It was contended on behalf of the respondent Bank that its agreement with the Treasurers shows that the latter bad the fullest responsibility for the appointment and dismissal and payment of salary of the employees in charge of the, Cash Department of the Bank and that therefore the Treasurers could not but be independent contractors. It has already been noticed that the appointment of such assistants as are entrusted with the work of the Cash Department is not under the absolute power of the Treasurers. The appointment has to be approved by the Bank and the Treasurers cannot continue to employ those workmen in whose fidelity and efficiency the Bank has no confidence. Hence both in the matter of appointment and dismissal of the employees the Bank reserves to itself the power to ' give direction to the Treasurers. Similarly in the matter of the payment of salary the money comes out of the coffers of the Bank, though it may be paid by the hand of the Treasurers. In this connection it was contended on behalf of the appellant that payment of salary of the employees in the Cash Department is made through the Ban]. ,, itself but we have no tangible evidence in this case beyond the bare assertion at the Bar. But, in our opinion, the situation in respect of the appointment, dismissal and payment of salary of the employees of the Cash Department is analogous to that of the employees of a particular department of Government, in which appointment and dismissal of ministerial staff may rest with an authority so empowered by the head of the department. Payment of salary may also be made by the appointing authority but the money comes out of the Government treasury. In those circumstances, can it be rightly asserted that 1441 those employees are not the servants of Government? The analogy may not be perfect, because, in the present case, the appointment and dismissal of the employees of the Cash Department is the joint responsibility of the Bank and its Treasurers. It has got to be so because the Treasurers are the guarantors of the fidelity and efficiency of the employees and the Bank has to exercise complete control over the day to day discharge of their functions because it is the Bank which is vitally and immediately concerned with the efficient and honest discharge of the duties of the assistants in the Cash Department, the efficient running of which is the most important of a bank 's functions. It will further be noticed with reference to the terms of the agreement set out above that whereas the Treasurers and their nominees have to take their orders from the Bank Manager or other such functionary, there is no specific provision that those nominees shall discharge their day to day functions under the direct control of the Treasurers or that they will be subject to the immediate control of the Treasurers in the discharge of their daily duties and in the matter of the grant of leave of absence. There could not be such a provision, as a dual control of that kind in the daily work of the employees would lead to a great deal of confusion and lack of discipline amongst the ministerial staff. The employees of the Cash Department have of necessity to be under the direct control of the Bank Manager or of some other functionary appointed by the Bank. It is the Bank which has undertaken the responsibility in the matter of their pay and prospects in the service and naturally therefore, such employees, even as other employees of the Bank, have to take their orders from the Bank. It must therefore be held that the Treasurers are the servants of the Bank and that their nominees must equally be so. The Appellate Tribunal held that on a reading as a whole of the clauses of the agreement aforesaid the appellant was an employee of the Treasurers and not of the Bank, It did not address itself pointedly 1442 to the question as to what was the exact relation between the Bank and the Treasurers. It did not also consider the question as to what would be the position of the employees of the Cash Department vis a Vis the Bank if it were held that the Treasurers Id. themselves were the servants of the Bank and not independent contractors. Before the Appellate Tribunal both parties appear to have concentrated their attention on the question as to whether the employees of the Cash Department were servants of the Bank or of the Treasurers. In our opinion, that was not a correct approach to the determination of the controversy between the parties. If the Treasurers ' relation to the Bank was that of servants to a master, simply because the servants were authorized to appoint and dismiss the ministerial staff of the Cash Department would not make the employees in the Cash Department independent of the Bank. In that situation the ultimate employer would be the Bank through the agency of the Treasurers. It was argued on behalf of the respondent that even if it were held that the Treasurers were the servants of the Bank and not independent contractors, the legal position of the employees of the Cash Department vis a vis the Bank would be the same, namely, that they will be in law the servants of the Treasurers. In our opinion, there is no substance in that contention. If a master employs a servant and authorizes him to employ a number of persons to do a particular job and to guarantee their fidelity and efficiency for a cash consideration. , the employees thus appointed by the servant would be equally with the employer, servants of the master. It is not always correct to say that persons appointed and liable to be dismissed by an independent contractor can in. no circumstances be the employees of the third party. This would be clear from the following observations of Lord Esher, M.R., in the case of Donovan vs Laing, Wharton & Down Construction,Syndicate(1): "It is true that the ' defendants selected the man and paid his wages, and these are circumstances which, if nothing else intervened, would be strong to show (1) (1893] at 632, 1443 that he was the servant of the defendants. So, indeed, he was as to a great many things but as to the working of the crane he was no longer their servant, but bound to work under the orders of Jones & Co., and, if they saw the man misconducting himself in working the crane or disobeying their orders, they would have a right to discharge him from that employment". Those observations have been approved in the latest decision of the House of Lords in the case of Mersey Docks & Harbour Board vs Coggins & Griffith (Liverpool) Ltd.(1). The House of Lords distinguished that ruling on facts but did not depart from the general rule laid down in the earlier decision that the determinative factor is as to which party had control over the workers as to how they would do their job from day to day. Lord Macmillan in his speech at p. 14 has observed as follows: "Many reported cases were cited to your Lordships but where,, as all agree, the question in each case turns on its own circumstances, decisions in other cases are rather illustrative than determinative. So far as attempts have been made to formulate a criterion of general application, it cannot be said that these attempts have been very successful". It would thus appear that the question as to whose employee a particular person was has to be determined with reference to the facts and circumstances of each individual case. Lord Porter in the course of his speech in the reported case (supra) at p. 17 has observed as follows: "Many factors have a bearing on the result. Who is paymaster, who can dismiss, how long the alternative service lasts, what machinery is employed, have all to be kept in mind. The expressions used in any individual case must always be considered in regard to the subject matter under discussion but amongst the many tests suggested I think that the most satisfactory, by which to ascertain who is the employer at any particular time is to ask who is entitled to tell the employee the way in which he is to do the work upon which he is engaged". (1) ; , 1444 As indicated above, in the present case the direction and control of the appellant and of the ministerial staff in charge of the Cash Department of the Bank was entirely vested in the Bank through its manager or other superior officer. We have therefore no hesitation in differing from the conclusion arrived at by the Appellate Tribunal and in holding that the appellant was an employee of the Bank. That being so, the Tribunal had the jurisdiction to make the directions it did in respect of the appellant. The respondent did not at any stage of the proceedings challenge the orders of the Tribunal on its merits. That conclusion being reached, there is no difficulty in upholding the orders of the Tribunal in respect of the appellant. It is therefore not necessary to pronounce upon the other points raised by the parties. The appeal is accordingly allowed wit costs throughout. Appeal allowed.

The appellant was appointed head cashier in one of the branches of the respondent Bank by the Treasurers who were in charge of the Cash Department of the Bank by virtue of an agreement between them. The question arose as to whether the appellant was an employee of the Bank. (i) that the terms of the agreement clearly showed that the Treasurers were servants of the Bank and not independent contractors; and that (ii)as the direction and control of the appellant and of the ministerial staff in charge of the Cash Department of the Bank was entirely vested in the Bank, the appellant was an employee of the Bank. If a master employs a servant and authorizes him to employ a number of persons to do a particular job and to guarantee their fidelity and efficiency for a cash consideration, the employees thus appointed by the servant would be, equally with the employer, servants of the master. The question as to whose employee a particular person is has to be determined with reference to the facts and circumstances of each individual case, and among the many tests by which to ascertain who is the employer, the most satisfactory one is to ask who is entitled to tell the employee the way in which he is to do the work upon which he is engaged. (1) (1924] I.L.R. (2) Cal. 297, 1428 Donovan vs Laing, Wharton & Down Construction Syndicate ([1893] and Mersey Docks & Harbour Board vs Coggins & Griffith (Liverpool) Ltd. ([1947] A.C.1), referred to.

Appeal No. 758 1963. Appeal from the judgment and decree dated February of the former Bombay High Court in Appeal of 1957 from original decree. 815 J. B. Dadachanji, Ravinder Narain and O. C. Mathur, for the appellant. Girish Chandra and Sardar Bahadur, for respondents Nos. 1, 2 (i) to 2 (iv), 3 and 4. February 17, 1964. The Judgment of the Court was delivered by: MUDHOLKAR, J. The question which arises for consideration in this appeal by a certificate granted by the High Court of Bombay is whether a will alleged to have been executed by one Ramdhan on May 23, 1947 is genuine or is a fabrication. By this will, Ramdhan is alleged to have bequeathed almost his entire property consisting of 16 fields assessed to land revenue at Rs. 425/ per annum, five houses, a shop and movables consisting of 800 tolas of gold, 1,000 tolas of silver, Rs. 50,0001/ cash and Rs. 15,000/ due from debtors as well as cattle, agricultural implements, utensils, etc., to the appellant, and practically excluded his widow. Sitabai and his three married daughters. The appellant is the grandson of one of the three predeceased uncles of Ramdhan, and the ground on which the widow and the daughters were practically excluded by Ramdhan is said to be the strained relations which developed between Ramdhan and his wife during his last days. Ramdhan died on October 31. 1948, and Sitabai, who was all along living with him, came into possession of Ramdhan 's property. Admittedly, the appellant did not try to disturb her possession. According to him, he allowed Sitabai to remain in possession on his behalf, and that for some time she was managing the estate in a satisfactory way. Later on, however, she, in utter disregard of the appellant 's interests, began to give away some portions of the property to her daughters and strangers, even though she knew that the property had been bequeathed to him by Ramdhan. and that she was entitled to receive only a maintenance of Rs. 40/ per month under the will of Ramdhan. It may be mentioned that Ramdhan was a resident of Peepalgaon in the district of Parbhani, and the entire property, movable as well as immovable, is at Peepalgaon itself. Upon these allegations, the plaintiff instituted the suit out of which this appeal arises, in the District Court at 816 Parbhani. Sitabai denied the execution of the alleged will by Ramdhan, and also denied the relationship claimed by the appellant with Ramdhan. According to her, after Ramdhan 's death she was in exclusive possession of the property, that she is a helpless widow without a male issue, and that the appellant taking advantage of this fact ha,. set up a false will and laid claim to Ramdhan 's property. While admitting that the immovable property had been correctly set out in the plaint, she challenged the correctness of some of the items of the movable property, During the pendency of the suit, one Madanlal was joined as a party to it on the. basis of his claim to be the adopted son of Ramdhan. lie also challenged the genuineness of the will. According to him, he was adopted by Ramdhan in the month of Chait, Samvat, 1999 according to the prevailing custom in the State of Udaipur. Sitabai died during the pendency of the suit, and her daughters, Champabai, Rambhabai, and Rajubai as also Ram Pershad, one of Sitabai 's sons in law, who was alleged to have obtained possession of the property after the death of Sitabai, were brought on record as the legal representatives of Sitabai. The trial Court held in favour of the appellant that he was related to Ramdhan, as alleged by him, and that the will executed by Ramdhan was genuine. It also negatived Madanlal 's claim of having been adopted by Ramdhan. On these findings, that Court decreed the appellant 's suit. legal representatives of Sitabai thereupon preferred an appeal before the High Court, which held that the will set up by the appellant is not genuine, and on that ground, dismissed his suit. In support of the will, the appellant examined himself, the scribe, Venkat Rajaram and three of the attesting witnesses, Raja Kaniahprasad, Rasheeduddin Ahmed and Wamanlal. The appellant also examined some witnesses in support of his contention that the property bequeathed to him under the will was entrusted by him to Sitabai after the death of Ramdhan. On the other hand, the respondents have led evidence to show that Ramdhan could not have been at Hyderabad where the will is alleged to have been executed, on May 23, 1947, because till the afternoon of the 817 previous day he was at a village nearly 300 miles distant from Hyderabad. The High Court, on a consideration of the entire evidence adduced by the parties, came to the conclusion that the will was prepared under highly suspicious circumstances, and that the evidence adduced by the appellant was not such as to satisfy it that the alleged will was a genuine one. Accord ing to the High Court, the circumstances appearing in the case indicate that the alleged will was "in all probability" a false document brought into existence without the knowledge of Ramdhan. The High Court rightly pointed out that the nature of proof which was required in a case of this kind was that laid down by the Privy Council in Sarat Kumari Bibi vs Sakhi Chand(1), where it has been stated that in all cases in which a will is prepared under circumstances which arouse the suspicion of the Court that it does not express the mind of the testator, it is for the propounder of the will to remove that suspicion. According to the High Court, the evidence led by the appellant was so unsatisfactory that it was impossible to give any effect to the alleged will. Mr. Dadachanji 's grievance, however, is that the entire approach of the High Court to the evidence in this case was wrong, because it first took into consideration the various circumstances, and then judged the credibility of the wit nesses in the light of those circumstances. In support of his contention, he has relied upon the following observation of Biswas, J. in Kristo Gopal vs Baidya Nath(2): "It is difficult to avoid the conclusion that the learned Judges for some reason or other must have formed the idea that the will was not a genuine document, and that having formed such, an idea. he looked at the evidence of each of the witnesses with a suspicious eye. On no other hypothesis is it possible to explain the criticism which he has led himself to make. " The learned Judge has supported his observation by quoting the following observations of Lord Watson in Chotey Narain Singh vs Mt. Ratan Koer(3): (1)(1928) L.R. 56 I.A. 62. (2) A.I.R. 1939 CaL 87. (3) 22 I.A. 12. 23. 134 159 S.C. 52 818 "The theory of improbability remains to be considered; and the first observation which their Lordships, have to make is that, in order to prevail against such evidence as has been adduced by the respondent in this case, an improbability must be clear and cogent. It must approach very nearly to, if it does not altogether constitute, an impossibility. " The learned Judge has then observed as follows: "In a case where. attesting witnesses are produced and they give clear and cogent testimony regarding execution, one should require very strong circumstances to repel the effect of such testimony. It will not do to talk airily about circumstances of suspicion. It is no doubt true that a person who takes it upon himself to dispute the genuineness of a will cannot be expected to prove a negative in many cases. At the same time, the difficulty in which, on his own seeking, he places himself, will not relieve him of the burden it may be a heavy burden of displacing the positive testimony on the other side. If he rests his case on suspicion, the suspicion must be a suspicion inherent in the transaction itself which is challenged and cannot be a suspicion arising out of a mere conflict of testimony." Then the learned Judge went on to observe that if there was evidence to show that the will was actually made, it would not be relevant to enquire whether there was any occasion or motive for the execution of the will, and that if such a test were to be applied in every case, no will could probably be proved at all. The questions which we have to consider are whether there was, in fact, a will, that is to say, whether Ramdban did execute a will during his lifetime, and if so, whether the document upon which the appellant relies is a will executed by Ramdhan and duly attested by witnesses. The appellant can prove these facts only by adducing evidence of the due execution of the will by Ramdhan and of its attestation. The challenge before us is as to the credibility of the witnesses 819 who have come forward to say that the document upon which the appellant relies not merely bears the signature of Ramdhan but represents the disposition made by Ramdhan, that is it was executed by Ramdhan, and that the attesting witnesses attested the execution of the will by Ramdhan. In order to judge the credibility of the witnesses, the Court is not confined only to the way in which the witnesses have deposed or to the demeanour of witnesses, but it is open to it to look into the surrounding circumstances as well as the probabilities, so that it may be able to form a correct idea of the trustworthiness of the witnesses. This issue cannot be determined by considering the evidence adduced in the Court separately from the surrounding circumstances which have also been brought out in the evidence, or which appear from the nature and contents of the document itself. We do not understand the observations of Lord Waston to mean that the testimony as to the execution of the document has to be considered independently of the attendant circumstances. All that he says is that where there is a large and consistent body of testimony tending to show the execution of a will by the testator, that evidence should not be lightly set aside on the theory of improbability. Dealing with the mode of proof of a will, this Court has observed in H. Venkatachala lyengar vs B. N. Thimmajamma and Others(1): "As in the case of proof of other documents so in the case of proof of wills it would be idle to expect proof with mathematical certainty. The test to be applied would be the usual test of the satisfaction of the prudent mind in such matters. However, there is one important feature which distinguishes wills from other documents. Unlike other documents the will speaks from the death of the testator, and so, when it is propounded or produced before a court, the testator, who has already departed the world cannot say whether it is his will or not; and this aspect naturally introduces an element of solemnity in the decision of the question as to whether the document pro pounded is proved to be the last will and testa (1) 426. 820 ment of the departed testator. Even so, in dealing with the proof of the wills the court will start on the same enquiry as in the case of the proof of documents. The propounder would be called upon to show by satisfactory evidence that the will was signed by the testator, that the testator at the relevant time was in a sound and disposing state of mind, that he understood the nature and effect of the dispositions and put his signature to the document of his own free will. Ordinarily when the evidence adduced in support of the will is disinterested, satisfactory and sufficient to prove the sound and disposing state of the testator 's mind and his signature as required by law, courts would be justified in making a finding in favour of the propounder. In other words, the onus on the propounder can be taken to be discharged on proof of the essential facts just indicated. There may, however, be cases in which the execution of the will may be surrounded by suspicious circumstances. The alleged signature of the testator may be shaky and doubtful and evidence in support of the propounder 's case that the signature in question is the signature of the testator may not remove the doubt created by the appearance of the signature; . the dispositions made in the will may appear to be unnatural, improbable or unfair in the light of relevant circumstances; or, the will may otherwise indicate that the said dispositions may not be the result of the testator 's free will and mind. In such cases the court would naturally expect that all legitimate suspicions should be completely removed before the document is accepted as the last will of the testator. The presence of such suspicious circumstances naturally tends to make the initial onus very heavy; and unless it is satisfactorily discharged, courts would be reluctant to treat the document as the last will of the testator." 821 This Court also pointed out that apart from suspicious circumstances of this kind, where it appears that the propounder has taken a prominent part in the execution of the will which confers substantial benefits on him, that itself is generally treated as a suspicious circumstance attending the execution of the will, and the propounder is required to remove the suspicion by clear and satisfactory evidence. In other words, the propounder must satisfy the conscience of the Court that the document upon which he relies is the last will and testament of the testator. This decision has been recently referred to in a Judgment of this Court in Shashi Kumar Banerjee and others vs Subodh Kumar Banerjee(1) (Civil Appeal No. 295 of 1966 decided on September 13, 1963). There, Wanchoo J. who spoke for the Court, has observed as follows : "The mode of proving a will does not ordinarily differ from that of proving any other document except as to the special requirement of attestation prescribed in the case of a will by section 63 of the Indian Succession Act. The onus of proving the will is on the propounder and in the absence of suspicious circumstances surrounding the execution of the will, proof of testamentary capacity and the signature of the testator as required by law is sufficient to discharge the onus. Where however there are suspicious circumstances, the onus is on the propounder to explain them to the satisfaction of the court before the court accepts the will as genuine. Where the caveator alleges undue influence, fraud and coercion, the onus is on him to prove the same. Even where there are no such pleas but the circumstances give rise to doubt it is for the propounder to satisfy the conscience of the Court. The suspicious circumstances may be as to the genuineness of the signature of the testator, the condition of the testator 's mind, the dispositions made in the will being unnatural, improbable or unfair in the light of relevant circumstances or there might be other indications in the will to show that the testator 's (1) C.A. No. 295 of 1960, D. Sept. 13. 1963 (Non reportable). 822 mind was not free. In such a case the court would naturally expect that all legitimate suspicion should be completely removed before the document is accepted as the last will of the testator. If the propounder himself takes part in the execution of the will which confers a substantial benefit on him, that is also a circumstance to be taken into account, and the propounder is required to remove the doubts by clear and satisfactory evidence. If the propounder succeed in removing the suspicious circumstances the court would grant probate, even if the will might be unnatural and might cut off wholly or in part near relations. It is in the light of these settled principles that we have to consider whether the appellants have succeeded in establishing that the will was duly executed and attested." In Sarat Kumari Bibi 's case(1) on which the High Court has relied and which is also relied upon in Venkatachala lyengar 's case(2) just cited, it was found that one Jamaluddin who took benefit under the will, had taken an active part in the preparation of the will, and, therefore, the rule made by Lindley and Davey L.JJ. in Tyrrell vs Painton(3) that where circumstances exist which would excite the suspicion of the Court, the burden is upon the propounder of the will to remove such suspicion and prove affirmatively that the testator knew and approved of the contents of the document, was applied. The High Court has analysed the entire evidence adduced by the propounder of the will to prove its due execution by Ramdhan, and along with that evidence, it has also considered certain attendant circumstances. One is the fact that the will is said to have been executed at Hyderabad, which is a place where the appellant resides and carries on his profession as a medical practitioner and not at Peepalgaon, where Ramdhan resided. The evidence adduced in the case shows that on the day prior to the one on which the will purports to have been executed, Ramdhan was at Ghanegaon till the afternoon. This place is 8 miles distant from Peepalgaon, and (1) [1928] L.R. 56 I.A. 62. (2) [1959] Supp. 1, S.C.R. 426, 443. (3) , 157, 159. 823 the nearest railway station is 20 miles distant from Peepal gaon. The will is said to have been executed at about noon, and though it is not impossible, it is highly improbable that Ramdhan could have been present at the place of execution by that time. The third thing is that the will was executed in the house of the appellant. One of the circumstances is that there was no particular reason why the will should have been executed at that time, because there is no suggestion that Ramdhan was not keeping good health. Then again, the property is very considerable, and instead of employing the services of a trained lawyer to draw up the will, a layman like Venkat Rajaram, who has given his profession as "Jagirdari" had been enlisted. The scribe as well as the attesting witnesses are not the personal friends of Ramdhan, though they say they knew him, but appear to be either the friends or neighbours of the appellant. Yet, the appellant wants the Court to believe that all these persons were collected by Ramdhan after his arrival at Hyderabad on the morning of May 23. This, in itself, would be an improbable thing indeed, because Ramdhan would not have had enough time at his disposal for doing it. Again, there is no explanation why he should collect only the friends and acquaintances of the appellant rather than persons, who were his own friends. The High Court has further pointed out that the document is inscribed on a flimsy paper. It is in high flown Urdu, and is alleged to have been dictated by him in that language. No doubt, the evidence indicates that Ramdhan could speak in Urdu, but it also indicates that he cannot read or write in Urdu. It would, therefore, be legitimate to infer that the language which he could speak was the unlettered man 's Urdu and not high flown Urdu. which contains an admixture of Persian words. Indeed, such words have actually been used in this document. The signature of Ramdban is itself in Modi script, which would not have been the case if were well versed in Urdu. When we turn to the reverse of the sheet on which the document is inscribed, we find that as we go lower down, more and more words seem to be crammed in each line and the spacing between two lines tends to decrease, even though there appears to have been plenty of room for the signature of Ramdhan to be scribed lower down 824 on the paper. It would be legitimate to infer from this that the signature was already there before the will was scribed. This feature of the document as well as the quality of the paper used would suggest that a piece of paper bearing Ramdhan 's signature has been utilised by the scribe for engrossing what purports to be a will. Finally, there is the circumstance that the will is un natural in the sense that though Ramdhan left property worth several lakhs, he made no provision for a residence for his wife but gave her only Rs. 40/ per month as her maintenance, and made only paltry bequests to his daughters. It is true that the daughters are married in affluent families, but in the absence of a male issue, a father is normally expected to give at least substantial bequests to his daughters. Instead, the wiil gives almost the entire property to a distant relative, who, it may be noticed, was neither brought up by the testator, nor was a person who looked after the testator during, his declining years. All this is said to have been due to the fact that Ramdhan 's relations with his wife had become strained. Indeed, the relationship between Ramdhan and his wife had become so bad that Ramdhan, according to the appellant, suspected that she was trying to poison him. Curiously enough, in spite of this, Ramdhan continued to live with Sitabai right till his death, and had made no arrangement for a person other than her to take charge of the cash and the gold and silver ornaments of the value of a couple of lakhs of rupees or so, in the event of his dying suddenly. There is nothing to suggest that Ramdhan 's food was cooked by any one other than Sitabai. To prove the appellant 's allegations that Ramdhan and Sitabai were not getting on well, the main evidence is that of the appellant himself, who is the person who has obviously taken an active part in procuring the execution of the document which he has set up as the will of Ramdhan. He must be held to have taken an active part, even though, according to him, he did not do so, because the will was written not only at Hyderabad where he lives and carries on his profession but also in his own house, and the persons who played one part or the other in this connection are either his friends or his neighbours. It is these circumstances which have to be borne in mind while evaluating the testimony of the witnesses bear 825 ing on the execution of the will. Further, it is necessary for the appellant to satisfy the conscience of the Court about the genuineness of this will by removing all suspicions which naturally flow from the various circumstances, which we have set out above. There is not an iota of evidence in this regard, and we are not satisfied that the suspicion created by the circumstances referred to by us has been removed. Learned counsel has taken us through the evidence of the appellant, the scribe and three attesting witnesses examined by him. All this evidence has been critically examined by the High Court but for reasons given by it in its judgment, not accepted by it. We find no reasons for viewing the evidence differently. We have already adverted to the fact that no particular reason has been even indicated by the appellant as to why Ramdhan thought of executing a will long before his death. If his idea in doing so was to make certain that his property does not fall in Sitabai 's hands after his death one would have expected him to make some arrangement for keeping the movables out of her reach. He, however, made no such arrangement. Further, he would have also taken the precaution of registering the will, so that any challenge to its genuineness could not have been successfully made. Further, there is no unimpeachable evidence to show that the will was brought to light immediately after Ramdhan 's death, which would have been the case if it were a genuine will. On the other hand, there is one circumstance which suggests that the claim on the basis of Ramdhan 's will was not even thought of by the appellant till long after Ramdhan 's death. The circumstance is the continuance of Sitabai in possession of the cash, gold and silver articles and other movables, even subsequent to Ramdhan 's death. Of course, the appellant has given the explanation that he allowed her to remain in possession on his behalf, but his evidence is wholly incredible. Indeed, the appellant has said that he instituted the suit because he found Sitabai parting with portions of Ramdhan 's movables in favour of her daughters and strangers after the death of Ramdhan. At least, one thing will follow from this that according to him Sitabai was more interested in her daughters than in him. If, therefore, he had a genuine claim to Ramdhan 's property, he would not have 826 allowed Sitabai to remain in possession of Ramdhan 's movables. At least, he would have obtained from her a document containing the list and description of the movables and also an admission to the effect that she was entrusted with them by the appellant and that she had no right in them. Had she refused to execute such a document, one would have naturally expected the appellant to institute a suit for their possession immediately. There is no explanation for the absence of such a document, and thus this is also a circumstance which militates against the genuineness of the will. In the circumstances, we hold that the High Court was right in rejecting the evidence of the attesting witnesses and the scribe as well as of the appellant with regard to the exe cution of the will by Ramdhan. We accordingly uphold the judgment of the High Court, and dismiss the appeal with costs. Appeal dismissed.

The appellant filed a suit claiming the property of one R which was in possession of R 's widow on the allegation that R had executed a will bequeathing almost his entire property to the appellant and practically excluding his widow and daughters. The ground on which the widow and the daughters were excluded is said to be the strained relations which had developed between R and his wife. The widow denied the execution of the alleged will and challenged the genuineness. The Trial Court holding that the will was genuine decreed the suit. On appeal, the High Court dismissed the suit holding that the win was not genuine. The finding of the High Court was based on the evidence and the attending circumstances appearing in the case. Or appeal to this Court by a certificate granted: Held: (i)In order to judge the credibility of the witness, the Court is not confined only to the way in which the witnesses have deposed or to the demeanour of the witnesses, but it is open to it to look into the surrounding circumstances as well as the probabilities, so that it may be able to form a correct idea of the trustworthiness of the witnesses. This issue cannot be determined by considering the evidence adduced in the Court separately from the surrounding circumstances brought out in the evidence, or which appear from the nature and the contents of the document itself. (ii) It is necessary for the propounder to satisfy the court about the genuineness of the will by removing all suspicions which naturally from the various circumstances. Surat Kumar Bibi vs Sakti Chand, , Krishto opal vs Baidyanath, A.I.R. 1939 Cal. 87, Chotey Narain Singh V. Ali. Ratan Koer, (1894) L.R. 22 I.A. 12, H. Venkachala Iyengar vs N. Thaimmajamma, [1959] Supp. 1 S.C.R. 426, Shashi Kumar Banerjee vs Subodh Kumar Banerjee, C.A. No. 295 of 1960. Sept. 13, 1963 (Non reportable and Tyrell vs Painton, , referred to.

l Appeal Nos. 2135 of 1966. Appeal from the judgment and order dated January 27, 1965 of the Rajasthan High Court in D. D. Election Appeal No. 93 of 1963. R. K. Garg, D. P. Singh and section C Agarwal, for the appellant. B.D. Sharma and L. D. Sharma, for the respondent. The Judgment of the Court was delivered by Wanchoo, J. This is an appeal 'on a certificate granted by the Rajasthan High Court and arises in the following circumstances. There was an election to the Rajasthan Legislative Assembly from the Beawar constituency at the general election in 1962. A number of persons stood for election, two of whom were the appellant and the respondent. The appellant secured the highest number of votes while the respondent came second. The appellant was declared successful at the election and this led to an election petition by the respondent. A number of grounds were taken in the election petition for invalidating the election of the appellant; but in the present appeal we are concerned with one ground and shall refer to that only. That ground was that the appellant had commited a corrupt practice as defined in section 123(4) of the Representation of the People Act, No. 3 of 1951, (hereinafter referred to as the Act). The case of the respondent was that the appellant had published a statement of fact in relation to the respondent 's personal character or conduct and that statement of fact was false, and the appellant either believed it to be false or did not believe it to be true. The statement was reasonably calculated to prejudice the prospects of the respondent 's election. In consequence, the respondent prayed that the election of the appellant be set aside. It is unnecessary to refer to the reply of the appellant to the above contention, for learned counsel for the appellant does not dispute the findings of fact arrived at by the High Court. It will therefore be enough to refer to these findings with respect to the corrupt practice alleged by the respondent. The High Court found that the appellant was responsible for the publication of a poem entitled Mang raha hoon de bhai vote : (I am an applicant and request your vote). This poem was composed by one Avinash Chander of Beawar. It was not disputed before the High Court that the poem in question was aimed at the respondent and he was the target of the attack made therein. The High Court also found that the poem in question was read at an election meeting on February 21, 1962 at which the appellant himself was presiding. Avinash Chander had recited this poem at that meeting. It was also found 129 that the booklet containing the poem was printed at the instance of one Chand Mohammad, who was polling and counting agent of the appellant and who had also paid the author (Avinash Chander) something for it. The appellant had seen the booklet containing this poem sometime before the meeting of February 21, 1962 and had read it. Further the High Court held that the booklet containing the poem was printed with the knowledge and approval of the election agent of the appellant. Finally, the High Court held that the poem was recited at the meeting of February 21, 1962 by Avinash Chander and the appellant was presiding at that meeting and Kalyan Singh, his election agent, was also present in it, and thus there was sufficient publication within the meaning of section 123(4) of the Act, for which the appellant was responsible. The Tribunal had held that the appellant was responsible for the publication of the booklet containing this poem and it contained statements of fact which the appellant either believed to be false or did not believe to be true. These statements of fact were held to be in relation to the personal character or conduct of the respondent and were reasonably calculated to prejudice the prospects of the respondent 's election. In consequence the Tribunal had held the appellant guilty of the corrupt practice within the meaning of section 123(4) and allowed the election petition. The appellant then went in appeal to the High Court and three main points were urged on his behalf there. In the first place, it was contended that there was no statement of fact at all in the poem in question. Secondly, it was contended that even if there was any statement of fact in the poem it should have been proved that Avinash Chander who had recited it either believed it to be false or did not believe it to be true and that no attempt was made to prove this. Lastly, it was contended that the onus to prove that corrupt practice had been committed lay on the respondent and that had not been discharged. The High Court rejected all the three contentions and held that there was one statement of fact in the poem in question. That statement was either believed to be false or was not believed to be true by the appellant. The High Court also held that the belief of Avinash Chander was immaterial and the respondent had discharged the onus that lay on him. In the result the appeal was dismissed. The appellant then applied for and obtained a certificate from the High Court, and that is how the matter has come before us. The same three points which were raised before the High Court have also been raised before us in the appeal. The first question that we shall consider is whether there was a statement of fact at all in the poem in question. The contention on behalf of the appellant is that there was no statement of fact with respect to the character or conduct of the respondent in the poem and that it merely expressed opinions which did not come within the ambit of section 123(4 130 Now there is no doubt that the poem was aimed at the respondent which is made clear by the second stanza which starts with the words "Pakka Pandit Sharma Hoon": (I am pucca Pandit Sharma). It is not in dispute that the respondent was the only Sharma who contested the election. Considering the heading of the poem to which we have already referred it is obvious that the respondent was depicted therein as requesting for votes. In the sixth stanza, the respondent is made to say: sab choron ka sartaj: (I am the greatest of all thieves); and it is this phrase which the High Court has held to be a statement of fact. We are of opinion that this passage states as a fact that the respondent is the greatest of all thieves, though in the poem the statement is put as if it was coming from the mouth of the respondent. The question is whether a statement to the effect that one of the candidates standing for election is the greatest of all thieves is a statement of fact or is a mere expression of opinion about the candidate. It is not in dispute that if it is a statement of fact it is clearly in respect of the personal character or conduct of the candidate concerned. It seems to us that if a candidate is called the greatest 0 all thieves, the person saying so is making a statement of fact. The statement that a person is a thief or the greatest of all thieves cannot in our view be a mere opinion, and we agree with the High Court that when the respondent was called the greatest of all thieves a statement of fact was being made as to his personal character or conduct. It is however urged on behalf of the appellant that there are no details as to the time when the respondent committed thefts or the place where he committed them, and therefore a mere bald statement that the respondent was a thief or the greatest of all thieves could be an expression of opinion only and not a statement of fact. We are unable to accept this. Section 123(4) in our opinion does not require that when a statement of fact is made as to the personal character or conduct of a candidate details which one generally finds (for example) in a charge in a criminal case, must also be there and that in the absence of such details a statement to the effect that a person is (for example) a thief or murderer is a mere expression of opinion. To say that a person is a thief or murderer is a statement of fact and the mere absence of details as to time and place would not turn a statement of fact of this nature into a mere expression of opinion. Learned counsel for the appellant relies on a number of cases in support of his contention that such a bald statement without particulars could not be a statement of fact. The first case to which reference may be made is Ellis vs National Union of Conservative and Constitutional Association.(1) It has not been possible for us to get the report of this case. But in Parker 's Election Agent and 1. 109, Law Times Journal 493; & Times Newspaper, October 3rd, 1900:44 Sol. Journ. 131 Returning Officer, 6th Edition, p. 91, it has been mentioned. There it is stated that "a statement which imputed that the candidate was a traitor, and was one of certain persons who were in correspondence with the enemy shortly before the South African war broke out in 1899" was not held to be a statement of fact and did not come within the mischief of the relevant provision of English law relating to elections. But in Rogers on Elections, Vol. 11, 20th Edition, p. 368, the same case is referred and the facts given there seem to be different. It is stated there that a poster was published stating that Radical members of the House of Commons were in correspondence with the enemy, and this statement was held not to come within the ambit of the law on the ground that it did not state that the plaintiff was in correspondence with the Boers. As the report is not available it is very difficult to judge what exactly was decided in that case. If the facts are as given in Rogers, it seems that there was no statement of fact with respect to the candidate in that case and all that was said was that Radical members of the House of Commons were in correspondence with the Boers, and the candidate happened to be one of the Radical members. If that is so, it was not clearly a statement of fact with respect to the candidate in particular and that case would not be of any assistance to the appellant. The next case to which reference may be made is A. section Radha krishna Ayyar vs Emperor.(1) It was held there that for the purpose of section 171 G of the Indian Penal Code, something must be stated as a fact and not as a general imputation or as a matter of opinion. In that case, a candidate was prosecuted under section 500 of the Indian Penal Code, and he took the plea that he should have been prosecuted under section 171 G of the Indian Penal Code and that this could not be done without the sanction of government, which was not obtained. In that case a defamatory document was published with respect to the candidate. That document contained only one or two statements of fact, but the bulk of it consisted of mere general expression, and it was held that a prosecution under section 500 of the Indian Penal Code was not barred. But one of the statements which was held not to be a statement of fact was this, namely, they are misappropriating government money by committing forgeries. Now it must be remembered that the question there was whether prosecution under section 171 G would lie and the High Court was of the view that it would not and gave its reasons thus: "When it is alleged that a man does many kinds of harm to the poor, that he misappropriates government money, that he commits forgery and so forth, how would it be possible, in the absence of particulars, to prove prima facie that the allegations are false?" Consequently, the High Court held that the offending document on the whole was one to which section 171 G could not be applied. We (1) A.I.R. 1932 Mad. 132 are of opinion that the view taken by the High Court, at any rate, with respect to 'the allegation that the candidate in question was misappropriating government money was not a statement of fact is not correct. The next case to which reference may be made is Narayana swamy Naichker and Others vs D. Devaraja Mudaliar & Others.(1) There also the question was whether a person should be prosecuted under section 500 and not under section 171 G of the Indian Penal Code. This case does not seem to support the appellant, for it was held there that the statement that the candidate had committed fraud in respect of money in the fund office and was removed by the general body or by the department, was a statement of fact. The next case to which reference may be made is Hajee Moham mad Kadir Sheriff vs Rahimatullah Sahib.(2) In that case also the question was whether the prosecution should have been under section 500 or under section 171 G of the Indian Penal Code. The statement there was that the candidate was a leper, and the High Court held that this was not a case which fell within section 171 G but no reasons were given for the view. It seems to us that this case does not help the appellant for the allegation that a person is a leper cannot be said to relate to personal character or conduct of the candidate; it only mentions a physical defect. The last case to which reference may be made is V. P. Shan mugam and Another vs Thangavelu.(3) That also dealt with section 171 G of the Indian Penal Code. In that case, a printed notice was published containing a series of rhetorical questions viz. whether it was true or not that the candidate used to receive money and withdraw from contest in elections. The exact words used are not to be found in the report and the High Court seems to have held that as no particulars were mentioned it would not be a statement of fact. It seems to us however that if an allegation is made that a candidate had withdrawn from context at previous elections after taking money that would be a statement of fact and the view taken by the High Court is not correct. The question whether a particular statement with respect to a candidate at an election is a statement of fact or is a mere expression of opinion would depend on the facts of each case and will have to be judged in the circumstances in which the statement was made and in the context of the writing in which it appears, in case it is part of a writing. But it is not in our opinion correct to say that a statement with respect to a candidate can never be a statement of fact, unless it is accompanied by particulars as to time, place and date which one finds (for example) in a charge sheet in a crimi (1) A.I.R. [1936] Madras 360. (2) A.I.R. 1940, Madras 230. (3) A.I.R. 1958, Madras 240. 133 nal case. Whether in a particular setting a bald statement without particulars would be a mere expression of opinion or would amount to a statement of fact would depend upon the circumstances of each case and the court will have to consider the setting in which the statement was made and the entire writing in the context of which it appears and the nature of the statement itself before it comes to the conclusion that it is a statement of fact or an expression of opinion. Where particulars are given it may not be difficult to come to the conclusion that the statement is a statement of fact; but even a bald statement without particulars may be a statement of fact and not a mere expression of opinion. It seems to us that mere absence of particulars would not necessarily mean that a statement without particulars is always an expression of opinion. Take a case where a candidate is said to be a murderer. The mere fact that the name of the victim or the date when the murder took place or the place where it happened is not mentioned, would not detract from the statement being a statement of fact. At the same time a similar bald statement that a candidate is a murderer in the context in which it appears if it is in writing may not be a statement of fact and may be a mere matter of opinion, as, for, example, where it is said that a candidate is a murderer of all decencies in life. The question whether a bald statement amounts to a statement of fact or a mere expression of opinion would depend on the facts and circum stances of each case and also on the setting in which the statement appears whether it is in writing or oral. In the present case, taking the poem as a whole there can be no doubt that when the respondent was called the greatest of all thieves there was a clear statement of fact that he was a thief or the greatest of all thieves and not a mere expression of opinion. This is the impression that one gets from reading the poem as a whole, and we agree with the High Court that in the setting in which the statement was made in the poem and in the circumstances in which it came to be made, there is no question of the statement being a matter of opinion; it was undoubtedly a statement of fact. We may in this connection refer to Inder Lal vs Lai singh,(1) where this Court held that an allegation to the effect that a candidate was purchaser of the opponents of the Congress by means of money, ,without any particulars as to who was purchased and when, was taken as a statement of fact relating to the personal conduct or character of the candidate. It is true that in that case the question was whether the statement was with respect to personal conduct or character of the candidate and there was no dispute that it was a statement of fact. Even so we are of opinion that that case shows that particulars are not necessary before a bald statement with respect to personal character or conduct of the candidate can be said (1) [1962] Supp. 3 S.C.R. 114. 134 to be a statement of fact. As we have said already, presence of particulars will make it easier to come to the conclusion that it is a statement of fact; but the absence thereof does not necessarily mean that it is always an opinion and can never be a statement of fact. It will all depend, as we have said already, on the facts and circumstances of each case. Then it is said that the Madras Hi Court had already taken a certain view as to the meaning of the words "statement of fact" under the election law as it was before the Act, and as the words in section 123(4) of the Act are more or less similar to the earlier law it should be taken that the legislature had approved of the view taken by the Madras High Court which seems to suggest that particulars are necessary before a statement can be said to be a statement of fact. Reliance in this connection is placed on the following observations of Viscount Buckmaster in Barras vs Aberdeen Steam Trawling and Fishing Co. Ltd.(1) "It has long been a well established principle, to be applied in the consideration of Acts of Parliament that where a word of doubtful meaning has received a clear judicial interpretation, the subsequent statute which incorporates the same word or the same phrase in a similar context, must be construed so that the word or phrase is interpreted according to the meaning that has previously, been assigned to it. " We are of opinion that this principle does not apply in the present. We are here concerned with the meaning of the words "statement of fact". This is not a phrase of doubtful meaning and merely because one High Court took one view it does not follow that when the Act was passed in 1951 the legislature intended that no statement can be a statement of fact unless particulars were mentioned therein. We therefore agree with the High Court that the statement that the respondent was the greatest of all thieves is a statement of fact in the facts and circumstances of this case and in the context in which the words appear in the poem. This takes us to the next point, namely, that it should have been proved that Avinash Chander who recited the poem at the meeting believed the statement to be false or did not believe it to be true and that on this point Avinash Chander was not even questioned though he appeared as a witness. The High Court has held that the belief of Avinash Chander is immaterial, and that it is the belief of the appellant that matters. We are of opinion that this view of the High Court is correct section 123(4) runs thus (1) ; , 411. 135 "(4) The publication by a candidate or his agent or by any other person with the consent of a candidate or his election agent, of any statement of fact which is false, and which he either believes to be false or does not believe to be true, in relation to the personal character or conduct of any candidate, or in relation to the candidature, or withdrawal of any candidate, being a statement reasonably calculated to prejudice the prospects of that candidate 's election. The sub section requires; (i) publication of any statement of fact by a candidate, (ii) that fact is false, (iii) the candidate believes it to be false or does not believe it to be true, (iv) the statement is in, relation to the personal character or conduct of another candidate; and (v) the said statement is one being reasonably calculated to prejudice the prospects of the other candidate 's election : (see Sheopat Singh vs Ram Pratap.(1). This case thus lays down that the person with whose belief the provision is concerned is ordinarily the candidate who, if we may say so, is responsible for the, publication. The responsibility of the candidate for the publication arises if he publishes the thing himself. He is equally responsible for the publication if it is published by his agent. Thirdly he is also responsible where the thing is published by any other person but with the consent of the candidate or his election agent. In all three cases the responsibility is of the candidate and it is ordinarily the candidate 's belief that matters for this purpose. If the candidate either believes the statement to be false or does not believe it to be true he would be responsible under section 123(4). In the present case the poem was not actually read by the appellant, but it was read in his presence at a meeting at which he was presiding by Avinash Chander. In these circumstances the High Court was right in coming to the conclusion that the recitation of the poem by Avinash Chander at the meeting amounted to the publication of the false statement of fact contained in it by another person with the consent of the candidate, and in this case, even of his election agent who was also present at the meeting. But the responsibility for such publication in the circumstances of this case is of the candidate and it is the candidate 's belief that matters and not the belief of the person who actually read it with the consent of the candidate. What would be the position in a case where the candidate had no knowledge at all of the publication before it was made need not be considered for that is not so here. It is not disputed in this case that the statement that the respondent was the greatest of all thieves, was false. It is, also not seriously challenged that the appellant did not believe it to be true ' The contention that Avinash Chander 's belief should have been proved must therefore fail. (1) ; 136 Then we come to the question of onus. In this connection reliance is placed on Dr. Jagjit Singh vs Giani Kartar Singh(1). In that case it was held that the onus to prove the essential ingredients prescribed by sub section (4) of section 123 of the Act is on him who alleges publication of false statements of fact. The election petitioner has to prove that the impugned statement has been published by the candidate or his agent, or if by any other person, with the consent of the candidate or his election agent. He has further to show that the impugned statement of fact is false and that the candidate either believed that statement to be false or did not believe it to be true. It has further to be proved inter alia that the statement was in relation to the personal character or conduct of the complaining candidate. Finally, it has to be shown that the publication was reasonably calculated to prejudice the prospects of the complaining candidate 's election. But though the onus is on the election petitioner to show all these things, the main things that the election petitioner has to prove are that such a publication was made of a statement of fact and that that statement is false and is with respect to the personal character or conduct of the election petitioner. The burden of proving that the candidate publishing the statement believed it to be false or did not believe it to be true though on the complaining candidate is very light and would be discharged by the complaining candidate swearing to that effect. Thereafter it would be for the candidate publishing the statement to prove otherwise. The question whether the statement was reasonably calculated to prejudice the prospects of the election of the candidate against whom it was made would generally be a matter of inference. So the main onus on an election petitioner under section 123(4) is to show that a statement of fact was published by a candidate or his agent or by any other person with the consent of the candidate ,or his election agent and also to show that that statement was false and related to his personal character or conduct. Once that is proved and the complaining candidate has sworn as above indicated, the burden shifts to the candidate making the false statement of fact to show what his belief was. The further question as to prejudice to the prospects of election is generally a matter of inference to be arrived at by the tribunal on the facts and circumstances of each case. In the present case the main onus that lay on the respondent has been discharged. He has proved that there was a publication ,of the nature envisaged under section 123(4) of the Act. He has also proved that the statement of fact was made with respect to him. He has further proved that that statement was false and related to his personal character or conduct. There can be no doubt that a statement of this nature calling one candidate a thief or the greatest of all thieves is reasonably calculated to prejudice the prospects of (1) A.I.R. 1966 S.C. 773 137 this election. He further swore that the statement was false to the knowledge of the appellant and the latter did not believe it to be true. It was then for the appellant to show what his belief was. The burden having thus shifted we are of opinion that it was for the appellant to show either that the statement was true or that he believed it to be true. This the appellant has failed to do. The High Court therefore rightly held that the respondent had discharged the burden which lay on him. The appeal therefore fails and is hereby dismissed with costs. G.C. Appeal dismissed.

The appellant was the winning candidate In an election to the Rajasthan Legislative Assembly. The respondent who was one of the unsuccessful candidates filed an ' election petition and alleged therein that the appellant was guilty of corrupt practice within the meaning of a. 123(4) of the Representation of the People Act, 1951. The corrupt practice alleged was that at a meeting presided over by the appellant a poem was read out which represented the respondent to be the greatest of all thieves '. The Election Tribunal as well as the High Court gave their findings against the 'appellant who came to this Court with certificate. It was contended on behalf of the appellant that : (i) the statement in question was not a statement of fact but only of opinion, (ii) No attempt had been made to prove that the person who recited the poem containing the statement believed it to be false or did not believe that it was true, (iii) the onus to prove that corrupt practice had been committed lay on the respondent and that had not been discharged. HELD (i) The mere absence of details as to time and place would not turn a statement of fact into a mere expression of opinion. [130 F G] In the present case taking the poem as a whole there could be no doubt that when the respondent was called the greatest of all thieves there was a clear statement of fact about his personal character and conduct. [133 E F] (ii) The appellant presided and his election agent was present at the meeting at which the poem in question was read. The responsibility for the publication in the circumstances of the case was that of the appellant and it was the appellant 's belief that mattered and not the belief of the person who read it with the consent of the appellant. [135 E G] (iii) The onus on an election petitioner under section 123(4) is to show that a statement of fact was published by a candidate or his agent or by any other person with the consent of the candidate or his election agent and also to show that that statement was false and related to his personal character or conduct. This onus is very light and can be discharged by the complaining candidate swearing to that effect. Once that is done the burden shifts to the candidate, making the false statement of fact to show what his belief was. [136E F] It was for the appellant to show either that the statement was true or that he believed it to be true. The appellant had failed to do so. The High Court therefore rightly held that the respondent had discharged the burden which lay on him. [137 A B] Case law considered.

N: Criminal Appeal No. 126 of 1975. Appeal by special leave from the judgment and order dated the 19th/20th February, 1974 of the Bombay High Court in Criminal Appeal No. 1549 of 1971. O. P. Rana and R. N. Poddar for the Appellant. Ram Jethmalani and Miss Rani Jethmalani for the Respondent. The Judgment of the Court was delivered by CHINNAPPA REDDY, J. It is one of the sad and distressing features of our criminal justice system that an accused person, resolutely minded to delay the day of reckoning, may quite conveniently and comfortably do so, if he can but afford the cost involved, by journeying back and forth, between the Court of first instance and the superior Courts, at frequent interlocutory stages. Applications abound to quash investigations, complaints and charges on all imaginable grounds, depending on the ingenuity of client and counsel. Not infrequently, as soon as a court takes cognizance of a case requiring sanction or consent to prosecute, the sanction or consent is questioned as improperly accorded, so soon as a witness is examined or a document produced, the evidence is challenged as illegally received and many of them are taken up to the High Court and some of them reach this Court too on the theory that 'it goes to the root of the matter '. There are always petitions alleging 'assuming the entire prosecution case to be true, no offence is made out '. And, inevitably proceedings are stayed and trials delayed. Delay is a known defence tactic. With the passage of time, witnesses cease to be available and memories cease to be fresh. Vanishing witnesses and fading memories render the onus on the prosecution even more burdensome and make a welter weight task a heavy weight one. Sure, we do not mean to suggest that the responsibility for delaying criminal trials is always to be laid at the door of the rich and the reluctant accused. We are not unmindful of the delays caused by the tardiness and tactics of the prosecuting 302 agencies. We know of trials which are over delayed because of the indifference and somnolence or the deliberate inactivity of the prosecuting agencies. Poverty struck, dumb accused persons, too feeble to protest, languish in prisons for months and year on end awaiting trial because of the insensibility of the prosecuting agencies. The first Hussainara case (Hussainara Khatoon & Ors. vs Home Secretary, State of Bihar, Govt. Of Bihar, Patna)(1) was one like that. Sometimes when the evidence is of a weak character and a conviction is not a probable result, the prosecuting agencies adopt delaying tactics to keep the accused persons in incarceration as long as possible and to harass them. This is a well known tactic in most conspiracy cases. Again, an accused person may be seriously jeopardised in the conduct of his defence with the passage of time. Witnesses for the defence may become unavailable and their memories too may fade like those of the witnesses for the prosecution. In such situations in appropriate cases, we may readily infer an infringement of the right to life and liberty guaranteed by article 21 of the Constitution. Denial of a speedy trial may with or without proof of something more lead to an inevitable inference of prejudice and denial of justice. It is prejudice to a man to be detained without trial. It is prejudiced to a man to be denied a fair trial. A fair trial implies a speedy trial. In Hussainara Khatoon vs State of ' Bihar(1), this Court said (at p. 179). "Speedy trial is of the essence of criminal justice and there can be no doubt that delay in trial by itself constitutes denial of justice. It is interesting to note that in the United States, speedy trial is one of the constitutionally guaranteed rights. The Sixth Amendment to the Constitution provides that" 'In all criminal prosecutions, the accused shall enjoy the right to a speedy and public trial '. So also Article 3 of the European Convention on Human Rights provides that: 'every one arrested or detained shall be entitled to trial within a reasonable time or to release pending trial '. We think that even under our Constitution, though speedy trial is not specifically enumerated as a fundamental right, 303 it is implicit in the broad sweep and content of Article 21 as R interpreted by this Court in Maneka Gandhi vs Union of India(1). We have held in that case that Article 21 confers a fundamental right on every person not to be deprived of his life or liberty except in accordance with the procedure prescribed by law and it is not enough to constitute compliance with the requirement of that Article that some semblance of a procedure should be prescribed by law, but that the procedure should be 'reasonable, fair and just '. If a person is deprived of his liberty under a procedure which is not 'reasonable, fair and just ', such deprivation would be violative of his fundamental right under Article 21 and he would be entitled to enforce such fundamental right and secure his release. Now obviously procedure prescribed by law for depriving a person of his liberty cannot be 'reasonable, fair or just ' unless that procedure ensures a speedy trial for determination of the guilt of such person. No procedure which does not ensure a reasonable, quick trial can be regarded as 'reasonable, fair or just ' and it would fall foul of Article 21. There can, therefore, be no doubt that speedy trial and by speedy trial we mean reasonably expeditious trial, is an integral and essential part of the fundamental right to life and liberty enshrined in Article 21". What is the remedy if a trial is unduly delayed ? In the United States, where the right to a speedy trial is a constitutionally guaranteed right, the denial of a speedy trial has been held to entitle an accused person to the dismissal of the indictment or the vacation of the sentence. But in deciding the question whether there has been a denial of the right to a speedy trial, the Court is entitled to take into consideration whether the defendant himself was responsible for a part of the delay and whether he was prejudiced in the preparation of his defence by reason of the delay. The Court is also entitled to take into consideration whether the delay was unintentional, caused by over crowding of the Court 's docket or under staffing of the Prosecutors. Strunk vs United States(2) is an instructive case on this point. As pointed out in the first Hussainara case, (supra) the right to a speedy trial is not an expressly guaranteed constitutional right in India but is implicit in the right 304 to a fair trial which has been held to be part of the right to life and liberty guaranteed by article 21 of the Constitution. While a speedy trial is an implied ingredient of a fair trial, the converse is not necessarily true. A delayed trial is not necessarily an unfair trial. The delay may be occasioned by the tactic or conduct of the accused himself. The delay may have caused no prejudice whatsoever to the accused. The question whether a conviction should be quashed on the ground of delayed trial depends upon the facts and circumstances of the case. If the accused is found to have been prejudiced in the conduct of his defence and it could be said that the accused had thus been denied an adequate opportunity to defend himself, the conviction would certainly have to go. But if nothing is shown and there are no circumstances entitling the Court to raise a presumption that the accused had been prejudiced there will be no justification to quash the conviction on the ground of delayed trial only. In the present case, in the beginning, three persons, Champalal Punjaji Shah, Poonam Chand and Mohan Lal were charged by the learned Additional Chief Presidency Magistrate 8th Court, Esplanade, Bombay, with offences under section 120B of the Indian Penal Code read with 135 of the Customs Act and rule 126P (2) (ii) and (iv) of the Defence of India Rules, 1962, 135(a) and (b) and (i) of the Customs Act and rule 126P (2) (ii) and rule 126P (2) (iv) of the Defence of India Rules. After some evidence had been led by the prosecution, the Public Prosecutor filed an application before the learned Magistrate requesting permission to withdraw from the prosecution against accused No. 2, Poonam Chand. Permission was granted and thereafter Poonam Chand was examined by the prosecution as their witness. After some vicissitudes, necessitated by the respondent Champalal Punjaji Shah taking the matter to the higher courts, the trial finally concluded and by a judgment dated December 13, 1971 the learned Magistrate acquitted Mohan Lal, accused No. 3 but convicted accused No. 1, Champalal Punjaji Shah under various heads of the charge and sentenced him to suffer imprisonment for various terms ranging from two years to four years and to the payment of fine of Rs. 10,000 on each of different counts. The substantive sentence of imprisonment were directed to run concurrently. On appeal, the respondent was acquitted by the High Court. The State of Maharashtra has filed the present appeal against the judgment of the High Court of Bombay after obtaining special leave from this Court under article 136 of the Constitution. The brief facts of the case may now be stated. On May 30, 1965, on information received, P.W. 4, the Superintendent of 305 Central Excise, and P.W. 1, the Deputy Superintendent of Central Excise, accompanied by other Central Excise officers and two panchas, Savalram Ganpat Bhagat (P.W. 7) and another went to fiat No. 14 on the first floor of a building known as Vidya Vihar on Tulsi Pipe Road, Dadar, Bombay. The flat had two doors, one away from the staircase, locked from the outside and another near the staircase and closed from inside. P.W. 1 pressed the calling bell and the door was opened by Poonam Chand. Another person was sitting on a sofa inside the room. He was accused No. 1. On seeing the Central Excise officers accused No. 1 got up and went towards them. PW 1 told the accused that he was authorised to search the room and showed them the authorisation given to him by PW 4. The room was then searched. The rear side of the entrance door had a handle from which was hanging a 'Tiger ' brass lock. Besides the sofa there was a steel almirah. PW 1 asked accused No. 1 to open the almirah. Accused No. 2 Poonam Chand then took out a bunch of keys from the pocket of his trousers and opened the almirah. There were eight drawers in the steel almirah. These drawers contained some documents. It was noticed that the two bottom drawers had false bottoms. When the false bottoms were pulled out and searched, they were found to contain 11 jackets in each of which there were 100 slabs of gold weighing 10 tolas each. The total quantity of gold found secreted in the almirah was 11,000 tolas. The gold slabs had foreign markings on them. A key was also found in that almirah and this key was found to fit the 'Tiger ' lock which was hanging from the inner handle of the front door of the flat. Thereafter accused No. 1 's person was searched and some documents and two bunches of keys, one containing eight keys and the other containing three keys were found. The bunch of eight keys was found to fit the steel almirah from which the slabs of gold were recovered. Two of the three keys of the other bunch were obviously keys of a scooter while the third key was found to fit the 'Tiger ' lock which was on the handle of the back of the front door of the flat. Thereafter a panchnama was prepared. During the course of the investigation it was found that . the flat was taken on a 'leave and licence ' basis by accused No. 3. After the investigation was completed a complaint was filed for the various offences mentioned by us at the outset. The case of the respondent was that he had purchased a scooter from Mohan Lal and had gone to the flat of Mohan Lal that night for completing some negotiations. When he was coming from the building he was dragged into flat No. 14 by the Customs 306 officers. He had nothing to do with the flat nor did he have anything to do with the gold found in the flat. The bunch of eight keys was not found on his person as alleged by the prosecution. The bunch of three keys was on his person but two out of the three keys were of the scooter purchase by him from accused No. 3. Shri Jethmalani, learned counsel for the respondent initially challenged the reception of the evidence of Poonam Chand into the record but desisted from doing so when we told him that he might confine himself to the rest of the evidence which appeared to us to be sufficient to hold the respondent guilty of the offence with which he was charged. The three outstanding circumstances established against the respondent and not disputed before us by the learned counsel for the respondent were (1) the presence of the respondent in the flat at the time of the raid by the Central Excise officers and the recovery of the gold slabs of foreign origin from the steel almirah and (2) the recovery of the bunch of eight keys from his person which keys fitted the almirah from which the gold slabs were recovered and (3) the recovery of a bunch of three keys from his person one of which fitted the lock which was hanging from the inside handle of the door of the flat. To any mind, unassailed by "some light, airy, unsubstantial doubt that may flit through the minds of any of us about almost anything at sometime or other( ')" these circumstances should be sufficient to draw an inference of guilt. The High Court however thought that the steel almirah in the flat was not shown to have been specially made and that the keys of a similar almirah could well fit it and that was perhaps how the keys recovered from the accused did fit the almirah in the flat. That of course was not the plea of the accused nor was it a suggestion made to the prosecution witnesses. We agree with the submission that circumstantial evidence must be of a conclusive nature and circumstances must not be capable of a duality of explanations. It does not however mean that the Court is bound to accept any exaggerated, capricious or ridiculous explanation which may suggest itself to a highly imaginative mind. It is well to remember that the Evidence Act considers a fact as "proved" when, after considering the matters before it, the Court either believes it to exist, or considers its existence so probable that a prudent mind ought under the circumstances of the particular case, to act upon the supposition that it exists. It is also 307 worthy of remembrance that a Court may presume the existence of A any fact which it thinks likely to have happened, regard being had to the common course of natural events, human conduct and public and private business in their relation to the facts of the particular case. We are unhesitatingly of the view that the explanation fancied by the High Court was a wholly unreasonable explanation in the circumstances of the case. Shri Jethmalani reminded us first that we were considering circumstantial evidence, second we were dealing with an appeal against acquittal and third we were exercising our extraordinary but exceptional jurisdiction under article 136. Indebted as we are to him, for his forceful presentation of the reasons against interference with the judgment of the High Court, we think that, interference in this case is imperative and hesitation to interfere will lead to a miscarriage of justice. Shri Jethmalani also urged that the trial of the respondent was considerably delayed, that there was thus a violation of the fundamental right to life and liberty guaranteed under article 21 of the Constitution and that was a sufficient ground to entitle the accused to a dismissal of the complaint against him. We have earlier discussed the relevant principles which should guide us in such situations. In this case the accused himself was responsible for a fair part of the delay. He has also not been able to show cause how he was prejudiced in the conduct of his defence by reason of the delay, Shri Jethmalani then suggested that the long lapse of time since the commission of the offence should be taken into account by us and we should refuse to interfere with the order of acquittal or at any rate we should not send the accused back to prison particularly in view of the fact that the accused was preventively detained for over two and nearly three years on the basis of the very acts complained of in this particular case. We are afraid we are unable to agree with Shri Jethmalani. The offence is one which jeopardises the economy of the country and it is impossible to take a casual or a light view of the offence. It is true that where the offence is of a trivial nature such as a simple assault or the theft of a trifling amount, we may hesitate to send an accused person back to jail as it would not be in the public interest or in the interest of anyone to do so. But the offences with which we are concerned and the stakes involved clearly show that sympathy in this case would be misplaced. We therefore, set aside the judgment of the High Court and restore that of the learned Additional Chief Presidency Magis 308 trate, 8th Court, Esplanade, Bombay. The respondent will surrender forthwith. The gold slabs will stand confiscated to the Central Government. The appeal is allowed. P.B.R. Appeal allowed.

Under the present system of criminal justice an accused person resolutely minded to delay the day of reckoning, may quite conveniently and comfortably do so, if he can but afford the cost involved, by journeying back and forth between the court of first instance and the superior Courts at frequent interlocutory stages, by filing applications to quash investigations, complaints and charges on all imaginable grounds. Delay is a known defence tactic. All this is not to say that the responsibility for delaying criminal trials should always be laid at the door of the rich and the reluctant accused. Delays caused by tardiness, indifference and somnolence or the deliberate inactivity of prosecuting agencies are not uncommon or unknown. As a result of the delaying tactics of prosecuting agencies an accused person may be seriously jeopardised in the conduct of his defence. In such a situation it may be possible to infer infringement of the right to life and liberty guaranteed by Article 21 of the Constitution. Denial of a speedy trial may lead to an inference of prejudice and denial of justice. Hussainara Khatoon vs State of Bihar, [ 1979] 3 SCR 169, referred to. In deciding whether there has been denial of the right to speedy trial, the court is entitled to take into consideration whether the defendant himself was responsible for a part of the delay. whether he was prejudiced in the preparation of his defence by reason of the delay and whether the delay was unintentionally caused by reason of overcrowding of the Court 's docket or under staffing of prosecutors and so forth. Though in India the right of speedy trial is not an expressly guaranteed constitutional right it is implicit in the right to fair trial which is a part of the right to life and liberty guaranteed by Article of the Constitution. While a speedy trial is an implied ingredient of a fair trial the converse is not necessarily true. A delayed trial is not necessarily an unfair trial. The question whether conviction should be quashed on grounds of delayed trial depends upon the facts and circumstances of a case. If it is shown to the 300 satisfaction of the Court that the accused had been prejudiced in the conduct of his defence and thus had been denied adequate opportunity to defend himself the conviction would have to be set aside. There would, on the contrary, be no justification to quash a conviction on the ground of delayed trial unless it is shown that there are circumstances entitling the court to raise a presumption that the accused had been prejudiced. [304 B C] In the instant case in a surprise raid on the house of the respondent, Central Excise officers discovered a large quantity of gold bars with foreign markings concealed in the false bottom of a steel almirah, the keys of which were found with him. On a charge for offences under section 120B I.P.C. read with section 135 Customs Act and rule 126P(2)(ii) and (iv) of the Defence of India Rules 1962, the Additional Chief Presidency Magistrate convicted the respondent and variously sentenced him under different counts with imprisonment and fine. On appeal the High Court acquitted him. ^ HELD: Although it is settled law that circumstantial evidence must be of a conclusive nature and circumstances must not be capable of a duality of explanations, the Court is not bound to accept any exaggerated, capricious or ridiculous explanation which may suggest itself to a highly imaginative mind. The three circumstances established in the instant case were: (1) presence of the respondent in the flat at the time of the raid by Central Excise officers and recovery of gold slabs with foreign markings from the steel almirah: (2) recovery from his person of a bunch of eight keys which fitted the almirah and (3) recovery of a bunch of three keys from his person, one of which fitted the lock hanging from the inside handle of the door of the flat. The explanation fancied by the High Court that the steel almirah in the flat was not shown to have been specially made and that the keys of a similar almirah could well fit it and that perhaps was how the keys recovered from the respondent did fit the almirah in the flat, was a wholly unreasonable explanation in the circumstances of the case. This was not the plea of the respondent, nor did he make any such suggestion to the prosecution witnesses. [306 FG & CD] Notwithstanding the fact that the case is based on circumstantial evidence and this is an appeal against acquittal and that this Court is exercising extraordinary but exceptional jurisdiction under Article 136 of the Constitution, interference with the judgment of the High Court in the instant case is imperative hesitation to do which would lead to miscarriage of justice. [307 C] The respondent being himself responsible for a fair part of the delay, could not complain that there was violation of his fundamental right to life and liberty guaranteed under Article 21; nor has he shown how he was prejudiced in the conduct of his defence by reason of the delay. [307 E] Nor again would the fact that there was a long lapse of time since the commission of the offence or that the respondent was preventively detained for over two years be of any avail to him because the offence was one which jeopardised the country s economy. It is impossible to take a casual or light view of 301 such an offence. It is only where the offence is of a trivial nature as for example, a simple assault or theft of a trilling amount that the Court might hesitate to send the accused back to jail after a long lapse of time; but the nature of the offence and the stakes involved in this case do not merit any sympathy being shown to the respondent. [307 G H]

Petition No. 3128 of 1988. IN Writ Petition (Criminal) No. 1451. of 1985. (Under Article 32 of the Constitution of India.) Petitioner in person. P.A. Chaudhary, S.B. Bhasme, V.C. Mahajan, Tapash Ray, Swaraj Kausal, Probir Choudhary, K. Ram Kumar, K. Ram Mohan, K.R. Nambiar, A.S. Bhasme, C.V.S. Rao, Girish Chandra, Kailash Vasdev, J.R. Dass, D.K. Sinha, A.V. Rangam, T.V. Ratna, A. Subba Rao, Ranjan Mukherji, D.N. Mukherjee, R.S. Sodhi, T. Sharma, M. Veerappa, A.S. Nambiar, P.K. Manohar, Mrs. H. Wahi, Dalveer Bhandari, Mahabir Singh, P.R. Ramasesh, A.K. Sanghi Ms. Kamini Jaiswal, D.K. Sinha, J.R. Das, Ms. A. Subhashini, R.B. Misra, S.K. Bhattarcharya, Mrs. Urmila Kapoor, and Ms. section Janani for the Respondents . The Order of the Court was delivered by VENKATACHALIAH,J. This Miscellaneous Petition for leave to withdraw the main public interest litigation is filed under circumstances which can only be characterised as somewhat unfortunate. The main petition is brought to highlight the gross violations of the constitutional and statutory rights of a large number of children in the country who are suffering custodial restraints in various parts of the country and for the protection and enforcement of their rights. It might clear some possible misconceptions if it is clarified what this order is not about. The applicant is not, by the force of this order, denied the right or the PG NO 649 opportunity of instituting any public interest litigation nor is the right of a public minded citizen to bring an action for the enforcement of fundamental rights of a disabled segment of the citizenry disputed. The question agitated relates, on the contrary, to the aspect whether a public minded person who brings such an action is entitled, as of right, to withdraw the proceedings from the court. Applicant asserts that this Court cannot refuse leave for withdrawal. The proceedings, it is contended, are the result of a ' 'voluntary action of a citizen" and that, as a corollary, the proceedings cannot be continued except with applicant 's participation. The applicant relies on what she calls "a citizen 's right to be a petitioner in person in a public interest litigation". As stemming from this premise, applicant contends that not only that leave for withdrawal cannot be refused but also that the main petition cannot be continued by any other citizen or organisation. No elaborate arguments are, indeed, necessary to decide a question such as this; but out of deference to the applicant 's submission that the propositions she propounds in this behalf be considered by the court, we proceed to do so. Applicant, on certain perceptions and assessment of her own, both as to the effectiveness and utility of the continuance of the proceedings as well as the manner of their conduct in and by this court, which according to her, has not been conducive either to their efficacy or to her participation there in with "dignity ' ' seeks leave to withdraw the main petition itself. Figuratively, this is a `walk out ' of the court. The prayer, if granted, would frustrate the important issues the main petition has served to high light in the matter of the status and enforcement of the laws enacted for the protection and welfare of the children in the country. The proceedings espouse the cause of a large number of suffering children who, on account of the traditional inertia against reform, the bureaucratic and official apathy, insensitivity to and lack of human consideration for the lot of the suffering children and the lack of proper perceptions of the values and idealogy of the legislation concerning children even on the part of law enforcing agencies, are being denied the protection of their constitutional and statutory rights. It is not necessary to go into all the averments in the present application. The board reasons on which the applicant has persuaded herself to make this somewhat extraordinary request are recognisable in three areas: PG NO 650 The first is that this court has become "dysfunctional" in relation to, and in the context of, the gravity of the violations of the rights of children and the urgency of the requisite remedial steps and that though the proceedings were listed for final disposal in the month of November, 1986, however, owing to unjustified adjournments obtained by the respondents and owing further, to the functional deficiencies of the procedure of this court the proceedings have not yet been finally disposed of. It is a~so averred that the court has not been able to exact prompt complainance with its own orders and directions, issued from time to time, from the respondents. The second area is that the applicant is disabled from conductive proceedings with "dignity" as certain happenings in court had the effect of casting and tended to cast a slur on her integrity and dignity. The third this pertains to the claim that no body else can go on with this litigation is that the proceedings were initiated as a result of the voluntary action on the part of a citizen and that that citizen is entitled to withdraw them. The applicant claims that she as representing "other conscientious citizens, social workers and activists is duty bound to sustain the citizen?s right to be petitioners in person" and that, therefore, the petition cannot be continued against the wishes and without the participation of the applicant. The applicant 's stand on these points are put across, according to the learned counsel for respondents, in over assertive tone of great severity but of questionable propriety. But we should not allow to be influenced by this. The applicants references to the manner of conduct of the proceedings are certainly unflattering to the Court. But the concern of this Court for and its achievements in the field of public interest litigation are open to the public assessment; and the assessments even of those immersed in an individual experience and where objectivity might, episodically, be clouded should also serve some purpose of introspection. Though the language employed in relation to the Court is not conspicuous for its moderation, we may yet examine objectively the justifiability, if any, for such strong expressions of remonstrance. In regard to the first area, applicant 's grievance had better be set out from her own application : "The petitioner submits that with such an over whelming confirmation and reconfirmation of the fact of imprisonment PG NO 651 of children by the State, the GOI hundreds of DJs as also the reaffirmation of Hussainara Khatoon in one of the orders in this petition by this Court, were sound grounds for delivering final judgment in this case in November, 1986." "The then Chief justice of India who was presiding Judge of the Bench . . fixed9.l2.l986 as the date for delivering final judgment, and 2.12.1986 for confirming that date." "The petitioner states that she obeyed the Court 's order and arranged the Court 's hundreds of files. But the CJ absented himself from the Court for 3 days to attend an International Judges ' meet he had initiated and convened." "The petitioner states that on 13.12.1986, an hour and half after opening of the Court, the then Cj informed the petitioner that he would not be in Court that afternoon hence there can be no final hearing as scheduled. The petitioner understands that the CJ had to inaugurate some chambers and the date had been fixed in advance. " The grievance is that the final disposal of the main petition was not expeditiously done. In a public interest litigation, unlike traditional dispute resolution mechanism. there is no determination or adjudication of individual rights. While in the ordinary conventional adjudications the party structure is merely bi polar and the controversy pertains to the determination of the legal consequences of past events and the remedy is essentially linked to and limited by the logic of the array of the parties, in a public interest action the proceedings cut across and transcend these traditional forms and inhibitions. The compulsions for the judicial innovation of the technique of a public interest action is the constitutional promise of a social and economic transformation to usher in an egalitarian social order and a welfare State. Effective solutions to the problems peculiar to this transformation are not available in the traditional judicial system. The proceedings in a public interest litigation are, therefore, intended to vindicate and effectuate the public interest by prevention of violation of the rights, constitutional or statutory, of sizeable segments of the society, which owing to poverty, ignorance, social and economic disadvantages cannot themselves assert and quite often not even aware of those rights. The technique of public interest litigation serves to provide an effective remedy to enforce these group rights and PG NO 652 interests. In order that these public causes are brought before the Courts, the procedural techniques judicially innovated specially for the of public interest action recognises the concomitant need to lower the Locus standi thresholds so as to enable public minded citizens or social action groups to act as conduits between these classes of persons of inherence and the forum for the assertion and enforcement of their rights. The dispute is not comparable to one between private parties with the result there is no recognition of the status of a Dominus Litis for any individual or group of individuals to determine the course: or destination of the proceedings, except to the extent recognised and permitted by the Court. The "rights" of ' those who bring the action on behalf of the others must necessarily by subordinate to the interests,, of those for whose benefit the action is brought. The grievance in a public interest action, generally speaking, is about the content and conduct of governmental action in relation to the constitutional or statutory rights of segments of society and in certain circumstances the conduct of governmental policies. Necessarily, both the party structure and the matters in controversy are sprawling and amorphous, to be defined and adjusted or re adjusted as the case may be ad hoc, according as the exigencies of the emerging situations. The proceedings do not partake of pre determined private law litigation models but are exogeneously determined by variations of the theme. Again, the relief to be granted looks to the future and is generally, corrective rather than compensatory which, sometimes, it also is. The pattern of relief need not necessarily be derived logically from the rights asserted or found. More importantly, the court is not merely a passive, disinterested umpire or onlooker, but has a more dynamic and positive role with the responsibility for the organisation of the proceedings, moulding of the relief and this is important also supervising the implementation thereof. The Court is entitled to, and often does seek the assistance of expert panels, Commissioners, Advisory committees, Amici etc. This wide range of the responsibilities necessarily implies correspondingly higher measure of control over the parties, the subject matter and the procedure. Indeed as the relief is positive and implies affirmative action the decision are not "one shot" determinations but have on going implications. Remedy is both imposed, negotiated or quasi negotiated. Therefore, what corresponds to the stage of final disposal in an ordinary litigation is only a stage in the proceedings. There is no formal, declared termination of the proceedings. The lowering of locus standi threshold does PG NO 653 not involve the recognition or creation of any vested rights on the part of those who initiate the proceedings, analogus to Dominus Litis. The theme, implicit in the applicants hyper articulated grievance, is that this Court has not shown adequate concern for justice in this case. Is this justified? The record of the proceedings show that even by November, 1986, directions of far reaching effect had been issued and very significant exercises had been initiated. The grievance, in the ultimate analysis, is really in the area of non compliance by the several States and its authorities with the orders and directions issued by the Court from time to time in the proceedings. In order to appreciate the position, perhaps, it would be relevant to refer to the prayers made in the main petition and the orders passed from time to time even prior to a month of November, 1986. The prayer in the main petition was that this Court should pass order directing the Respondent States: (a) to release all children detained in the jails in the respondent States; (b) to furnish complete information respecting all children detained in the States and the circumstances and the legal facts of such detention and the number of available juvenile courts and children homes ; (c) to appoint district judges of the district to visit jails, sub jails and lock ups to identify and release children in such illegal detention ; (d) to requisition immediately necessary buildings and provide infrastructure and make immediate interim arrangements for "places of housing" of children facing trial before juvenile courts. The petition also seeks directions to the respective states, Legal Aid Boards, District legal Aid Committees through the appointment of 'duty counsel ' to ensure protection of the rights of the children etc. In regard to most of the areas covered by these prayers, orders were made from time to time by this Court. The Court 's orders dated 15.4. 1986, 12.7.1986, 13.8.1986, 21.11.1986, show that certain important and far reaching actions were initiated and appropriate directions were issued to the States and authorities concerned. The following are some of the excerpts of the orders made by this Court: "This Writ Petition discloses a disturbing state of affairs with regard to children below the age of 15 years in jail. It is an elementary requirement of any civilised society and it has been so provided in various statutes concerning children that children should not be confined in PG NO 654 jail because incarceration in jail has a dehumanising effect and it is harmful to the growth and development of children " . We would, therefore, direct the District Judges in the country to nominate the Chief Judicial Magistrate or any other judicial magistrate to visit the District Jail and sub Jail in his District for the purpose of ascertaining how many children below the age of 16 years are confined in jail, what are the offences in respect of which they are charged, how many of them have been in detention Whether in the same jail or previously in any other jail before being brought to the jail in question, whether they have been produced before the children 's court and if so, when and how many times and whether any legal assistance is provided to them. Each district 3judge will give utmost priority to this direction . " " . We would also direct the State Legal Aid & Advise Board in each State or any other Legal Aid Organisation existing in the State concerned, to send two lawyers to each jail within the State once in a week for the purpose of providing legal assistance to children below the age of 16 years who are confined in jails. If there are any other persons confined in jails who are there merely because they are suffering from some handicap (physical or otherwise) they should be released immediately and placed in appropriate home or place where they can receive suitable medical assistance or other educational training. ' ' [Vide order dated 15.4. 1986] "Meanwhile, there are a few matters which need our urgent directions. It seems that there are a number of children who are mentally or physically handicapped and there are also children who are abandoned or destitute and who have no one of take care of them. They are lodged in various jails in different states . ." " . The State Governments must take care of this mentally or physically handicapped children and remove them PG NO 655 to a Home where they can be properly looked after and so far as the mentally handicapped children are concerned, they can be given proper medical treatment and physically handicapped children may be given not only medical treatment but also vocational training to enable them to earn their livelihood. Those children who are abandoned or lost and are presently kept in jails must also be removed by the State Governments to appropriate places where they can be looked after and rehabilitated . " " . We would also ask the Director General, All India Radio and the Director General, Dordarshan to give publicity requesting non governmental social service organisations to offer their services for the purpose of accepting these children with a view to taking care of them and providing for their rehabilitation in accordance with a hand out to be sent by the Registrar of this Court." "There are two girls in the Julpaiguri District Jail who have been kept in that jail in "safe custody" One of them is Parbati Dass, aged 8, who has been detained in jail since 12. 11. 84 and the other is Sabita Sah, aged 10, who has been detained in jail since 20.8.85 . " . ". We would accordingly direct that Parbati Dass and Sabita Shah should be transferred immediately to the Home in Raiketpara as recommended by the District Judge, jalpaiguri. " [Vide order dated 12.7. 1986] "This Court directed the District Judges in the country to nominate the Chief Judicial Magistrate or any other Judicial Magistrate to visit the District Jail and Sub Jail in their districts for the purpose of ascertaining how many children below the age of 16 years are confined in jail, what are the offences in respect of which they are charged, how many of them have been in detention whether in the same jail or previously in any other jail before being brought to the jail in question, whether they have been produced before the children 's court and, if so, when and how many times and whether any legal assistance is provided to them. The Court also directed that each District Judge PG NO 656 will give utmost priority to this direction and the Superintendent of each jail in the district will provide full assistance to the District judge or the Chief Judicial Magistrate or the judicial magistrate, in this behalf who will be entitled to inspect the registers of the jail visited by him as also any other document/documents which he may want to inspect and will also interview the children if he finds it necessary to do so for the purpose of gathering the correct information in case of any doubt. The District Judge, Chief Judicial Magistrate or the Judicial Magistrate, as the case may be, will submit report to this court within 10 weeks from today . " . . . . . . "Six further weeks have passed beyond the time indicated in the order dated April 15, 1986, and even till this day analysis shows that several District Judges have not complied with the direction. This Court had intended that the reports of the District Judges would be sent to the Registry of this Court though the Registrars of the respective High Courts. This obviously meant that the Registrars of the High Courts were to ensure compliance. We are both concerned and surprised that a direction given by the apex Court has not been properly carried out by the District Judges who are an effective instrumentality in the hierarchy of the judicial system. Failure to submit the reports within the time set by the Court has required adjournment of the hearing of the writ petition on more than one occasion. We are equally surprised that the High Courts have remained aloof and indifferent and have never endeavored to ensure submission of the reports by the District Judges within the time indicated in the order of this Court. We direct that every defaulting District Judge who has not yet submitted his report shall unfailingly comply with the direction and furnish the report by August 31, 1986, through his High Court and the Registrar of every High Court shall ensure that compliance with the present direction is made. " PG NO 657 " . We are of the view that the petitioner should have access to information and should be permitted to visit jails, children 's homes, remand homes, observation homes, borstal schools and all institutions connected with housing of delinquent or destitute children. We would like to point out that this is not an adversary litigation and the petitioner need not be looked upon as an adversary. She has in fact volunteered to do what the State should have done. We expect that each State would extend to her every assistance she needs during visit as aforesaid. We direct that the Union Government respondent No. 1 shall deposit a sum of rupees ten thousand for the time being within two weeks in the Registry of this Court which the petitioner can withdraw to meet her expenses. We would like to make it clear that the information which the petitioner collects by visiting the children 's institutions in different States as indicated above is intended to be placed before this Court and utilised in this case and not intended for publication otherwise. " [Vide order dated 5th August, 1986] "If a child is a national asset, it is the duty of the State to look after the child with a view to ensuring full development of its personality. That is why all statutes dealing with children provide that a child shall not be kept in jail. Even apart from this statutory prescription, it is elementary that a jail is hardly a place where a child should be kept. There can be no doubt that incarceration in jail would have the effect of drawing the development of the child exposing him to beneful influences, coarsening his conscience and alienating him from the society. It is a matter of regret that despite statutory provisions and frequent exhortations by social scientists, there are still a large number of children in different jails in the country as is now evident from the reports of the survey made by the District Judges pursuant to our order dated 15th April, 1986l. Even where children are accused of offences, they must not be kept in Jails. It is no answer or the part of the State to say that it has lot got enough number of remand homes or observation homes or other places where children can be kept and that is why they are lodged in jails. It is also no answer on the part of the State to urge that the PG NO 658 ward in the jail where the children are kept is separate from the ward in which the other prisoners are detained. It is the atmosphere of the jail which has a highly injurious effect on the mind of the child, estranging him from the society and breeding in him aversion bordering on hatred against a system which keeps him in jail. We would therefore like once again to impress upon the State Governments that they must set up necessary remand homes and observation homes where children accused of an offence can be lodged pending investigation and trial. On no account should the children be kept in jail and if a State Government has not got sufficient accommodation in its remand homes or observation homes, the children should be released on bail instead of being subjected to incarceration in jail. " . . . . . . . " . It is absolutely essential, and this is something which we wish to impress upon the State Governments with all the earnestness at our command, that they must set up Juvenile Courts, one in each districts and there must be a special cadre of Magistrates who must be suitably trained for dealing with cases against children. They may also do other criminal work, if the work of the Juvenile Court is not sufficient to engage them fully, but they must have proper and adequate training for dealing with cases against juveniles, because these cases require a different type of procedure and qualitatively a different kind of approach. " "We would also direct that where a complaint is filed or first information report is lodged against a child below the age of 16 years for an offence punishable with imprisonment of not more than 7 years, the investigation shall be completed within a period of three months from the date of filing of the complaint or lodging of the First Information Report and if the investigation is not completed within this time, the case against the child must be treated as closed . If within three months, the chargesheet is filed against the child in case of an offence punishable with imprisonment of not more than 7 years, the case must be tried and disposed of within a further period of 6 months at the PG NO 659 outside and this period should be inclusive of the time taken up in committal proceedings, if any . ." ". We would direct every State Government to give effect to this principle or norm laid down by us in so far as any future cases are concerned, but so far as concerns pending cases relating to offences punishable with imprisonment of not more than 7 years, we would direct every State Government to complete the investigation within a period of 3 months from today if the investigation has not already ,resulted in filing of chargesheet and if a charge sheet has been filed, the trial shall be completed within a period of 6 months from today and if it is not, the prosecution shall be quashed." [Vide order dated 13th August, 1986] "In regard to Sub Jails, no reports have been received in respect of such jails of 14 districts of Maharashtra. Though this matter was listed on 14. 11.1986 for final disposal, an adjournment became imperative in view of the failure of compliance with the directions in the manner indicated above and the matter is adjourned till 2. 12. 1986. We direct the Registrars of the High Courts of the States in which the districts indicated above are located to ensure compliance with the previous directions by 30.11. We hope and trust that special care will be taken to ensure compliance and this Court will not be forced to take any stringent action. " [Vide order dated 21st Nov., 1986] 9. It is true that with the active and willing co operation of the respective States, the progress made in the proceedings would have been far more substantial. It is also true that several of the States and the authorities have not, prima facie, realised the seriousness and the magnitude of the problem. Some states pleaded financial constraints in implementing the directions. The detention and mal treatment of children in violation of the law is far too serious a matter to be looked at with any complacence, and unfortunately, a stage has now been reached where this Court cannot be content with the PG NO 660 expectation of compliance with its orders in these proceedings but would have to go further and exact it. The States have to be more honest about their obligations to the delinquent children. Children misbehave because, perhaps, the society and the elders have, may be behaved worse. Society is becoming increasingly in hospitable to its weak. By ignoring the non custodial alternatives prescribed by law and exposing the delinquent child to the trauma of custodial cruelty, the state and the society run the serious risk of losing the child to the criminal clan. This is no more a matter of concession to the child; but its constitutional and statutory right. Even so, unduly harsh and coercive measures against the states and the authorities might themselves become counter productive. In the matter of affirmative action the willing cooperation of the authorities must, as far as possible, be explored. If the proceedings are allowed to be diverted at every stage into punitive proceedings for non compliance, the main concern and purpose of the proceedings might tend to be over shadowed by its incidental ramifications. The coercive action would, of course, have to be initiated if persuasion fails. We are dealing with a large number of states and authorities. There are 32 respondents, 429 districts in which reports of the District Judges have been called for and nearly 400 of them have submitted their reports. There are innumerable jails, sub jails, remand homes, custodial institutions etc. This court issued notice to the Home Secretaries of the States to file their reply by 15 7 1988 Finally. The applicant has complained that "the non participation of counset has assumed focal importance to the case" and has also aired a grievance about the "Court 's overwhelming use of discretionary powers to accommodate every one except the petitioner". The point to note is that learned counsel for the respondent States and the applicant arc not in the same position. The former were accountable to the Court to report compliance by their respective client States with the directions issued by the Court. Learned counsel appeared to have sought extensions of time. Their request might or might not have been made with perfect justifications. Grant of their request does not to amount discriminatory treatment meted out to the applicant who was not in any such position representing any party who was required to report compliance with the Court 's directions. The two are not comparable positions. Indeed. in January 1988, the case appears to have been adjourned for about six weeks on grounds of ill health of the applicant herself. While we understand the concern of the applicant in regard to the delays occasioned, we are unable to appreciate PG NO 661 the unconcealed, cynical scorn the applicant has permitted to exhibit towards the process of this Court. Instead of sustaining and strengthening the process of this Court in what is clearly a sensitive and difficult task of some importance and magnitude, the applicant has chosen to give herself the role of a self appointed invigilator and has made a generous use of that position by her barbed quips and trenchant comments against the court. By this, we think, she has done no service either to herself or to the cause she sought to serve. Scornful impatience can also wreck a mission. The attitudes of the applicant is perhaps conditioned and influenced by her own perceptions of what she considers to be the real and larger issues apart from the immediate problems of the case involved in the proceedings. Applicant says: ". . Therefore, it is important to establish principles of accountability of the GOI, the States and the Judiciary." " In the last analysis both the dignity of the Court, the honour of the institution of judiciary and the effectiveness of judicial process are at stake. " We are afraid, the references to judicial accountability, having regard to the specific context in which they are made in the context,really mean no more than that the proceedings are to be conducted in conformity with the standards of promptitude and dispatch of which the applicant chooses to constitute herself the judge, to sit in judgment over the alleged short comings in that behalf. The concept of public accountability of the judicial system is, indeed, a matter of vital public concern for debate and evaluation at a different plane. All social and political institutions are under massive challenges are pressures of reassessment of their relevance and utility. Judicial institutions are no exception. The justification for all public institutions are related to and limited by their social relevance, professional competence and ability to promote the common weal. There is no denying that a debate is necessary and, perhaps, is overdue. But for that reason courts of law, in their actual day to day judicial work, cannot allow the incantations and professions of these principles to enable parties to judicial adjudications to constitute themselves the overseers of the judicial performance and accountabil ity in the individual case in which they are immediately concerned and permit themselves comments and criticism of the PG NO 662 judicial work in the particular case. The application and its annexures are replete with statements intended to demostrate the inefficacy of the proceedings before this Court, disclosing a cynical distrust of its utility and effec tiveness. Indeed, while comments and criticisms of judicial functioning, on matters of principle, are healthy aids for introspection and improvement, the criticism of the functioning of the Court in the course of and in relation to a particular proceeding by the parties to it borders on a conduct intended or tending to impair the dignity,authority and the functional disposition of the court. The attitude "we call respect for law" says a learned author"is a complex one". It "may consist for example, in the belief that the law is democratic and fair and that it contributes to social progress or that it protects individual rights. They may include pride that the law of one 's country is by and Iarge enlightened and progressive, satisfac tion that one lives under the protection of an adequate legal system,respect or even admiration for institutions or persons involved in creating or administering the law and for symbols of the law . . 251]. It is,therefore, thought important to maintain respect and dignity of the Courts and its officers whose task is to uphold and enforce the law because without such respect public faith in the administration of justice would be undermined and the law itself would fall into dis respect. What excites general dissatisfaction with the judicial determi nations of the Court also indisposes the minds of litigants to obey them shaking men 's allegiance to law. "Laws are not made by Legislatures alone,but by the law abiding as well; the Statute ceases to embody a law (except in a formal sense) in the degree that it is widely dis regarded. This is not to deny the broader right to criticise the systemic inadequacies in the larger public interest. It is the privileged right of the Indian citizen to believe what he considers to be true and to speak out his mind, though not, perhaps, always with the best of tastes; and speak perhaps, with greater courage than care for exactitude. Judiciary is not exempt from such criticism. Judicial institution are,and should be made, of stronger stuff intended to endure and thrive even in such hardy climate. But we find no justification to the resort to this freedom and privilege to criticise the proceedings during their pendency by persons who are parties and participants therein. The first ground, therefore, does not justify the withdrawal of this public interest litigation. If we PG NO 663 acknowledge any such status of a Dominus Litis to a person who brings a public interest litigation, we will render the proceedings in public interest litigations vulnerable to and susceptible of a new dimension which might, in conceivable cases,be used by person for personal ends resulting in prejudice to the public weal. 13 The second ground for withdrawal is no better. The ground is that the applicant, in view of what transpired in the two immediately preceding dates of hearing of the case, is unable to prosecute the proceedings with dignity" and that, therefore, the applicant is entitled to withdraw the proceedings. There is, and can be, no dis agreement with the principles that even the humblest citizen of the land, irrespective of his station in life, is entitled to present his case with dignity and is entitled to be heard with courtesy and sympathy. Courts are meant for and are sustained by, the people and no litigant can be allowed to be looked upon as a supplicant or an importuner. It is, unfortunate that the applicant claims that there was any shortcom ing in this behalf in her case. We regret that there should at all have been any occasion for this. Let us see whether there is any real justifi cation for this. At one of the hearings of the case, the Court had occasion to point out to the applicant who was not present in Court at the com mencement of the hearing and who sought to interrupt the submissions of Shri Bhasme, learned Senior Counsel, who was on his legs, that she having been absent at the commencement of the proceedings could not interrupt the proceedings. It is the practice of courts that when parties in person or even learned counsel who were not initially present but seek to participate in the proceedings, a formal submission is made to the court in that behalf. This is nothing more than a matter of courtesy and decorum. As the applicant straight away sought to interrupt the learned counsel who was on his legs, she was told of the impropriety. Her re action to this as set out in the application is this: "The petitioner states that she arrived in Court just 40 seconds after her case was called. " The petitioner states that Mr. Bhasme Counsel for Maharashtra, had just started his argument that as the counsel for Maharashtra, he found himself with papers of Himachal Pradesh. He said that in the absence of correct documents not being available to him, and the Home Secretary, they be allowed an adjournment of 12 weeks. PG NO 664 "The petitioner states and submits that she had a right to reply to Mr. Bhasme 's outlandish argument. The petitioner states and submits that she come to the Court as a responsible citizen at her personal cost. She is not a paid professional. " The question was not of the right of the applicant to make such submissions as she considers appropriate but one of the manner of its exercise. But the applicant does not seem to appreciate this. Indeed she did exercise her right and made a strong criticism of Sri Bhasme 's submissions. The court also had occasion to point out to the applicant the impropriety of addressing communications to Judges by postal letters in regard to the pending cases or on matters bearing on them. The re action of the applicant which has been set out in strong assertions is, again, that she is entitled to address such communications and in para 7(b) of her written submissions relies on the position, inter alia, that letters to the Courts have been the basis of many public interest litiga tions; that applicant was not a private litigant and got no benefit from the letters she wrote, that Judges were themselves inviting the citizens to write to the Court etc. What this argument over looks is that the initiation of a public interest litigation or proceedings for issue of a writ of Habeas Corpus on the basis of letters reflects and symbolises the Court 's anxiety to relax the rigour of formal pleadings. However, In proceedings which are already initiated and are pending it would be inappropriate for a party to the proceedings to address latters directly to the Judges. What is sought to be brought to, the notice of the Court should, as far as possible be filed in the Registry for being placed before the appropriate bench or submitted in the open court. There might be extra ordinary circumstances when a party is compelled to resort to the expedience of a letter or a telegram Even in such a case, it would be appropriate to, address them to the Registry to be placed before the appropriate bench. The difficulties arising out of such direct communications are too obvious to require any elaborate dis cussion. The opposite parties would not have had the benefit of the information contained in the communication. Sometimes, even the other judges on the Bench would not know. The authenticity and even the delivery of the communication may be disputed. It is only proper that Judges who have to decide the case should not be drawn into such controversies. That apart the office would not be able PG NO 665 to check the papers and process them for appropriate judicial notice. Judicial tradition considers, for good reason, such practice undesirable. Applicant,however, has, and is entitled to, her own views in the matter. We regret our inability to accept them. Another instance referred to by the applicant as impairing her 'dignity ' arose in the context of the court pointing out to the applicant the impropriety of her resorting to the press to air her grievances against the proceedings in court and of making what the Court con sidered, a factually inaccurate statement. Indeed on the subsequent date of hearing, the Court had pointed out to the applicant of her misunderstanding of what she stated to the press and that the "warning" which the applicant thought was administered to her and made a public complaint about, was not directed towards her but was attributed by her erroneously to herself. This clarification should have been sufficient. But the clarification of the Court, apparently, did not re assure her. Referring to it she says : "On 27.O8.88, the Court explained that the warning " we will put you on the dock if you utter another word, was addressed to the counsel for Maharashtra while I was warned that I was in contempt of Court for writing a letter to the Court. Well, as I perceived it them both the threats were held out to me because I was on my legs at that time. Frankly, we are unable to unravel the purpose of this pre disposition to and determination on her part to misunderstand. We shall leave it at that. Applicant has her own notions of the relationship between the Court and the parties. She asserts: " . . While the litigants have entitlements the Court has decision making powers. However, the Court 's special powers do not make it more equal, nor do they make the Court the fountain head of justice. The citizen petitioner coming to court on behalf of fellow citizens whose rights art: violated by the State is certainly an equal participant and not a subsidiary of the institution. " " . . Institutions are made by the conduct and the quality of work and output of the persons who man it. My PG NO 666 application No. 3128/88 records the conduct of person who man it. This record is not a slur on the institution of the judiciary but a citique, of a dysfunctional institution. " It is true that the parties who seek justice at the hands of the Court are neither its subordinates or subsidiaries. But the notion of an equal participation, in its practical applications, presents difficulties and can not be stretched to the point where the court could share the responsi bility, and the powers that go with it Of regulating the proceedings of the court with any of the parties before it. In the existing system, the parties who seek recourse to courts have to submit themselves to the jurisdiction and discipline of the Court. Their conduct, in relation to the proceedings, is liable to be regulated by the Court. This is not a matter of expression or assertion of any superiority but is merely a necessity and a functional imperative. The second ground on which withdrawal is sought is, therefore, wholly insubstantial and proceeds on what appear to be certain subjec tive susceptibilities of the applicant which, to the extent they are irreconcilable with the discipline of the Court cannot be countenanced. The third ground is that the proceedings are brought as a "voluntary action" and that applicant is entitled to sustain her right to be the petitioner in person" in a public interest litigation and that the proceedings cannot be proceeded with after de linking her from the proceedings. This again proceeds on certain fallacies as to the rights of a person who brings a public interest litigation. Any reconnection of any such vested right in the persons who initiate such proceedings is to introduce a new and potentially harmful element in the judicial administration of this form of public law remedy. That apart,what is implicit in the assertion of the applicant is the appropriation to herself of the right and wisdom to determine the course the proceedings are to or should take and its pattern. This cannot be recognised. In the pre sent proceedings the Court has already gone through and has initiated an elaborate exercise as indicated in the orders excerpted earlier. The petition cannot be permitted to be abandoned at this stage. Only a private litigant can abandon his claims. Though the main prayer is one for the withdrawal of the petition, in the written submissions, however, the applicant seems to strike a different note and seeks to participate in the proceeding subject to certain conditions. No litigant PG NO 667 can be permitted to stipulate conditions with the Court for the continuance of his or her participation. There is, thus, no substance in any of the grounds. Now at the end of the day, the order that commends itself as appropriate having regard to all in the circumstances of the case, is to refuse permission for the withdrawal of the petition, and to direct that the applicant be deleted from that: array of parties in this proceeding. The proceedings shall now be proceeded with a direction to the Supreme Court Legal Aid Committee to prosecute the petition together with the aid and assistance of such persons or agencies as the Court may permit or direct from time to time. The other prayer in the application is for modification of the order dated 5.8.1986 and 13.8.1486 forbidding the applicant from using the information collected by her during her visits to jails and other custodial institutions pursuant to the Court 's order in 1 ')86. This permission cannot be granted during the pendency of the proceedings as the information was gathered for purposes of the case and pursuant to the directions of this Court. In the result, the Criminal Miscellaneous Petition is dismissed; but the name of the Supreme Court Legal Aid Committee shall be substituted in place of that of the applicant. There will be no order as to costs. M. L. A. Petition dismissed.

The petitioner had filed a Writ Petition (Criminal) No. 1951 of 1985 in the Supreme Court praying that the respondents States be directed: (a) to release all children detained in the jails in the respondent States ; (b) to furnish 'complete information respecting all children detained in the States and the circumstances and the legal facts of such detention and the number of available juvenile courts and children homes; (c) to appoint district judges of the districts to visit jails, sub jails and lock ups to identify and release children in such illegal detention; (d) to requisition immediately necessary buildings and provide infrastructure and make immediate interim arrangements for `places of housing ' of children sought directions to the respective States, Legal. Aid Boards, District Legal Aid Committees through the appointment of ` duty_counsel ' to ensure protection of the right of the children etc. The said petition was treated as a public interest litigation and in regard to most of the areas covered by the aforesaid prayers, orders were made from time to time by this Court. However, being dissatisfied with the progress of the case, the petitioner preferred a Misc. Petition for leave to withdraw the main public interest litigation on the PG NO 643 PG NO 644 grounds: (1) that the Supreme Court has become "dysfunctional" in relation to, and in the context of the gravity of the violations of the rights of children and the urgency of the requisite remedial steps and that though the proceedings were listed for final disposal in the month of November, 1986 however, owing to unjustified adjournments obtained by the respondents and owing further, to the functional deficiencies of the procedure of this court the proceedings have not yet been finally disposed of; (2) that the Court has not been able to exact prompt compliance with its own orders and directions, issued from time to time, from the respondents; (3) that the applicant is disabled from conducting proceedings with "dignity" as certain happenings in Court had the effect of casting and tended to cast a slur on her integrity and dignity: and (4) that the proceedings were brought as a "voluntary action" and that applicant is entitled to sustain her right to be the "petitioner in person" in a public interest litigation and that the proceedings cannot be proceeded with after delinking her from the proceedings. Dismissing the criminal miscellaneous petition, HELD: (1) The permission to withdraw the main petition is refused and it is directed that the applicant be deleted from the array of parties in this proceeding. The proceedings shall now be proceeded with a direction to the Supreme Court Legal Aid Committee to prosecute the petition together with the aid and assistance of such persons or agencies as the Court may permit or direct from time to time. [667B C] 1(ii) The order dated 5.8.1986 and I3.8.1986 forbidding the applicant from using the information collected by her during her visits to jails and other custodial institutions cannot he modified during the pendency of the proceedings as the information was gathered for purposes of the case and pursuant to the directions of this Court. [667D] 2(i) The "rights" of those who bring the action on behalf of the others must necessarily be subordinate to the "interests" of those for whose benefit the action is brought. [652C] 2(ii) In a public interest litigation, unlike traditional disputeresolution mechanism, there is no determination or adjudication of individual rights. While in the ordinary conventional adjudications the party structure is merely bi polar and the controversy pertains to the determination of the legal consequences of past events and the remedy is essentially linked to and limited by the logic of the array of the parties, in a public interest action the PG NO 645 proceedings cut across and transcend these traditional forms and inhibitions. The compulsions for the judicial innovation of the technique of a public interest action is the constitutional promise of a social and economic transformation to usher in an egalitarian social order and a welfare State; Effective solutions to the problems peculiar to this transformation are not available in the traditional judicial system. The proceedings in a public interest litigation are, therefore, intended to vindicate and effectuate the public interest by prevention ot violation of the rights, constitutional or statutory, of sizeable segments of the society, which owing to poverty, ignorance, social and economic disadvantages cannot themselves assert and quite often not even aware of those rights. The technique of public interest litigation serves to provide an effective remedy to enforce these group rights and interests. In order that these public causes are brought before the courts, the procedural techniques judicially innovated specially for the public interest action recognises the concomitant need to lower the locus standi threshoIds so as to enable public minded citizens or social action groups to act as conduits between these classes of persons of inherence and the forum for the assertion and enforcement of their rights. The dispute is not comparable to one between private parties with the result there is no recognition of the status of a Dominus Litis for any individual or group of individuals to determine the course of destination of the proceedings, except to the extent recognised and permitted by the court. [651E H; 652A C] 2(iii) What corresponds to the stage of final disposal in an ordinary litigation is only a stage in the proceedings. There is no formal, declared termination of the proceedings. The lowering of locus standi threshold does not involve the recognition or creation of any vested rights on the part of those who initiate the proceeding, analogus to Dominus Litis.[652H;653A] 3. Unduly harsh and coercive measures against the states and the authorities might themselves become counter productive. In the matter of affirmative action the willing cooperation of the authorities must, as far as possible, be explored. If the proceedings are allowed to be diverted at every stage into punitive proceedings for non compliance,the main concern and purposes of the proceedings might tend to be over shadowed by its incidental ramifications. The coercive action would, of course, have to be initiated if persuasion fails. [660C D] In the instant case, the Court 's orders dated 15.4.86, 12.7.86. 5.9.96, 13.8.86 and 21.11.86, show that certain PG NO 646 important and far reaching actions were initiated and appropriate directions were issued to the States and authorities concerned. The first ground, therefore, does not justify the withdrawal of this public interest Litigation. If the Court acknowledges any such status of a Dominus Litis to a person who brings a public interest litigation, it will render the proceedings in public interest litigations vulnerable to and susceptible of a new dimension which might, in conceivable cases, be used by persons for personal ends resulting in prejudice to the public weal. [653F G;662H; 663A B] 4(i) The concept of public accountability of the judicial system is, indeed, a matter of vital public concern for debate and evaluation at a different plane. But, for that reason courts of law, in their actual day to day judicial work, cannot allow the incantations and professions of these principles to enable parties to judicial adjudications to constitute themselves the overseers of the judicial performance and accountability in the individual case in which they are immediately concerned and permit themselves comments and criticism of the judicial work in the particular case. [661F,G H;662A] 4(ii) While comments and criticisms of judicial functioning, on matters of principle, are healthy aids for interspersion and improvement, the criticism of the functioning of the Court in the course of and in relation to a particular proceeding by the parties to it borders on a conduct intended or tending to impair the dignity, authority and the functional disposition of the court. It is, therefore thought important to maintain respect and dignity ot the courts and its officers whose task is to uphold and enforce the law because without such respect, public faith in the administration of justice would be undermined and the law itself would fall into disrespect. [662B C] 4(iii) This is not to deny the broader right to criticise the systemic inadequacies in the larger public interest. It is the privileged right of the Indian citizen to believe what he considers to be true and to speak out his mind, though not, perhaps, always with the best of testes; and speak perhaps, 'with greater courage then care for exactitude. Judiciary is not exempt from such criticism. Judicial institutions are. and should be made, of stronger stuff ' intended to endure and thrive even in such hardy climate. [662F G] In the instant case, there is no justification to the resort to this freedom and privilege to criticise the proceedings during their pendency by persons who are parties and participants therein. [662G H] PG NO 647 5(i) Even the humblest citizen of the land, irrespective of his station in life, is entitled to present his case with dignity and is entitled to be heard with courtesy and sympathy, Courts are meant for, and are sustained by, the people and no litigant can be allowed to be looked upon as a supplicant or an importuner. [663C D] 5(ii) The parties who seek justice at the hands of the court are neither its subordinates or subsidiaries. But the notion of an equal participation, in its practical applications, presents difficulties and cannot be stretched to the point where the court could share the responsibility, and the powers that go with it, of regulating the proceedings of the court with any of the parties before it. In the existing system. the parties who seek recourse to courts have to submit themselves to the jurisdiction and discipline of the court. Their conduct, in relation to the proceedings. is liable to be regulated by the court. This is not a matter of expression or assertion of any superiority but is merely a necessity and a functional imperative [666B C] In the instant case, keeping in view the facts and circumstances or the case, the second ground of withdrawal is wholly insubstantial and proceeds on what appear to be certain subjective susceptibilities of the applicant which, to the extent they are irreconcilable with the discipline of the court, cannot be countenanced. [666D] 6(i) The contention, that applicant is entitled to sustain her right to be the "petitioner in person" in a public interest litigation and that the proceedings cannot be proceeded with after de linking her from the proceedings cannot be accepted. Any recognition of any such vested right in the persons who initiate such proceedings is to introduce a new and potentially harmful element in the judicial administration of this form of public law remedy. That apart, what is implicit in the assertion of the applicant is the appropriation to herself of the right and wisdom to determine the course the proceedings are to or should take and its pattern. This cannot be recognised. [666E G] 6(ii) No litigant can be permitted to stipulate conditions with the court for the continuance of his or her participation. [667A] 7. The initiation of a public interest litigation or proceedings for issue of a writ of Habeas Corpus on the basis of letters reflects and symbolises the Court 's anxiety to relax the rigour of formal pleadings. However, in proceedings which are already initiated and are pending it world be inappropriate for a party to the proceedings to address letters directly to the Judges. What is sought to be PG NO 648 brought to the notice of the Court should,as far as possible, be filed in the Registry for being placed before the appropriate bench or submitted in the open court. There might be extra ordinary circumstances when a party is compelled to resort to the expedience of a letter or a telegram. Even in such a case, it would be appropriate to address them to the Registry to be placed before the appropriate bench. The difficulties arising out of such direct communications are too obvious to require any elaborate discussion, [664E G]

Civil Appeal Nos. 295 & 296 (NT) of 1974. From the Judgment and Order dated 19.7.1973 of the Kerala High Court in I.T.R. Nos. 32 and 33 of 1971. section Poti, section Sukumaran and D.N. Mishra, for the Appellant. G.C. Sharma, K.C. Dua and Miss A. Subhashini, for the Respondent. The Judgment of the Court was delivered by SABYASACHI MUKHARJI, J. These two appeals arise by certificate by the High Court in Income Tax Reference Nos. 32 and 33 of 1971. The High Court of Kerala by its judgment dated 19th July, 1973 answered the following two questions in the negative and in favour of the revenue. "(i) Whether, on the facts and in the circumstances of the case, the Tribunal was justified in law in holding that the sums of Rs. 2,90,220 and Rs. 3,63,750 were not assessable as income of the assessee for the assessment years 1960 61 and 1961 62? (ii) Whether, on the facts and in the circumstances of the case, the Tribunal was justified in law and had material for holding that the sums of Rs. 2,90,220 and Rs. 3,63,750 are exempt from taxation under section 4(3)(vii) of the Indian Income tax Act, 1922 for the assessment years 1960 61 and 1961 62 respectively?" The references relates to assessment years 1960 61 and 1961 62. The assessee 's accounting year was the calender year. 940 The assessee publishes a Malyalam daily newspaper by name Kerala Dhwani. Till 1953, he was a lecturer in History and Political Science in the College at Kottayam. He had his education in the United State of America, during 1953 to 1957. During this period of stay in the U.S.A. he had the privilege of associating himself with the India Gospel Mission in the United States. The India Gospel Mission, it was stated, was collecting money for its working abroad through the Indian Christian Crusade. The assessee was also publishing a religious magazine called "Viswa Deepam". The magazine was started in January, 1957. The father of the assessee Shri K.G. Thomas was the Editor of Viswa Deepam. Shri Thomas was also in America and he was also doing missionary work in America for some time. In 1958, Shri Thomas, the lather of the assessee was in India the was going to America off and on. Indian Christian Crusade, U.S.A. is an institution sponsoring religious education in India and it was admitted that the assessee was propagating the ideals of the Indian Christian Crusade on returning to India after finishing his education in the States. Later on the assessee started publishing a paper called "Kerala Dhwani". This paper was started in 1959. While the assessee was in America, he took his Ph.D. degree. For the assessment year 1960 61, the assessee filed a return disclosing a loss of Rs. 1,59,894 under the head 'business '. The assessee, as mentioned hereinbefore, was publishing Malayalam daily newspaper called 'Kerala Dhwani '. While t scrutinising the accounts, the Income tax Officer found in the ledger folio in the name of the assessee amounts totalling Rs. 2,57,138 credited in ' his account. The assessee was asked to explain these credits and he represented that most of the amounts were received by the assessee as donations from U.S.A. through an organisation known as Indian Christian Crusade, U.S.A. The Income tax Officer found that the names and other details of persons who had donated the amounts were not available. He also found that such amounts amounted in all Rs. 2,90,220. The Income tax Officer had stated that in the absence of definite information regarding the individuals who has made the donations, it had to be presumed that the amounts had been given by the Indian Christian Crusade, U.S.A. to the assessee. The assessee 's case before the Income tax Officer was that the amounts received by the assessee were purely personal gifts and testimonials which were given because of the esteem and regard for the personal qualities of the assessee and that the payments were purely voluntary. The Income tax Officer rejected the contention. He held: 941 (i) The payment of donations started simultaneously with the publication of the daily newspaper Kerala Dhwani and the donations were continued during the period the publication continued. (ii) The donations were regular and continued for the next year also. (iii) There was nothing to show that the amounts were given on account of the personal qualities of the assessee. (iv) The donations were being made regularly throughout the year and these were evidently given as aid to the running of the newspaper which was the business carried on by the assessee. (v) The Indian Christian Crusade, U.S.A. which was paying money to the assessee was an enterprise in India established for the furtherence of ideals and objectives similar to theirs. For aforesaid reasons the Income tax Officer held that the so called donations were payments by way of remuneration for the work done by the assessee in connection with the spreading, in India, of the ideals of the Indian Christian Crusade, U.S.A. The Income tax Officer came to the conclusion that the amounts paid to the assessee were connected with the business of the assessee and were liable to be taxed as the business income of the assessee. He, therefore, brought to tax Rs. 2,90,220 which had been received during the assessment year. For the next assessment year, the assessee had received similar amounts totalling to Rs. 3,63,750 through the Indian Christian Crusade, U.S.A. For the reasons given in the order of the previous year, the Income tax Officer treated this amount also as the business income for the assessment year 1961 62 and brought the same to tax. The assessee filed appeals in respect of both the years and the Appellate Assistant Commissioner disposed of the appeals by different orders delivered on the same date. He discussed all the contentions raised by the assessee in his appellate orders. The main contention raised by the assessee before the Appellate Assistant Commissioner was that the various amounts credited in his bank account and in his personal account in the business represented gifts made by personal friends in the U.S.A., that the amounts were collected by the Indian Christian Crusade and forwarded to India to the assessee. The Appellate Assistant Commissioner rejecting these contentions of the assessee found that the assessee was a journalist and it was his avocation or vocation to propagate certain ideas and ideals. He was closely associated with the missionary work carried on by the Indian Christian Crusade in America and he was propagating the ideals of 942 Indian Christian Crusade, America in India because of his close relationship with that origination as mentioned hereinbefore. The assessee during his stay in U.S.A. and after his return was engaged in a movement for the spread of religion and fighting the forces of atheism. According to the assessee, his friends in America and those Who believed in the cause which he sponsored were sending him donations for helping tile movement and the amounts that were handed over to or were collected by the Indian Christian Crusade, U.S.A. were remitted to him. In further appeal the Tribunal held that the amounts did not represent remuneration or payments for services rendered. The tribunal further held that the receipts were clearly causal and non recurring and aid not arise in the course of the exercise of any vocation. Then the aforesaid two questions were referred to the High Court under Section 66 (1) of the Indian Income tax Act, 1922. The High Court held that the receipts of casual and non recurring nature would not be included in the total income of a person. But if there were receipts arising from the exercise of a vocation, these would be included in the total income, even if these were of casual or non recurring nature or voluntary and the receipts resulting from such payments would be outside Section 4(3)(vii) of the Income tax Act, 1922 (hereinafter referred to as the ( 'Act '). Relying on the findings of the Tribunal, the High Court held that the assessee was very actively, fully occupied with the activities connected with achieving the objects of straightening faith in God and fighting against atheism and was occupied with this affair. The payer which he published for this purpose was a daily coming out with views in support of this mission. Teaching and propagating religion could be an occupation. It was not necessary that its object should be to earn a livelihood. Anything in which a person was engaged systematically could be an occupation or vocation. The next question would be whether receipts could be said to arise from such occupation or vocation. There was link between the activity of the assessee and the payments, and that the payments were made by those who held similar views as those of the assessee and who were very much interested in the propagation and the acceptance of those views by the general public. The payments were made for the purpose of helping the assessee to run the paper which was the mouth piece or medium through which the ideas were to be spread. The 943 connection between the activity of the assessee and the donations was thus intimate. lt arose out of the vocation or the occupation carried on by the assessee. Therefore, the receipts arose from the exercise of an occupation by the assessee. The high Court also considered whether such payments were excluded by Section 4(3)(vii) of the Act. Section 4 of the Act made the total income of the previous year of any person assessable to tax and sub section (3) specified certain incomes which should not be included in the total income of the person. Sub section (vii) of Section 4(3) was in the following terms: "(vii) any receipts not being capital gains chargeable according to the provisions of section 12B and not being receipts arising from business or the exercise of a profession, vocation or occupation, which are of a casual and non recurring nature or are not by way of addition to the remuneration of an employee. As the section made it clear, in order to be entitled to exemption, the receipts must be of income character first. In the instant case, there is no doubt that if a sum of money is received for the purpose in pursuance of an avocation or vocation, it arose out of this vocation or profession. If this is so, then this was income under the Act. Such income could only be excluded if it was specifically excluded by any provision of the Act. The High Court held, and in our opinion rightly, that in view of the facts and circumstances of this case as found by the Tribunal, these amounts were not excluded under Section 4(3)(vii) of the Act. The position was thus, these amounts were received by the assessee in the course of his avocation or vocation and were given to him for the purpose of the same. These were therefore incomes which were not also of a casual or non recurring nature nor were these capital gains under Section 12B of the Act. If that was the position, then, in our opinion, the amounts were clearly taxable as held by the Income tax Officer and by the High Court. Several aspects of the question were placed before us on a large canvass namely that the High Court had gone into facts of the first time over ruling the findings of the fact of the Tribunal without there being a question to that effect and also there was no finding that the receipts were of income character. In support of these contentions, several decisions of this Court were referred before us, Inter alia, Parimisetti Seetharamma vs 944 Commissioner of Income Tax, Andhra Pradesh. , Reliance was placed on the observations appearing at pages 536, 537 and 538 of the said report. It was urged that the burden of proof was wrongly placed by the High Court and on the facts, that the two circumstances relied on by the High Court did not establish that certain money was given to the assessee as remuneration for services and as such it could not be held that the person concerned was assessable to tax. It was urged that the High Court wrongly placed the burden of proof upon the assessee. But on the facts and in the circumstance of this case, the conclusion recorded by the High Court in the instant case was borne out on the facts on record. The observations of this Court referred to above cannot be of much assistance to the assessee. The case which is most apposite to the facts of the instant case is a decision of this Court in the case of P. Krishna Menon vs Commissioner of Income Tax, Mysore, Travancore Cochin and Coorg. Bangalore. , There after retirement from Government service, the appellant therein was spending his time in studying and teaching Vedanta philosophy. L, who was one of his disciples, used to come from London at regular intervals to Trivendrum where the appellant resided, and stay there for a few months at a time and attend his discourses, and so received instructions in Vedanta and had the benefits of his teachings. L transferred his entire balance standing to this credit in his on account at Bombay, amounting to more that Rs. 2 lakhs, to the account of the appellant opened in the letter 's name in the same bank at Bombay. Thereafter, from time to time, L put in further sums into the appellant 's account in Bombay. The question was whether the receipts from L. constituted the appellants income taxable under the Travancore Income Tax Act, 1121 (Malayalam Era) which was identical with the Indian Income Tax Act, 1922. It was held that teaching was a vocation, if not a profession, and teaching Vedanta was just as much teaching as any other teaching and therefore a vocation; that in order that an activity might be called a vocation it was not necessary to show that it was an organised activity and that it was indulged with a motive of making profit; it was well established that it was not the motive of a person doing an act which decided whether the act done by him was the carrying on of a business, profession or vocation; and if any business, profession or vocation in fact produced an income, that was taxable income and none the less so because it was carried on without the motive of producing an income; that teaching of Vendetta by the appellant in that case was the 945 carrying on of a vocation by him and that the imparting of the teaching was the causa causans of the making of the gifts by L, and it was impossible to hold that the payments to the appellant had not been made in consideration of the teaching imparted by him, and that, therefore, the payments were income arising from the vocation of the appellants that the payments made by L were income arising from a vocation. These were not casual or non recurring receipts and no question of exemption under Section 4(3)(vii) of the Act arose. It was further observed that in order that a payment might be exempted under Section 4(3)(vii) as a casual and non recurring receipt, it had to be shown that it did not arise from the exercise of a vocation. In the instant case before us, identical is the position. The assessee carried on a vocation of preaching against atheism. In the course of such vocation and for the purpose of the same he received the amounts in question as donation for the furtherance of the objects of his vocation. The receipts arose to the assessee for the carrying on of the vocation by the assessee, and these were not casual and non recurring. These were taxable. These facts were found by the Income tax Officer. These facts not in so many terms but essentially found by the Appellate Assistant Commissioner and were reiterated by the Tribunal and the High Court accepted these findings of facts and answered the question accordingly. Reliance was also placed on the decisions of the Gujarat High Court in the case of the Acharya D.V. Pande vs Commissioner of Income tax, Gujarat., , and Commissioner of Income tax, Gujarat vs Shri Girdharram Hariram Bhagat, , decisions of the Bombay High Court in the Case of Maharaj Shri Govindlalji Ranchhodlalji vs Commissioner of Income tax, Ahmedabad, , and H.H. Maharani Shri Vijaykuverba Shed of Morvi and Another vs Commissioner of Income tax, Bombay City II, , decision of the Madras High Court in the case of S.A. Ramakrishnan vs Commissioner of Income tax, Madras, , and decision of the Delhi high Court in the case of Siddhartha Publications (P) Ltd. vs Commissioner of Income tax, Delhi, , dealing with certain facts and circumstances where income could be said be taxable. From all these decisions, two facts emerge. The burden is on the revenue to establish that the receipt is of a revenue character. Once receipt is found to be of a revenue character 946 whether it comes under exemption or not, it is for the assessee to establish. Facts must be found by the Tribunal and the High Court must proceed on the basis of the facts found by the Tribunal. The High Court cannot afresh go to the facts over ruling the facts found by the Tribunal unless there is a question to that effect challenging the facts found by the Tribunal. These propositions are well settled and in this case in the decision of the High Court, these principles, in our opinion, have not been breached. It has been established that the assessee was carrying on a vocation, the vocation preaching of Christian Gospel and helping anti atheism was the vocation of his life. He was running a newspaper in aid of that. The donations received from America were to help him for the said purpose. They arose out of his carrying on and continued so long as he carried on this avocation or vocation. These receipts therefore arose out of his vocation. These were therefore his income. In the facts these were not exempt under Section 4(3)(vii) of the Act. In the premises these were taxable. Numerous decisions were referred to us on the question as to how far the High Court could interfere with the facts found by the Tribunal. Reliance was placed on the decisions of this Court in the case Karnani Properties Ltd. vs Commissioner of Income tax, West Bengal, , Aluminium Corporation of India Ltd. vs Commissioner of Income tax, West Bengal, , Anil Kumar Roy Chowdhury and Others vs Commissioner of Income tax, West Bengal II, , Commissioner of Income tax, West Bengal III vs Kamal Singh Rampuria, , Commissioner of Income tax, West Bengal III vs Imperial Chemical Industries (India) (P) Ltd., , and the decision of the Bombay High Court in the case of Commissioner of Income tax, Bombay City II vs Deviprasad Khandelwal and Co. Ltd., , and also the decision of the Madras High Court in the case of Commissioner of Income tax vs P.S. Chelladurai. , 145 I.T.R. 139. We have set out the findings of the Tribunal and considered the findings of the Tribunal as well as the judgment of the High Court. There has not been any unwarranted interference by the High Court with the facts found by the Tribunal. Basic facts have been found by the Tribunal. On the question where income could be said to arise, it may be relevant to refer to Strong & Co. of Romsey, Limited vs Woodifield (Surveyor of Taxes), ; There a brewery 947 company owned an inn which was carried on by the manager as part of their business. A customer sleeping in the inn was injured by the fall of a chimney, and recovered damages and costs against the company for the injury, which was owing to the negligence of the company 's servants. The question was whether the amounts paid as damages could be claimed as a deduction from the business of s carrying on the activities of the inn keeper. The Lord Chancellor observed at page 452 of the report as follows: "I think only such losses can be deducted as are connected with in the sense that they are really incidental to the trade itself. They cannot be deducted if they are mainly incidental to some other vocation or fall on the trader in some character other than that of trader. The nature of the trade is to be considered. To give an illustration, losses sustained by a railway company in compensating passengers for accidents in travelling might be deducted. On the other hand, if a man kept a grocer 's shop, for keeping which a house is necessary, and one of the window shutters fell upon and injured a man walking in the street, the loss arising thereby to the grocer ought not be deducted. Many cases might be put near the line, and no degree of ingenuity can frame a formula so precise and comprehensive as to solve at sight all the cases that may arise. In the case of The Commissioner of Inland Revenue vs E.C. Warnes & Co. Ltd., , at page 231 of the Report, Rowlatt J. observed: "I may shelter myself behind the authority of Lord Loreburn, who, in his judgment in the House of Lords in Strong & Co. vs Woodifield, said that it is impossible to frame any formula which shall describe what is a loss connected with or arising out of a trade. That statement I adopt, and 1 am not sure that I gain very much by going through a number of analogies; but it seems to me that a penal liability of this kind cannot be regarded as a loss connected with or arising out a trade. In the instant case there cannot be any doubt that the receipts by the assessee arose out of the avocation of the assessee of propagating views against atheism and preaching Christian Gospel. 948 In view of the facts and circumstances of the case there was a link between the activities of the assessee and the payments received by him and the link was close enough. In that view of the matter, in our opinion, the High Court was right in answering both the questions referred to it in the negative and in favour of the revenue. The appeals accordingly fail and are dismissed with costs. Civil Miscellaneous Petition No. 10046 of 1976 for condonation of delay in filing the additional papers is allowed. A.P.J. Appeals dismissed.

The assessee appellant had associated himself with the India Gospel Mission while he was getting his education in the United States of America during 1953 to 1957 and was propagating the ideals of Indian Christian Crusade, U.S.A., an Institution sponsoring religious education in India. The India Gospel Mission was collecting money for its working abroad through the Indian Christian Crusade. On returning to India in January 1957 he started publishing a religious magazine called "Viswa Deepam" and in 1959 started publishing Malyalam daily newspaper called "Kerala Dhwani". In the assessment year 1960 61 he filed a return disclosing a 1088 of Rs. 1,59,894 under the head 'business '. While scrutinising the accounts, the Income Tax Office found amounts totalling Rs. 2,90,220 credited in the assessee 's accounts. Since the names and other details of persons who had donated the amounts were not available it had to be presumed that the amounts had been given to the assessee by the Indian Christian Crusade, U.S.A. and therefore, the Income Tax Officer rejected the contention of the assessee that the amounts received by him were purely personal gifts and testimonials made voluntarily and held that the so called donations were payments by way of remuneration for the work done by the assessee in connection with the spreading in India, of the ideals of the Indian Christian Crusade, U.S.A. and that these amounts were connected with the business of the assessee and were liable to be taxed as his business Income. He, therefore, brought to tax Rs. 2,90,220 which had been received during the assessment year 1960 61. For the assessment year 1961 62 the assessee had received similar amounts totalling to Rs. 3,63,750 through the Indian Christian Crusade, U.S.A. and Income Tax Officer treated this amount also as business income and brought the same to tax. 937 The assessee filed appeals and the Appellate Assistant Commissioner while dismissing the appeals held that the assessee was a journalist and it was his avocation or vocation to propagate Christian ideas and ideals and that the assessee during the stay in U.S.A. and after his return was engaged in a movement for the spread of religion and for fighting the forces of atheism. In further appeal, the tribunal held that the amounts did not represent remuneration or payments for services rendered, and that the receipts were clearly casual and non recurring and did not arise in the course of the exercise of any vocation. The Tribunal referred the matter to the High Court, which held that the receipts of casual and non recurring nature would not be included in the total income of a person. But if there was receipts arising from the exercise of vocation, these would be included in the total income, even if these were of a casual or non recurring nature or voluntary and the receipts resulting from such payments would be outside section 4(3)(vii) of the Income Tax Act, 1922. Since there was link between the activity of the assessee and the payments and the same were made by those who held similar views and who were interested in the propagation and the acceptance of those views by the general public, the receipts, therefore, arose from the exercise of an occupation by the assessee. Dismissing the Appeals ^ HELD: 1. The receipts by the assessee arose out of the avocation of the assessee of propagating views against Atheism ant preaching Christian Gospel. [947 H] 2. There was a link between the activities of the assessee and the payments received by him and the link was close enough. [948 A] Strong & Company, of Romsey Limited vs Woodifield (Surveyor of Taxes), ; and The Commissioner of Inland Revenue vs E.C. Warnes & Co. Ltd., [1919] 12 T.C. 227, referred to. Section 4(3)(vii) of the Indian Income Tax Act 1922 makes it clear that in order to be entitled to the exemption, the receipts must be of income character first. if a sum of money is received for the purpose in pursuance of an avocation or vocation, it arose out of this vocation or profession. If that is 938 so, then this was income under the Act. Such income could only be excluded if it was specifically excluded by any provision of the Act. [943 D E] 4. The High Court rightly held that in view of the facts and circumstances of this case as found by the Tribunal, these amounts were received by the assessee in the course of his avocation or vocation and were given to him for the purpose of the same. These were, therefore, incomes which were neither of a casual or non recurring nature nor were these capital gains under section 12B of the Act. The amounts were, therefore, clearly taxable as held by the Income Tax Officer and by the High Court. [943 E G] P. Krishna Menon vs Commissioner of Income Tax, Mysore, Travancore Cochin and Coorg. Bangalore. , relied upon. The burden 18 on the revenue to establish that the receipt is of a revenue character. Once receipt is found to be of a revenue character whether it comes under exemption or not, it is for the assessee to establish. Facts must be found by the Tribunal and the High Court must proceed on the basis of those facts. The High Court cannot afresh go to the facts over ruling the facts found by the Tribunal unless there is a question to that effect challenging the facts as found by the Tribunal. In this case the High Court has not interfered with the basic facts found by the Tribunal. It has been established that the assessee was carrying on a vocation of preaching of Christian Gospel and helping anti athesim. He was running a newspaper in aid of that. The donations received from America were to help him for the said purpose. They arose out of his carrying on and contained so long purpose. The carried on this avocation or vocation. These receipts, therefore, arose out of his vocation. These were, therefore, his Income, not exempt under s.4(3)(vii) of the Act and were taxable. [945 H, 946 A C] Parimisetti Seetharamma vs Commissioner of Income Tax, Andhra Pradesh, inapplicable. Acharya D.V. Pande vs Commissioner of Income tax, Gujarat, , Commissioner of Income Tax, Gujarat vs Shri Giurdharram Hariram Bhagat, , Maharaj Shri Govindlalji Ranchhodlaji vs Commissioner of Income tax, Ahmedabad, , H.H. Maharani Shri Vijay Kuverba Saheb of Morvi and Another vs Commissioner of Income Tax Bombay City II, S.A. Ramkrishnan vs Commissioner of Income tax, Madras, , Siddhartha Publications (P) Ltd. vs Commissioner of 939 Income tax, Delhi. , Karnani Properties Ltd. vs Commissioner of Income tax, West Bengal, , Aluminium Corporation of India Ltd. vs Commissioner of Income tax, West Bengal, , Anil Kumar Roy Chowdhury and Others vs Commissioner of Income tax, West Bengal II, , Commissioner of Income tax, West Bengal III vs Kamal Singh Rampuria, , Commissioner of Income tax, West Bengal III vs Imperial Chemical Industries (India) (P) Ltd. , Commissioner of Income tax, Bombay City II vs Devi Prasad Khandelwal and Co. Ltd. , and Commissioner of Income tax vs P.S. Chelladurai, , referred to.

Appeal No. 219 of 1967. Appeal from the judgment and decree dated December 16, 1965 of the Andhra Pradesh High Court in C.C C. Appeal No. 24 of 1969. M. C. Chagla, R. Y. Pillai and N. Nettar, for the appellants. C. K. Daphtary, Rameshwar Nath and Swaranjit Sodhi, for respondent No. 1 (A). V. A. Seyid Muhammad and section P. Nayar, for respondent No. 3. 7 3 7 The Judgment of the Court was delivered by Ray, J. This is an appeal by certificate against the judge ment dated 15 December, 1965 of the Andhra Pradesh High Court dismissing the appellants ' suit and setting aside, the decree in favour of the appellant passed by the Additional Chief Judge, City Civil Court, Hyderabad on 18 October, 1958. Shah Abdul Rahim a resident of the pity of Hyderabad died on 26 September, 1905 leaving behind him four sons Abdul Hai, Ghulam Nooruddin, Abdul Razak and Ghulam Ghouse Mohiuddin and two daughters Kamarunnissa Begum and Badiunnissa Begum. Shah Abdul Rahim had large movable and immovable properties. 'Me sons and the daughters entered into two agreements in the month of July, 1908 and appointed arbitrators to partition the Matrooka properties of Syed Shah Abdul Rahim. On 1 August, 1908 the arbitrators made an Award partitioning, the properties. On 13 August, 190 8 there was a decree in the Darul Khaza Court, Hyderabad confirming the Award of 1 August, 1908. The appellant filed the suit out of which the appeal arises on 24 July, 1941 for setting aside the decree dated 13 August, 1908 confirming the award and for partitioning certain Matrooka properties. In 1942, the suit was dismissed. An. appeal was preferred to the High Court of Hyderabad. During the pendency of the appeal Abdul Hai died in 1950 and his legal representatives were brought on the record of the suit in the month of February, 1952. The appeal filed in the year 1943 was disposed of by the High Court of Andhra Pradesh in April 1957 remanding the case to the City Civil Court, Hyderabad. On 18 October, 1958 the Additional Chief Judge, City Civil Court, Hyderabad decreed the suit in favour of the appellant and cancelled the decree of the Darul Khaza Court dated 13 August, 1908. On appeal the Andhra Pradesh High Court on 15 December, 1965 set aside the decree passed by the Additional Chief Judge. The undisputed facts are these When Abdul Rahim died in 1905 Abdul Hai the eldest son was major. The appellant was a minor. There were two references to arbitration . Before the arbitrators the appellant a minor was represented by his brother Ghulam Nooruddin as the guardian. The parties to the arbitration agreements were Abdul Hai, Ghulam Nooruddin, Abdul Razak the appellant represented by his guardian Nooruddin, Qamarunnissa Begum and Badiunnisa Begum. It will appear from the award that before the arbitrators there was no dispute ,between the parties and the arbitrators did not think it necessary to frame any issues. Before the arbitrators the plaintiffs marked 738 with the letter 'F ' a plan showing properties attached to the Khankah and Dargah and those properties were market as Exhibits B 1 to B 10 and the plaintiffs relinquished their title to properties marked Exhibits B 1 to B 10 and further stated "neither at present nor in future will they have any share and right in the said property". As to properties marked B 1 to B 10 the parties stated ,before the arbitrators that Abdul Hai was the Sajjada Nashin of the Dargah and was in possession of, the Dargah and khankah properties. The award was made a rule of court within a short time upon a plaint filed by Nooruddin, Abdul Razak, the appellant represented by Nooruddin as the guardian and the two sisters Qamarunnisa Begum and Badiunnisa Begum. The defendant was Abdul Hai. The facts recited in the decree are these. Syed Shah Nooruddin a pious person of Hyderabad had his Khankah situated at Nampalli. The Dargah of the said pious man was also situated in the same locality. After Syed Shah Nooruddin 's death his son in law, Abdur Rahim became the Sajjada of the Khankah and the Dargah Shariff. The Sajjada had control over all the expenses ,of the Dargah and Khankah and the entire property attached to the Dargah and Khankah remained in possession of the Sajjadana,sheen and all the expenses of the Dargah and Khankah were met from the income. After the death of Abdur Rahim, Abdul Hai became the Sajjadanasheen and was having control over the Dargah and Khankah. Abdur Rahim left three adult sons and one minor son and also two adult daughters. Apart from the property attached to the Dargah and Khankah Abdur Rahim left personal Matrooka properties. There might have been a dispute between the parties regarding the partition of these properties. But the parties settled the dispute by mutual consent and by agreement referred the matter to arbitration for the settlement of the dispute. 'The arbitrators made an award. The decree recited that the properties marked with the letter 'F ' in the plan annexed to the award were Khankah and Dargah Shariff properties in the possession of the defendant Abdul Hai for meeting the expenses of the Khankah and no one has any right or claim over the property 'at present ' or 'in future. The decree concluded by stating that the bargah and Khankah properties were not liable to partition and none ,of the plaintiffs "shall have any right or claim regarding the same". The appellant impeached the award and the decree upon the award inter alia on the grounds that the award was void by reason of lack of lawful guardian on behalf of the appellant to protect ,and represent the rights and interests of the minor in the arbitration proceedings and in the proceedings resulting in the decree upon the award. The appellant also claimed that the award and 739 the decree should be avoided because the properties marked Exhibits B 1 to B 10 were not Dargah and Khankah properties in fact and were treated in the award and the decree to be Dargah and Khankah on the wrongful representation of Abdul Hai. The, appellant in the year 1938 discovered for the first time the true and correct facts that the same were not Khankah and Dargah properties and therefore claimed the same as divisible upon partition amongst the heirs of Abdul Rahim. The trial Court held that the award and the decree thereon were obtained by fraud and the decree was to be set aside. The reasoning given by the trial Court was that it was established one the evidence that Abdul Hai was in full possession and enjoyment of the whole of the property of Abdul Rahim including the property marked as Exhibits B 1 to B 10. In the letter dated 13, August, 1938 Exhibit P 8 Abdul Hai denied that the property was waqf property belonging to the Dargah and asserted that it was. owned and possessed by him and relinquished by his relatives. The letter was held by the trial Court to indicate that Abdul Hai knew that the property was the property of his father which be inherited along with his brothers and sisters and in spite of such knowledge and belief he caused it to be represnted before the arbitrators that the property belonged to the Dargali and that the same was in his possession as Sajjadanasheen. The trial Court further held that the appellant came to know the real state of affairs from the letter of, Abdul Hai dated 13 August, 1938 and therefore the suit was not barred by limitation. The trial Court therefore passed a decree for cancellation of the decree passed upon the award and passed a preliminary decree for partition of ' the Matrooka properties including the properties marked as. Exhibits B 1 to B 10 in the award. In the High Court four questions were considered. First, whether apart from the appellant any other party was a minor at the time of the arbitration agreement and whether there was a dispute which could be referred to arbitration. Second, whether there was proof that at the time of the arbitration agreement and the award Abdul Hai made a fraudulent and false representation to his brothers and sisters and made Them believe that the properties belonging to the Sajjadanasheen were the properties of Dargah and Khankah which were not partible and by representation and fraud prevented the partition of those properties. Third, whether the appellant had knowledge that Abdul Hai had claimed the properties as the ancestral properties of the Sajjadanasheen earlier than the time when the appellant said he had knowledge and whether the suit was barred by limitation. Fourth, what would be the effect of the filing of the written statement by the defendant 740 No. 6 in the year 1958 and the omission of defendant No. 7 to Me any written statement to obtain partition of the properties in the event of the decree and the award being set aside The High Court held that the appellant was a minor but the ,other parties were not minors. The High Court Held that the reference to the arbitration and the a ward thereon were void The High Court held that the decree of the Darul Khaza Court upon the award was not a nullity and the present suit should have been filed within three years of the appellant obtaining majority. The High Court also held that the decree of the Darul Khaza Court was not obtained by fraud. 'Me High Court held that Abdul Hai ,asserted in the year 1927 that the Dargah and the Khankah properties were his personal properties and from that date Abdul Hai asserted his title adverse to the appellant and the other plaintiffs and the appellant and the other plaintiffs knew in 1927 of the adverse claim of Abdul Hai. Therefore, the suit was barred by limitation. The minority of the appellant is a fact found both by the trial ,Court and the High Court. It is an admitted fact that the appellant 's guardian was his brother Nooruddin at the time of the arbitration proceedings and at the time of the decree on the award. The brother is not a lawful guardian under the Mohammedan Law. The legal guardians are the father, the executor appointed by the fathers will, the fathers father and the executor appointed by the will of the father 's father. No other relation is entitled to the guardianship of the property of a minor as of right. Neither the mother nor the brother is a lawful guardian though the father ,or the paternal grand father of the minor may appoint the mother, brother or any other person as executor or executrix. In default ,of legal guardians a duty of appointing guardian for the protection and preservation of the minor 's property is of the court on proper application. It was held by this Court in Mohd. Amin & Ors. vs Vakil Ahmed & Ors.(1) relying on the dictum in Imambandi vs Mutsaddi(2) that where disputes arose relating to succession to the estate of a deceased Mohammedan between his three sons, one of whom was a minor, and other relations, and a deed of settlement embodying an agreement in regard to the distribution of the properties belonging to the estate was executed by and between the parties, the eldest son acting as guardian for and on behalf of the minor son the deed was not binding on the minor son as his brother was not his legal guardian and the deed was void not only qua the minor, but with regard to all the parties including those who were sui juris. It is clear on the authority of this decision that the arbitration agreement and the award and the decree (1) ; (2) 45 T.A. 73 741 are all void in the present case by reason of lack of legal guardian of the appellant. There is intrinsic evidence in the award, that the parties effected a settlement. Counsel on behalf of the respondent relied on a copy of an application in the Court of the Darul Khaza in the proceedings for passing the decree upon the, award in support of the contention that the court appointed Nooruddin as the guardian of the appellant. It is stated in the application that the defendant No. 3 (sic) meaning thereby plaintiff No. 3 the present appellant is a minor and Nooruddin is the real brother and the appellant is under the guardianship of Nooruddin. The application was for permission to Me the suit. There is no order for appointment of a guardian. Further, the Court in appointing the guardian of property of a minor is guided by circumstances for the welfare of the minor. There is no justification to hold that Nooruddin was either "the legal guardian or a guardian appointed by the Court. The decree which was passed on the award appears on an examination of the pleadings and the decree itself that the parties proceeded to have the decree on the basis of the award without any contest as and by way of mutual settlement. It will, appear from the decree that it was admitted by the parties that Abdul Hai was in possession of the Dargah and Khankah and that Abdul Hai alone was the Sajjadanasheen of the Khankah. The relinquishment of property by Nooruddin on behalf of the minor is not binding on the minor. There was no legal sanction 'behild such compromise in the arbitration and in the proceedings result ing in a decree upon the award. There was no legal guardian. The rights and interests of the minor were also not protected particularly when there was conflict of interest between the minor and Abdul Hai. The arbitration agreement, the award and the decree of the Daral Khaza Court on the award are therefore void. The High Court held that the appellants suit was barred by limitation by reason of knowledge of the appellant that Abdul Hai was in adverse possession since the year 1927 or 1928. In regard to the properties which the appellant claimed in the suit as liable to partition, it is established that all parties proceeded on the basis that Exhibits B 1 to B 10 in the award were not Matrooka pro perties but Dargah and Khankah properties. If, in fact, they are not Dargah and Khankah properties but Matrooka properties, these should be available to co owners for partition unless there are legal impediments. The estate of a deceased Mohamedan devolves on his heirs at the moment of his ' death. The heirs succeed to the estate as tenants in common in specific shares. Where the heirs continue to hold the estate as tenants in common without 742 dividing it and on of them subsequently brings a suit for recovery of the share the period of limitation for the suit does not run against him from the date of the death of the deceased but from the date of express ouster or denial of title and Article 144 of Schedule 1 to the Limitation Act, 1908 would be the relevant Article. Counsel on behalf of the respondent submitted that there were two impediments to the appellant 's claim for partition of the properties. One was that the decree passed by the Court of Darul Khaza upon the award was not obtained by fraud and could not be set aside by reason of limitation. The other was that the appellant came to know in the year 1927 that Abdul Hai adversely claimed properties as his own and therefore the appellant 's claim was barred by limitation. The High Court held that the appellant was aware of the attachment of the personal and the Dargah and Khankah properties by the Government of the Nizam in the year 1927 as also release in the same year of the properties attached. The High Court had that when parties had knowledge of the attachment of the properties it could not be postulated that they would have no knowledge of the contentions of Abdul Hai as to release of the Dargah and Khankah properties on the ground that those were not Dargah and Khankah but personal properties of Abdul Hai. Knowledge of release of properties would not amount to ouster of the appellant from the property or of abandonment of rights. The evidence of the appellant was that in 1350 Fasli corres ponding to the year 1941 the appellant came to know that a letter had been written by Abdul Hai to the Ecclesiastical Department of the Government of the Nizam in the year 1938 to the effect that the properties shown as Dargah and Khankah in the award F. and the decree were not Dargah and Khankar properties. The appellant also came to know from the same letter that all the properties including those stated to be Dargah and Khankah properties in the award were attached by the Government of Nizam in the year 1927 and after enquiry by the Government of the Nizam all the properties were :released in the year 1927. The appellant further came to know from that letter that Abdul Hai claimed the properties as his own. Thereupon the appellant demanded from Abdul Hai partition of the property as Matrooka. Abdul Hai asked the appellant to consult lawyer. On the evidence it would be utterly wrong to speculate that the appellant knew of the contentions advanced in 1927 by Abdul Hai for the release of the properties by stating that they were not Dargah and Khankah properties. There was no sub section at the. 743 time of the examination of the appellant that he was aware in,. 1927 of the contentions of Abdul Hai. The High Court relied on Exhibit A 38 a letter dated 19 October, 1927 written by the,, appellant to Abdul Hai to impute knowledge of the attachment. and release of the properties. The appellant was never confronted with at letter. it was never suggested to the appellant that the letter could be construed as attributing to the appellant the knowledge of any adverse claim made by Abdul Hai with" regard to the properties. In that letter the appellant stated that. be was indebted to the elder brother Abdul Hai for his kindness. The appellant also stated that the expenditure incurred in connection with the litigation would be divided into four parts and the amount incurred on behalf of the appellant could be recovered from his account. This letter dated 19 October, 1927 does not at all have the effect of establishing that the appellant had knowledge of any adverse claim of the appellant. The appellant was never shown the letter to explain what litigation he referred to. No inference can be drawn against the appellant without giving him an opportunity to have his say in that matter. It is unfortunate that Abdul Hai died during the pendency of the suit and before the, trial. Not only his oral evidence but also the correspondence that Abdul Hai had with the Government of the Nizam in the year 1927 did not find way into the record of the suit. It would be totally misreading the appellant 's letter of the, year 1927 as impressing the appellant with the knowledge of ' ouster by Abdul Hai of the appellant from the properties forming the subject matter of the suit. There are two letter of great importance. One is dated 13 August, 1938 and marked Exhibit P 8 written by Abdul Hai to, the Director of Endowment, Government of Hyderabad and the other is dated 7 September, 1938 written by the Ecclesiastical Department of the Government of Hyderabad to the Secretary of the Endowments, Ecclesiastical Department of the Government of ' Hyderabad. The letter of Abdul Hai was written in answer to an application made about that time to the Government of the Nizam by One Sheikh Abdur Rahim a tenant against whom Abdul Hai bad filed a suit for recovery of rent. Abdur Rahim made an allegation that the properties in respect of which Abdur Hai filed a suit were Dargah and Khankah properties. The complaint of Abdur Rahim was however dismissed and the matter was not allowed to be reopened on the strength of the orders of the Government recited by Abdul Hai in, his letter. In answer Abdul Hai recorded these facts. The Nizaim in the month of April, 1927 appointed the Secretary of the Ecclesiastical Department and the Commissioner of Police to enquire and report as to which of the properties were attached to the Dargah and which were per 744 sonal private properties. Another Commission was appointed by the Nizam to enquire into the proper use of the endowed properties. The Ecclesiastical Department by Letter dated 28 December, 1927 held that only the villages Debser and Sangvi were found to be under the Dargah. All properties of the parties which had been attached by the Nizam were released by letter dated 3 January, 1928 excepting the two villages. Abdul,Hai by letter dated 16 January, 1928 to the Government of the Nizam stated that the properties marked Exhibits B 1 to B 10 in the award and the decree of the Court of Darul Khaza did not belong to the Dargah and Khankah. Abdul Hai further pointed out that the Nizam by a firman dated 11 November, 1927 had issued orders ,saying that according to the opinion of the Council the Govern ment 's supervision should be lifted from the 'maash ' referring thereby to the properties which had been attached by the Nizam and the same should be given over into the possession of Abdul 'Hai. The other letter dated 5 January, 1939 from the Government ,of the Nizam stated that only two villages were held to be Dargah and the Government of the Nizam had made thorough enquiries and held that there was no other Dargah and Khankah properties and the question could not be re opened. It is established in evidence that the properties which wore ,described as. Dargah and Khankah properties before the arbitrators and the decree of the Darul Khaza Court are not Dargah and Khankah properties. Abdul Hai obtained an adjudication and an order of the Government of the Nizam in the year 1927 that only two villages of Debser and Sangvi belonged to the Dargah and the rest were not Dargah and Khankah properties. The appellant knew that there was litigation about the year 1927 about the properties. It is not in evidence as to what that litigation was or which properties were concerned there with because the letter was not shown to the appellant. Even if it be assumed that all parties treated the properties marked Exhibits B 1 to B 10 as Dargah properties upto the year 1927 and thereafter there was an adjudication on the representation of Abdul Hai that the properties were not Dargah and Khankah the parties would be entitled to tile same. The only way in which the parties could lose their rights to the property would be on the finding that there was adverse possession or ouster. The decree of the Darul Khaza Court will not be an obstacle to the claim of the appellant for partition, of the properties, because the properties are admittedly not Dargah and Khankah properties but Matrooka properties. The arbitration proceedings were void by reason of lack of legal guardian of the appellant to enter into 745 a compromise. The decree of the Darul Khaza Court is also invalid and not binding on the appellant for the same reason. If all parties proceeded upon a basis that these were Dargah and Khankah properties and that basis is wiped out by the Government of the Nizam the, parties to their position as heirs to the Matrooka property. The award and the decree by reason of evidence of facts discovered since the judgement and the decree of the Darul Khaza Court cannot be allowed to stand because the effect of the discovery of the facts is to make it "reasonably probable that the action will succeed. In Birth vs Birch(1) the Court of Appeal held that a judgment will be set aside on the ground of fraud if evidence of facts discovered since the judgment raise a reasonable probability of the success of the action. The principle can be stated in the words of Westbury, L.C. in Rolfe vs Gregory(2) "when the remedy is given on the ground of fraud, it is governed by this important principle, that the right of the party `defrauded is not affected by lapse of time, or generally speaking by anything done or omitted to be done so long as he, remains, without any fault of his own, in ignorance of the fraud that has been committed . This decision was referred to by the Calcutta High Court in Biman Chandra Datta vs Promotha Nath Ghose(3) where the dictum of Westbury, L.C. was restated by holding that where a plaintiff had been kept from knowledge, by the defendant, of the circumstances constituting the fraud, the plaintiff could rely upon section 18 of the Limitation Act to escape from the bar of limitation. In the present case, it is apparent that until the year 1927 the appellant and the other parties were clearly kept out of the knowledge of the true character of the properties. Even after 1927 it cannot be said on the evidence on record that the appellant had any knowledge of the true character of the properties or ouster or adverse possession of Abdul Hai. The reasons are that Abdul Hai never alleged against the appellant and the other parties openly that he was enjoying the properties to the total exclusion of the appellant and the other brothers. Possession by one co owner is not by itself adverse to other co owners. On the contrary, possession by one co owner is presumed to be the possession of all the co owners unless it is established that the possession of the co owner is in denial of title of co owners and the possession is in hostility to co owners by exclusion of them. In the present there is no case to evidence to support this conclusion. Ouster is an unequivocal act of assertion of title. There has to be open denial of title to the parties who are entitled to it by excluding and ousting them. (1) 1902 Probate Division 131 (2) [18 64] ; (3) I.L.R. 746 Section 18 of the Limitation Act, 1908 provides that when a person having a right to institute a suit has by means of fraud been kept from the knowledge of such right or of the title on which it is founded, the time limited for instituting a suit against the person guilty of the fraud shall be computed from the time when the fraud first became known to the person affected thereby. In Rahim boy vs Turner(1) Lord Hobliouse said "When a man has committed a fraud and has got property thereby it is for him to show that the person injured by his fraud and suing to recover the property has had clear and definite knowledge of those facts which constitute the fraud, at a time which is too remote to allow him to bring the suit". Therefore if the plaintiff desires to invoke the aid of section 18 of the Limitation Act he must establish that there has been fraud and that by means of such fraud he has been kept from the knowledge,of his right to sue or of the title whereon it is founded. In the present case, he have with reasonable diligence discovered it. There was active properties were Matrooka and not Dargah and Khankah. When Abdul Hai got the properties released by reason of the decision of the Government of the Nizam in the year 1927 the properties became divisible among the appellant and his brothers and sisters. The existence of the right of the appellant was kept concealed by Abdul Hai. The appellant was not aware of the right nor could lie have with reasonable diligence discovered it. There was active concealment by Abdul Hai of the fact that the properties were not Dargah and Khankah having full knowledge of the fact. It was only in 1941 (1350 Fasli) that the appellant came to know of the Matrooka character of the properties. It was then that the appellant also came to know that Abdul Hai had kept the character of properties concealed from the parties and entirely misstated and misrepresented the character of the properties by mis leadin the parties and obtaining by consent an award and a decree thereon without any contest. The cause of action for partition of properties is said to be a perpetually recurring one" See Monsharam Chak ravarty & Ors. vs Gonesh Chandra Chakravarty & Ors. In Mohammedan Law the doctrine of partial partition is not applicable because the heirs are tenants in common and the heirs of the deceased Muslim succeed to the definite fraction of every part of his estate. The share,,, of heirs under Mohamedan Law are definite and known before actual partition. Therefore on partition of properties belonging to a deceased Muslim there is division by metes and bounds in accordance with the specific share of each heir being already determined by the law. (1) 20 I.A.1 (2) 17 C.W.N.521 747 In the present case the suit is for partition of properties which were by consent of parties treated as Dargah and Khankah but which were later discovered to be Matrooka properties in fact and therefore the declaration in the award and the decree on the award that those were Dargah and Khankah properties cannot stand and the entire partition is to be lie opened by reason of fraud in the earlier proceedings. In the present case, the overwhelming evidence is that because of the representation of Abdul Hai that he was the Sajjadanasheen and the properties marked Exhibits B 1 to B 10 were Dargah and Khankah properties, that all the parties treated the properties as Dargah and Khankah before the arbitrators and in the decree upon the award. The very fact that there was never any contest indicates that the compromise and settlement between the parties was on the basis that the properties were Dargah and Khankah. It was absolutely within the knowledge of Abdul Hai as to what the true character of the properties was. The other parties did not have any opportunity of knowing the same. Abdul Hai knew the real character, concealed the true character and suggested a different character and thereby mislead all the parties. Again, when Abdul Hai approached the Government of the Nizam and got the properties released by asserting that they were not Dargah and Khankah properties in the year 1927. Abdul Hai did not inform the same to any of the parties. The unmistakable intention of Abdul Hai all along was to enjoy the properties by stating these to be Dargah and Khankah. When the parties came to know the real character of the properties even then Abdul Hai was not willing to have partition. On these facts it is established that the fraud committed by Abdul Hai relates "to matters which prima facie would be a reason for setting the judgment aside". That is the statement of law in Halsbury 's Laws of England, Third Edition, Volume 22, paragraph 1669 at page 790. For these reasons we accept the appeal and set aside the judgment of the High Court and restore the judgment and decree of the trial court. The appellant will be entitled to costs of this Court. The parties will pay and bear their own costs in the High Court. G.C Appeal allowed.

Shah Abdul Rahim was Sajjadanasheen of a Dargah and Khankah in Hyderabad. He had four sons and two daughters. After his death in 1905 he was succeeded as Sajjadanasheen by his eldest son Abdul Hai Shah Abdur Rahim left Matrooka property apart from the properties appertaining to the Dargah and Khankah. The matter of the partition of Matrooka properties was referred to arbitrators. The appellant who was Abdur Rahim 's youngest son was a minor at the time and was represented in the arbitration proceeding by his brother Nooruddin. The properties Exhibits B 1 to B 10 were acknowledged by the parties before arbitrators to be in the possession of Abdul Hai as Dargah and Khankah properties and any right or claim to them was renounced by Abdul Hai 's brothers and sisters. The arbitrators gave their award on August 1, 1908 partitioning the properties. On August 13, 1908 there was a decree in the Darul Khaza Court confirming the aforesaid award. The properties B 1 to B 10 thereafter remained in the possession of Abdul Hai. In 1927 Abdul Hai got an adjudication from the Nizam 's Government that the Dargah and Khankah properties consisted only of two villages and that properties B 1 to B 10 were not Dargah and Khankah properties. In 1938 Abdul Hai wrote a letter to the Nizam 's government again asserting that properties B 1 to B 10 were his personal properties. The appellant filed a suit on 24th July 1941 for setting aside the decree dated. August 13, 1908, passed by the Darul Khaza Court and for partition of the Matrooka properties left by his father including properties B 1 to B 10. He impeached the award and the decree on the ground that he was not represented by 1 lawful guardian. He claimed that the award and decree should be avoided because they were based on the wrongful representation of Abdul Hai that they were Dargah and Khankah properties. The trial court decreed the suit holding : (1) that the award and decree in question were obtained by fraud; (2) that the letter written by Abdul Hai in 1938 showed that he was aware of the Matrooka character of the properties but kept this fact from his brothers and sisters; (3) that the appellant 73 5 came to know the facts from the said letter of 1938 and the suit was not therefore barred by limitation. The High Court in appeal held (1) that the appellant was a minor and therefore reference to the arbitration and the award thereon were void; (2) that the decree passed by the Damlkhaza Court was not a nullity since the appellant did not file his suit within three years after attaining majority; (3) that the decree was not obtained by fraud; (4) that Abdul Hai asserted in 1927 that the properties in question were his personal properties and this assertion of title adverse to the appellant and his brothers and sisters became known to them in 1927 and for this reason also the suit was barred by limitation. in ' appeal by certificate to this Court, HELD: The appeal must be allowed, (i) The minority of the appellant was a fact found by the trial court and the High Court. The appellant 's brother who represented him in the arbitration and court proceedings was not a legal guardian, nor was he appointed by the Court. The relinquishment of property by Nooruddin on behalf of the minor was not binding on the minor whose interests were not protected. The arbitration proceedings, the award and the decree of the Darul Khaza Court on the award were therefore void. [740 D, 741 E F] Mohd. Amin & Ors. vs Vakil Ahmed & Ors, ; and Imambandi vs Mutsaddi, 45 I.A. 73, referred to. ' (ii) The estate ' of a deceased Mohammedan devolves on his heirs at the moment of his death. The heirs succeed to the estate as tenants in common in specific shares. When the heirs continue to hold the estate as tenants in common without dividing it and one of them subsequently brings a suit for recovery of the share the period of limitation for the suit does not run against him from the date of the death of the deceased but from the date of express ouster or denial of title and article 114 of Sch. 1 to the Limitation Act 1908 would be the relevant Article. [741 H, 742 A] (iii) The cause of action for partition of properties is a perpetually recurring one '. In Mohammedan Law the doctrine of partial partition is not applicable because the heirs are tenants in common and the heirs of the deceased Muslim succeed to the definite fraction of every part of his estate. In the present case the suit was for partition of properties which were by consent of parties treated as Dargah and Khankah but which were later discovered to be Matrooka properties in fact and therefore the declaration in the award and the decree on the award that those were Dargah and Khankah properties could not stand and the entire partition had to be reopened by reason of fraud in the earlier proceedings. [746 G 747 B] Monsharam Chakravarty & Ors. vs Gonesh Chandra Chakravarty & Ors., , referred to. (iv) The decree of the Darul Khaza Court could not be an obstacle to, the claim of the appellant for partition of the properties, because the properties were admittedly not Dargah and Khankah properties but Matrooka Properties. If all parties proceeded upon a basis that these , were Dargah and Khankah properties and that basis is wiped out by the adjudication by the Government of the Nizam, the parties are restored to their position as heirs to the Matrooka property. The award and the decree by reason of evidence of facts discovered since the judgment and the decree of the Darul Khaza Court could not be allowed to stand because the effect of the discovery of the facts was to make it "reason ably probable that the action will succeed". [744 H 745 B] 1100Sup CI/72 73 6 Birch vs Birch, [1902] Probate Division 131, referred to. (v) When a plaintiff has been kept from knowledge by the dependent of the circumstances constituting the fraud, the plaintiff can rely upon section 18 of the Limitation Act to escape from the bar of limitation. When Abdul Hai got the properties released by reason of the decision of the Government of the Nizam in the year 1927 the properties became divisible among the appellant and his brothers and sisters. The existence of the right of the appellant was kept concealed by Abdul Hai. The appellant was not aware of the right nor could he have with reasonable diligence discovered it. There was active concealment by Abdul Hai of the fact that the properties were not Dargah and Khankah having full knowledge of the fact. It was only in 1941 that the appellant came to know of the Matrooka character of the properties. [745 E, 746 E] Rolfe vs Gregory, ; , Boman Chandra Datta vs Promotha Nath Ghose, L.L.R. and Rahimboy vs Turner, 20 I.A. 1. referred to. (vi) On the facts of the case it was established that the fraud committed by Abdul Hai relates "to matters which prima facie would be a reason for setting the judgment aside". [747 E F] Halsbury 's Laws of England, Third Edition, Vol. 22, para 1669 at p. 790. referred to. (vii) The plea of adverse possession must also fail. It was apparent that until the year 1927 the appellant and the other parties were already kept out of the knowledge of the true character of the properties. Even after 1927 it could not be said on the evidence On record that the appellant had any knowledge of the true character of the properties or of ouster or adverse possession of Abdul Hai. Possession by one co owner is not by itself adverse to other co owners. On the contrary possession by one co owner is presumed to be the possession of all the co owners unless it is established that the possession of the co owner is in denial of title of co oweners and the possession is in hostility to co owners by exclusion of them. In the present case there was no evidence to support this conclusion. Ouster is an unequivocal act of assertion of title. There has to be open denial of title to the parties who are entitled to it by excluding and ousting them. [745 F H]

iminal Appeal No. 9 of 1955. Appeal by special leave from the Judgment and Order dated the 26th September, 1951, of the Hyderabad High Court in Criminal Confirmation No. 638/6 of 1951 and Criminal Appeal No. 770 of 1951, arising out of the Judgment and Order dated the 27th June, 1951, of the Court of the Sessions Judge, Osmanabad, in Criminal Case No. 12/8 of 1951. 525 R. Patnaik for the appellant. Porus A. Mehta and P. G. Gokhale for the respondent. September 27. The Judgment of the. Court was delivered by BOSE J. This is another of those cases in which Courts are compelled to acquit because Magistrates and Sessions Judges fail to appreciate the importance of section 342 of the Criminal Procedure Code and fail to carry out the duty that is cast upon them of questioning the accused properly and fairly, bringing home to his mind in clear and simple language the exact case he has to meet and each material point that is sought to be made against him, and of afford ing him a chance to explain them if he can and so desires. Had the Sessions Judge done that in this case it is possible that we would not have been obliged to acquit. The facts are simple. The appellant Machander was charged with the murder of one Manmatb. Machander 's brother Gona was also challaned but as he absconded he could not be tried. The appellant and the deceased and Gona reside in the same village. There was some ill feeling between the appellant and the deceased and it can be accepted that Gona shared his brother 's sentiments because, so far as the latest cause for enmity goes, Gona is equally concerned; and this also applies to Pandu, the appellants father, and Bhima, another brother. The causes for enmity are the following. In or about the year 1947 the appellant appears to have stolen a pair of bullocks and a cart belonoing to the deceased. The deceased prosecuted him for the theft and also instituted a civil suit for the price of the cart 'and bullocks. He succeeded in both cases. The appellant was convicted of the theft and sent to jail. A decree was also passed against him for Rs. 520 and that decree was duly executed. We now come to the events immediately preceding the murder. The appellant and his family took forcible possession of some land belonging to the 526 deceased 's sister Parubai. She sued the whole family for possession of this land, that is to say, she impleaded the appellant 's father Pandu, the appellant and his two brothers Bhima and Gona. The last hearing was on 15 12 1950 and the decision was announced on 16 12 1950. It was in Parubai 's favour. The deceased conducted this litigation on behalf of his sister. He was present in Court on the 15th and was present at Parenda, where the Court is situate, up to 3 P.m. on the 16th, the day the decision was announced. That was the last that was seen of him. These facts are said to be the cause of the ill feeling. But, as the facts themselves indicate, a similar cause for enmity (though not to the same degree) could be assigned to the father and the other brothers; equally, they had similar opportunities. The movements of the appellant have been traced to Parenda and back but not the movements of the rest of the family. So it is not shown that they had no similar opportunity to murder. It can however be accepted that cause for enmity on the appellant 's part is established. It is proved that the deceased went to Parenda on the 15th for the last hearing of the case and that he was also there on the 16th up to 3 p.m. It is also proved that the appellant was in Court on the 15th and that he was in Parenda on the following day. It can be accepted that both the deceased and the appellant were present in Court at the same time on the 15th and that therefore the appellant knew that the deceased had attended the Court that day. But there is no proof that the two met each other or that either knew about the movements of the other on the 16th. All we know is that both went to see their respective pleaders at different places and times and learned the result of the case. Four or five days after the case, the appellant came home but not the deceased. The deceased 's son Shantiling (P.W. 10), who knew that the appellant bad also gone to Parenda for the case, asked him where his father was. The appellant said that the father had not attended court. This made the son 527 anxious, 'so he went to Parenda to make enquiries. The pleaders there told him that his father had attended court on the 15th and that he was in Parenda till,3 P.m. on the 16th. Shantiling (P.W. 10) immediately informed the police that his father was missing and gave them a description of him and also a list of the things he was wearing and a description of the horse he was riding. This was on the 26th. Three days later, on the 29th, he lodged a regular complaint and said that he was afraid his father had been murdered and said that he suspected the appellant and his brother Gona. The appellant was arrested the same day and after his arrest he led the police and Panchas to a place where blood stained earth and grass were found and a bloo dstained stone, also some of the articles which Shantiling (P.W. 10) had described to the police on the 26th, namely pieces of a silver linga, two silver kadas, a silver spike and a white gilt button. All except the kadas were found to be stained with human blood. About 25 paces from here the appellant pointed out another place where the corpse of the deceased was found to be buried. Pearl ear rings and a kardoda of yarn with three iron keys were still on the body. They were all stained with human blood and are proved to have belonged to the deceased. On the 1st of January 1951 the appellant took the police and the Panchas to a place where two saddle straps and two iron stirrups were buried. One of the stirrups was stained with human blood. On the 3rd the reins of the horse and the horse itself were discovered but this discovery was not at the instance of the appellant. Except for the confession, which has been excluded, this is all there is against the appellant. The question is whether that is enough to bring guilt home to him. Stated briefly, the circumstances are 1. That the appellant knew that the deceased had attended the Court at Parenda on the 16th and that he had seen him there but when questioned about it he told a lie. 67 528 In passing it is to be observed that this is not the .lass of case in which an accused person is last seen with a murdered man within a few hours of the murder. Though the deceased and the appellant were both in Court at the same time, they were not there "together" and in view of the ill will between them and in view of the fact that the deceased went on a horse it is unlikely that they travelled together either going or coming; and the appellant was not with the deceased when he was last seen at 3 P.m. on the 16th. But it is clear that the appellant wanted to hide something. 2.That thirteen days after the murder he knew that Manmath had been murdered. He also knew where the murder had been committed and where the body and certain articles belonging to the deceased were hidden. 3.That there was ill will between them, but an ill will that other members of the appellants family might be expected to share. 4.That he had full opportunity to commit the crime, but the same kind of opportunity that the other members of his family also had. The question is whether these four circumstances, regarded in the background of this case, are sufficient to warrant a conclusion of murder by the appellant. In our opinion, they are not because the same circumstances could be said to point with equal suspicion at other members of the appellant 's family. It has to be remembered that the brother Gona was also suspected and that he absconded and could not be traced. We do not say that he was the murderer and it would be wrong to suggest that in his absence, but if he was, then the appellant 's knowledge of the murder and of the concealment, thirteen days later, might have been derived from Gona, or it might even be that he saw his brother commit the crime and hide the corpse and the articles. Those are hypotheses that are not unreasonable on the facts of this particular case and they have not been reasonably excluded. Consequently, we are unable to bold that mere knowledge thirteen days later, coupled with a motive which three others 529 share, and a lie about the deceased 's movements told four or five days after the murder, are enough; and, as that is all that the High Court has based on, the conviction must be set aside. We have assumed throughout that the identity of the corpse that was discovered on the 29th and the fact of murder have been established. Those facts were not admitted before us but we need not discuss the point. It is enough to say that, in our opinion, both facts are satisfactorily proved. We referred, earlier in our judgment, to a confession which the High Court has excluded. This was excluded from evidence because the appellant was not questioned about it under section 342, Criminal Procedure Code. We gather that the High Court thought that that occasioned prejudice though the learned Judges do not say so in so many words. The appellant was arrested on the 29th and he made many discoveries on the 29th December 1950 and on the 1st, 2nd and 3rd January 1951 but did not confess till the 6th. Much might have happened in the eight days between his arrest and the 6th, so the High Court was not unjustified in refusing to take that into consideration without bearing the appellant 's side of the story. We were asked to reopen the question and, if necessary, to remand the case. But we decline to do that. Judges and magistrates must realise the importance of the examination under section 342 of the Criminal Procedure Code and this Court has repeatedly warned them of the consequences that might ensue in certain cases. The appellant was arrested in December 1950 and has been on his trial one way and another ever since, that is to say, for over 4 1/2 years. We are not prepared to keep persons who are on trial for their lives under indefinite suspense because trial judges omit to do their duty. Justice is not one sided. It has many facets and we have to draw a nice balance between conflicting rights and duties. While it is incumbent on us to see that the guilty do not escape it is even more necessary to see that persons accused 530 of crime are not indefinitely harassed. They must be given a fair and impartial trial and while every reasonable latitude must be given to those concerned with the detection of crime and entrusted with the administration of justice, limits must be placed on the lengths to which they may go. Except in clear cases of guilt, where the error is purely technical, the forces that are arrayed against the accused should no more be permitted in special appeal to repair the effects of their bungling than an accused should be permitted to repair gaps in his defence which he could and ought to have made good in the lower courts. The scales of justice must be kept on an even balance whether for the accused or against him, whether in favour of the State or not; and one broad rule must apply in all cases. The error here is not a mere technicality. The appellant appears to have been ready to disclose all on the 29th and make a clean breast of everything and yet the police waited eight days before getting a confession judicially recorded. That may be capable of explanation but the difficulty of asking an accused person to establish facts of this kind in his favour four and a half years later is obvious. Without therefore attempting to lay down any general rule, we are not prepared to order a retrial in this case because of the facts that appear here. The appeal is allowed. The conviction and sentence are set aside and the appellant is acquitted.

The appellant was put up on his trial on a charge of murder. The trial continued for 41/2 years. His brother who was a co accused absconded. The evidence against the appellant was circumstantial. His confession, made 8 days after his arrest, led to certain discoveries but he was never questioned about it by the trial court under section 342 of the Code of Criminal Procedure. The High Court excluded the confession from the evidence, upheld the conviction but altered the death sentence to one of rigorous imprisonment for life. The Supreme Court took the view that the High Court was right in excluding the confession from the evidence and the conviction was unsustainable on the evidence on record. Held, that in the particular facts of the case the omission to examine the accused under section 342 of the Code was no more technicality and it would be unjust to the accused to remand the case for a retrial and the order of conviction and sentence passed on him must be set aside. That while it is no doubt incumbent on the court to see that no guilty person escapes, it is still more its duty to see that justice is not delayed and accused persons indefinitely harassed. The scales must be held even between the prosecution and the accused. That it is imperative that Magistrates and Sessions Judges should remember the duty that section 342 of the Code of Criminal Procedure imposes on them of questioning the accused person fairly and properly telling him in clear and simple language the case he has to meet and the material points made against him so that he can, if he so desires, explain and meet them.

ivil Appeal No. 2468 of 1982. From the Judgment and Order dated 8.3.1982 of the High Court of Andhra Pradesh in C.R.P. Nos. 3726, 3727, 3910 and 4883 of 1979. PG NO 202 Dr. Y.S. Chitale and G. Narasimhulu for the Appellant. T.S. Krishnamurti Iyer, Krishan Kumar and Rajeshwar Rao for the Respondents. The Judgment of the Court was delivered by NATARAJAN, J. This appeal by special leave by a tenant arises out of a common judgment rendered by the High Court of Andhra Pradesh in four Civil Writ Petitions. Two of the Revision Petitions were filed by the appellant herein and the other two were filed by one Narsimha Murthy, the second respondent herein. By a common judgment the High Court d_missed all the four revision Petitions. While Narsimha Murthy has not preferred any appeal the appellant has filed this appeal by special leave to question the legality and propriety of the decree for eviction passed against him on the ground he had unauthorisedly sublet the leased premises to the second respondent for running a hotel. Originally the building bearing door nos. 7 2 606, 607, 617 and 618 (old door No. 2540) Rashtrapati Road, Secunderabad belonged to one Bhima Rao. The appellant took the ground floor of the premises on lease in the year 1953 from the said Bhima Rao on a monthly rent of Rs.250 for running a hotel in the name and style of Sharada Bhavan. In or about September 1967 Bhima Rao conveyed the premises by means of a Deed of Gift to his daughter Manga Devi, the first respondent herein and the appellant duly attorned his tenancy and was paying her the rent. After August l969 the hotel came to be run by the second respondent instead of the appellant. As the first respondent had reasons to believe that the appellant had either transferred his rights under the lease or sublet the leased premises to the second respondent, she terminated the tenancy by means of notice with effect from 31st January, l97 l and called upon the appellant to surrender possession thereafter. The appellant refused to vacate and sent a reply refuting the allegations contained in the notice issued to him. This led to the first respondent filing a petition under Section 10 of the Andhra Pradesh Buildings (Lease. Rent and Eviction) Control Act. 1960 (for short the Act ' hereafter) to seek the eviction of the appellant and the second respondent on three grounds viz. (1) wilful default in payment of rent, (2) unauthorised subletting and (3) causing waste to the property. The Rent Controller ordered eviction on the second and third grounds. The appellant and the second respondent preferred seperate appeals to the Appellate Authority and both the appeals were dismissed. Thereafter the two affected parties filed two PG NO 203 revisions each against the dismissal of the appeals and the High Court clubbed all the four revisions and rendered a common judgment dismissing all the revision petitions. The High Court, however, affirmed the finding of the courts below only on the ground of sub letting and consequently, the sole question for consideration in this appeal is whether the High Court has erred in law in upholding the order for eviction passed by the first two Courts on the ground of sub letting. Dr. Chitale, learned counsel for the appellant took us through the terms of the agreement Exhibit R 14 entered into between the appellant and the second respondent as well as the relevant portions of the judgments of the Courts below and the High Court and argued that this was a case where the appellant had only transferred the managing rights of the hotel to the second respondent and hence there was no basis or material for the Rent Controller or the Appellate Court to hold that the appellant had sublet the leased premises to the second respondent and therefore the High Court too was in error in confirming the order of eviction passed against the appellant and the second respondent. The learned counsel further contended that neither the agreement nor the conduct of the parties afforded any ground for taking the view that the appellant had transferred his rights under the lease or had sublet the premises to the second respondent, and on the other hand there was adequate material to show that the appellant had retained his rights in the leased premises notwithstanding his placing the hotel business in the hands of the second respondent. To substantiate these contentions Dr. Chitale laid stress on certain clauses in the agreement which seek to emphasise that the transfer of rights pertained to the business alone and not the leasehold rights of the appellant in the leased premises. The clauses referred to are as follows. Clause 2 sets out that the first party (the appellant) 'has agreed to allow the second party (the second respondent) to manage the said Sharada Bhawan with all the furniture etc.". Clause 7 interdicts the second party from permitting "the use of the premises for any purpose other than that for which it is being used viz. as a vegetarian restaurant" without the consent in writing of the first party. Clause 8 enjoins the second party to "maintain the standard and reputation which the said business has earned and acquired". Clause 9 prohibits the second party from assigning or underletting or otherwise parting with the business without the permission in writing of the first party. Clause 11 stipulates that the second party shall observe all the rules and regulations governing the licences granted to the first party by the Municipality, Police etc. and further sets out that if any breach is committed by the PG NO 204 second party he should indemnify the first party. Under Clause 13 the first party has reserved a right to inspect the business at all reasonable times to satisfy himself that The second party was fulfilling the conditions set out in the agreement. Clause 15 provides that on the expiry of the agreement the second party should "peacefully and quietly surrender and hand over possession of the business to the first party together with all the furniture, fixtures, utensils etc. " Clauses 16 and 17 are of significance for both parties and, therefore, they are extracted in full: "Clause 16 The lease of the premises wherein the said business is being run, shall continue to be enjoyed exclusively by the first party at all times, and first party shall be liable to pay the monthly rent of Rs.250 or any other enhanced rent that may be Agreed upon between the first party and the landlord and in such event the second party shall pay to the first party the difference between the present rent of Rs.250 and the enhanced rent along with the monthly amounts payable vide clause (2) hereof, and shall observe faithfully all terms and conditions of the agreement of tenancy between the first party and the owner of the premises. It is clearly understood and agreed this agreement is only with respect to the running of the said business on a "MUNAFA" basis to the second party and not subletting or underletting of the premises housing the said business. Clause 17 The essence of this agreement is that the second party shall run the said business on his own account making use of the existing property such as furniture, fixture, etc. which continue to belong to the first party with out any proprietory rights or interest to the second party on any of the said property. It is distinctly understood and agreed between the parties here to that the second party shall not be entitled to obtain any credit or accommodation from any third party on the security of the said business. The parties hereto agree that the second party shall carry on the said business on his own account and responsibility and the first party shall not be liable in any manner or to any extent in respect of the second party 's liabilities arising out of his running the said business or otherwise. " Placing reliance on these clauses it was seriously canvassed on behalf of the appellant that the agreement was PG NO 205 explicit in its terms and there was no ambiguity and as per the terms the transfer effected was only the business of running the hotel and not the appellant 's interest in the leased property and no sub tenancy was created in favour of the second respondent. The appellant 's counsel urged that in almost identical circumstances this Court has held in Md. Salim vs Md. Ali, ; that the transfer effected was only the right to manage the business run by the lessee and there was no transfer of any interest of the lessee in the business premises. It was the further contention of Dr. Chitale that in all such cases the Courts must look to the dominant intention of the parties while effecting the transfer to find out whether the transfer amounted to a sub letting of the leased premises. A reference was made to the decision in Dwarka Prasad vs Dwarka Das Saraf; [ 19761 1 SCR 277 in this behalf. Disputing the contentions of Dr. Chitale Mr. Krishnamurthy Iyer, learned counsel appearing for the first respondent, stated that the intention of the parties and the true nature of the transaction between them was the handing over of the hotel on a permanent basis to the second respondent together with the tenancy rights of the appellant. Mr. Iyer said that for obvious reasons the parties had to camouflage the real nature of the transaction, by making it appear that the managing rights of the business alone were transferred but the truth could not be suppressed and hence the lower courts had rightly held that the transfer had all the trappings of sub letting and the appellant was therefore liable for eviction. It was urged that in view of the concurrent findings rendered against the appellant by the Rent Controller and the Appellate Authority, the High Court could have very well declined to go into the merits of the findings without reappraisal of the evidence but even so the High Court had given the appellant the indulgence of a detailed examination of the evidence for itself and has after such exercise confirmed the findings of the Courts below and as such, there is no need or justification for any further examination the contentions of the appellant. The learned counsel submitted that if nevertheless the case of the appellant has to be considered once ever again, then the agreement. though subtly worded, provided adequate material to show that the transfer of the business had brought about a subletting of the premises also. The manner in which the hotel had been run by the second respondent, it was added, afforded additional material to prove the factum of sub letting of the premises. Krishnamurthy Iyer drew our attention to several terms in the agreement, to which we PG NO 206 shall advert to in due course, to substantiate his contentions. The learned counsel also placed for our consideration a decision of Alagiriswamy, J., as he then was, in M. Rodgers vs Prakash Rao Naidu, and of this court in Bhagwan Das vs Rajeev Singh, Since both the parties lay emphasis upon the terms of the agreement to support their respective contentions, it is necessary that we look into the terms of the agreement for ourselves. The preamble sets out that the terms "first party" and "second party", cannoting the appellant and the second respondent, will wherever the context permits include their heirs, successors, administrators and assigns. The agreement would say that the first party, as the owner of the vegetarian restaurant "Sharada Bhawan" has agreed to allow the second party to manage the said hotel with all the furniture etc. The agreement is for a period of eleven months from the 1st day of September 1969 and thereafter the same could be renewed or extended for any further period by mutual consent except in the event of the first party being evicted, in which event the second party would not be entitled to any compensation for any loss or damage caused to him by reason of the eviction. Clause 2 provides that "in consideration of obtaining on hire on munafa basis of the business together with all the furniture etc. the second party should pay to the first party a sum of Rs.750 per month during the period of first eleven months and thereafter at the rate of Rs.900 per month during the subsequent renewed or extended period. " As per Clause 3 the second party should pay all taxes, tees, rates and other statutory outgoings in respect of the business and ii any loss is caused to the first party by non payment, the latter was entitled to recover all such charges from the second party and would also be entitled to cancel or terminate the agreement forthwith. According to Clause 4 the second party was responsible for not only payment of all expenses and charges relating to the running of the business but also for carrying out "repairs to business premises, painting, colour wash. and the like". The same Clause empowers the second party to appoint, dismiss, promote or otherwise deal with all members of the staff and employees of all categories ' ' and makes him liable for all claims and demands relating to the period covered by the agreement. ' Clause 7 prohibits the second party from using the premises for any purpose other than for running a vegetarian restaurant without the consent of the first party. Clause 9 interdicts the second party from assigning or under letting or otherwise parting with the business without the written permission of the first party. Clause 13 stipulates that the second party should allow the first party to inspect the business at all reasonable times to satisfy himself that the PG NO 207 second party was fulfilling the conditions governing the agreement. Clause 15 sets out that "the second party shall on the expiry of the agreement peacefully and quietly surrender and hand over possession of the said business to the first party with all the furniture and fixtures, utensils, etc. " Clause 16 which has already been extracted states that the lease of the premises shall continue to be enjoyed exclusively by the first party at all times, and the first party shall be liable to pay the monthly rent of Rs.250 or any other enhanced rate that may be agreed upon between the first party and the landlord and in such an event the second party shall pay to the first party the difference between the present rent of Rs.250 and the enhance rent along with the monthly amounts payable by him. There is an explanatory clause stating that the agreement is only with respect to the running of the business and not to any subletting or underletting of the premises. Clause 17 stipulates that the business was to be run by the second party on his own account making use of the existing property such as furniture, fixture etc. belonging to the first party without any proprietory rights or interest and that the second party was not entitled to obtain any credit or accommodation from any third party on the security of the business and that he was to run the business on his own account and responsibility. Clause 18 makes the second respondent solely responsible for any consequences arising out of non compliance with the orders passed by the competent authorities or for contravention of any of the provisions of the laws in force Clauses 19 and 20 provide for the second respondent furnishing a cash security of Rs.5000 and the first respondent being entitled to reimburse himself from out of the deposit amount any loss or damages suffered by him on account of any default committed by the second party On a reading of the various provisions of the agreement unable to accept the contentions of the appellant that what was transferred was only the hotel business and not the appellant 's interest in the leased premises as a lessee. Though the agreement is initially for a period of 11 months the renewal clause would enable the parties to go on extending the lease for any length of time and as per the preamble such extensions of lease would be binding upon the heirs, successors, administrators and assigns of both parties. The appellant had handed over the furniture, utensils etc. to the second respondent and received a sum of Rs.5,000 as security and he was entitled to reimburse himself for any loss or damage caused to the furniture and the utensils. Though the agreement states that the appellant will continue to be the lessee of the property it is obvious that the rent of Rs.250 per month was really to be paid by PG NO 208 the second respondent through the appellant. There is a specific provision in Clause 16 that in the event of the landlord enhancing the rent, the second respondent should pay "the difference between the present rent of Rs.250 and the enhanced rent along with the monthly amounts payable as per clause 2. " It is therefore patent that the burden of paying the rent has been passed on to the second respondent and this can occur only if the premises had been sublet to him. The agreement confers proprietory rights on the second respondent over the hotel business inasmuch as he is made the sole authority to appoint the staff as well as terminate their services and also take disciplinary action against them. He is empowered to run the business on his own account and responsibility so long as he pays the appellant a sum of Rs.750 per month or the first eleven months and thereafter a sum of Rs.900 per month All the taxes, fees, rates and other statutory outgoings are to be paid by the second respondent himself. Even the cost of effecting repairs to the business premises and painting and colour washing etc. are to be borne by him alone. Clauses 7 and although appearing to interdict the second respondent from changing the user of the premises or from assigning or subletting the business, really permit him to do so, if he obtains the consent or permission in writing of the appellant. If what was transferred to the second respondent was only the right to manage the hotel business, it is incomprehensible that he would be called upon to effect repairs to the leased premises or to undertake painting, colour washing etc. at his own expense. Similarly the question of the second respondent changing the user of the premises or assigning or subletting or parting with the business with the written consent or the appellant will not arise if his rights under the agreement were restricted to the management of the business alone. Clause 15 is curiously worded because it speaks about the second respondent peacefully and quietly surrendering and handing over possession of the business to the first party with all the furniture, fixtures, utensils etc. ' ' The clause would show that what was really meant was surrendering the possession of the building but in order to conceal matters, the word 'business has been used in the place of 'building '. On a conspectus of all the terms of the agreement we feel that the High Court was fully justified in taking the view that the appellant and the second respondent had used all the ingenuity at their command to camaflouge the real nature of the transaction and make it appear that there was only a transfer of the managing rights of the business and not a transfer of the business in toto together with the right to occupy the leased premises The clauses on which the appellant 's counsel placed reliance to project the PG NO 209 appellant 's case are only make believe clauses which have been introduced with a design and purpose viz. to conceal the real nature of the contract so that the landlord may not seek the eviction of the appellant on the ground of subletting the premises. In spite of the introduction of a few cleverly worded clauses the other clauses are self revealing and go to show that the parties were fully aware of the vulnerability of their action and the risk of eviction ensuing therefrom. It is on account of such awareness the appellant has carefully provided in the agreement that in the event of his being evicted from the premises he will not be liable to pay any compensation for any loss or damage resulting to the second respondent. Besides the agreement, the manner in which the second respondent had been conducting the business would also show that he was not a transferee of the managing rights alone but he was a transferee of the business together with the appellant 's interest in the leased premises also. The business turnover increased from Rs.200 to 250 per day to Rs.700 to 800 per day. The second respondent was assessed to income tax and sales tax in his own name as the proprietor of Sharada Bhawan and not as the manager of the hotel. He was recognised as the proprietor of the hotel and admitted to membership of the Hotel Owner 's Association. He exercised absolute control over the business and over the members of the staff and was the sole authority to appoint them or terminate their services or take disciplinary action against them. He was not bound to render accounts to the appellant or share with him the profits or losses of the business. He became solely responsible to bear all the expenses and to pay all the taxes, public charges etc. Thus even the conduct of the parties afford material to conclude that what was transferred to the second respondent was much more than the right to run the hotel business for a limited period. It is therefore futile for the appellant to say he had not parted with his interests in the leased premises to the second respondent. As regards the decisions cited by Dr. Chitale we do not think that either of them can advance the appellant s case m any manner. In Md. Salim vs Md. Ali (supra) the facts were perceptibly different. That was also a case where the right of management of a shop run by a tenant was conferred on one Md. Salim and it was agreed between the parties that from out of the amount paid by Md. Salim, the lessee was to pay the rent to the landlord. The agreement, however, expressly stated that the transferer will remain the proprietor of the business, and that the licence for the business should stand in his name and that after a period of two years the transferee will restore the business along with the articles PG NO 210 in good condition to the transferor. The transfer agreement had been attested by the landlord himself. It was on these facts it was decided in that case that there was no transfer of interest in the business premises and what was transferred was only the right to manage the business. In the present case the agreement provides for the second respondent being allowed to run the business for any length of time as his own proprietory concern and to have all the benefits exclusively for himself. In the other case of Dwarka Prasad (supra) the court dealt with the application of the ' dominant intention" test with reference to the facts of that case. The question in there was whether a cinema theatre equipped with projectors and other fittings and ready to be launched as an entertainment house was "accommodation", as defined in Section 2(1)(d) of the U.P. (Temporary) Control of Rent and Eviction Act, 1947, and if so, whether the Act "barricades eviction by the landlord because the premises let constitutes an accommodation" It was in that context the Court observed that where the lease is composite and has a plurality of purpose the decisive test is a dominant purpose of the demise. There is no occasion in this case for the test of 'dominant intention being applied because there was and there can be no lease of the managing rights of the hotel business as such and on the contrary what was transferred was an outright transfer of the hotel together with the furniture, equipment etc. as well as the lease hold right of the erstwhile hotelier in the leased premises. The facts of this case bear a close similarity to the facts noticed in Bhagwan Das v .S. Rajdev Singh, (supra) That was a case where the premises let out to one Usha Sales was put under the occupation of one Bhagwan Das and when the landlord sought the eviction of the tenant on the ground of sub letting the plea raised was that Bhagwan Das had been appointed as an agent by Usha Sales for displaying and selling the protect o Usha Sales and Bhagwan Das was in the occupation of the premises on his own behalf for the purposes of his business as an agent. The Court after perusing the agreement entered into between Usha Sale and Bhagwan Das held that the appellant was given complete control and supervision of the premises, and that the agreement was a curious mixture of inconsistencies and was plainly a clumsy attempt to camouflage the sub tenancy which was intended to be created thereby. The facts of the present nt case, have a striking similarity to the facts noticed in that case and. therefore, the same conclusion should be reached in this case also. Besides the above said decision Mr. Iyer referred us to a decision of the Madras High Court in M. Rodgers vs N. Prakash Rao Naidu. (supra) where a tenant who was running a printing press in a leased building stopped the business and the manager began running the press as the lessee of the machinery without the tenant having any PG NO 211 share in the business. On the landlord sueing the tenant for eviction on the ground of subletting, the High Court held that since the machinery cannot be run unless it is placed in the premises where it is situated, the lessee of the machinery would get the advantage of the use of the business premises also and as such the lease amount stipulated for the lease of the machinery would also include the lease amount payable for the building and hence the transaction would clearly amount to the lessee subletting the building simultaneously with the leasing out of the machinery. The present case warrants the same view being taken especially in the light of the recitals in the agreement which stipulate that the amount payable by the second respondent would comprise in it the rent payable by the appellant landlord for the leased premises. At the end of the arguments it was represented at the bar that the second respondent has since vacated the premises and handed over the business to the appellant and that the appellant himself is now running the hotel through his son. We do not think the changed circumstances can affect the rights of the first respondent in any manner to have the appellant evicted on the ground of subletting. In the light of our conclusions, the appeal fails and is dismissed. However, having regard to the fact that the appellant would require some time to find an alternate place to shift his hotel, he is granted six month 's time from today to vacate the premises subject to his filing an undertaking within four weeks from today on the usual terms. There will be no order as to costs. R.S.S. Appeal dismissed.

The appellant had taken the demised premises on lease in 1953 for running a hotel. In August 1969 the hotel came to be run by the second respondent. Thereupon, the landlady Ist respondent terminated the tenancy as she had reasons to believe that the appellant had either transferred his rights under the lease or sublet the premises. On the appellant refusing to vacate, the first respondent filed petition under section 10 of the Andhra Pradesh Buildings (Lease, Rent and Eviction) Control Act, 1960 seeking eviction on the ground of sub letting. The Rent Controller ordered eviction. The appeals before the Appellate Authority failed. The High Court, in revision, affirmed the finding of sub letting. Before this Court, it was contended on the basis of the terms of the agreement entered into between the appellant and the second respondent, that the appellant transferred only the management rights of the hotel and had retained his rights under the lease. It was urged that the courts must look at the dominant intention of the parties. On the other hand, the first respondent contended that the true nature of the transaction was the handing over of the hotel on a permanent basis together with the tenancy rights of the appellant. Dismissing the appeal, it was, HELD: (I) On a conspectus of all the terms of the agreement the High Court was fully justified in taking the view that the appellant and the second respondent had used all the ingenuity at their command to camouflage the real nature of the transaction and made it appear that there was only a transfer of the managing rights of the business and PG NO 200 PG NO 201 not a transfer of the business in toto together with the right to occupy the leased premises. [208G H] (2) It was patent that the burden of paying the rent had been passed on to the second respondent and this could occur only if the premises had been sublet to him. [208B] (3) Though the agreement was initially for 11 months, the renewal clause would enable its extension for any length of time which was binding upon the heirs, successors, and assigns of the parties.[207G] (4) The agreement conferred proprietary rights on the second respondent over the hotel business inasmuch as he was made the sole authority to appoint the staff as well as terminate their services and empowered him to run the business on his own account and responsibility. [208B C] (5) Besides the agreement, the manner in which the second respondent had been conducting the business would also show that he was not a transfer of the managing rights alone but was a transfer of the business together with the appellant s interest in the leased premises also. [209C] Dwarka Prasad vs Dwarka Das Barar, 11976] I SCR 277; Md. Salim vs Md. Ali, ; , distinguished. M. Rodgers vs N. Prakash Rao Naidu, 11969] I MLJ 352 and Bhagwan Das vs section Rajeev Singh, , referred to. (6) At the end of the arguments in the case it was represented at the Bar that the second respondent has since vacated the premises and handed over the business to the appellant and hat the appellant himself was now running the hotel through his son. The changed circumstances could not, in the Court s opinion, affect the rights of the first respondent in any manner to have the appellant evicted on the ground of subletting. [211C D]

on No. 40 of 1955. Under Article 32 of the Constitution for a Writ of Habeas Corpus. 208 Purshottam Trikumdas, (K. B. Asthana, Syed Murtaza Fazl Ali and Rajinder Narain, with him) for the petitioner. M.C. Setalvad, Attorney General for India and C.K Daphtary Solicitor General for India (Porus A. Mehta and R.H. Dhebar, with them) for the respondents. April 7. The Judgment of Mukherjea C. J., Das, Vivian Bose and Imam JJ. was delivered by Das J. Sinha J. delivered a separate Judgment. DAS J. This is a petition for a writ in the nature of a writ of habeas corpus calling upon the respondents to show cause why the petitioner, who is now confined in the Central Jail at Rewa, should not be set at liberty. The petitioner 's grievance is that he has been deprived of his liberty otherwise than in accordance with procedure established by law. A rule nisi having been issued, the respondents have filed an affidavit by way of return to the writ. The question for our decision is whether the return is good and sufficient in law. The facts leading up to the present petition are few and simple. In the years 1948 and 1949 the petitioner was the Minister of Industries in the Government of Vindhya Pradesh which was at that time an acceding State within the meaning of section 6 of the Government of India Act, 1935 as amended in 1947. On the 11th April, 1949 the petitioner was arrested in Delhi on the allegation that he had accepted illegal gratification in order to show favour to Panna Dia mond Mining Syndicate in the matter of the lease of the Diamond Mines at Panna. In December, 1949 the petitioner along with one Mohan Lal, who was the then secretary in the Ministry of Industries, was put up for trial before the Court of Special Judge, Rewa, constituted under the Vindhya Pradesh Criminal Law Amendments (Special Courts) Ordinance No. V of 1949. The charges were under sections 120 B, 161 465 and 466 of the Indian Penal Code as adapted for Vindhya Pradesh by the Indian Penal Code (Application to Vindhya Pradesh) Ordinance No. XLVIII of 209 1949. By his judgment pronounced on the 26th July 1950 the Special Judge acquitted both the accused. The State preferred an appeal against that acquittal to the Judicial Commissioner of Vindhya Pradesh. By his judgment pronounced on the 10th March 1951 the Judicial Commissioner reversed the order of acquittal, convicted both the accused and sentenced them to different terms of rigorous imprisonment under the different sections in addition to the payment of certain fines. On the application of the petitioner and his co accused the Judicial Commissioner on the 12th March 1951 issued a certificate to the effect that four points of law raised in the case and formulated by him in his order Were fit for the consideration of this Court in appeal under article 134 of the Constitution of India. A petition of appeal was filed in this Court on the strength of this certificate of fitness and it was registered as Criminal Appeal No. 7 of 1951. As the case involved a substantial question of law as to the interpretation of the Constitution, it was, in April 1953, placed before a Bench of five Judges of this Court as required by article 145(3) of the Constitution. For convenience of reference we shall call a Bench of five or more Judges as the Constitution Bench. The validity of the convictions and sentences was challenged before the Constitution Bench on the ground that there had been infringements of articles 14 and 20 of the Constitution. A further point of law was raised that no appeal lay to the Judicial Commissioner from the acquittal by the special Judge. By their judgment pronounced on the 22nd May 1953 the Constitution Bench rejected all these objections. The judgment concluded with the following direction: "The appeal is accordingly directed to be posted for consideration whether it is to be heard on merits". This was evidently done in view of the fact that the certificate of fitness granted by the Judicial Cormmissioner was limited only to four points of law. The constitutional points having been disposed of, the appeal was placed before a Division Bench of three Judge who on the 20th October 1953 ordered 27 210 the appeal to be heard on the merits. The appeal was accordingly put up for hearing before another Division Bench consisting of three Judges. On the 5th March 1954 this Division Bench allowed the appeal of Mohan Lal and acquitted him but dismissed the appeal of the petitioner with respect to his conviction under sections 161, 465 and 466, Indian Penal Code, as adapted in Vindhya Pradesh, but set aside his conviction on the charge under section 120 B. The sentence of three years ' rigorous imprisonment was maintained but the sentence of fine was set aside. On the 18th March 1954 a petition for review was filed on behalf of the petitioner. It was directed against the judgment of the Constitution Bench pronounced on the 22nd May 1953 repelling the constitutional points as well as against the judgment of the Division Bench dated the 5th March 1954 dismissing the petitioner 's appeal on the merits. On objection being taken by the Registry against one application being filed for the review of two judgments one of which had been pronounced much earlier than the period allowed for filing a review application, the petitioner filed a second application for review of the judgment of the Constitution Bench and prayed for condonation of the delay in filing the same. On the 5th April 1954 the application for review was put up for hearing before the same Division Bench which had pronounced the judgment on the merits dated the 5th March 1954. After considering the points of review relating to that judgment the Division Bench on the same day came to the conclusion that no ground had been made out for review of that judgment and accordingly dismissed the petition. An order was drawn up as of that date directing the petitioner who had been previously enlarged on bail to surrender and serve out his sentence. On the 12th April 1954 another petition was filed on behalf of the petitioner praying that the review matter relating to the judgment of the Constitution Bench delivered on the 22nd May 1953 be placed before a Constitution Bench for final disposal. That review application was put up before a Constitution 211 Bench which on the 17th May 1954 declined to entertain the same. In the meantime the petitioner had in the last week of April 1954 surrendered and has since then been confined in the Central Jail at Rewa. The present application has, therefore, been made for a writ of habeas corpus on the allegation that the petitioner has been and is being deprived of his liberty otherwise than in accordance with procedure established by law. In the present petition the petitioner has again urged that the Court of the Judicial Commissioner of Vindhya Pradesh was not the proper forum for entertaining the appeal against the judgment of the Special Judge and consequently the judgment of the Judicial Commissioner setting aside the acquittal of the petitioner convicting and imposing sentence of imprisonment was void and inoperative. Alternatively, it has been urged that, assuming that the Judicial Commissioner had jurisdiction to hear the appeal from the Special Judge and his judgment was in accordance with procedure established by law, the appeal filed by the petitioner in this Court against the judgment of the Judicial Commissioner should have been, under article 145(3) of the Constitution, beard and completely disposed of by the Constitution Bench. As regards the first point as to the incompetency of the Court of the Judicial Commissioner to entertain the appeal from the decision of the Special Judge the same has been fully dealt with by the Constitution Bench and cannot be reagitated. Indeed, learned counsel appearing in support of this petition has not pressed the same. The only point urged before us is the alternative plea mentioned above which depends for its decision on a true construction of article 145. Article 145 by clause (1) authorises this Court, subject to the provisions of any law made by Parliament and with the approval of the President to make rules for regulating generally the practice and procedure of the Court, including, amongst others, rules as to the procedure for hearing appeals, as to the entertainment of appeals under sub clause (c) of clause (1) of article 212 134 and as to the conditions subject to which any judgment pronounced or order made by the Court may be reviewed and the procedure for such review. Clauses (2) and (3) of the article are in the terms following "(2)Subject to the provisions of clause (3), rules made under this article may fix the minimum number of Judges who are to sit for any purpose, and may provide for the powers of single Judges and Division Courts. (3)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 this Constitution or for the purpose of hearing any reference under article 143 shall be five: Provided that, where the Court hearing an appeal under any of the provisions of this Chapter other than article 132 consists of less than five Judges and in the course of the hearing of the appeal the Court is satisfied that the appeal involves a substantial question of law as to the interpretation of this Constitution the determination of which is necessary for the disposal of the appeal, such Court shall refer the question for opinion to a Court constituted as required by this clause for the purpose of deciding any case involving such a question and shall on receipt of the opinion dispose of the appeal in conformity with such opinion". The contention of the petitioner is that the question whether a particular case involves a substantial question of law as to the interpretation of the Constitution is to be examined at the time when the case first comes before this Court. If at that stage it is found that it is a case involving a substantial question of law as to the interpretation of the Constitution it becomes irrevocably impressed with that character and quality and the minimum number of Judges who are to sit for the purpose of deciding such case must be a Constitution Bench, that is to say, a Bench of at least five Judges. The argument then proceeds to say that once the Constitution Bench takes seisin of the case and starts the hearing that 213 Bench and that Bench alone must decide the whole of such case, that is to say, decide all questions, constitutional or otherwise, arising in the case. Sri Purshottam Trikumdas who appears in support of this petition has strongly relied on the language used in clause (3) and contends that "the case" cannot be split up and that the clause requires the entire case to be disposed of by the Constitution Bench. He, therefore, urges that the Division Bench had no jurisdiction to take up the case involving substantial ques tions of law as to the interpretation of the Constitution and consequently the judgment of that Division Bench pronounced on the 5th March, 1954 was illegal and void. According to him, his client 's appeal, in the eye of the law, remains undisposed of and as he had been let out on bail until the disposal of his appeal, his detention in jail pursuant to the judgment of the Division Bench, which is a nullity, amounts to deprivation of his personal liberty otherwise than in accordance with procedure established by law and is an infringement of his fundamental right under article 21 of the Constitution. The argument at first sight certainly appears to be plausible but on a deeper consideration of the constitutional provisions bearing on the subject and the general principles regulating the procedural powers of Courts we are unable to accept the same as sound or well founded. In this very case the Judicial Commissioner of Vindhya Pradesh had granted a certificate of fitness under article 134(1)(c). Consequently under the proviso to clause (3) of article 145 the appeal might well have been placed before a Division Bench consisting of less than five Judges. In that situation, being satisfied that the appeal involved a substantial question of law as to the interpretation of the Constitution the determination of which was necessary for the disposal of the appeal, that Division Bench could refer the question for the opinion of a Constitution Bench and on receipt of the opinion dispose of the appeal in conformity with such opinion; but to accede to the argument of Sri Purshottam Trikumdas will lead us to hold that while a Division Bench of three 214 Judges could split up this very case, had it been posted before it in the first instance, by referring the con stitutional questions to a Constitution Bench for its opinion and then, after receipt of that opinion, disposing of the rest of the case on merits in conformity with such opinion, a Constitution Bench of five or more Judges before which the case happened to be posted in the first instance could not split up the case by deciding the constitutional questions and leaving the rest of the case to be dealt with and disposed of by a Division Bench of less than five Judges on merits in conformity with the opinion of the Constitution Bench thus saving the time of the Constitution Bench. Reference may also be made to article 228 which authorises the High Court, if satisfied that a case pending in a Court subordinate to it involves a substantial question of law as to the interpretation of the Constitution the determination of which is necessary for the disposal of the case, to withdraw the case and either to dispose of the case itself or determine the said question of law and return the case to the Court from which it has been so withdrawn so as to enable the said Court to proceed to dispose of the case in conformity with the judgment of the High Court. Here again learned counsel 's argument leads us to hold that while the High Court can split up a case involving a substantial question of law as to the interpretation of the Constitution a Constitution Bench of this Court cannot do so. Apart from these provisions of the Constitution there are provisions made by procedural statutes which result in a case being partly heard by one Judge and partly by another Judge. To cite only a few instances, reference may be made to section 24 and Order 18, rule 15 of the Code of Civil Procedure and sections 350, 526, 528 and 556 of the Code of Criminal Procedure. The argument of Sri Purshottam Trikumdas, pushed to its logical conclusion, must amount to this that although Courts operating under the ordinary procedural code may split up cases into different stages for the purpose of hearing and decision) a Constitution Bench of this Court cannot do so if a case involving substantial questions of law as to 215 the interpretation of the Constitution happens to be posted before it in the first instance. Learned counsel for the petitioner recognises the incongruity that results from his argument but contends that it cannot be helped because the relevant provisions referred to above expressly sanction the splitting up of cases whereas the body of clause (3) of article 145 does not. His argument is that in the cases mentioned above splitting up of cases has to be allowed because the special provisions of the Constitution or other statutes provide for such splitting up in those cases. He contends that the very fact that these provisions had to be made clearly indicates that but for them there could not have been any splitting up of the case. It is said that these provisions are exceptions to the general rule of indivisibility of a case. We are unable to accept this reasoning as correct. In the first place the proviso to article 145(3), article 228 and the other provisions of the Codes referred to above quite clearly indicate that the splitting up of cases into different stages for bearing and decision is not repugnant to the Constitution or the general principles of procedural law. The underlying principle of the Constitution is clear and all that it insists upon is that all constitutional questions should be heard and decided by a Bench of not less than five Judges. As long as this requirement is fulfilled there can be no constitutional objection to the rest of the case being disposed of by a Division Bench of less than five Judges, so as to save the time of the Constitution Bench of five or more, Judges. In the next place we are not aware of any such general rule of indivisibility as is being insisted upon by learned counsel. There is nothing in principle which requires that a case,must always be decided in its entirety by one Judge or one set of Judges even though such a case may conveniently be dealt with in two or more stages. Indeed, in Maulvi Muhammad Abdul Majid vs Muhammad Abdul Aziz(1) the Privy Council pointed out that where a Judge had before (1) L.R. 24 I.A. 22. 216 him a case consisting of two parts, a question of title and an incidental question of account depending on title, it did not require any provision of the Civil Procedure Code to authorise him to decide the first question and reserve the second for further investigation and that to treat such a proceeding as beyond the power of the Court and as an error which barred the proceedings reserved for further decision was a serious miscarriage of justice. Indeed, the Court often exercises its inherent power, if it thinks fit to do so, to decide questions of jurisdiction or limitation or the like as preliminary questions reserving other questions of fact for future investigation. The decision of a case at two or more stages may and often does result in the case not being decided by the same Judge, for the Judge who decided at the first stage may, by reason of death, retirement or transfer, be not available for deciding the case at the later stages, it follows, therefore, that no argument can be founded on any supposed general rule of indivisibility of a case for the purpose of its hearing and decision. The consideration that there is no such general rule as is relied on by learned counsel and that the splitting up of cases is not generally repugnant to law and in particular to the Constitution, leads us to the conclusion that in construing clause (3) of article 145 no quality of indivisibility need be attributed to the words "the case" used therein. A case may, to begin with, involve a substantial question of law as to the interpretation of the Constitution, but it may cease to do so at a later stage. Suppose a case which involves a constitutional question is placed before a Constitution Bench but learned counsel appearing in support of the case intimates to the Bench that he does not press any constitutional point, surely he can not, in that situation, insist that the time of a Bench of five or more Judges should be spent on the determination of a case which, by his own election, has ceased to involve any constitutional question. Likewise, when the constitutional questions involved in the case are disposed of by a Constitution Bench what 217 remains of the case cannot properly or appropriately be described as still a "case involving a substantial question of law as to the interpretation of this Constitution". It should be borne in mind that when a case or appeal is properly admitted to this Court all that the parties are entitled to is a decision of this Court and not of any Particular Bench. So long as the minimum number of Judges which the Constitution and the rules framed by this Court prescribe are present to hear and decide the questions raised from stage to stage, they represent the Court for the purpose of giving decisions on its behalf and the parties get all that they are entitled to under the law. If a Court is entitled to decide a case in stages, as the Privy Council has held it can, there is no reason why article 145(3) should be so construed as to deprive this Court of that inherent power. It will involve no violation of any principle of natural justice or of any legal principle if we construe clause (3) of article 145 as requiring only that the minimum number of five Judges must sit for the purpose of deciding any case in so far and as long as it involves a substantial question of law as to the interpretation of this Constitution. We find nothing in the language of clause (3) of article 145 which militates against this interpretation of that clause. Indeed, it is on this interpretation that the practice has grown up in this Court for a Constitution Bench to dispose of all constitutional questions and to leave the other subsidiary questions for disposal by a Division Bench of less than five Judges in conformity with the opinion of the Constitution Bench. There is nothing that we find in the body of clause (3) of article 145 which compels us to depart from the famous maxim cursus curiae est lex curiae which was laid down by Lord Coke in Burrowes vs High Commission Court(1) and which was quoted with approval in Habibar Rahman vs Saidannessa Bibi(2). For reasons stated above we consider that a good and valid return has been made by the respondents to the rule nisi issued to them and this application must be dismissed. We order accordingly. (1) 3 Bulst. 48, 53. 331, 335. 218 SINHA J. I regret to have to differ from my learned brethren on the construction of article 145(3) of the Constitution which is the main question in controversy in this case. Clause (3) of article 145 is in these terms: "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 this Constitution or for the purpose of hearing any reference under article 143 shall be five: Provided that, where the Court hearing an appeal under any of the provisions of this Chapter other than article 132 consists of less than five Judges and in the course of the hearing of the appeal the Court is satisfied that the appeal involves a substantial question of law as to the interpretation of this Constitution the determination of which is necessary for the disposal of the appeal, such Court shall refer the question for opinion to a Court constituted as required by this clause for the 'Purpose of deciding any case involving such a question and shall on receipt of the opinion dispose of the appeal in conformity with such opinion". It is noteworthy that the Constitution has not vested this Court with complete power to make rules as to the constitution of Benches for hearing matters coming before this Court in its Original, Appellate or Advisery Jurisdiction. Clause (2) of article 145 has invested this Court with power to make rules fixing the minimum number of Judges who are to sit for any purpose and for defining the powers of single Judges and Division Courts. But this power is expressly made subject to the limitation laid down in clause (3) quoted above; that is to say, where any case involves a substantial question of law as to the interpretation of the Constitution (omitting the words not material for our present purpose) the minimum number of Judges prescribed by the Constitution to decide such a case is five. A case may involve questions of law as to the interpretation of the Constitution, as also other questions. In this case we have to determine whether clause (3) contemplates the whole case or a part of a 219 case. In my opinion, the Constitution while laying down clause (3) of article 145 contemplates the whole matter in controversy arising in a case which may include substantial questions of law as to the interpretation of the Constitution as also other questions. The main clause (3), excepting cases coming within the purview of the proviso does not contemplate a splitting up of a case into parts, one part involving substantial questions of law as to the interpretation of the Constitution and another part or parts not involving such questions. My reasons for coming to this conclusion are as follows: Clause (3) itself read along with the proviso makes a distinction between a "case" and a "question" of the nature indicated in the proviso to the clause. The Constitution has clearly indicated that cases coming within the purview of the proviso may be split up so as to admit of the questions of constitutional importance being determined by a Bench of at least five Judges who may be described for the sake of convenience as "Constitution Bench" in contradistinction to a Division Court consisting of less than five Judges, as is contemplated in the proviso. The main clause (3) requires a case of the description therein set out to be heard and decided by a Constitution Bench, whereas the proviso contemplates that only the question of constitutional importance (using a compendious phrase) has to be decided by a Constitution Bench and the case out of which such a question arises remaining in the seisin of the Division Court before which the case was originally placed for hearing. The Constitution has placed cases involving substantial questions of law of constitutional importance on a special footing. If the framers of the Constitution had intended that not the whole case but only particular questions of the nature indicated had to be heard by a minimum number of five Judges, they would have used words similar to those used in the proviso making it permissible for the Constitution Bench to give its opinion for the decision of the case by a Division Court in conformity with that opinion, 220 A reference to the terms of article 228 of the Constitution would also show that the framers of the Constitution were fully alive to the difference between the decision of the "case itself" and a "question of law" of constitutional importance involved in that case. It has made clear in that article that the High Court shall either decide the whole case including the question of law as to the interpretation of the Constitution which was necessary for the disposal of the case or determine only such a question or questions and return the case to the original court for disposal in conformity with the judgment of the High Court on such question or questions. The Constitution made these specific provisions to emphasize that there is a distinction between determining the case itself and determining a substantial question of law of constitutional importance. Can it be said that if clause (3) of article 145 had been enacted without the proviso, a case could be heard piecemeal first by a Constitution Bench which would determine only questions of law as to the interpretation of the Constitution, and then the residue of the case being heard and determined by a Division Court? That, in my opinion, would not be in compliance with the imperative provisions of the main clause (3). The framers of the Constitution therefore enacted the proviso in the nature of an exception to the general rule laid down in the main clause (3). It has to be observed that the proviso is limited to appeals only, subject to the further exception that such appeals should not have come up to this Court through the process laid down in article 132 of the Constitution. It is thus clear that not all cases contemplated in the main clause (3) but only appeals of a particular description would come within the qualifying provisions of the proviso. The word "case" has not been defined but it may be taken as settled law that it is much wider than a "suit" or an "appeal". Hence whereas the proviso would apply to appeals brought up to this court, except those under article 132 of the Constitution, the main clause (3) would apply to all appeals and all 221 other matters coming up to this Court in its Original, Appellate and Advisory jurisdictions. In my opinion, there cannot be the least doubt that the main provisions of clause (3) are all embracing, and contemplate all cases coming up to this Court. It has not been contended that the present case comes within the purview of the proviso but it has been said that if it is open to a Division Court to refer a question of constitutional importance to a Constitution Bench, why should not a Constitution Bench be competent to refer questions other than those of constitutional importance to a Division Court? The answer is that whereas the former is contemplated by the Constitution in terms, the latter is not. Nor are there any rules to that effect. But it has been further observed that the splitting up of a case into parts, one involving questions of constitutional importance and the remaining part not involving questions of that kind, is not against the provisions of the Constitution. But, in my opinion, if the Constitution has made a specific provision as to the splitting up of a case into parts, one cognisable by a Court of higher jurisdiction like a Constitution Bench and the rest by a court of lower jurisdiction like a Division Court, the argument is not available that a splitting up of a case apart from those specific provisions is also permissible. In this connection reference was made to certain provisions of the Code of Civil Procedure as also of the Code of Criminal Procedure to show that those Codes do contemplate hearing of the same case in part by different courts, but those are all courts of co ordinate jurisdiction in which the question of the power of the court itself relatively to the subject matter of the case is not in question. The court which originally dealt with the case and the court which finally came to hear and determine the matter were each one of them competent to deal with the whole matter or any part of it. That is not the position here. In this case the argument on behalf of the petitioner is that as admittedly his appeal involved substantial questions of law as to the interpretation of the Constitution and as it did not come 222 within the purview of the proviso to clause (3) of article 145 of the Constitution, it should have been dealt with throughout by a Constitution Bench. It was suggested in answer to this argument that after the questions of law of constitutional importance had been dealt with by the Constitution Bench the case ceased to be one involving such questions and therefore could have been heard by a Division Court. But the difficulty in accepting this argument is that once a Constitution Bench was seized of the case, it could not transfer it to another Bench for sharing the decision of that case with it. That Bench should have heard out the whole case and it had not the power to direct, and it did not so direct, that the remaining part of the case should be heard by a Division Court. Once a Constitution Bench is seized of the case, it has to hear the case to its conclusion. There was no process known to the rules framed under the rule making power of this Court by which a case once it came before a Constitution Bench could get transferred from that Bench to a Division Court either automatically or by orders of any authority. But it has been suggested that it may happen that a Constitution Bench may start the hearing of the case, and before the hearing is concluded one of the Judges is by reason of death or otherwise disabled from hearing out the case and in that event the Chief Justice has the power to constitute another Bench. But that is quite a different matter. In that case the hearing by the previous Bench comes to nothing and the Bench constituted afresh by the Chief Justice has to hear out the whole case afresh. It has also been suggested on the other side that a "case" may mean a part of a case. In my opinion, that submission is not well founded; because, if that argument were accepted and pushed to its logical conclusion, it may make the provisions of the main clause (3) of article 145 nugatory. Article 132 of the Constitution has been, as indicated above, excepted from the operation of the proviso to clause (3). Suppose an appeal is brought to this Court under article 132 of the Constitution as the case involved substantial 223 questions of law as to the interpretation of the Con stitution. That case besides involving questions of that character, may also involve other questions. If the argument that a "case" includes part of a case were accepted, then it will be permissible for a Constitution Bench to hear the questions of constitutional importance and leave the rest of the case to be determined by a Division Court, though such a case is expressly excluded from the operation of the proviso and thus is directly within the terms of the main clause (3). Hence every case coming before this Court involving a question of constitutional importance may be dealt with in part in so far as it relates to that question by a Constitution Bench and the remaining part by a Division Court. That, in my opinion, was not intended by the framers of the Constitution. The term "case" therefore must mean the whole matter in controversy before this Court. Such a matter may relate to one of several questions in controversy in the original court, if the determination of that question is sufficient to dispose of the case within the meaning of the Explanation to article 132 of the Constitution. It was further argued by the learned Attorney General that the whole clause (3) of article 145 along with the proviso must be read together. But even so read, the language of clause (3) does not warrant the hearing of the case piecemeal by different Benches unless it comes within the purview of the proviso. The proviso is meant to cover only a limited class of cases which otherwise would have come within the purview of the main clause (3). But the proviso cannot have a larger effect than is justified by its language, viz., that only a question of that description has to be referred for the opinion of the larger Bench, the case itself remaining on the file of the smaller Bench. The proviso thus makes a clear distinction between a "case" and a "question". It has also been said there is an inherent power in the court to transact its business according to its established practice. In the first place, this Court is still in its formative stages and it cannot be said to 224 have an "established practice". Secondly, it cannot establish a practice in the teeth of the provisions of the Constitution which it is pledged to uphold. The reference to the decision of the Privy Council in Moulvi Muhammad Abdul Majid vs Muhammad Abdul Aziz(1) is not apt because in that case the hearing at the two stages of the trial was to be done by a court of coordinate jurisdiction; that is to say, a court which could hear and determine the whole case or each of the two parts of the case taken separately by itself, unlike the present case in which the two parts of the hearing have been done by two courts of unequal power. Similarly the reference to the maxim " cursus curiae est lex curiae" of Coke C. J. in Burrowes vs High Commission Court(1), referred to in Habibar Rahman vs Saidannessa Bibi(3) and to the other cases all proceed on the assumption that there is nothing in the statute law against such a course being taken. But, in my opinion, such a nebulous practice is opposed to the positive provisions of clause (3) of article 145. In my opinion therefore, the present case comes directly within the main clause (3) of article 145 of the Constitution and is admittedly not covered by the proviso to that clause. That being so, the petitioner 's appeal to this Court has not been heard and determined in accordance with the procedure established by this Constitution and therefore the petitioner is entitled to the benefit of the protection afforded by article 21 of the Constitution. His appeal, therefore, has got to be heard and determined in accordance with the procedure laid down in article 145(3) of the Constitution. I would therefore allow the petition to this extent only that the appeal be heard by a Constitution Bench on a declaration that the judgment of the Division Court dated the 5th March 1954 is not that of a competent court. BY THE COURT: In accordance with the judgment of the majority, the petition is dismissed. (1) L.R. 21 I.A. 22. (2) 3 Bulst. 48, 53. (3) I.L.R. , 335.

Held (Per MUKHERJEA C.J., DAS, VIVIAN BOSE, and IMAM JJ. SINHA J. dissenting) that a Constitution Bench of five or more Judges before which a case happens to be posted in the first instance 207 is competent to split up the case by deciding the constitutional questions and leaving the rest of the case to be dealt with and disposed of by a Division Beach of less than five Judges on merits in conformity with the opinion of the Constitution Bench. The splitting up of cases into different stages for hearing and decision is not repugnant to the Constitution or the general principles of procedural law. The underlying principle of the Constitution is clear and all that it insists upon is that all constitutional questions should be heard and decided by a Bench of not less than five Judges. As long as this requirement is fulfilled there can be no constitutional objection to the rest of the case being disposed of by a Division Bench of less than five Judges, so as to save the time of the Constitution Bench of five or more Judges. There is no general rule of indivisibility of a case for the purpose of its hearing and decision: vide.proviso to Article 145(3) and Article 228 of the Constitution, section 24 and Order 18, Rule 15 of the Code of Civil Procedure and sections 350, 526, 528 and 556 of the Code of Criminal Procedure. Article 145(3) of the Constitution cannot be so construed as to deprive the Supreme Court of the inherent power of splitting up a case for the purpose of hearing and decision . Per SINHA J. The Constitution while laying down clause (3) of Article 145, contemplates the whole matter in controversy arising in a case, which may include substantial questions of law as to the interpretation of the Constitution as also other questions. The main clause (3), excepting cases coming within the purview of the proviso, does not contemplate a splitting up of a case into parts, one part involving substantial questions of law as to the interpretation of the Constitution and another part or parts not involving such questions. The language of clause (3) of Article 145 does not warrant the hearing of a case piecemeal by different Benches unless it comes within the purview of the proviso. The proviso is meant to cover only a limited class of cases which otherwise would have come within the purview of the main clause (3). But the proviso cannot have a larger effect than is justified by its language, viz., that only a question of that description has to be referred for the opinion of the larger Bench, the case itself remaining on the file of the smaller Bench. The proviso thus makes a clear distinction between a "case" and a "question". Maulvi Muhammad Abdul Majid vs Muhammad Abdul Aziz (L.R. 24 I.A. 22), Burrowes vs High Commission Court (3 Bulst. 48) and Habibar Rahman vs Saidannessa Bibi (I.L.R. , referred to.

etition Nos. 90 & 312 of 1992. Under Article 32 of the Constitution of India. , D.D. Thakur, Tapash Ray, M.L. Verma, Gauray Jain, and Ms. Abha Jain for the Petitioner in W.P. No. 90 of 1992. R.P. Gupta for the Petitioner in W.P. No. 312/92. G. Ramaswamy, Attorney General, D.P. Gupta, Solicitor General, B. Parthasarthy, C.V.S. Rao, A.S. Bhasme and Chava Badri Nath Babu for the Respondent. R. K. Jain, and Rajan Mukherjee for the customs, Excise & Gold (Control) Appellate Tribunal. K.K. Venugopal, Ms. Pallav Shisodia and C.S.S. Rao for the Respondent. The Judgments of the Court were delivered by AHMADI, J. We have had the benefit of the industry, erudition and exposition of the constitutional and jurisprudential aspects of law on the various questions urged before us in the judgment of our esteemed Brother K. Ramaswamy, J. But while concurring with the hereinafter mentioned conclusions recorded by him we would like to say a few words to explain our points of view. Since the facts have been set out in detail by our learned Brother we would rest content by giving an abridged preface which we consider necessary. It all began with the receipt of a letter dated December 26, 1991, from Shri R.K. Jain, Editor, Excise Law Times, addressed to then Chief Justice of India, Shri M.H. Kania, J., complaining that as the Customs, Excise and Gold Control Appellate Tribunal (for short 'the CEGAT) was without a President for the last over six months the functioning of the Tribunal was adversely affected, in that, the Benches sit for hardly two hours or so, the sittings commence late at about 10.50 818 a.m., there is a tendency to adjourn cases on one pretext or the other so much so that even passing of interim orders, like stay orders, etc., is postponed and inordinately delayed, and the general tendency is to work for only four days in a week. The work culture is just not there and the environmental degradation that has taken place is reflected in the letter of Shri G. Sankaran dated June 3, 1991 who prematurely resigned as the President of the CEGAT. Lastly, he says that there were nearly 42,000 appeals and approximately 2000 stay petitions pending in the CEGAT involving revenue worth crores of rupees, which will remain blocked for long. Three directions were sought, namely, "(i) the immediate appointment of the President to the CEGAT, preferably a senior High Court Judge , (ii) order an enquiry into the mal functioning of the CEGAT; and (iii) issue all other directions as your Lordship may deem fit and necessary. " This letter was directed to be treated as Public Interest Litigation and notice was issued to the Union of India restricted to relief No. (i) i.e. in regard to the appointment of the President of the CEGAT. On April 29, 1992, the learned Additional Solicitor General informed the Court that the appointment of the President was made. On the next date of hearing the relevant file on which the decision regarding appointment was made was produced in a sealed envelope in Court which we directed to be kept in safe custody as apprehension was expressed that the file may be tempered with. The focus which was initially on the working of the CEGAT and in particular against the conduct and behaviour one of its Members now shifted to the legality and validity of the appointment of respondent No. 3 as its President. Serious allegations were made against respondent No. 3 and his competence to hold the post was questioned. It was contended that his appointment was made in violation of the Rules and convention found mentioned in the message of Shri Y.V. Chandrachud, the then Chief Justice of India, dated October 5, 1992 forwarded on the occasion of the inauguration of the CEGAT. The further allegation made is that even though High Court Judges were available no serious attempt was made to requisition the services of one of them for appointment as President of the CEGAT. To put a quietus to the entire matter at an early date we called the file from the Registry on May 4,1992 but when we were about to peruse the same the learned Additional Solicitor General contended 'that the Court cannot inspect it because he desired to claim privilege '. We, therefore, directed that a formal application may be made in that behalf before the next date of hearing and returned the file to enable the making of such an application. 819 Accordingly, the then Finance Secretary filed an affidavit claiming privilege under sections 123 and 124, Evidence Act, and Article 74(2) of the Constitution. The Minister of State in the Finance Department was also directed to file an affidavit in support of the claim for privilege which he did. It is in this context that the question of privilege arose in the present proceedings. Our learned Brother Ramaswamy, J. dealt with this question elaborately. After referring to the provisions of the relevant Statutes and the Constitution as well as the case law of both foreign and Indian courts, the authoritative text books. he has concluded as under: "Having perused the file and given our anxious consideration we are of the opinion that on the facts of the case. . it is not necessary to disclose the contents of the records of the petitioner or his counsel. " We are in respectful agreement with this conclusion recorded by our learned Brother though not entirely for in the reasons which have weighed with him. On the question of appointment of respondent No. 3 as the President of the CEGAT we must notice a few provisions contained in the CEGAT Members (Recruitment anti Conditions of Service). Rules, 1997 (hereinafter called 'the Rules '). Rule 2(c) defines a member, to include the President of the CEGAT also; Rule 3 prescribes the qualifications for appointment and Rule 6sets out the method of recruitment of 'a member through a Selection Committee consisting of a Judge of the Supreme Court of 'India nominated by the Chief Justice of India. Rule 10 provides for the appointment of the President. It says that the Central Government shall appoint one of the members to be the President. Sub rule (2) then provides as under "(2) Notwithstanding anything contained in rule 6. a sitting or retired judge of a High Court may also he appointed by the Central Government as a member and President simultaneously. " Sub rule (4) and the proviso thereto bear reproduction "(4) Where a serving judge of a High Court is appointed as a member and President, he shall hold office as President for a period of three years from the date of his appointment or till he attains the age of 62 years, whichever is earlier: 820 Provided that where a retired judge of a High Court above the age of 62 years is appointed its President. he shall hold office for such period not exceeding three years as may be determined by the Central Government at the time of ' appointment or re appointment. " It will thus he seen that the rules empower the Central Government to appoint any member as the President of the CEGAT. It is true that under sub rule (4), a serving judge and under the proviso thereto, a retired judge, can also be appointed a Member and President simultaneously. In the case of a serving judge his age of superannuation is fixed at 02 years but in the case of a retired judge he may be appointed for it period of three years at the most. Insofar as a serving High Court Judge is concerned, he holds office until he attains the age of 62 years, vide Article 217 of the Constitution. It therefore, heats common sense why a sitting Judge of he High Court would opt to serve as the President of tile CEGAT if lie is to retire At the same age without any benefit. On tile contrary he would lose certain perks which are attached to tile office of a High Court Judge. Even status wise lie would suffer as his decisions would he subject to the writ jurisdiction of the High Court under Articles 226/227 of tile Constitution. He may agree to accept the offer only if he had an extended tenure of at least three years. We are, therefore, in agreement with our learned Brother that sub rule (4) of Rule 10 of the Rules needs a suitable change to make it sufficiently attractive for sitting High Court Judges to accept appointment as the President of the CEGAT. We also agree with our learned brother that to instill the confidence of the litigating public in the CEGAT. the Government must make a sincere effort to appoint a sitting Judge of the High Court is a President of the CEGAT in consultation of the Chief Justice of India and it a sitting Judge is not available the choice must fall on a retired Judge as far as possible. This would he consistent with the assurance given by the Finance Department as is reflected in the letter of Shri Chandrachud, extract wherefrom is reproduced by our learned Brother in his judgment. Shri Harish Chandra was a Senior Vice President when the question of ' filling, up the vacancy of the President came up for consideration. He was fully qualified for the post under the Rules. No challenge is made on that count. Under Rule 10(1) the Central (Government is conferred the power to appoint one of the Members to be the President. Since the validity of the Rule is not questioned there can be no doubt that the Central Government was entitled to appoint respondent No. 3 as the President. But it was said that the track record of respondent No. 3 was poor and he was hardly fit to hold the post of the President of the CEGAT. It has been averred that respondent No. 3 had been in the past proposed for appointment 821 as a Judge of the Delhi High Court but his appointment did not materialise due to certain adverse reports. Assuming for the sake of argument that these allegations are factually accurate, this Court cannot sit in judgment over the choice of the person made by the Central Government for appointment as a President if the person chosen is qualified and eligible for appointment under the Rules. We, therefore, agree with our learned Brother that this Court cannot sit in judgment over the wisdom of the Central Government in the choice of the person to be appointed as a President so long as the person chosen possesses the prescribed qualification and is otherwise eligible for appointment. therefore, cannot interfere with the appointment of respondent No. 3 on the ground that his track record was poor or because of adverse reports on which account his appointment as a High Court Judge had not materialised. The allegations made by Shri R.K. Jain in regard to the working of the CEGAT are rave and the authorities can ill afford to turn a Nelson 's eve to those allegations made by a person who is fairly well conversant with the internal working of the Tribunal. Refusal to inquire into such grave allegations, some of which are capable of verification, can only betray indifference and lack of a sense of urgency to tone up the working of the tribunal. Fresh articles have appeared in the Excise Law Times which point to the sharp decline in the functioning of the CEGAT pointing to a serious management crises. It is high time that the administrative machinery which is charged with the duty to supervise the working of the CEGAT wakes up from its slumber and initiates prompt action to examine the allegations by appointing a high level team which would immediately inspect the CEGAT, identify the causes for the crises and suggest remedial measures. This cannot brook delay. Lastly, the time is ripe for taking stock of the working of ' the various Tribunals set up in the country after the insertion of Articles 323A 323B in the Constitution. A sound justice delivery system is a sine qua non for the efficient governance of a country wedded to the rule of law. An independent and impartial justice delivery system in which the litigating public has faith and confidence alone can deliver the goods. After the incorporation of these two articles,Acts have been enacted whereunder tribunals have been constituted for dispensation of justice. Sufficient time has passed and experience gained in these last few years for taking stock of the situation with a view to finding out if they have serve the purpose and objectives for which they were constituted. Complaints have been heard in regard to the functioning, of other tribunals as well and it is time that a body like the Law Commission of India has comprehensive look in with a view to 822 suggesting measures for their improved functioning. That body can also suggest changes in the different statutes and evolve a model on the basis whereof tribunals may be constituted or reconstituted with a view to ensuring greater independence. An intensive and extensive study needs to be undertaken by the Law Commission in regard to the constitution of tribunals under various statutes with a view to ensuring their independence so that the public confidence in such tribunals may increase and the quality of their performance may improve. We strongly recommend to the Law Commission of India to undertake such an exercise on priority basis. A copy of this judgment may be forwarded by the Registrar of this Court to the Member Secretary of the Commission for immediate action. We have thought it wise to clarify the extent of our concurrence with the views expressed by our learned Brother in his judgment to avoid possibility of doubts being raised in future. We accordingly agree with our learned Brother that the writ petitions should stand disposed of accordingly with no order as to costs. K.RAMASWAMY, J.: The same facts gave birth to the twin petitions for disposal. by a common judgment. On October 11, 1982, the Customs Central Excise and Gold (Control) Appellate Tribunal for short 'CEGAT ' came into existence with Justice F.S. Gill as its President. After he retired in 1985 no Judge was appointed as President. In letter dated December 26, 1991, addressed to the Chief Justice of India, the petitioner highlighted the mal functioning of the CEGAT and the imperative to appoint a sitting or retired judge of the High Court as President to revitalise its functioning and to regenerate warning and withering faith of the litigant public of the efficacy of its adjudication. Treating it as writ petition on February 25, 1992 this court issued rule nisi to the first respondent, initially to make immediate appointment of the President of the CEGAT, prefer ably a senior High Court Judge. On March 30, 1992 when the Union 's counsel stated that the matter was under active consideration of the government, having regard to the urgency, this court hoped that the decision would he taken within two weeks from that date. On April 20, 1992 the learned Addl. Solicitor General reported that the appointment of the President had been made, however. the order was not placed on record. In the meanwhile die petitioner filed writ petition No. 312 of 1992 impugning the appointment of Sri Harish Chander, as President and sought to quash the same being in violation of the direction issued by this ( 'our( on February 25, 1992 and to strike down Rules 10(1), (3) and (4) of the CEGAT Members (Recruitment and Conditions of Service) Rules 1987, for short the 'Rule ' as violative of article 43 of the Constitution. Rule nisi was also issued to the respondents in that writ petition on May 4, 1992. The tile in a sealed cover was produced. The first and the third respondents were directed to file their counters 823 within four weeks. This court also directed the first respondent "to reflect in the counter what was the actual understanding in regard to the convention referred to in the letter of the then Chief Justice of India dated October 5, 1982"; "What procedure was followed at the time of the appointment by first respondents" and "whether Chief Justice of India was consulted or whether the first respondent was free to choose a retired or a sitting Judge of the High Court as President of the Tribunal with or without consultation of the Chief Justice of India". "It should also point out what procedure it had followed since then in the appointment of the President of the Tribunal". It should also clarify whether "before the third respondent was appointed as the President, "any effort or attempt was made to ascertain if any retired or a sitting Judge of the High Court could be appointed as the President of the Tribunal" and directed to post the cases for final disposal on July 21, 1992. At request, to enable to government to file a counter, the rile was returned. The Solicitor General though brought the file on July 21, 1992. objected to our inspecting the file and desired to claim privilege. The file was directed to be kept in the custody of the Registrar General till further orders. The union was directed to file written application setting out the grounds on which the claim for privilege is founded and directed the Registry to return the sealed envelop as the Solicitor General expressed handicap to make precise claim of the privilege for want of file. Thereafter an application was filed supported by the affidavit of the Secretary, Finance and the State Minister also filed his affidavit. Counter affidavits and rejoinders were exchanged in the writ petitions. The Attorney General also appeared on behalf of the Union. The government 's claim for privilege is founded upon section 123 of the and article 74 (2) of the Constitution of India. Later on the Solicitor General modified the stand that the government have no objection for the court to peruse the file but claimed privilege to disclose the contents of the file to the petitioner. Section 123 of the postulates that "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 124 provides that no public officer shall be compelled to disclose communications made to him in official confidence, "when he considers that the public interests would suffer by the disclosure". section 162 envisages procedure on production of the documents that a witness summoned to produce a document shall, if it is in his possession or power, bring it to the court, notwith standing any objection which there may be to its production or to its admissibility. 824 "The validity of any such objection shall be decided by the court. " The court, if it deems fit, may inspect the documents, unless it refers to matters of State, or take other evidence to enable it to determine on its admissibility. The remedy under article 32 of the Constitution itself is a fundamental right to enforce the guaranteed rights in Part 111. This court shall have power to issue writ of habeas corpus, mandamus, certiorari, quowarranto or any other appropriate writ or direction or order appropriate to the situation to enforce any of the fundamental right (power of High court under article 226 is wider). Article 144 enjoins that all authorities, civil and judicial, in the territory of India shall act in aid of this Court. Article 142 (1) empowers this Court to make such orders as is necessary for doing complete justice in any cause or matter pending before it. Subject to the provisions of any law made in this behalf by the Parliament, by Clause 2 of article 142. this 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. " When this Court was moved for an appropriate writ under article 32, rule nisi would be issued and for doing complete justice in that cause or matter, it has been invested with power to issue directions or orders which includes ad interim orders appropriate to the cause. All authorities, constitutional, civil judicial, statutory or persons in the territory of India are enjoined to act in aid of this court. This court while exercising its jurisdiction, subject to any law, if any, made by Parliament consistent with the exercise of the said power, has been empowered by Cl. 2 of article 142 with all and every power to make any order to secure attendance of any person, to issue "discovery order nisi" for production of any documents, or to order investigation . Exercise of this constituent power is paramount to enforce not only the fundamental rights guaranteed in Part III but also to do complete justice in any matter or cause, presented or pending adjudication. The power to issue "discovery order nisi" is thus express as well as inherent as an integral power of Judicial review and process in the court to secure the attendance of any person or discovery or production of any document or to order investigation in that behalf. However. in an appropriate case, depending on facts on hand, court may adopt such other procedure as would be warranted. The petitioner must make strong prima facie case to order discovery order nisi, etc. and it must not be a hunting expedition to fish out some facts or an attempt to cause embarrassment to the respondents nor for publicity. But on issuance of rule nisi by this Court under article 32 or a discovery order nisi the government or any authority, constitutional, civil, judicial. statutory or otherwise or any person, must produce the record in their 825 custody and disobedience thereof would be at the pain of contempt. Section 123 of the Evidence Act gives right to the government, in other words, to the minister or in his absence head of the department, to claim privilege, in other words immunity from disclosure of the unpublished official state documents in public interest. In a democracy, governed by rule of law State is treated at par with a person by article 19(6) in commercial/industrial activities. It possessed of no special privileges. This Court in State of U.P. vs Raj Narain & Ors. at 349 held that an objection claiming immunity should be raised by an affidavit affirmed by the head of the department. The court may also require a Minister to affirm an affidavit. They must state with precision the grounds or reasons in support of the public interest immunity. It is now settled law that the initial claim for public interest immunity to produce unpublished official records for short "state documents" should be made through an affidavit generally by the Minister concerned, in his absence by the Secretary of the department or head of the Department. In the latter case the court may require an affidavit of the Minister himself to be filed. The affidavit should indicate that the documents in question have been carefully read and considered and the deponent has been satisfied, supported by reasons or grounds valid and germane, as to why it is apprehended that public interest would be injured by disclosure of the document summoned or called for. If the court finds the affidavit unsatisfactory a further opportunity may be given to file additional affidavit or be may be summoned for cross examination. If the court is satisfied from the affidavit and the reasons assigned for withholding production or disclosure, the court may pass an appropriate order in that behalf. The Court though would give utmost consideration and deference to the view of the Minister, yet it is not conclusive. The claim for immunity should never be on administrative routine nor be a garb to avoid inconvenience, embarrassment or adverse to its defence in the action, the latter themselves a ground for disclosure. If the court still desires to peruse the record for satisfying itself whether the reasons assigned in the affidavit would justify withholding disclosure, the court would, in camera, examine the record and satisfy itself whether the public interest subserves withholding production or disclosure or making the document as part of the record. On the one side there is the public interest to be protected; on the other side of the scale is the interest of the litigant who legitimately wants production of some documents, which he believes will support his own or defeat his adversary 's case. Both are matters of public interest, for it is also in the public interest that justice should be done between litigating parties by production of all relevant documents for which public interest immunity has been claimed. They must be weighed one 826 competing public interest in the balance as against another equally competing public administration of justice. The reasons are: there is public interest that harm shall not be done to the nation or the public service by disclosure of the document in question and there is public interest that the administration of justice shall not be frustrated by withholding the document which must be produced, if justice is to be done. The court also should be satisfied whether, the evidence relates to the affairs of the State under sec. 123 or not; evidence is relevant to the issue and admissible. As distinct from private interest, the principle on which protection is given is that where a conflict arise between public and private interest, private interest must yield to the public interest. In S.P. Gupta & Ors. etc vs Union of India & Ors. [1982] 2 SCR 365, this court by seven Judges ' bench held that the court would allow the objection to disclosure if it finds that the document relates to affairs of State and its disclosure would be injurious to public interest, but on the other hand, if it reaches 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 in the administration of justice in the particular case before it overrides all other aspects of public interest, it will overrule the objection and order disclosure of the document. When an objection was raised against disclosure of a particular document that it belongs to a class which in the public interest ought not to be disclosed, whether or not it would be harmful to disclose that class document or the contents of that particular document forming part of the class would be injurious to the interest of the state or the public service, it would be difficult to decide in vacuum the claim because it would almost invariably be supported by an affidavit made either by the Minister or head of the department and if he asserts that to disclose the contents of the document would or might do to the nation or the public service a grave injury, the court out of deference will be slow to question his opinion or to allow any interest, even that of justice, to prevail over it unless there can be shown to exist some factors suggesting either lack of good faith or an error of judgment on the part of the minister or the head of the department or the claim was made in administrative routine without due consideration or to avoid inconvenience or injury to their defence. However, it is well settled law that the court is not bound by the statement made by the minister or the head of the department in the affidavit and it retains the power to balance the injury to the State or the public service against the risk of injustice. The real question which the court is required to consider is whether public interest is so strong to override the ordinary right and interest of the litigant that he shall be able to lay before a court of justice of the relevant evidence. In balancing the competing interest it is the duty of the court to see that there is the public interest that harm shall not be done to the nation or the 827 public service by disclosure of the document and there is a public interest that the administration of justice shall not be frustrated by withholding documents which must be produced if justice is to he done. It is, therefore, the paramount right and duty of the court not of the executive to decide whether a document will be produced or may he withheld. The court must decide which aspect of public interest predominates or in other words whether the public interest which requires that the document should not be produced out weighs the public interest that a court of justice in performing its functions should not be denied access to relevant evidence. In some cases, therefore, the court must weight one competing aspect of the public interest against the other, and decide where the balance lies. If the nature of the injury to the public interest is so grave a character then even private interest or any other interest cannot be allowed to prevail over it. The basic question to which the court would. therefore, have to address itself for the purpose of deciding the validity of the objection would be, whether the document relates to affairs of State or in other words, is it of such a character that its disclosure would be against the interest of the State or the public service and if so, whether the public interest in it ; non disclosure is so strong that it must prevail over the private interesting the administration of justice and on that account, it should not be allowed to be disclosed. By operation of Sec. 162 of Evidence Act the final decision in regard to the validity of an objection against disclosure raised under section 123 would always be with the court. The contention, therefore, that the claim of public interest immunity claimed in the affidavit of the State Minister for Finance and the Secretary need privacy and claim for immunity of state documents from disclosure is unsustainable. The same is the law laid down by the Commonwealth countries, see Conway vs Rimmer. ; ; D. vs National Society for the Prevention of Cruelty to Children ; ; Burmah Oil Co. Ltd. vs Governor and Company of the Bank of England, ; ; Butters Gas and Oil Co. vs Hammer ; Air Canada vs Secretary of State for Trade ; and Council of Civil Service Unions vs Minister for the Civil service, ; Pursuant to the law laid down in Conway 's, case the Administration of Justice Act, 1970 was made enabling the court to order disclosure of the documents except where the court, in exercise of the power under sections 31 to 34, considered that compliance of the order would be injurious to the public interest consistent with the above approach is the principle laid by this court in S.P. Gupta 's case. In United States of America the Primacy to the executive privilege is given only where the court is satisfied that disclosure of the evidence will expose military 828 secrecy or of the document relating to foreign relations. In other respects the Court would reject the assertion of executive privilege. hi United States vs Reynolds [1935] 1 ; , Environment Protection Agency vs Patsy T. Mink [410] U.S. ; 11; Newyork Times vs U. section ; Pentagan Papers case and U. section vs Richard M. Nixon ; = ; 1035. What is known as Watergate Tapes case, the Supreme Court of U.S.A. rejected the claim of the President not to disclose the conversation he had with the officials. The Administrative Procedure Act 5, Art 552 was made. Thereunder it was broadly conceded to permit access to official information. Only is stated hereinbefore the President is to withhold top secret documents pursuant to executive order to be classified and stamped as "highly sensitive matters vital to our national defence and foreign policies". In other respects under the Freedom of Information Act, documents are accessible to production. In the latest Commentary by McCormick on Evidence, 4th Ed. by John W. Strong in Chapter 12, surveyed the development of law on the executive privilege and stated that at p. 155, that "once we leave the restricted area of military and diplomatic secrets, a greater role for the judiciary in the determination of governmental claims of privilege becomes not only desirable but necessary. . . Where these privileges. are claimed, it is for the judge to determine whether the interest in governmental secrecy is out weighed in the particular case by the litigant 's interest in obtaining the evidence sought. A satisfactory striking of this balance will, on the one hand, require consideration of the interests giving rise to the privilege and an assessment of the extent to which disclosure will realistically impair those interests. On the other hand, factors which will affect the litigant 's need will include the significance of the evidence sought for the case. the availability of the desired information from other sources, and in some instances the nature of the right being, asserted in the litigation." In Robinson vs State of South Australia, PC, Shankey vs Whitlan [1979] 53 ALR p.1; FAI Insurances Ltd. vs The Hon. Sir, Henry Arthus Winneke and ors; , , whitlan vs Australian Consolidated Press Ltd.,[1985] 60 ALR p.7; Minister for Arts Heritage and Environment and Ors. vs Pekoi Wallsend Ltd and Ors. and Commonwealth of Australia vs Northern Land Council, and Anr. , Australian Courts consistently rejected the executive privilege and exercise the power to determine whether the documents need immunity from disclosure in the public interest. The same view was endorsed by the Supreme Court of 'Canada in R. vs Shinder and Gagnon vs Quebec, Securities Commission ; The Supreme Court of Victoria in Bruce vs Waldron. [1963] VLR p.3; The Court of Appeal of New south Wales in Re Tunstall. exhibit P. Brown, [1966] 84 W.N. (Pt. 2) 829 [N.S.W.] 13. The Court of Appeal of the New Zealand in Corbett vs Social Security Commission , Creednz Inc vs Governor General [1981] 1 N.L.R. p. 172; The Supreme Court of Ceylon in Apponhamy vs Illangaretute, [1964] 66 C.L.W. 17. The Court of Appeal of Jamaica in Allen vs By field [No.2] at page 71 and The Court of Session in Scotland in Glasqow Corporation vs Central Land Board, [1956] Scotland Law Time p.4. The learned Solicitor General contended that a Cabinet sub committee constituted under Rules of Business approved the appointment of Harish Chander as President of CEGAT. The President accordingly appointed him. By operation of article 77 (3) and 74(1), the appointment was made by the President. The file constitutes Cabinet documents forming part of the Preparation of the documents leading to the formation of the advice tendered to the President. Noting of the officials which lead to the Cabinet note and Cabinet decision and all papers brought into existence to prepare Cabinet note are also its part. Section 123 of the Evidence Act and Article 74(2) precludes this court from inquiring into the nature of the advice tendered to the President and the documents are, therefore, immuned from disclosure. The disclosure would cause public injury preventing candid and frank discussion and expression of views by the bureaucrats at higher level and by the Minister/Cabinet Sub committee causing serious injury to public service. Therefore, Cabinet papers, Minutes of discussion by heads of departments; high level documents relating to the inner working of the government machine and all papers concerned with the government policies belong to a class documents which in the public interest they or contents thereof must be protected against disclosure. The executive power of the Union vested in the President by Operation of article 53(1) shall be exercised by him either directly or through officers subordinate to him in accordance with the Constitution. By operation of article 73(1), subject to the provisions of the constitution, the executive power of the Union shall extend to the matters with respect to which Parliament has power to make laws. Article 75(1) provides that the Prime Minister shall be appointed by the President and the other Ministers shall be appointed by the President on the advice of the Prime Minister; article 75(3) posits that the Council of Ministers shall be collectively responsible to the House of the People; article 75(4) enjoins that before a Minister enters upon his office, the President shall administer to him the oaths of office and of secrecy according to the forms set out for the purpose in the Third Schedule to the Constitution. Article 74(1) as amended by section 11 of the Constitution 42nd Amendment Act, 1976 with effect from January 3, 1977 postulates that there shall be a Council of Ministers with the Prime Minister as the head to aid and advise the President who shall, in the exercise of his functions, act in accordance with such 830 advice. The proviso thereto added by section 11 of the Constitution 44th Amendment Act, 1978 which came into effect from June 20, 1979 envisages that "provided that the President may require the Council of Ministers to reconsider such advice, either generally or otherwise, and the President shall act in accordance with the advice tendered after such reconsideration. " Clause (2) declares that "the question whether any, and if so what, advice was tendered by Minister to the President shall not be inquired into in any court. " In Satwant Singh Sawhney vs D. Ramarathnam. Asstt. Passport Officer , and in Maganbhai Ishwarbhai Patel vs Union of India and anr. ; , this Court held that the Ministers are officers subordinate to the President under article 53 (1) or 'the Governor under article 154 (1),. as the case may be. The President exercises his executive power under Art: 74 (1) through the Council of Ministers with the Prime Minister as its head who shall be collectively responsible to the House of People. The exercise of the power would be as per the rules of business for convenient transaction of the Govt. administration made under article 77(3), viz., the Govt. of India (Transaction of Business) Rules, 1961 for short the 'Business Rules '. The Prime Minister shall be duty bound under article 78 to communicate to the President all decisions of the Council of Ministers relating to the administration of the affairs of the Union and proposals for legislation etc. The details whereof are not material. Article 77(1) prescribes that "all executive actions of the Govt. of India shall be expressed to be taken in the name of the President and shall be authenticated in the manner specified in the Rules made by the President. The President issued business rules and has allocated diverse functions to the Council of Ministers, its committees and the officers subordinate to them. In Shamsher Singh vs State of Punjab ; , a Bench of seven Judges, speaking through Ray, C.J., held that the executive power is generally described as the residue which does not fall within legislative or judical power but executive power also partakes of legislative or judicial, actions. All powers and functions of the President, except his legislative powers, are executive powers of the Union vested in the President under article 53(1). The President exercises his functions, except conferred on him to be exercised in his discretion, with the aid and advice of the Council of Ministers as per the business rules allocated among his Ministers or Committees. Wherever the constitution requires the satisfaction of the President, the satisfaction required of him by the Constitution is not the personal satisfaction of the President, but is of the Cabinet System of Govt. The Minister lays down the policies. The Council of Ministers settle the major policies. The civil servant does it on behalf of the Govt. as limb of the Govt. The decision of any Minister or officer under the rules is the decision of the President. 831 Cabinet is a constitutional mechanism to ensure that before important decisions are reached many sides of the question are weighed and considered which would mean that much work must be done beforehand in interdepartmental discussions and in the preparation of papers for Cabinet Committees. Political decisions of importance are in their nature complies and need sufficient time and considerate thought. Equally, the decisions relating to public service need probity and diverse consideration. The Cabinet system is extremely well adapted to making considered decisions with all due speed and expedition. The principle of ministerial responsibility has a verity of meanings precise and imprecise, authentic and vague. Parliament rarely exercises direct control over Ministers. Though the floor of the House is the forum for correcting excesses of the government but rarely a place where a Minister can be expected to keep the information secret. Therefore, the Minister is answerable for his decision to the Parliament is fanciful. Sir Ivor Jennings,in his Cabinet Government, stated that the Cabinet is the supreme directing authority. It integrates what would otherwise be a heterogeneous collection of authorities exercising a vast variety of functions. Neither the Cabinet nor the Prime Minister, as such, claims to exercise any powers conferred by law. They take the decision, but the acts which have legal effect are taken by others the Privy Council, a Minister, a statutory commission and the like. At page 81, it is stated, that the existence and activities of these coordinating ministers does not impair or diminish the responsibility to Parliament of the departmental ministers whose policies they co ordinate. The ministers are fully accountable to Parliament for any act of policy or administration within their departmental jurisdiction. It does not follow that the coordinating ministers are non responsible. Having no statutory powers as coordinating ministers, they perform in that capacity no formal acts. But they share in the collective responsibility of the Govt. as a whole, and, as Minister they are accountable to Parliament. At page 233, he stated that the Cabinet has to decide policy matters. Cabinet is policy formulating body. When it has determined on a policy, the appropriate department carries it out, either by administrative action within the law or by drafting a bill to be submitted to Parliament so as to change the law. The Cabinet is a general, controlling body. It neither desires, nor is able to deal with all the numerous details of the Govt. It expects a minister to take all decisions which are not of real political importance. Every Minister must, therefore, exercise his own discretion as to what matters arising in his department ought to receive cabinet sanction. At page 35 1, he stated that civil servants prepare memorandum for their Ministers. Ministers discuss in Cabinet. Proposals are debated in the House of Commons. At the, persons involved are peculiar people and nobody knows what the man in the back street thinks of it all, though the politician often thinks he does. On the Cabinet 832 Minister 's responsibility at page 449, he stated that when it is said that a Minister is responsible to Parliament, it is meant that the House of Commons (in our constitution Lok Sabha) may demand an explanation. If that explanation is not considered satisfactory and the responsibility is collective, the House will vote against the Govt. and so compel a resignation or a dissolution. If the responsibility is not collective, but the act or advice was due to the negligence of or to an error of judgment by a Minister and the House disapproves, the Minister will resign. In Halsbury 's Laws of England, Fourth Ed., Vol. 8, para 820, it is stated that the Cabinet control of legislative and executive functions, the "modern English system of government is the concentration of the control of both legislative and executive functions in a small body of men, presided over by the Prime Minister, who are agreed on fundamentals and decide the most important questions of policy secretly in the Cabinet. The most important check on their power is the existence of a powerful and organised parliamentary opposition, and the possibility that measures proposed or carried by the government may subject them to popular disapproval and enable the Opposition to defeat them at the next general election and supplant them in their control of the executive. In Great Britain, Cabinet system is based on conventions. Patrick Gordon Walker in his 'The Cabinet ' 1973 Revised Ed. at p. 178 stated that basically Cabinet is a constitutional mechanism to ensure that before important decisions are reached many sides of the question are weighed and considered. This means that much work must be done beforehand in interdepartmental discussions and in the preparation of papers for Cabinet Committees and the Cabinet. Cabinet that acts without briefs or over hastily ' think for themselves ' usually, in my experience, make mistaken decisions. Political decisions of importance are in their nature complex and need some time and thought. The cabinet system is extremely well adapted to making considered decisions with all due speed. Cabinet discussions as distinct from Cabinet decisions must, from their nature, be kept secret. At page 184 he maintained that the main effective change towards less secrecy would be for the Cabinet to share with Parliament and public more of the factual information on which the government makes some of their decisions. Moves in this direction have begun to be taken. In his "the British Cabinet" John P. Mackintosh, 2nd Edn. at p. 11 stated that if there is dissension between Ministers, matters may be thrashed out in private and the contestants plead in turn with the Prime Minister, but it is in the Cabinet that the conflict must be formally solved, the minority either accepting the decision and assuming joint responsibility or, if they cannot tolerate it, tender their resignations. At p.529, he stated that some decisions are taken by the Prime Minister alone, some in consultation between him and the senior Ministers, while others are left to heads of departments, to the full Cabinet, to the concerned Cabinet Committee, or to the 833 permanent officials. Of these bodies the Cabinet holds the central position because, thou oh it does not often govern in that sense, it is the place where disputes are settled, where major policies are endorsed and where the balance of the forces emerge if there is disagreement. In the end, most decisions have to be reported to the Cabinet and Cabinet Minister are the only ones who have the right to complain, if they have not been informed or consulted. Hood Phillips and Paul Jackson in their Constitutional and Administrative Law, 7th Ed. at p.301 stated that the duties of Cabinets are: "(a) the final determination of the policy to be submitted to Parliament ', (b) the supreme control of the national executive in accordance with the policy prescribed by the Parliament, and (c) the continuous coordination and delimitation in the interests of the several departments of State. " The Cabinet, giving collective . advice" to the Sovereign through the Prime Minister, was said to exercise under Parliament, supreme control over all departments of State, and to be the body which coordinate the work on the one hand of the executive and the legislature, and on the other hand of the organs of the executive among themselves. At p.307, they stated that "committee system has increased the efficiency of the Cabinet, and enables a great deal more work to be done by Ministers". The Cabinet itself is left free to discuss controversial matters and to make more important decisions, and its business is better prepared. The system also enables non Cabinet Ministers to be brought into discussions. At p.309 it is stated that "the responsibility of Ministers is both individual and collective". The individual responsibility of a Minister for the performance of his official duties is both legal and conventional: it is owed legally to the sovereign and also by convention to Parliament. Responsibility is accountability or answerability. The responsible Minister is the one under whose authority an act was, done, or "who must take the constitutional consequences of what has been done either by himself or in his department". In 'the Cabinet Walker, at page 183 stated that the feeling is widespread that the Cabinet shrouds its affairs in too much secrecy and that Parliament, Press and public should be able to participate to a greater degree in formulation of policy. With few exceptions Cabinet decisions have to be made public in order to he made effective, although a small number that do not need to be executed, do not become known, for instance talks with a foreign country or a decision not to take some action. All other cabinet decisions are necessarily disclosed and are subject to public scrutiny. Cabinet discussions as distinct from Cabinet decisions must, from their nature, be kept secret. Cabinet discussions often depend upon confidential advice from civil servants or reports from Ambassadors. If those are disclosed and thus become subject to public attack, it would be extremely difficult for the cabinet 834 to secure free and frank advice. In Rai Sahib Ram Jawaya Kapur & Ors. vs The State of Punjab at 236, this Court held that the existence of the law is not a condition precedent for the exercise of the executive power. The executive power connotes the residual government function that remain after legislative and judicial functions are taken away, subject to the provisions of the Constitution or the law. It would thus be held that the Cabinet known as Council of Ministers headed by Prime Minister under article 75(3) is the driving and steering body responsible for the Governance of the country. They enjoy the confidence of the Parliament and remain in office so long as they maintain the confidence of the majority. They are answerable to the Parliament and accountable to people. They bear collective responsibility and shall be bound to maintain secrecy. Their executive function comprises of both the determination of the policy as well as carrying it into execution, the initiation of legislation, the maintenance of order, the promotion of social and economic welfare, direction of foreign policy. In short the carrying on or supervision of the general administration of the affairs of Union of India which includes political activity and carrying on all trading activities, the acquisition, holding and disposal of property and the making of contracts for any purpose. In short the primary function of the Cabinet is to formulate the policies of the Govt. in confirmity with the directive principles of the Constitution for the Governance of the nation; place before the Parliament for acceptance and would carry on the executive function of the State as per the provisions of the Constitution and the laws. Collective responsibility under article 75(3) of the Constitution inheres maintenance of confidentiality as enjoined in oaths of office and of secrecy set forth in Schedule III of the Constitution that the Minister will not directly or indirectly communicate or reveal to any person or persons any matter which shall be brought under his/her consideration or shall become known to him/her as Minister except as may be required for the "due discharge of his/her duty as Minister". The base and basic postulate of its significance is unexceptionable. But the need for and effect of confidentiality has to be nurtured not merely from political imperatives of collective responsibility envisaged by article 75(3) but also from its pragmatism. Bagehot in his 'The English Constitution ', 1964 Edition at p. 68 stated that the most curious point about the Cabinet is that so very little is known about it. The meetings are not only secret in theory, but secret in reality. By the present practice, no official minute in all ordinary cases is kept of them. Even a private note is discouraged and disliked. . But a Cabinet, though it is a committee of the legislative assembly,is a committee with a power which no assembly would unless 835 for historical accidents, and after happy experience have been persuaded to entrust to any committee. It is a committee which can dissolve the assembly which appointed it; it is a committee with a suspensive veto a committee with a power of appeal. In Commonwealth of Australia vs Northern Land Council & Anr. [1991] 103 Australian Law Reports, p. 267, the Federal Court of Australia General Division, was to consider the scope of confidentiality of the cabinet papers, collective responsibility of the Council of Ministers and the need for discovery of the Cabinet note books and dealt with the question thus : "The conventional wisdom of contemporary constitutional practice present secrecy as a necessary incident of collective responsibility. But historically it seems to have derived from the 17th century origins of the cabinet as an inner circle of Privy Councillors, sometimes called the Cabinet Council who acted as advisors to the monarch. . However, that basis for confidentiality has to be assessed in the light of the political, imperatives of collective responsibility. " Confidentiality has been described as ' the natural correlative of collective responsibility. It is said to be difficult for Ministers to make an effective defence in public of decisions with which it is known that they have disagreed in the course of Cabinet discussions. The Cabinet as a whole is responsible for the advice and conduct of each of its members. If any member of the Cabinet seriously dissents from the opinion and policy approved ' by the majority of his colleagues it is his duty as a man of honour to resign. Cabinet secrecy is an essential part of the structure of government which centers of political experience have created. To impair it without a very strong reason would be vandalism the wanton rejection of the fruits of civilisation. By operation of article 75 (3) and oaths of office and of secrecy taken, the" individual Minister and the Council of Ministers with the Prime Minister as its head, as executive head of the State as a unit, body or committee are individually and collectively responsible to their decisions or acts or policies and they should work in unison and harmony. They individually and collectively maintain secrecy of the deliberations both of administration and of formulating executive or legislative policies. Advice tendered by the Cabinet to the President should be unanimous. The Cabinet should stand or fall together. Therefore, the Cabinet as a whole is collectively responsible for the advice tendered to the President and for the conduct of business of each of his/her department. They require to maintain secrecy and confidentiality in the performance of that duty of office entrusted by the Constitution and the laws. Political promises or aims as per manifesto of the political party are necessarily broad; in their particular applications, when voted to power, may be the subject of disagreement among the members of the Cabinet. 836 Each member of the Cabinet has personal responsibility to his conscience and also responsibility to the Government. Discussion and persuasion may diminish disagreement, reach unanimity, or leave it unaltered. Despite persistence of disagreement, it is a decision, though some members like it less than others. Both practical politics and good Government require that those who like it less must still publicly support it. If such support is too great a strain on a Minister 's conscience or incompatible to his/her perceptions of commitment and find it difficult to support the decision, it would be open to him/her to resign. So the price of the acceptance of Cabinet office is the assumption of the responsibility to support Cabinet decisions. The burden of that responsibility is shared by all. Equally every member is entitled to insist that whatever his own contribution was to the making of the decision, whether favourable or unfavourable, every other member will keep it secret. Maintenance of secrecy of an individual 's contribution to discussion, or vote in the Cabinet guarantees most favourable and conducive atmosphere to express views formally. To reveal the view, or vote, of a member of the Cabinet, expressed or given in Cabinet, is not only to disappoint an expectation on which that member was entitled to rely, but also to reduce the security of the continuing guarantee, and above all, to undermine the principle of Collective responsibility. Joint responsibility supersede individual responsibility; in accepting responsibility for joint decision, each member is entitled to an assurance that he will be held responsible not only for his own, but also as member if the whole Cabinet which made it; that he will be held responsible for maintaining secrecy of any different view which the others may have expressed. The obvious and basic fact is that as part of the machinery of the Government, Cabinet secrecy is an essential part of the structure of the government. Confidentiality and collective responsibility in that scenario are twins to effectuate the object of frank and open debate to augment efficiency of public service or effectivity of collective decision to elongate public interest. To hamper and impair them without any compelling or at least strong reasons, would be detrimental to the efficacy of public administration. It would tantamount to wanton rejection of the fruits of democratic governance, and abdication of an office of responsibility and dependability. Maintaining of top secrecy of new taxation policies is a must but leaking budget proposals a day before presentation of the budget may be an exceptional occurrence as an instance. Above compulsive constraints would give rise to an immediate question whether the minister is required to disclose in the affidavit the reasons or grounds for public interest immunity of disclosure and the oath of secrecy is thereby whether breached or whether it would be a shield for non production of unpub 837 lished state documents or an escape route to acts impugned as fondly pleaded and fervently argued by Attorney General. It is already held that on issuance of rule nisi or discovery order nisi" every or, ,an of the State or the authority or a person is enjoined to act in aid of this court and pursuant thereto shall be required to produce the summoned documents. But when a claim for public interest immunity has been laid for non disclosure of the state documents, it is the Minister 's "due discharge of duty" to state on oath in his affidavit the grounds on which and the reasons for which he has been persuaded to claim public interest immunity from disclosure of the state papers and produce them. The oath of secrecy the Minister had taken does not absolve him from filing the affidavit. It is his due discharge of constitutional duty to state in the affidavit of the grounds or reasons in support of public interest immunity from producing the state documents before the Court, In Attorney General vs Jonathan Cape Ltd. [1976] Queen 's Bench, 752, Lord Widgery, C.J., repelled the contention that publication of the diaries maintained by the Minister would be in breach of oath of secrecy. In support of the plea of secrecy reliance was placed on the debates on cabinet secrecy, that took place on December 1, 1932 in the House of Lords. An extract from the official report of House of Lords, at Column 520 Lord Hailsham 's speech emphasised the imperative to maintain secrecy and the limitation which rigidly hedged around the position of a Cabinet Minister thus: "having heard that oath read your Lordships will appreciate what a complete misconception it is. to suppose, as some people seem inclined to suppose, that the only obligation that rests upon a Cabinet Minister is not to disclose what are described as the Cabinet 's minutes. He is sworn to keep secret all matters committed and revealed unto him or that shall be treated secretrly in council". He went on to point out that: "I have stressed that because, as my noble and learned friend Lord Halsbury suggested and the noble Marquis, Lord Salisbury, confirmed, Cabinet conclusions did not exist until 16 years ago. The old practice is set out in a book which bears the name of the noble Earl 's father, Halsbury 's Laws of England, with which I have had the honour to be associated in the present edition. " Then in column 532 of the speech Lord Hailsham, stated that the oath of secrecy should be maintained. "Upon matters on which it is their shorn duty to express, their. opinions. with complete frankness and to give all information, without any haunting fear that what happens may hereafter by publication create difficulties for themselves or, what is far more grave, may create complications for the king and country that they are trying to serve. For those reasons I hope that the inflexible rule which has hitherto prevailed will be maintained in its integrity, and that if there has been any relaxation or misunderstanding, of which I say nothing, 838 the debate in this House will have done something to clarify the position and restate the old rule in all its rigour and all its inflexibility." As a Council of Minister, his duty is to maintain the sanctity of oath and to keep discussions and information he had during its course as secret. Lord Widgery after considering the evidence of a former Minister examined in that case who did not support the view of Lord Hailsham, held thus: "that degree of protection, afforded to cabinet papers and discussions cannot be determined by single rule of thumb. Some secrets require a high standard of protection for short time, other requires protection till a new political generation has taken over. In the Present action against the literary executors, "the perpetual injunction against them restraining from their publication was not proper". It was further held that the draconian remedy when public interest demands it would be relaxed. In Sankey vs Whitlan 1979 153 Australian Law Journal Reports, 11, while considering the same question, Gibbs, A.,C.J., at p.23, held that the fact that members of the Executive Council are required to take a binding oath of secrecy does not assist the argument that the production of State papers cannot be compelled. The plea of privilege was negatived and the Cabinet papers were directed to be produced. The contention that the Minister is precluded to disclose in his affidavit the grounds or the reasons as to how he dealt with the matter as a part of the claim for public interest immunity is devoid of substance. It is already held that it is the duty of the Minister to file an affidavit stating the grounds or the reasons in support of the claim from public interest immunity. He takes grave risk on insistence of oath of secrecy to avoid filing an affidavit or production of State documents and the court may be constrained to draw such inference as are available at law. Accordingly we hold that the oath of office of secrecy adumberated in Article 75(4) and Schedule III of the Constitution does not absolve the Minister either to state the reasons in support of the public interest immunity to produce the state documents or as to how the matter was dealt with or for their production when discovery order nisi or rule nisi was issued. On the other hand it is his due discharge of the duty as a Minister to obey rule nisi or discovery order nisi and act in aid of the court. The next limb of the argument is that the Cabinet Sub committee 's decision is a class document and the contents of state documents required to be kept in confidence for efficient functioning of public service including candid and objective expression of the views on the opinion by the Ministers or bureaucrats etc. The prospects of later disclosure at a at a litigation would hamper and dampen 839 candour causing serious incursion into the efficacy of public service and result in deterioration in proper functioning of the public service. This blanket shielding of disclosure was disfavoured right from Robinson vs State of South Australia [1931] Appeal Cases, (P.C.), p. 704 Lord Warrington speaking for the Board held that the privilege is a narrow, one and must sparingly be exercised. This court in Raj Narain 's case considering green book, i.e., guidelines for protecting VVIPs on tour, though held to be confidential document and be wihheld from production, though part of its contents were already revealed, yet it was held that confidentiality itself is not a head of privilege. In S.P. Gupta 's case, Bhagwati, J., speaking per majority, reviewing the case law and the privilege against disclosure of correspondence exchanged between the Chief Justice of the Delhi High Court, Chief Justice of India and the Law Minister of the Union concerning extension of term or appointment of Addl. Judges of the Delhi High Court, which was not dissented, (but explained by Fazal Ali,J.) held that in a democracy, citizens are to know what their Govt. is doing. No democratic Govt. can survive without accountability and the basic postulate of accountability is that the people should have information about the functioning of the Govt. It is only if the people know how the Govt. is functioning and that they can fulfill their own democratic rights given to them and make the democracy a really effective participatory democracy. There can be little doubt that exposure to public scrutiny is one of the surest means of running a clean and healthy administration. Disclosure of information in regard to the functioning of the Govt. must be the rule and secrecy can be exceptionally justified only where strict requirements of public information was assumed. The approach of the court must be to alleviate the area of secrecy as much as possible constantly with the requirement of public interest bearing in mind all the time that the disclosure also serves an important ' aspect of public interest. In that case the correspondence between the constitutional functionaries was inspected by this court and disclosed to the opposite parties to formulate their contentions. In Conway 's case, the speech of Lord Reid is the sole votery to support the plea of confidentiality emphasising that, "the business of Govt. is difficult enough as it is no Govt. could contemplate with equanimity the inner workings of the Govt. machine being exposed to the gazes of those ready to criticise without adequate knowledge of the background and perhaps with some axe to grind". Other Law Lords negated it. Lord Morris of Borth y Gest referred it as "being doubtful validity". Lord Hodson thought it "impossible to justify the doctrine in its widest term. Lord Pearce considered that "a general blanket protection of wide classes 840 led to a 0complete lack of common sense". Lord Upjohn found it difficult to justify the doctrine "when those in other walks of life which give rise to equally important matters of confidence in relation to security and personal matters as in the public service can claim no such privilege". In Burmah Oil Co 'section case House of Lords dealing with the cabinet discussion laid that the claim for blanket immunity "must now be treated as having little weight, if any". It was further stated that the notion that "any competent and conscientious public servant would be inhibited at all in the candour of his writings by consideration of the off chance that they might have to be produced in a litigation as grotesque". The plea of impairment of public service was also held not available stating "now a days the state in multifarious manifestations impinges closely upon the lives and activities of individual citizens. Where this was involved a citizen in litigation with the state or one of its agencies, the candour argument is an utterly insubstantial ground for denying his access to relevant document". The candour doctrine stands in a different category from that aspect of public interest which in appropriate circumstances may require that the "Sources and nature of information confidentially tendered" should be with held from disclosure. In Reg vs, Lewes Justices, Ex Parte Secretary of state for the Home Department [1973] A.C. 388 and D.V National Society ,for the Prevention of Cruelty to Children ; , are cases in point on that matter and needs no reiteration. It would, therefore, be concluded that it would be going too far to lay down that no document in any particular class or one of the categories of cabinet papers or decisions or contents thereof should never, in any circumstances, be ordered to be produced. Lord Keith in Burnnah Oil 's case considered that it would be going too far to lay down a total protection to cabinet minutes. The learned Law Lord at p. 1134 stated that "something must turn upon the subject matter, the persons who dealt with it, and the manner in which they did so. In so far as a matter of government policy is concerned, it may be relevant to know the extent to which the policy remains unfulfilled, so that its success might be prejudiced by disclosure of the considerations which led to it. In that context the time element enters into the equation. Details of an affair which is stale and no longer of topical significance might be capable of disclosure without risk of damage to the public interest. . The nature of the litigation and the apparent importance to it of the documents in question may in extreme cases demand production even of the most sensitive communications to the highest level." Lord Scarman also objected total immunity to Cabinet documents on the plea of candour. In Air Canada 's case, Lord Fraser lifted Cabinet minutes front the total immunity to disclose, although same were entitled to a hi oh degree of protection . ." 841 In Jonathan Cape Ltd. 's case, it was held that, "it seen is that the degree of protection afforded to Cabinet papers and discussions cannot be determined by a single rule of thumb. Some secrets require a high standard of protection for a short time. Others require protection until new political generation has taken over. Lord Redcliff Committee, appointed pursuant to this decision, recommended time gap of 15 years to withhold disclosure of the cabinet proceedings and the Govt. accepted the same. Shanky 's case ratio too discounted total immunity to the Cabinet document as a class and the plea of hampering, freedom and candid advice or exchange of views and opinions was also rejected. It was held that the need for protection depends on the facts in each case. The object of the protection is to ensure the proper working of the Govt. and not to shield the Ministers and servants of the crown from criticism however, intemperate and unfairly based. Pincus J. in Harbour Corp. of Queensland vs Vessey Chemicals Ply Ltd. ; Wilcox J. in Manthal Australia Pty Ltd. vs Minister for industry, Technology and commerce 11987171 ALR 109; Koowarta vs Bjelke Petersen [1988] and took the same view. In Australia, the recognised rule thus is that the blanket immunity of all Cabinet documents was given a go bye. In United States vs Richard M. Nixon ; = 41 Lawyers Ed., 2nd Ed., 1039, a grand jury of the United States District Court for the District of Columbia indicted named individuals, charging them with various offences, including conspiracy to defraud the United States and to obstruct justice; and Mr Nixon, the President of United States was also named as an unindicted coconspirator. The special prosecutor issued a third party subpoena duces tecum directing the President to produce at the trial certain tape recordings and documents relating to his conversations with aides and advisors known as Watergate rapes. The President 's executive privilege again st disclosure of confidential communications was negatived holding that the right to the production of all evidence at a criminal trial has constitutional dimensions under sixth amendment. The fifth amendment guarantees that no person shall be deprived of liberty without due process of law. It was, therefore, held that it is the manifest duty of the court to vindicate those guarantees, and to accomplish that, it is essential that all relevant and admissible evidence be produced. Though the court must weigh the importance of the general privilege of confidentiality of Presidential communications in performance of his responsibilities, it is an inroad on the fair administration of criminal justice. In balancing between the President 's generalised interest in confidentiality and the need for relevant evidence in the litigation, civil or criminal and though the interest in preserving confidentiality is weighty indeed "and entitled to great respect. " Allowing privilege to withhold evidence that is demonstrably relevant in a criminal trial would cut deeply into the guarantee of due process of law and gravely impair the basic function of the courts. A President 's acknowledged need for 842 confidentiality in the communications of his office is general in nature, whereas constitutional need for production of relevant evidence in a criminal proceeding is specific, and central to the fair adjudication of a particular criminal case in the administration of justice. Without access to specific facts a criminal prosecution may be totally frustrated. The President 's broad interest in confidentiality of communications will not be vitiated by disclosure of a limited number of conversations preliminarily shown to have some bearing on the pending criminal cases. If the privilege is based only on the generalized interest in confidentiality, it cannot prevail over the fundamental demands of due process of law in the fair administration of criminal justice. The generalized assertion of privilege must yield to the demonstrated, specific need for evidence in a pending criminal trial. Exemptions were engrafted only to the evidence relating to "the security of the State, diplomatic relations and defence". It was held that "the importance of this confidentiality is too plain to require further discussion. Human experience teaches that those who expect public dissemination of their remarks may well temper candor with a concern for appearances and for their own interest to the detriment of the decision making process. Whatever the nature of the privilege of confidentiality of Presidential communications in the exercise of article 11 powers, the privilege can be said to derive from the supremacy of each branch within its own assigned area of constitutional duties. Certain powers and privileges flow from the nature of enumerated powers, the protection of the confidentiality of Presidential communications has similar constitutional underpinnings. However, neither the doctrine of separation of powers, nor the need for confidentiality of high level communications, without more, can sustain an absolute, unqualified Presidential privilege of immunity from judicial process under all circumstances. The President 's need for complete candor and objectivity from advisers calls for great deference from the courts. However, when the privilege depends solely on the broad, undifferentiated claim of public interest in the confidentiality of such conversations, a confrontation with other values arises. Absent a claim of need to protect military, diplomatic, or sensitive national security secrets, we find it difficult to accept the argument that even the very important interest in confidentiality of Presidential communications is significantly diminished by production of such material for in camera inspection with all the protection that a district court will be obliged to provide. In a clash of public interest that harm shall be done to the nation or the public service by disclosure of certain documents and the administration of justice shall not be frustrated by withholding the document which must be produced if justice is to be done, it is the courts duty to balance the competing interests by weighing in scales, the effect of disclosure on the public interest or injury to administration 843 of justice, which would do greater harm. Some of the important considerations in the balancing act are thus: "in the interest of national security some information which is so secret that it cannot be disclosed except to a very few for instance the state or its own spies or agents just as other counters have. Their very lives may be endangered if there is the slighest hint of what they are doing. In Mark Hosenball. R. vs Home Secretary. ex parte Hosenball , in the interest of national security Lord Denning, M.R. did not permit disclosure of the information furnished by the security service to the Home Secretary holding it highly confidence The public interest in the security of the realm was held so great that the sources of the information must not be disclosed nor should the nature of the information itself be disclosed. There is a natural temptation for people in executive position to regard the interest of the department as paramount forgetting that there is yet another Greater interest to be considered, namely, the interest of justice itself. Inconvenience and justice are often not on speaking terms. No one can suppose that the executive will never be guilty of the sins common to all people. Sometimes they may do things which they on which they on ought not to do or will not do things they ought to do. The court must be alive to that possibility of the executive committing illegality in its process, exercising its powers, reaching a decision which no reasonable authority would have reached or otherwise abuse its powers, etc. If and when such wrongs are suffered or encountered injustice by an individual what would be the remedy? Just as shawl is not suitable for winning the cold, so also mere remedy of writ of mandamus, certiorari, etc. or such action as is warranted are not enough, unless necessary foundation with factual material, in support thereof, are laid. Judicial review aims to protect a citizen from such breaches of power, non exercise of power or lack of power etc. The functionary must be guided by relevant and germane considerations. If the proceeding, decision or order is influenced by extraneous considerations which ought not to have been taken into account, it cannot stand and needs correction, no matter of the nature of the statutory body or status or stature of the constitutional functionary though might have acted in good faith. Here the court in its judicial review, is not concerned with the merits of the decisions, but its legality. It is, therefore, the function of the court to see that lawful authority is not abused. Every communication that passes between different departments of the Govt. or between the members of the same department interse and every order made by a Minister or Head of the Department cannot, therefore, be deemed to relate to the affairs of the state, unless it related to a matter of vital importance, the disclosure of which is likely to prejudice the interest of the state. Confidentiality, candour and efficient public service often bear common 844 mask. Lord Keath in Burmah Oil 's case, observed that the notion that any ' competent or conscientious public servant would be inhibited in the candour of his writings by consideration of the off chance that they might have to be produced inlitigationisgrotesque. The possibility that it impairs the public service was also nailed. This court in section P. Gupta 's case also rejected the plea of hampering candid expression of views or opinion by constitutional functionaries and bureaucrats. In Whitlam vs Australian Consolidated Press [1985] 60 ALR p. 7, the Supreme Court of Australia Capital territory in a suit for damages for defamation, the plaintiff, the former Prime Minister of Australia was called upon to answer certain interrogatories to disclose discussions and words uttered at the meeting of the Cabinet or of the Executive Council at which the plaintiff had been present. The commonwealth intervened and claimed privilege prohibiting the plaintiff to disclose by answering those interrogatories. The claim was based on two grounds: (i) the oath taken by the plaintiff as a member of the Executive Council; and also immunity from disclosing of the Cabinet meetings and both were public policies. It was also contended that it would be in breach of the principle of collective Cabinet responsibility. The court held that the oath taken by the plaintiff did not in itself provide a reason for refusing to answer the interrogatories whether immunity from disclosure would be granted depends upon the balancing of two competing aspects, both of public policy, on the one hand the need to protect a public interest which might be endangered by disclosure, and on the other the need to ensure that the private rights of individual litigants are not unduly restricted. The disclosure of the meeting of the Cabinet or of the Executive Council would not be a breach of the principle of other two responsibilities. Bagehot stated, protection from disclosure is not for the purpose of shielding them from criticism, but of preventing the attribution to them of personal responsibility. It was stated that "I am not required to lay down a precise test of when an individual opinion expressed in Cabinet becomes of merely historical interest". The Cabinet minutes and minutes of discussion are a class. They might in very special circumstances be examined. Public interest in maintaining Cabinet secrecy easily outweighs the contrary public interest in ensuring that the defendant has proper facilities for conducting its case, principally because of the enormous importance of Cabinet secrecy by comparison with the private rights of an individual and also because of the relative unimportance of these answers to the defendant 's case. Answers to interrogatories 87 (vii), (viii) and (ix) were restrained to be disclosed which relates to the members of the Council who expressed doubts as to whether the borrowing was wholly for temporary purpose and to identify such purpose. In Jonathan Cape Ltd. case, Lord Widgery CJ. held that publication of the Cabinet discussion after certain lapse of time would not inhibit free discussion in the Cabinet of today, even though the individuals involved are the same, and the national problems have a distressing similarity with those of a decade ago. It is difficult to say at what point the material 845 loses its confidential character. on the ground that publication will no longer undermine the doctrine of joint Cabinet responsibility. The doctrine of ' joint Cabinet responsibility is not undermined so long as the publication would not "inhibit free discussion in the Cabinet and the court decides the issue '. In Minister for Arts Heritage and Environment and Ors. vs Peko Wallsend Ltd. and Ors. 11987175 ALR 218, Federal Court of Australia General Division, the respondent had mining lease under the existing law. In 1986 the Cabinet decided that portion of the same land covered by KNP Kakadu National Park in the Northern Territory (State 2) was earmarked for inclusion in the World Heritage List (the List) which had been established under the World Heritage Convention (the Convention) and to submit to Parliament aplan of management for the national park which differed from a previous plan "which enabled exploration and mining to take place outside pre existing leases with the approval of the Governor General". Under the Convention on listing, could be made without the "consent" of the State party concerned. The respondents laid the proceedings to restrain the appellants from taking further steps to have Stage 2 nominated for inclusion on the list on the basis that Cabinet was bound by tile rules of natural justice to afford the man opportunity to be heard and that it failed to do so. The Single Judge declared the action as void. Thereafter the National Park and Wildlife conservation Amendment Act, 1987 came into force adding sub section (IA) to section 10 of that Act which provides that "No operations for the recovery of ' minerals shall be carried on in Kakadu National Park". While allowing the appeal, the full court held that the Executive action was not immune from judicial review merely because it was carried out in pursuance of a power derived from the prerogative rather than a statutory source. The decision taken for the prerogative of the Cabinet is subject to judicial review. In Commonwealth of Australia vs Northern Land Council and Anr. [1991] 103 ALR p.267, in a suit for injunction for Northern Land Council (NLC) against the Commonwealth sought production of certain documents including 126 Cabinet notebooks. A Judge of the Federal Court ordered the Commonwealth to produce the notebooks for confidential inspection on behalf of NLC. On appeal it was held that information which may either directly or indirectly enable the party requiring them either to advance his own case or to damage the case of his advisory are necessary. The class of Cabinet papers do not afford absolute protection against disclosure and is not a basis for otherwise unqualified immunity from production. The Commonwealth cannot claim any immunity for public interest immunity from production. The court should decide at the threshold balancing of the public interest in the administration of justice. The court does not have to be satisfied that, as a matter of likelihood rather than mere speculation, the materials would contain evidence for tender at trial. 846 In a democracy it is inherently difficult to function at high governmental level without some degree of secrecy. No Minister, nor it Senior Officer would effectively discharge his official responsibilities if every document prepared to formulates sensitive policy decisions or to make assessment of character rolls of coordinate officers at that level if they were to be made public. Generally assessment of honesty and integrity is a high responsibility. At high co ordinate level it would be a delegate one which would furthered compounded when it is not backed up with material. Seldom material will be available in sensitive areas. Reputation gathered by an officer around him would form the base. If the reports are made known, or if the disclosure is routine, public interest grievously would suffer. On the other hand, confidentiality would augment honest assessment it) improve efficiency and integrity in the officers. The business of the Govt. , when transacted by bureaucrats, even in personal level, it would be difficult to have equanimity if the inner working of the Govt. machinery is needlessly exposed to the public. On such sensitive issues it would hamper the expression of frank and forthright views or opinions. Therefore, it may be that at that level the deliberations and in exceptional cases that class or category of documents get protection in particular, on policy matters. Therefore. the court would he willing to respond to the executive public interest immunity to disclose certain documents where national security or high policy, high sensitivity is involved. In Asiatic Petroleium vs Anglo Persian Oil , the court refused production of the letter concerning the Govt. plans relating to Middle Estern campaigns of the First World was. as claimed by the Board of Admiralty. Similarly, in Duncan vs Cammell Laired, ; , tile House of lords refused disclosure of the design of sub marine. The national defence as a class needs protection in the interest of security of the State. Similarly to keep good diplomatic relations the state documents or official or confidential documents between the Govt. and its agencies need immunity from production. In Council of Civil Service Union vs Minster for Civil Service the Govt. Communications headquarters (GCHQ) functions were to ensure the security of military and official communications and to provide the Govt. with signals intelligence. They have to handle secret information vital to national security. The staff of CCHQ was permitted to be members of the trade union, but litter on instructions were issued, without prior consultation, amending the Staff rules and directed them to dissociate from tile trade union activities. The Previous practice of prior consultation before amendment was not followed. Judicial review 847 was sought of the amended rules pleading that failure to consult the union before amendment amounts to unfair act and summoned the records relating to it. An affidavit of the cabinet Secretary was filed explaining the disruptive activities, the national security, and the union actions designed to damage Govt. agencies. Explaining the risk of participation by the members in further disruption, the House held that executive action was not immune from judicial review merely because it was carried out in pursuance of a power derived from a common law, or prerogative, rather than a statutory source and a minister acting under a prerogative power might, depending upon its subject matter, whether under the same duty to act fairly as in the case of action under a statutory power. But, however, certain information. on consideration of national security, was withheld and the failure of prior consultation of the trade union or its members before issue the amended instruction or amending the rules was held not infracted. In Burmah Oil Co 'section case. at an action by the Oil Company against the Bank for declaration that the sale of units in British Petroleum held by the company at 2.30 Pounds per unit was unconscionable and inequitable. The oil company sought production of the cabinet decision and 62 documents in possession and control of the bank. The state claimed privilege on the basis of the certificate issued by the Minister. House of Lords per majority directed to disclose certain documents which were necessary to dispose of the case fairly. Lord Scarman laid that they were relevant, but their significance was not such a:, to override the public interest objections to their production. Lords Wilberforce dissented and held that public interest demands protection of them. In The Australian Communist Party & Ors. vs Commonwealth & Ors. [1950 51] 83 C.L.R. p. 1, at p. 179, Dixon, J. while considering the claim of secrecy and non availability of the proclamation or declaration of the Governor General in Council based on the advice tendered by the Minister rejected the privilege and held that the court would go into the question whether the satisfaction reached by the Governor General in Council was justified. The court has ,one into the question of competence to dissolve a voluntary or corporate association i.e. Communist Party as unlawful within the meaning of Sec. 5(2) of the Constitutional Law of the Commonwealth. In The Queen vs Toohey ; , the Northern Territory (Self Government) Act, 1978 provides appointment of an Administrator to exercise and perform the functions conferred under the Act. The Town Planning Act, 1979 regulates the area of land to be treated as towns. The Commissioner exercising powers under the Act held that part of the peninsula specified in the schedule was not available for town Planning Act. When it was challenged. there was a change in the law and the Minister filed an affidavit 848 claiming the privilege of certain documents stating that with a view to preserve the land to the original, the Govt. have decided to treat that the land will continue to be held by or on behalf of the originals. Gibbs,. held that under modern conditions, a responsible Govt., Parliament could not always be relied on to check excesses of power by the Crown or its Ministers. The court could ensure that the statutory power is exercised only for the purpose it is granted. The secrecy of the counsel of the Crown is by no means complete and if evidence is available to show that the Crown acted for an ulterior purpose, it is difficult to see why it should not be acted upon. It was concluded thus: "In my opinion no convincing reason can be suggested for limiting the ordinary power of the courts to inquire whether there has been a proper exercise of a statutory power by giving to the Crown a special immunity from review. If the statutory power is granted to the Crown for one purpose, it is clear that it is not lawfully exercised if it is used for another. The courts have the power and duty to ensure that statutory powers are exercised only in accordance with law". The factors to decide the "public interest immunity would include" (a) where the contents of the documents are relied upon, the interests affected by their disclosure; (b) where the class of documents is invoked, where the public interest immunity for the class is said to protect; (c) the extent to which the interests referred to have become attenuated by the passage of time or the occurrence of intervening events since the matters contained in the documents themselves came into existence; (d) the seriousness of the issues in relation to which production is sought; (e) the likelihood that production of the documents will affect the outcome of the case; (f) the likelihood of injustice if the documents are not produced. In President Nixon 's case, the Supreme Court of the United States held that it is the court 's duty to construe and delineate claims arising under express powers, to interpret claims with respect to powers alleged to derive from enumerated powers of the Constitution. In deciding whether the matter has in any measure been committed by the Constitution to another branch of Government, or whether the action of that branch exceeds whatever authority has been committed, is itself a delicate exercise in constitutional interpretation, and is the responsibility of the court as ultimate interpreter of the Constitution. Neither the doctrine of separation of powers, nor the need for confidentiality of high level communications, without more, can sustain an absolute, unqualified Presidential privilege of immunity from judicial process under all circumstances. The separation of powers given in the Constitution were not intended to operate with absolute independence when essential criminal statute would upset the constitutional balance of "a workable government" and gravely impair the role of the courts under article III. The very integrity of the judicial system and public confidence in the system depend on full 849 disclosure of all the facts, within the framework of the rules of evidence. To ensure that justice is done, it is imperative to the function of courts that compulsory process be available for the production of needed evidence. The afore discussion lead to the following conclusions. The President while exercising the Executive power under Art.73 read with article 53, discharges such of those Powers which are exclusively conferred to his individual discretion like appointing the Prime Minister under article 75 which are not open to judicial review. The President exercises his power with the aid and advice of the Council of Ministers with the Prime Minister at the head under article 74 (1). They exercise the power not as his delegates but as officers subordinate to him by constitutional mechanism envisaged under article 77 and express in the name of President as per Rules of Business made under Art.77(3). They bear two different facets (i) the President exercise his power on the aid and advice; (ii) the individual minister or Council of Minister with the Prime Minister at the head discharge the functions without reference to the President. Undoubtedly the Prime Minister is enjoined under article 78 to communicate to the President all decisions of the Council of Minister relating to the administration of the affairs of the Union and proposals for legislation and to furnish such information relating to the administration or reconsideration by the Council of Ministers if the President so requires and submit its decisions thereafter to the President. That by itself is not conclusive and does not get blanket public interest immunity from disclosure. The Council of Ministers though shall be collectively responsible to the House of the People, their acts are subject to the Constitution, Rule of law and judicial review are parts of the scheme of the Constitution as basic structure and judicial review is entrusted to this Court (High Court under Art.226). When public interest immunity against disclosure of the state documents in the transaction of business by Council of Ministers of the affairs of State is made, in the clash of those interests, it is the right and duty of the court to weigh the balance in the scales that the harm shall not be done to the nation or the public service and equally of the administration of justice. Each case must be considered on its backdrop. The President has no implied authority under the Constitution to withhold the documents. On the other hand it is his solemn constitutional duty to act in aid of the court to effectuate judicial review. The Cabinet as a narrow centre of the national affairs must be in a possession of all relevant information which is secret or confidential. At the cost of repetition it is reiterated that information relating to national security, diplomatic relations. internal security or sensitive diplomatic correspondence per se are class documents and that public interest demands total immunity from disclosure. Even the slightest divulgence would endanger the lives of the personnel engaged in the services etc. The maxim Salus Popules Cast Supreme Lax which means that regard 850 for public welfare is the highest law, is the basic postulate for this immunity. Political decisions like declaration of emergency under article 356 are not open to judicial review but it is for the electorate at the polls to decide the executive wisdom. In other areas every communication which preceded from one officer of the State to another or the officers inter se does not necessarily per se relate, to the affairs of the State. Whether they so relate has got to be determined by reference to the nature of the consideration, the level at which it was considered, the contents of the document or class to which it relates to and their indelible impact on public administration or public service and administration of justice itself. Article 74(2) is not a total bar for production of the records. Only the actual advice tendered by the Minister or Council or Ministers to the President and the question whether any, and if so, what ad ice was tendered by the Minister or Council of ministers to the President, shall not be enquired into by the court. In other words the bar of judicial review is confined to the factum of advice, its extent, ambit and scope but not the record i.e. the material on which the advice is founded. In S.P. Gupta 's case (his court held that only the actual advice tendered to the President is immuned from enquiry and the immunity does not extend to other documents or records which form part of the advice tendered to the President. There is discernible modern trends towards more open government than was prevalent in the past. In its judicial review the court would adopt in camera procedure to inspect the record and evaluate the balancing act between the competing public interest and administration of justice. It is equally the paramount consideration that justice should not only be done but also would be publicly recognised as having been done. Under modern conditions of responsible government, Parliament should not always he relied on as a check on excess of power by the Council of Ministers or Minister. Though the court would not substitute its views to that of the executive on matters of policy, it is its undoubted power and duty to see that the executive exercises its power only for the purpose for which it is granted. Secrecy of the advice or opinion is by no means conclusive. Candour, frankness and confidentiality though are integral facets of the common genus i.e. efficient governmental functioning, per se by no means conclusive but be kept in view in weighing the balancing act. Decided cases how that power often was exercised in excess thereof or for an ulterior purpose etc. Sometimes the public service reasons will be decisive of the issue, but they should never prevent the court from weighing them against the injury which would be suffered in the administration of justice if the documents was not to be disclosed, and the likely injury to the cause of justice must also be assessed and weighed. Its weight will very according to the nature of the proceedings in which disclosure is sought, level at which the matter was considered , the subject matter of ' consideration, the 851 relevance of the documents and the degree of likelihood that the document will be of importance in the litigation. it striking the balance, the court may always, if it thinks it necessary, itself inspect the documents. It is therefore the constitutional, legitimate and lawful power and duty of this court to ensure that powers constitutional statutory or executive are exercised in accordance with the constitution and the law. This may demand though no doubt only in limited number of cases yet the inner workings of government may be exposed to public gaze. The contentions of Attorney General and Solicitor General that the inner workings of the government would be exposed to public gaze, and that some one who would regard this as an occasion without sufficient material to ill informed criticism is no longer relevant. Criticism, calculated to improve teh nature of that working as affecting the individual citizen is welcome. In so far as unpublished government policy is concerned, it may be relevant to know the extent to which the policy remains unfulfilled, so that its success might be prejudiced by disclosure of the considerations which led to it. In that context the time element becomes relevant. Details of affairs which are stale and no longer of significance might be capable of disclosure without risk of damage to the public interest .But depending on teh nature of he litigation and the apparent importance to it of the documents in question may in extreme case demand production even of the most be considered on its backdrop. President has no implied authority to withhold the document. On the other hand it is his solemn constitutional duty to act in aid of the court to effectuate judicial review. The Cabinet as a narrow centre of the national affairs must be in possession of all relevant information which is secret or confidential. Decided cases on comparable jurisdiction referred to earlier did held that executive had no blanket immunity to withhold cabinet proceedings or decisions. We therefore hold that the communication decisions or policy to teh President under article 74(1) gives only protection by article 74(2) of judicial review of the actual advice tendered to the president of India. The rest of the file and all the records forming part thereof are open to in camera inspection by this court. Each case must be considered on its own facts and surrounding scenario and decision taken thereon. In Jyoti Prokash Mitter vs Chief Justice Calcutta High Court ; the question was whether the President exercised the powers under article 217(3) of the Constitution was his discretionary one or acts with the aid and advice of Council of Ministers. The Constitution Bench held that the dispute as be decided by the President. The satisfaction on the correctness of age is that of he President. Therefore the matter has to be placed before the President. The 852 President has to give an opportunity to the judge to place his version, before teh President considers and decides the age of the judge. Accordingly it would be the personal satisfaction of the President and not that of the Council of Ministers. In the latter judgement sequential to this judgement in Union of India vs Jyoti Prakash [1971] 3SCR 4831, it was held that the mere fact that the President was assisted by teh machinery of Home Affaris Ministry in serving notices or receiving communications addressed to the learned judge cannot lead to an inference that he was guided review, this court upheld the decision of the President. In this context it was held that the orders of the president, even though made final can be set aside by court in an appropriate case though the Court will not sit in appeal over order and will not substitute its own opinion to that of the president by weighing the evidence placed before the president. The third category of case namely the decision taken at level of the minister or by the authorised Secretary at the Secretary level though expressed in the name of the President is not immured from judicial scrutiny and are to be produced and inspected by the court. If public interest immunity under article 74(2) or Sec 123 of Evidence ACt is claimed, the court would first consider it in camera and decide the issue as indicated above. Teh immunity must not be claimed on administrative route and it must be for valid, relevant and strong grounds or reasons stated in the affidavit filed in that behalf. Having perused the file and given our anxious considerations. We are of the view that on th facts of the case and in the light of the view we have taken, it is not necessary to disclose the contents of the records to the petitioner or his counsel. The first schedule of the business rules provide constitution of Cabinet Standing committees with function specified therein. Item 2 is "Cabinet Committee on appointments". Which is empowered to consider in item 1 all recommendations and to take decisions on appointments specified in the Annexure to the first Schedule. Therein under the residuary heading all other appointments item 4 provides that all other appointments which are made by the Govt. of India or which required the approval of the Govt. of India carrying a salary excluding allowances or a maximum salary excluding allowances of less than Rs. 5, 300 require the approval of the Cabinet Sub Committee. As per item 37 of the Third Schedule read with Rule 8 of the business Rules it shall be submitted to the Prime Minister for appointment. Mr. Harish Chander was appointed as judicial Member on October 29, 1982. He was later on appointed on january 15, 1991 as Senior Vice President of 853 CEGAT after the direction were issued by this Court, he was appinted as the President Mr. Jain assailed the validity of his appointment on diverse grounds. It was pleaded and Sri Thakur, his learned senior counsel, argued that as per the convention, a sitting or a retired judge of the High JCourt should have beenappointed as president of the CEGAT in consultation with the Chief Jusftice ofIndia and Harish Chander has been appointed in disregafrd of the express directions of this Court, It was, therefore, contended that it was in breach jof the judicial orderpassed by this Court. It was therefore, contended that it was in breach of the judicial orderpassed by this Court under Art, 32 Secondly it was contended that before the Actwas made a positive commitment was made time and again by the Govt. on the floor of the House that judicial independence of CEGAT is sifne qua non to sustain the confidence of the litigant public. The appointment of any person other thansitting or a retired judge of the High Court as President would be in its breach. Inits support it was cited the instance of Mr. Kalyansundaram as being the seniormost member, his claim should have been considered before Harish Chander was appointed. Sri Thakur further argued that when recommendations of HarishChander for appointment as a Judge of the Delhi High Court was turned down by the Chief Justice of India doubting his integrity, the appointment of such personof doubtful integrity as President would erode the independence of the judiciary and undermine the confidence of the litigant public in the efficacy of judicial adjudication, even though the rules may permit such an appointment. The rules are ultra vires of the basic structure, namely, independence of judiciary, Sri Thakur, to elaborate these conditions, sought permission to peruse the record. Sri Venugopal , the learned Senior Counsel for Harish Chander argued that his client being the senior Vice President was fvalidly appointed as President of the CEGET. Harish Chander has an excellent and impeccable record of service without any adverse remarks. His recommendation for appointment as a judge of the Delhi High Court, was "apparently dropped" which would not be construed to be adverse to Harish Chander. On behalf ofCentral Govt. it was admitted in thecounter affidavit that since rules do not envisage consultation with the Chidf Justice consultation was not done. It was argued that the Govt. have prerogative to appoint any member or Vice Chairman or Senior Vice President as President of CEGAT. Harish Chander being the senior Vice President, his case was considered and was recommended by the cabinet sub Committee for appointment. Accordingly he was appointed. Under section 129 of the Customs Act 52 of 1962 for short the Act. The Central Govt. shall constitute the CEGAT consisfting of as many judicial and technical members as it thinks fit to exercise the powers and discharge the functions conferred by the Act. Subject to making the statement of the case for 854 decision on any question of law arising out of orders of the CEGAT by the High Court under section 130: it) resolve conflict of decisions by this Court under section 130A, the orders of the CEGAT by operation of sub sectiton (4) of Section 129B. "shall be final". The President of CEGAT is the controlling authority as well as Presiding authority of the tribunals constituted at different places. Constitution of the CEGAT came to be made pursuant to the 5th Schedule of the Finance Act 2 of 1980 with effect from October 11, 1982. The President of India exercising the power under proviso it) article 309 of the Constitution made the Rules. Rule 2(c) defined "member" means a member of the Tribunal and unless the context otherwise requires, includes the President, the Senior Vice President, a Vice President, a judicial member and a technical member. 2(d) defines "President" means the President of the Tribunal. Rule 6 prescribes Method of Recruitment. Under Sub rule (1) thereof for the purpose of recruitment to the Post of member, there shall be a Selection Committee consisting of (i) a judge of the Supreme Court of India as nominated by the Chief Justice of India to preside over as Chairman; (ii) the Secretary to the Govt. of India in the Ministry of Finance, (Department of Revenue); (iii) the Secretary to the Govt. of India in the Ministry of Law (Department of legal Affairs); (iv) the President; (v) such other persons, not exceeding two, as the Central Govt. may nominate. Sub Rule (4) Subject to the provisions of Section 10, the Central Govt. shall, after taking into consideration the recommendations of the Selection Committee. make a list of persons selected for appointment as members. Rule 10 provides thus: (1) The Central Govt. shall appoint one of the member to be the President. (2) Notwithstanding anything contained in rule 6 a sitting, or retired judge of a High Court may also be appointed by the Central Government use member and President simultaneously. (3) Where a member (other than a sitting or retired judge of a High Court is appointed as President, he shall hold the office of the President for a period of three years or till he attains the age of 67 years, whichever is earlier. (4) Where a serving judge of a High Court is appointed as a member and President, he shall hold office as President for a period of three years from the date of his appointment or till he attains the age of 62 years. whichever is earlier. Provided that where a retired judge of a High Court above the age of 62 years is appointed as President. he shall hold office for such period not exceeding, three 855 years as may he determined by the Central Govt. At the time of appointment or reappointment. The Jha Committee in its report in para 16(22) recommended to constitute an independent Tribunal for excise or customs taking away the appellate powers from the Board. The Administrative Inquiry Committee in its report 1958 59 in para 4.15 also recommended that every effort should be made to enhance the prestige of the appellate tribunal in the eyes of the public which could be achieved by the appointment of a High Court Judge as the President. They, therefore, recommended to appoint the serving or retired High Court Judge as President of the Tribunal for a fixed tenure. In Union of India vs Pares Laminates Pvt. Ltd. Court), this Court held that GEGAT is a judicial body and functions as court within the limits of its jurisdiction. As a fact the Minister time and again during the debates when the Bill was under discussion assured both the Houses of Parliament that the CEGAT would be a judicial body presided over by a High Court Judge. In Keshwa nand Bharti vs Union of India [1973] Supp. SCR 1, Mathew and Chandrachud, JJ. held that rule of law and judicial review are basic features of the Constitution. It was reiterated in Waman Rao vs Union of India ; , As per directions therein the Constitution Bench reiterated in Sri Raghunathrao Ganpatrao vs Union of India ; In Krishna Swami vs Union of India at 649 para 66 one of us (K.R.S.J.) held that judicial review is the touchstone and repository of the supreme law of the land. Rule of law as basic feature permeates the entire constitutional structure Independence of Judiciary is sine quo non for the efficacy, of the rule of law. This court is the final arbiter of the interpretation of the constitution and the law. In S.P. Sampat Kumar vs Union of India & Ors.[1987] 1 SCR 435. this Court held that the primary duty of the judiciary is to interpret the Constitution and the laws and this would preeminently be a matter fit to be decided by the judiciary, as judiciary alone would be possessed of expertise in this field and secondly the constitutional and legal protection afforded to the citizen would become illusory, if it were left to the executive to determine the legality of its own action. The Constitution has, therefore created an independent machinery i.e. judiciary to resolve the disputes which is vested with the power of judicial review to determine the legality of the legislative and executive actions and to ensure compliance with the requirements of law on the part of the executive and other authorities. This function is discharged by the judiciary by exercising the power of judicial review which is a most potent weapon in the hands of the judiciary for maintenance of the rule of law. The power of judicial review is an integral part of our constitutional system and without it, there will be no government of laws and the rule of law would become a teasing illusion and a promise of unreality. The judicial review, therefore, is a basic and essential feature of the Constitution and it cannot be 856 abrogated without affecting the basic structure of the Constitution. The basic and essential feature of judicial review cannot be dispensed with but it would be within the competence of Parliament to amend the Constitution and to provide alternative institutional mechanism or arrangement forjudicial review, provided it is no less efficacious than the High Court. It must, therefore, be read as implicit in the constitutional scheme that the law excluding the jurisdiction of the High Court under articles 226 and 227 perrmissible under it, must not leave a void but it must set up another effective institutional mechanism or authority and vest the power of judicial review in it which must be equally effective and efficacious in exercising the power of judicial review. The Tribunal set up under the Administrative Tribunal Act, 1985 was required to interpret and apply articles 14, 15, 16 and 311 in quite an large number of cases. Therefore, the personnel manning the administra tive tribunal in their determinations not only require judicial approach but also knowledge and expertise in that particular branch of constitutional and administrative law. The efficacy of the administrative tribunal and the legal input would undeniably be more important and sacrificing the legal input and not givino it sufficient weityhtage would definitely impair the efficacy and effectiveness of the Administrative Tribunal. Therefore, it was held that the appropriate rule should be made to recruit the members; and consult the Chief Justice of India in recommending appointment of the Chairman, Vice Chairman and Members of the Tribunal and to constitute a committee presided over by judge of the Supreme Court to recruit the members for appointment. In M.B. Majiundar vs Union of lndia ; , when the members of CAT claimed parity of pay and superannuation as is available to the Judges of the High Court, this court held that they are not on par with the judges but a separate mechanism created for their appointment pursuant to article 323 A of the Constitution. Therefore, whatwas meant by this court in Sampath Kumar 's ration is that the Tribunals when exercise the power and function, the Act created institutional alternative mechanism or authority to adjudicate the service disputations. It must be effective and efficacious to exercise the power of judicial review. This court did not appear to have meant that the Tribunals are substitutes of ' the High Court under articles 226 and 227 of the Constitution. J.B. chopra vs Union of lndia , merely followed the ratio of Sampath Kumar. The Tribunals set up under articles 323A and 323B of the Constitution or under an Act of legislature are creatures of the Statute and in no case can claim the status as Judges of the High Court or parity or as substitutes. However, the personnel appointed to hold those oft7ices under the State are called upon to dischargee judicial or quasi judicial power. So they must have judicial approach and also knowledge 857 and expertise in that particular branch of constitutional, administrative and tax laws. The legal input would undeniably be more important and sacrificing the legal input and not giving it sufficient weightage and teeth would definitely impair the efficacy and effectiveness of the judicial adjudication. It is, therefore, necessary that those who adjudicate upon these matters should have legal expertise, judicial experience and modicum of legal training as on many an occasion different and complex questions of law which baffle the minds of even trained judges in the High Court and Supreme Court would arise for discussion and decision. In Union of India vs Sankal Chand Himatlal Sheth & Anr. ; at 442, this court at p. 463 laid emphasis that, "independence of the judiciary is a fighting faith of our Constitution. Fearless justice is the cardinal creed of our founding document. It is indeed a part of our ancient tradition which has produced great judges in the past. In England too, judicial independence is prized as a basic value and so natural and inevitable it has come to be reorded and so ingrained it has become in the life and thought of the people that it would be regarded an act of insanity for any one to think otherwise. " At page 471 it was further held that if the beacon of the judiciary is to remain bright, court must be above reproach, free from coercion and from political influence. At page 491 it was held that the independence of the judiciary is itself a necessitous desideratum of public interest and so interference with it is impermissible except where other considerations of public interest are so strong, and so exercised as not to militate seriously against the free flow of public justice. Such a balanced blend is the happy solution of a delicate, complex, subtle, yet challenging issue which bears on human rights and human justice. The nature of the judicial process is such that under coercive winds the flame of justice flickers, faints and fades. The true judge is one who should be beyond purchase by threat or temptation, popularity or prospects. To float with the tide is easy, to counter the counterfeit current is uneasy and yet the Judge must be ready for it. By ordinary obligation for written reasoning, by the moral fibre of his peers and elevating tradition of his profession, the judge develops a stream of tendency to function 'without fear or favour, affection or ill will ', taking care, of course, to outgrow his prejudices and weaknesses, to read the eternal verities and enduring values and to project and promote the economic, political and social philosophy of the Constitution to uphold which his oath enjoins him. In Krishnaswaini 's case in para 67 at p. 650, it was observed that "to keep the stream of justice clean and pure the judge must be endowed with sterling character, impeccable integrity and upright behaviour. Erosion thereof would undermine the efficacy of rule of law and the working of the constitution itself. In Krishna Sahai & Ors.v. State of U.P. & Ors.[1990] 2 SCC 673, this court 858 emphasised its need in constitution the U.P. Service Tribunal that it would he appropriate for the State of Uttar Pradesh to change it manning and a sufficient number of people qualified in law should he on the Tribunal to ensure adequate dispensation of justice and to maintain judicial temper in the functioning of the Tribunal". In Rajendra Singh Yadav & Ors vs State of U.P. & Ors. [1990] 2 SCC 763, it was further reiterated that the Services Tribunal mostly consist of Administrative Officers and the judicial element in the manning part of the Tribunal is very small. The disputes require judicial handling and the adjudication being, essentially judicial in character it is necessary that adequate number of judges of the appropriate level should man the Services Tribunals. This would create appropriate temper and generate the atmosphere suitable in an adjudicatory Tribunals and the institution as well would command the requisite confidence of the disputants. In Shri Kumar Padma Prasad vs Union of India & Ors. , this court emphasised that, "Needless to say that the independence, efficiency and integrity of the judiciary can only he maintained by selecting the best persons in accordance with the procedure provided under the Constitution. The objectives enshrined in the constitution cannot be achieved unless the functionaries accountable for making appointments act with meticulous care and utmost responsibility". In a democracy governed by rule of law surely the only acceptable repository of absolute discretion should be the courts. Judicial is the basic and essential feature of the Indian constitutional scheme entrusted to the judiciary. It cannot he dispensed with by creating tribunal under article 323A and 323B of the Constitution. Any institutional mechanism or authority in negation of judicial review is destructive of basic structure. So long as a the alternative institutional mechanism or authority set up by an Act is not less effective than the High court, it is consistent with constitutional scheme. The faith of the people is the bed rock on which the edifice of judicial review and efficacy of the adjudication are founded. The alternative arrangement must, therefore, be effective and efficient. For inspiring confidence and trust in the litigant public they must have an assurance that the person deciding their causes is totally and completely free from the influence or pressure from the Govt. To maintain independence and imperativity it,is necessary that the personnel should have at least modicum of legal training, learning and experience. Selection of competent and proper people instill people 's faith and trust in the office and help to build up reputation and acceptability. Judicial independence which is essential and imperative is secured and independent and impartial administration of justice is assured. Absence thereof only may get both law and procedure wronged and wrong headed views of the facts and may likely to give rise to nursing grievance of injustice. Therefore, functional fitness, 859 experience at the liar and aptitudinal approach are fundamental for efficient judicial adjudication. Then only as a repository of the confidence. as its duty, the tribunal would properly and efficiently interpret the law and apply the law to the given set of facts. Absence thereof would be repugnant or derogatory to the constitution. The daily practice in the courts not only gives training to Advocates to interrect the rules but also adopt the conventions of courts. In built experience would play vital role in the administration of justice and strengthen and develop the qualities, of intellect and character, forbearance and patience, temper and resilience which are very important in the practice of law. Practising Advocates from the Bar generally do endow with those qualities to discharge judicial functions. Specialised nature of work gives them added advantage and gives benefit to broaden the perspectives. "Judges " by David Pannick (1987 Edition), at page 50, stated that, "we would not allow a man to perform a surgical operation without a thorough training and certification of fitness. Why not require as much of a trial judge who daily operates on the lives and fortunes of others". This could be secured with the initial training given at the Bar and later experience in judicial adjudication. No one should expect expertise in such a vast range of subjects, but famliarity with the basic terminology and concept coupled with knowledge of trends is essential. A premature approach would hinder the effective performance of judicial functions. Law is a serious matter to be left exclusively to the judges, because judges necessarily have an important role to play in making and applying the law There is every reason for ensuring that their selection, training and working practice facilitate them to render their ability to decide the cases wisely on behalf of the community. If judges acts in injudicious manner, it would often lead to miscarriage of justice and a brooding sense of injustice rankles in an agrieved person. The CEGAT is a creature of the statute. yet intended to have all the flavour of judicial dispensation by independent members and President. Sri Justice Y.V. Chandrachud, Chief Justice of India, in his letter dated October 5, 1982 stated that "Govt. had Created a healthy convention of providing that the Tribunals will be headed by a President who will be a sitting or a retired judge of the High Court. Added to that is the fact that selection of the members of the Tribunal is made by a Committee headed by a judge of the Supreme Court. I am sure that the Tribunal will acquire higher reputation in the matter of its decision and that the litigants would look upon it as an independent forum to which they can turn in trust and confidence". This court to elongate the above objective directed the Govt. to show whether the convention is being followed in appointment of the President of 860 CEGAT and further directed to consider appointment of a Sr. Judge or a retired Chief Justice of the High Court as its President. Admittedly Chief justice of India was not consulted before appointing Sri harish Chander as President. Several affidavits filed on behalf of the Govt. do not also bear out whether the directions issued by this court were even brought to the notice of the Hon 'ble Prime Minister before finalising the appointment of Sri Harish Chander. The solemn assurance given to the Parliament that the Tribunal bears a judicious blend by appointment of a High Court Judge as President was given a go bye. While making statutory rules the executive appears to have made the appointment of it sitting or retired High Court Judge as President unattractive and directory frustrating the legislature animation. A sitting Judge when is entitled to continue in his office upto 62 years would he he willing to opt to serve as President, if his superannuation as President is conterminous with 62 years. He would be attracted only it he is given extended three years more tenure after his superannuation. But Rule 10(3) says that the total period of the tenure of the President by a sitting, or retired judge is "a period of three years or till he attains the age of 62 years, whichever is earlier", i.e. coterminus with superannuation as a Judge of the High Court. The proviso is only discretionary at the whim of the executive depleting independence and as an exception to the rule. Thereby practically tile spirit of the Act, the solemn assurance given by the Govt. to the Parliament kindling hope in the litigant public to have a sitting or a retired judge appointed as President has been frustrated deflecting the appointment of a judicially trained judge to exercise judicial review. We are constrained to observe that the rules, though statutory, were so made as to defeat the object of the Act. The question then is: can and if yes, whether this court would interfere with the appointment made of Flarish Chander as President following the existing, rules. Judicial review is concerned with whether the incumbent possessed of qualification for appointment and the manner in which the appointment came to be made or the procedure adopted whether fair, just and reasonable. Exercise of judicial review is to protect the citizen from the abuse of the power etc. by an appropriate Govt. or department etc. In our considered view granitic the compliance of the above power of appointment was conferred on the executive and confided to be exercised wisely. When a candidate was found qualified and eligible and was accordingly appointed by the executive to hold an office as a Member or Vice President or President of a tribunal. we cannot sit over the choice of the selection, but it be left to tile executive to select the personnel as per law or procedure in this behalf. In Sri Kumar Prasad case K.N. Srivastava, M.J.S., Legal Remembrance, Secretary to law and Justice. of Mozoram did not possess the requisite qualifications for appointment as a Judge of the High Court prescribed under Art.217 of the Constitution, namely, that he was not a District Judge for 10 years in State Higher Judicial Service, which is a mandatory 861 requirement for a valid appointment. Therefore, this Court declared that he was not qualified to be appointed as a judge of the High Court and quashed his appointment accordingly. The facts therein are clearly glaring and so the ratio is distinguishable. Sri Harish Chander, admittedly was the Sr. Vice President at the relevant time. The contention of Sri Thakur of the need to evaluate the comparative merits of Mr. Harish Chander and Mr. Kalyansundaram a senior most Member for appointment as President would not be one into in a public interest litigation. Only in a proceedings initiated by an aggrieved person it may be open to be considered. This writ petition is also not a writ of quo warranto. In service jurisprudence it is settled law that it is for the aggrieved person i.e. non appointee it) assail the legality of the offending action. Third party has no locus stand it to canvass the legality or correctness of the action. Only public law declaration would be made at the behest of the petitioner, a public spirited person. But this conclusion does not give quietus at the journey 's end. There are persistent allegations against malfunctioning of the CEGAT and against Harish Chander himself. Though we exercised self restraint to assume the role of an Investigator to charter out the ills surfaced, suffice to say that the union Govt. cannot turn a blind eye to the persistent public demands and we direct to swing into action, an indepth enquiry made expeditiously by an officer or team of officers to control the mal functioning of the institution. It is expedient that the Govt. should immediately take action in the matter and have fresh look. It is also expedient to have a sitting or retired senior Judge or retired Chief Justice of a High Court to be the President. The rules need amendment immediately. A report on the actions taken in this behalf be submitted to this court. Before parting with the case it is necessary to express our anguish over the ineffectivity of the alternative mechanism devised for judicial reviews. The Judicial review and remedy are fundamental rights of the citizens. The dispensation of justice by the tribunals is much to be desired. We are not doubting the ability of the members or Vice Chairmen (non Judges) who may be experts in their regular service. But judicial adjudication is a special process and would efficiently be administered by advocate Judges. The remedy of appeal by special leave under article 136 to this Court also proves to be costly and prohibitive and far flung distance too is working as constant constraint to litigant public who could ill afford to reach this court. An appeal to a Bench of two Judges of the respective High Courts over the orders of the tribunals within its territorial jurisdiction on questions of law would as usage a growing feeling of injustice of those who can ill effort to approach the Supreme Court. Equally the need for recruitment of members of the Bar to man 862 the Tribunals as well as the working system by the tribunals need fresh look and regular monitoring is necessary. An expert body like the Law Commission of India would make an indepth study in this behalf including the desirability to bring CEGAT under the control of Law and Justice Department in line with Income tax Appellate Tribunal and to make appropriate urgent recommendations to the Govt. of India who should take remedial steps by an appropriate legislation to overcome the handicaps and difficulties and make the tribunals effective and efficient instruments for making Judicial review efficacious, inexpensive and satisfactory. The writ petitions are disposed of with the above direction, but in the circumstances with no order as to costs. T.N.A. Petitions disposed of.

By a letter dated December 26, 1991 addressed to the Chief Justice of India, the petitioner, Editor, Excise Law Times, complained that ever since the retirement of president of the Customs, Excise and Gold control Appellate Tribunal (CEGAT) in 1985 no appointment of President was made as a result of which the functioning of the Tribunal was adversely affected. He also alleged malfunctioning in the CEGAT and sought directions for immediate appointment of the President as well as an enquiry into the mal functioning of CEGAT. The letter was treated as a Writ Petition in public interest litigation and on February 25,1992, this Court issued Rule Nisi to Union of India to make immediate appointment of the President of CEGAT, preferably a senior High Court Judge. After the directions were issued by this Court, Respondent No. 3, who was initially appointed as judicial Member and subsequently as Senior Vice President of the Tribunal, was appointed as President. The petitioner filed another petition challenging the appointment of President and sought to quash the same on the grounds that (1) the appointment was in breach of judicial order passed by this Court on February 25, 1992 because as per the convention a sitting or retired Judge of the High Court should have been appointed as President in consultation with the Chief Justice of India; even though High Court Judges were available no serious attempt was made to requisition the services of one of them for appointment as President; (2) before the Act was made a positive commitment was made time and again by the Government on the floor of the House that judicial independence of CEGAT is sine qua non to sustain the confidence of the 804 litigant public. The appointment of any person other than sitting or a retired judge of the High Court as President would be in its breach; and (3) the appointment of Respondent No. 3 as a Judge of the Delhi High Court was turned down by Chief Justice of India doubting his integrity, therefore appointment (of such a person as President of CEGAT would undermine the confidence of the litigant public in the efficacy of judicial adjudication. even though Rules may permit such appointment. The petitioner also prayed that Rules 10(1)(3) and (4) of the CEGAT Members (Recruitment and Conditions of Service) Rules, 1987 should be struck down as violative of Article 43 of the Constitution. the rules were ultra vires of the basic structure of the Constitution, namely independence of Judiciary. On May 4,1992 this Court issued Rule Nisi and on the next date of bearing the relevant rile on which decision regarding the appointment of President was made produced in the Court but on behalf of the Union of India an objection was taken by the Additional Solicitor General that this Court cannot inspect the rile as he intended to claim privilege`. Accordingly, pursuant to the directions given by this Court that a formal application may be made setting out the grounds on which the claim for privilege was founded, the Finance Secretary and the Minister of State for Finance filed affidavits claiming privilege under Sections 123 and 124 of the and Article 74 (2) of the Constitution stating that the Government had no (objection for the Court to peruse the rile but claimed privilege to disclose the contents of the rile to the petitioner. On behalf of the Union of India it was contended that a Cabinet SubCommittee approved the appointment of Respondent No. 3 as President of CEGAT and by operation of Article 77(3) and 74(1), the appointment was made by the President. The rile constitutes Cabinet documents forming part of the preparation (if the documents leading to the formation of the advice tendered to the President. Section '123 of the Evidence Act and Article 74 (2) precluded this Court from enquiring into the nature of the advice tendered to the President and the documents were, therefore, immune from disclosure. The disclosure would cause public injury preventing candid and frank discussion and expression of views by the bureaucrats at higher level and by the Minister/Cabinet Sub Committee causing serious injury to public service. On behalf of Respondent No.3 it was contended that (1) he had an excellent and impeccable record of service without any adverse remarks and dropping of his recommendation for appointment as a Judge of Delhi High 805 Court could not be construed adverse 'to him; (2) the Government had prerogative to appoint any member, or Vice Chairman or Senior Vice President as President and Respondent No.3 being the Senior Vice President, was considered and recommended by the Cabinet Committee for appointment. Hence he was validly appointed as President. Disposing the petitions, this Court, HELD: Per Ramaswamy, J. 1.The claim in the affidavits of the State Minister for Finance and the Secretary for immunity of state documents from disclosure is unsustainable. However, having perused the file and given anxious considerations,the Court is of the view that on the facts and circumstances of the case and in the light of the view taken, it is not necessary to disclose the contents of the records to the petitioner or his counsel. 1.1.Section 123 of the Evidence Act gives right to the Government to claim privilege, in other words immunity from disclosure of the unpublished official state documents in public interest. The initial claim for immunity should be made through an affidavit generally by the Minister concerned, in his absence by the Secretary of the department or head of the Department indicating that the documents in question have been carefully read and considered and the deponent has been satisfied, supported by reasons or grounds valid and germance, as to why it is apprehended that public interest would be injured by disclosure of the document summoned or called for. The claim for immunity should never he on administrative routine nor be a garb to avoid in convenience, embarrassment or adverse to its defence in the action, the latter themselves a ground for disclosure. 1.2.When a claim for public interest immunity has been laid for nondisclosure of the State documents, it is the Minister 's due discharge of duty to state on oath in his affidavit the grounds on which and the reasons for which he has been persuaded to claim public interest immunity from disclosure of the State papers and produce them. He takes grave risk on insistence of oath of secrecy to avoid filing an affidavit or production of State documents and the Court may be constrained to draw such inferences as are available at law. Accordingly the oath of office of secrecy adumbrated in Article 75(4) and Schedule III of the Constitution does not absolve the Minister either to state the reasons in support of the public interest immunity to produce the State documents or as to how the matter was dealt with or for their production when discovery order nisi or rule nisi was issued. On the other hand it is his due 806 discharge of the duty as a Minister to obey rule nisi or discovery order nisi and act in aid of the Government. Attorney General vs Jonathan Cape Ltd., ; Sankey vs Whitlan, and Whitlam vs Australian Consolidated Press, , referred to. If the Court is satisfied from the affidavit and the reasons assigned for withholding production or disclosure, the Court may pass an appropriate order in that behalf If the Court still desired to peruse the record for satisfying itself whether the reasons assigned in the affidavit would justify withholding disclosure, the court would, in camera, examine the record and satisfy itself whether the public interest subserves withholding production or disclosure or making the documents as part of the record. By operation of Section 162 of Evidence Act the final decision in regard to the validity of an objection against disclosure raised under Section 123 would always be with the Court. The Court is not bound by the statement made by the Minister or the Head of the Department in the affidavit and it retains the power to balance the injury to the State or the public service against the risk of injustice. The real question which the Court is required to consider is whether public interest is so strong to override the ordinary right and interest of the litigant that he shall he able to lay before a Court of justice the relevant evidence. In balancing the competing interests it is the duty of the court to see that there is the public interest that harm shall not be done to the nation or the public service by disclosure of the document and there is a public interest that the administration of justice shall not be frustrated by withholding documents which must he produced if justice is to be done. The basic question to which the court would, therefore, have to address itself for the purpose of deciding the validity of the objection would be, whether the document relates to affairs of State or the public service and if so, whether the public interest in its non disclosure is so strong that it must prevail over the private interest in the administration of justice and on that account, it should not be allowed to be disclosed. State of U.P. vs Raj Narain & Ors., ; S.P. Gupta Ors. 807 etc. vs Union of India & Ors. etc. etc., 1982 (2) S.C.R. 365; relied on. Conway vs Rimmer, ; ; D. vs National Society for the Prevention of Cruelty to Children, 1978 A.C. 171 (H.L.); Burmah Oil Co. Ltd. vs Governor and Company of the Bank of England, ; ; Butters Gas and Oil Co. vs Hammer, ; Air Canada vs Secretary of State for Trade, ; Council of Civil Service Unions vs Minister for the Civil Service, ; United State vs Reynolds, ; ; Environmental Agency, vs Pats), T Mink, ; (35) L. Ed. 2nd 11 9; Newyond Times vs U.S., ; ; U.S. vs Richard M. Nixon, ; = ; 1035; Robindon vs State of South Australia, ; Shankey vs Whitlan, ; ; FAI Insurances Ltd. vs The Hon Sir, Henn, Arthur Winneke and Ors., ; ; Whitlan vs Australian Consolidated Press Ltd., ; Minister for Arts Heritage and Environment and Ors. vs Peko Wallsend Ltd. and Ors. ; Commonwealth of Australia vs Northern Land Council and Anr. ; R. vs Shinder, Gagnon vs Ouebec Securities Commission, ; Bruce vs Waldron, ; Re Tunstall, exhibit P. Brown, [19661 84 W.N. (Pt2) (N.S.W.); Corbett vs Social Security Commission, ; Greednz Inc. vs Governor General, Apponhamy vs Illangarutute, [1964] 66 C.L.W. 17; Jamaica in Allen vs Byfields (No.2) [1964] 7 W.I.R.69 and Scotland in Glasgow Corporation vs Central Land Board, [1956] Scotland Law Time 4, referred to. Mecormic on Evidence, 4th Edn. by John w. Strong, referred to. 1.7.Every communication which proceeded from one of ricer of the State to another or the officers inter se does not necessarily per se relate, to the affairs of the State. Whether they so relate has got to be determined by reference to the nature of the consideration, the level at which it was considered, the contents of the document or class to which it relates to and their indelible impact on public administration or public service and administration of justice itself. The power to issue 'discovery order nisi ' is express as well as inherent as an integral power of judicial review and process in the Court to secure the attendance of any person or discovery or production of any document or to order investigation in that behalf. However, in an appropriate case, depend 808 ing on facts on hand. Court may adopt such other procedure as would be warranted. The petitioner must make a strong prima facie case to order discovery order nisi, etc. and it must not be a haunting expedition to fish out some facts or an attempt to cause embarrassment to the respondents nor for publicity. But on issuance of rule nisi by this Court under Article 32 or a discovery order nisi the Government or any authority, constitutional, civil, judicial, statutory or otherwise or any person, must produce the record in their custody and disobedience thereof would be at the pain of contempt. The Cabinet known as Council of Ministers headed by Prime Minister under Article 75 (3) is the driving and steering body responsible for the governance of the country. Collective responsibility under Article 75(3) of the Constitution inheres maintenance of confidentiality as enjoined in oaths of office and of secrecy set forth in Schedule III of the Constitution that the Minister will not directly or indirectly communicate or reveal to any person or persons any matter which shall be brought under his consideration or shall become known to him as Minister except as may be required for the 'due discharge of his duty as Minister '. The base and basic postulate of its significance is unexceptionable. But the need for and effect of confidentiality has to be nurtured not merely from political imperatives of collective responsibility envisaged by Article 75(3) but also from its pragmatism. Satwant Singh Sawhney vs D. Ramarathnam Asstt. Passport Officer, ; Magnbhai Ishwarbhai Patel vs Union of India and Anr., ; ; Shamsher Singh vs State of Punjab, ; ; Rai Sabhib Ram Jawaya Kapur & Ors. vs State of Punjab, and Commonwealth of Australia vs Northern Land Council & Anr., , referred to. Sir Ivor Jennings, Cabinet Government; Patrick Gordon Walker, The Cabinet, 1973 Revised Ed. P. 178; John P. Mackintosh, The British Cabinet, 2nd Edn. p.1 1; 0 Hood Phillips and Paul Jackson, Constitutional and Administrative Law, 7th Edn. P. 301; Walker, The Cabinet, p. 183; Halsbury Laws of England, 4th Edn. 8 para 820; Bagehot and The English Constitution, 1964 Edn., referred to. The Court would be willing to respond to the executive public interest immunity to disclose certain documents where national security or high policy, high sensitivity is involved. Information relating to national security, diplomatic relations, internal security or sensitive diplomatic corre 809 spondence per se are class documents and that public interest demands total immunity from disclosure. Even the slightest divulgence would endanger the lives of the personnel engaged in the services etc. The maxim Salvs Populs Cast Suprema Lax which means that regard for public welfare is the highest law, is the basic postulate for this immunity. Asiatic Petroleum vs Anglo Persian oil, ; Duncan vs Cammell Laird, 1942 A.C. 624; Council of Civil Service Union vs Minister for Civil Service, and Mark Hosemball R. vs Home Secretary exparte Hosenball, , referred to. But it would be going too far to lay down that no document in any particular class or one of the categories of Cabinet papers or decisions or contents thereof should never, in any circumstances, be ordered to he produced. Robinson vs State of South Australia, ; S.P. Gupta vs Union of India & Ors., [1982] 2 S.C.R. 365; State of U. P. vs Raj Narain & Ors., [1975] 2 S.C.R.333; Conway vs Rimmerl968A.C.910 (HL);Burmah Oil Co. Ltd. vs Governor and Company of the Bank of England, ; ; Reg. vs Lewes Justices, Ex Parte Secretary of State for the Home Department, and D. V. National Society for the Prevention of Cruelty to Children; , ; Air Canada vs Secretary of State for Trade, [1983] 2 A.C. 394 (HL); Shankey vs Whitlan, [1979] 53 A.L.R. 1; Harbour Corp of Queensland vs Vessey Chemicals Pvt. Ltd., ; Manthal Australia Pvt. Ltd. vs Minister for Industry, Technology and Commerce, ; Koowarta vs Bjelke Petersen, ; United States vs Richard M. Nixon, ; Lawyers Ed. 2nd Ed. 1039; Attorney General vs Jonathan Cape Ltd. ; Minister for Arts Heritage and Environment and Ors. vs Pekowallsend Ltd. and Ors., (1987) 75 A.L.R. 218; Commonwealth of Australia, vs Northern Land Council and Anr., ; Australian Community Party & Ors. vs Commonwealth & Ors. , ; and Queen vs Tohey, ; , referred to. Undoubtedly, the Prime Minister is enjoined under Article 78 to communicate to the President all decisions of the Council of Minister relating to the administration of the affairs of the Union and proposals for legislation and to furnish such information relating to the administration or reconsideration by the Council of Minister if the President so requires and submit its 810 decisions thereafter to the President. That by itself is not conclusive and does not get blanket public interest immunity from disclosure. The Council of Ministers though shall be collectively responsible to the House of the people, their acts are subject to the Constitution; Rule of law and judicial review are parts of the scheme of the Constitution as basic structure and judicial review is entrusted to this Court (High court under Article 226). 3.3.1.The communication of cabinet decisions or policy to the President under Article 74(1) gives only limited protection by Article 74(2) of judicial review of the actual tendered to the President of India. The rest of the file and all the records forming part thereof are open to in camera inspection by this Court. Each case must be considered on its own facts and surrounding scenario and decision taken thereon. Jyoti Prakash Mitter vs Chief Justice Calcutta High Court, ; and Union of India vs Jyoti Prakash, ; , referred to. 3.3.2.Article 74(2) is not a total bar for production of the records. Only the actual advice tendered by the Minister or Council of Ministers to the President and the question whether any, and if so, what advice was tendered by the Minister or Council of Ministers to the President, shall not be enquired into by the Court. In other words, the bar of judicial review is confined to the factum of advice, its extent, ambit and scope, but not the record i.e. the material on which the advice is founded. S.P. Gupta vs Union of India & Ors., [1982] 2 S.C.R. 365, referred to. 4.Judicial review is concerned with whether the incumbent possessed of qualification for appointment and the manner in which the appointment came to made or the procedure adopted whether fair, just and reasonable. Exercise of Judicial Review is to protect the citizen from the abuse of the power etc. by an appropriate Government or department etc. In Court 's considered view granting the compliance of the above power of appointment was conferred on the executive and confided to be exercised wisely. When a candidate was found qualified and eligible and was accordingly appointed by the executive to hold an office as a Member or Vice President or President of Tribunal, this Court cannot sit over the choice of the selection, but it be left to the executive to select the personnel as per law or procedure in this behalf. Shri Kumar Padma Prasad vs Union of India & Ors., , 811 distinguished. In service jurisprudence it is settled law that it is for the aggrieved person i.e. non appointee to assail the legality of the offending action. Third party has not locus standi to canvass the legality or correctness of the action. Only public law declaration would be made at the behest of the petitioner, a public spirited person. Therefore, the contention that there was need to evaluate the comparative merits of Respondent and the senior most Member for appointment as President would not be gone into in a public interest litigation. Only in a proceedings initiated by an aggrieved person it may be open to be considered. It is expedient to have a sitting or retired senior Judge or retired Chief Justice of a High Court to be the President. The rules need amendment immediately. Government had created a healthy convention of providing that the Tribunals will be headed by a President who will be a sitting or a retired judge of the High Court This Court to elongate the above objective directed the Government to show whether the convention is being followed in appointment of the President of CEGAT and further directed to consider appointment of a Senior Judge or a retired Chief Justice of the High Court as it President Admittedly Chief Justice of India was not consulted before appointing Respondent No.3 as President of CEGAT The solemn assurance given to the Parliament that the Tribunal bears a judicious blend by appointment of a High Court Judge as President was given a go bye. 6.1.While making statutory rules the executive appears to have made the appointment of a sitting or retired High Court Judge as President unattractive and Directly frustrating the legislative animation. A sitting Judge, when he is entitled to continue in his office upto 62 years, would not he willing to opt to serve as President, if his superannuation as President is co terminus with 62 years. He would he attracted only if he is given extended three years more tenure after his superannuation. But Rule 10 (3) says that the total period of the enure of the President by a sitting or retired Judge is 'a period of three years or till he attains the age of 62 years, whichever is earlier ', i.e. co terminus with superannuation as a Judge of the High Court. The, proviso is only discretionary at the whim of the executive depleting independence and is an exception to the rule. Thereby, practically the spirit of the Act, the solemn assurance given by the Government to the Parliament kindling hope in the litigant public to have a sitting or a retired Judge appointed as President has been frustrated deflecting the appointment of a 812 judicially trained judge to exercise judicial review. Court is constrained to observe that the rules, though statutory, were so made as to defeat the object of the Act. 7.There are persistent allegations against mal functioning of the CEGAT and against Respondent No. 3 himself. Though this Court exercised self restraint to assume the role of an investigator to charter out the ills surfaced, suffice to say that the Union Government cannot turn a blind eve to the persistent public demands and 'the Court directs to swing into action, an indepth enquiry made expeditiously by an officer or team of officers to control the malfunctioning of the institution. It is expedient that the Government should immediately take action in the matter and have fresh look. The Tribunals set up under Articles 323A and 323B of the Constitution or under an Act of legislature are creatures of the Statute and in no case can claim the status as Judges of the High Court or parity or as substitutes. However, the personnel appointed to hold the office under the State are called upon to discharge judicial or quasi judicial powers. So they must have judicial approach and also knowledge and expertise in that particular branch of constitutional, administrative and tax laws. The legal input would undeniably be more important and sacrificing the legal input and not giving it sufficient weightage and teeth would definitely impair the efficacy and effectiveness of the judicial adjudication. It is, therefore, necessary that those who adjudicate upon these matters should have legal expertise, judicial experience and modicum of legal training as on many an occasion different and complex questions of law which baffle the minds of even trained judges in the High Court and Supreme Court would arise for discussion and decision. M.B. Majumdar vs Union of India, ; ; Union of India vs Paras Laminates Ltd., ; Krishna Sahai & Ors. vs State of U. P. & Ors. , ; , and Rajendra Singh Yadav & Ors.v. State of U.P. & Ors. [1990] 2 S.C.C. 763, referred to. 8.1.Equally the need for recruitment of members of the Bar to man the Tribunals as well as the working system by the Tribunals need fresh look and regular monitoring is necessary. An expert body like the Law Commission of India should make an in depth study in this behalf including the desirability of bringing CEGAT under the control of Law and Justice Department in line with Income tax Appellate Tribunal and make appropriate urgent recommendations to the Government of India who should take remedial steps by an 813 appropriate legislation to overcome the handicaps and difficulties and make the Tribunals effective and efficient instruments for making judicial review efficacious, inexpensive and satisfactory. For inspiring confidence and trust in the litigant public they must have an assurance that the person deciding their causes is totally and completely free from the influence or pressure from the Government. To maintain independence imperativity it is necessary that the personnel should have at least modicum of legal training, learning and experience. Selection of competent and proper people instill people 's faith and trust in the office and help to build up reputation and acceptability. Judicial independence which is essential and imperative is secured and independent and impartial administration of justice is assured. Absence thereof only may get both law and procedure wronged and wrong headed views of the facts and may likely to give rise to nursing grievance of injustice Therefore, functional fitness, experience at the Bar and aptitudinal approach are fundamental for efficient judicial adjudication. Then only as repository of the confidence, as its duty, the Tribunal would properly and efficiently interpret the law and apply the law to the given set of facts. Absence thereof would be repugnant or derogatory to the Constitution. Union of India vs Sankal Chand Himatlal Sheth & Anr. ; , referred to. Judicial review is the basic and essential feature of the Indian constitutional scheme entrusted to the judiciary. It cannot be dispensed with by creating Tribunal under Articles 323A and 323B of the Constitution. Any institutional mechanism or authority in negation of judicial review is destructive of basic structure, So long as the alternative institutional mechanism or authority set up by an Act is not less effective than the High Court, it Ls consistent with constitutional scheme. The faith of the people is the bed rock on which the edifice of judicial review and efficacy of the adjudication are founded. The alternative arrangement must, therefore, be effective and efficient. Keshwanand Bharati vs Union of India, ; Waman Rao vs Union of India, ; Raghunathrao Ganpatrao vs Union of India ; ; Krishna Swathi vs Union of India, 1199214 S.C.C. 605; S.P. Sampat Kumar vs Union of India & Ors., ; and J.B. Chopra vs Union of India, , referred to. 814 9.1. It is necessary tip express Court 's anguish over the ineffectivity of the alternative mechanism devised for judicial review. The judicial review and remedy are fundamental rights of the citizens. The dispensation of justice by the Tribunals is much to be desires. Court is not doubting the ability of the members or Vice Chairman (non judges) who may be experts in their regular service. But judicial adjudication is a special process and would efficiency be administered by advocate Judges. The remedy of appeal by special leave under Article 136 to this Court also proves to be costly and prohibitive and far flung distance too is working as a constant constraint to litigant public who could ill afford to reach this Court. An appeal to a Bench of two Judges of the respective High Courts over the orders of the Tribunals within its territorial jurisdiction on questions of law would assuage a growing feeling of iNjustice of those who can ill afford to approach the Supreme Court. No one can suppose that the executive will never be guilty of the sins common to all people. Sometimes they may do things which they ought not to do or will not do things they ought to do. The Court must be alive to that possibility of the executive committing illegality in its process, exercising its powers, reaching a decision which no reasonable authority would have reached or otherwise abuse its powers, etc. If the proceeding, decision (or order is influenced extraneous considerations which ought not to have been taken into account, it cannot stand and needs correction, no matter of the nature of the statutory body or status or stature of the constitutional functionary though might have acted in good faith. It is, therefore, the function of the Court to see that lawful authority is not abused. Under modern conditions of responsible Government, Parliament should not always be relied on as a check on excess of power by the Council (of Ministers or Minister. Though the Court would not substitute its views to that of the executive on matters of policy, it is its undoubted power and duty to see that the executive exercises its power only for the purpose for which it is granted. It is the constitutional, legitimate and lawful power and duty of this Court to ensure that powers, constitutional statutory or executive are exercised in accordance with the Constitution and the law. This may demand, though no doubt only in limited number of cases, Yet the in networkings of government may be exposed to public gaze. Per Ahmadi J. (For himself and Punchhi J.) (Concurring) 1. This Court cannot sit in judgment over the wisdom of the Central 815 Government in the choice of the person to be appointed as a President so long as the person chosen possesses the prescribed qualification and is otherwise eligible for appointment. Respondent No. 3 was a Senior Vice President when the question of filling up the vacancy of the President came up for consideration. He was fully qualified for the post under the Rules. No challenge is made on that count. Under Rule 10 (1), the Central Government is conferred the power to appoint one of the Members to be the President. Since the validity of the Rule is not questioned there can be no doubt that the Central Government was entitled to appoint Respondent No. 3 as President. This Court cannot interfere with the appointment of Respondent No. 3 on the ground that his track record was poor or because of adverse reports on which account his appointment as a High Court Judge had not materialised. Assuming that the allegations against Respondent No. 3 are factually accurate, this Court cannot sit in judgment over the choice of the person made by the Central Government over the choice of the person made by the Central Government for appointment as a President if the person chosen is qualified and eligible for appointment under the Rules. However, to instill the confidence of the litigating public in the CEGAT, the Government must make a sincere effort to appoint a sitting Judge of the High Court as a President of the CEGAT in consultation with the Chief justice of India and if a sitting Judge is not available the choice must fall on a retired Judge as far as possible. Sub rule (4) of Rule 10 of the CEGAT Members (Recruitment and Conditions of Service) Rules, 1987 needs a suitable change to make it sufficiently attractive for sitting High Court judges to accept appointment as the President of the CEGAT. The rules empower the Central Government to appoint any member as the President of the CEGAT. It is true that under subrule (4), a serving Judge and under the proviso thereto, a retired Judge, can also be appointed a Member and President simultaneously. In the case of a serving Judge his age of superannuation is fixed at 62 years but in the case of the retired Judge he may be appointed for a period of three years at the most. Insofar as a service High Court Judge is concerned, he holds office until he attains the age of 62 years, vide Article 217 of Constitution. It, therefore, beats common sense why a sifting Judge of tile High Court would opt to serve as the President of the CEGAT if he is to retire at the same age without any benefit. On the contrary, he would lose certain 816 perks which are attached to the office of a High Court Judge. Even status wise he would suffer as his decisions would he subject to the writ jurisdiction of the High Court under Article 226,227 of the Constitution. He may agree to accept the offer only if he had an extended tenure of at least three years. The allegations made by Petitioner in regard to the working the CEGAT are grave and the authorities can ill aford to turn a Nelson 's eye to those allegations made by a person who is fairly well conversant with the internal working of the Tribunal. Refusal to inquire into such grave allegations, some of which are capable of verification, can only betrays indifference and lack of a sense of urgency to tone up the working of the Tribunal. It is high time that the administrative machinery which is charged with the duty to supervise the working of the CEGAT wakes up from its slumber and initiates prompt action to examine the allegations by appointing a high level team which would immediately inspect the CEGAT, identify the causes for the crises and suggest remedial measures. This cannot brook delay. The time is ripe for taking stock of the working of the various Tribunals set up in the country after the insertion of Articles 323A and 323B in the Constitution. A sound justice delivery system is a sine qua non for the efficient governance of a country wedded to the rule of law. An independent and impartial justice delivery system in which the litigating public has faith and confidence alone can deliver the goods. After the incorporation of these two articles, Acts have been enacted where under Tribunals have been constituted for dispensation of justice. Sufficient time has passed and experience gained in these last few years for taking stock of the situation with a view to finding out if they have served the purpose and objectives for which they were constituted. Complaints have been heard in regard to the functioning of other Tribunals as well and it is time that a body like the Law Commission of India ha, a comprehensive look in with a view to suggesting measures for their improved functioning. That body can also suggest changes in the different statutes and evolve a model on the basis where of Tribunals may be constituted or reconstituted with a view to ensuring greater independence. An intensive and extensive study needs to be undertaken by the Law Commission in regard to the constitution of Tribunals under various statutes with a view to ensuring their independence so that the public confidence in such Tribunals may increase and the quality of their performance may improve. It is strongly recommended to the Commission of India to undertake such an exercise 817 on priority basis. On the facts of the case it is not necessary to disclose the contents of the records to the petitioner or his counsel.

tion (Criminal) No. 669 of 1986. (Under Article 32 of the Constitution of India). R.K. Jain, R.P. Singh and Rakesh Khanna for the petitioners. S.C. Mahanto, C.V.S. Rao and Mahabir Singh for the Respondents. The Judgment of the Court was delivered by B.C. RAY, J. The petitioners who are life convicts in this writ petition have assailed a D.O. Letter No. 4665/1983 GI/G4/R.10 84 dated 24.4.1985 issued by the re spondent No. 3, Inspector General of Prisons, Haryana, Chandigarh intimating to the Superintendent of Jail that convicts who are on bail and whose sentences are suspended, are excluded from the remissions systems in view of the provisions of Section 637 of the Punjab Jail Manual on the ground that the aforesaid letter purports to deprive the petitioners from the benefit of remissions of 19 months and 12 days granted to them during the period they were on bail, while counting the total period of sentence including remis sions undergone by them in order to consider their cases of pre mature release from imprisonment. 1110 The petitioner No. 1, Jai Prakash was convicted by the District and Sessions Judge, Bhiwani, on December 4, 1975 under Section 302 of the Indian Penal Code and he was award ed life imprisonment. Against this judgment and order of the Sessions Judge he preferred an appeal before the High Court of Punjab and Haryana and he was granted bail on 12.1.1976. This appeal, however, was dismissed on 28.9.1978 and he was arrested on 29.1.1979 while he was going to the Court to surrender himself to serve out the remaining part of the sentence as stated by him. The petitioner has stated that during the period he was on bail he earned remission of 19 months and 12 days. Similarly, the petitioner Nos. 2 to 5 were also convict ed by the District and Sessions Judge, Bhiwani, on 23.3. 1976 in a case under Section 302 of the Indian Penal Code and they were awarded life imprisonment. Petitioner Nos. 2 to 5 were directed to be released on bail by the High Court of Punjab and Haryana during the pendency of their appeal by order dated 7.4.1976. The appeal was however dismissed by the High Court on 8.12. 1978 and they surrendered themselves before the Magistrate on 16.2. 1979 for serving out their remaining part of sentence. The petitioner Nos. 2 to 5 were also given remissions of 19 months and 12 days during the period they remained on bail. It has been stated that though all the petitioners were given remissions of 19 months and 12 days and they were under the impression that the period of remission earned by them would be taken into consideration under para 637 of Punjab Jail Manual while computing their sentence under Para 516 B of the Punjab Jail Manual. They have now been informed by the respondent No. 3 as per his letter dated 24.4.1985 addressed to the Superintendent, District Jail, Bhiwani, respondent No. 2, that the convicts who were on bail and whose sentences were suspended would be excluded from the remissions purported to be earned by them while they were on bail. The petitioners have submitted that a number of pris oners to whom remissions were given during the period when they were on bail were also released by the State Government after taking into consideration the remissions granted to them during the period when they were on bail or that their sentence had been suspended. Names of six persons were mentioned in the petition who were pre maturely released. It has been submitted on behalf of the petitioners that they are entitled to have their period of remissions earned by them during the period they were on bail, to be taken into account for consideration of their pre mature release under para 637 of the Punjab Jail Manual. It has been further submitted that the aforesaid letter issued by the respondent No. 3 laying 1111 down guidelines and instructions to respondent No. 2, that is, Superintendent of District Jail, Bhiwani, is contrary to the provisions contained in para 637 of Punjab Jail Manual. The petitioners have also stated that since they surrendered themselves before the jail authority after dismissal of their appeals by the High Court they are entitled to have the period of remissions earned by them to be counted while considering the total period of sentence undergone for their premature release. A counter affidavit affirmed by the Superintendent of District Jail, Bhiwani has been filed. It has been stated therein that no remission of period of sentence is permissi ble under paragraph 637 or any other provision of the Punjab Jail Manual (as applicable in Haryana) for the period that the convict remains on bail or his sentence is otherwise under suspension. Even the benefit of special remissions allowed to convicts under State Government orders on visits of the Hon 'ble Minister for Jail (though such orders did result in anomalous situations and on the basis of experi ence the Government is inclined to restrict such orders) cannot be available to the petitioners. It has been further averted that a perusal of the relevant orders of 1977 would show that the orders were applicable to prisoners who had been convicted before the date of visit of the Hon 'ble Minister in 1977, were released on bail subsequently and surrendered in the jail for undergoing the unexpired portion of the sentence. The petitioners are not entitled to the benefit claimed as they had not surrendered in the jail for undergoing the remaining period of the sentence. The appeal of petitioner No. 1 had been dismissed on 28.9.1978 but he did not surrender for several months. Ultimately, warrants for his arrest were issued by the Chief Judicial Magistrate on 24.1. 1979 and he was arrested and sent to jail on 29.1. According to the petitioners ' own averments in para 2 of the petition, the other four writ petitioners remained out of jail for more than two months after the dismissal of their appeal. It is evident that they had not surrendered in the jail for undergoing the remaining period of sentence immediately after dismissal of their appeals. It has been further averted that even if any remission had been ordered inadvertently against relevant rules, it is in the interest of administration of justice that the mistake is rectified and not perpetuated by taking further action on its basis. It has also been stated that similar cases of remission earned during the period of bail came up before the High Court of Punjab and Haryana and it was held by the High Court that special remissions were not available to the convicts who had not surrendered voluntarily on the expiry of the bail period. It has been stated further that non surrender of the convict for 1112 several months after dismissal of appeal by itself showed that the surrender was not voluntary and such a convict did not merit the remission and an interpretation different from that would defeat the administration of justice. It has been averred that petitioners could not avail of the remissions ordered erroneously and inadvertently not in accordance with the relevant rules. As regards the six specific cases men tioned, it has been stated that the benefit was given to Tuhi Ram and Dig Ram only but not in the cases of the other four convicts referred to in the petition. They were denied the benefit as it is being done to the petitioners. Para 637 of the Punjab Jail Manual which is relevant for consideration of the question raised, is set out herein: "MANUAL FOR THE SUPERINTENDENCE AND MANAGEMENT OF JAILS IN THE PUNJAB 637. Subject to the provisions of paragraph 634 remission under paragraph 635 shall be calculated from the first day of the calendar month next following the date of the prison er 's sentence: any prisoner who, after having been released on bail or because his sentence has been temporarily suspended is afterwards re admitted in the jail, shall be brought under the remission system on the first day of the calendar month next following his re admission, but shall be credited on his return on jail with any remission which he may have earned previous to his release on bail or the suspension of his sentence. Remission under paragraph 636 shall be calculated from the first day of the next calendar month following the appointment of the prisoner as convict warder, convict overseer or convict night watchman. " On a reading of the aforesaid provision it is manifest that a prisoner who has been released on bail or whose sentence has been temporarily suspended and has afterwards been re admitted in jail will be brought under remission system on the first day of the calendar month next following his re admission. In other words, a prisoner is not eligible for remission of sentence during the period he is on bail or his sentence is temporarily suspended. The submission that the petitioners who were temporarily released on bail are entitled to get the remission earned during the period they were under bail, is not at all sustainable. As such the remissions that were inadvertently given to these petition ers cannot be taken into account in considering the total 1113 period of sentence undergone by them while considering their premature release from imprisonment under paragraph 637 of the Punjab Jail Manual. It also appears from the order of the Governor of Haryana dated 14th August, 1977 annexed as Annexure 'R1 ' to the writ petition that the special remis sion was granted by the Governor of Haryana to only those prisoners who were in confinement on 14th August, 1977 on the occasion of the first visit of the Chief Minister of Haryana to jail and who had been subsequently released on bail. It is pertinent to set out paragraph 2 of the said order: "All those prisoners who have been convicted before the 14th August, 1977 but subsequently released on bail shall be enti tled to the remission only if they surrender in the jail for undergoing the unexpired portion of their sentence. " The petitioners though convicted prior to 14th August, 1977 that is the date of visit of the Hon 'ble Minister to the Jail were granted bail before the said date. As such they are not entitled to the said remission in accordance with the order of Governor of Haryana. Secondly, all these petitioners did not surrender in the jail for undergoing the unexpired portion of their sentences immediately after their appeals were dismissed by the High Court. On the other hand, the petitioner No. 1 whose appeal was dismissed on 28.9. 1978 did not surrender either to the jail or to the Magis trate for serving out the remaining part of sentence till he was arrested on 29.1. 1979 in pursuance of the warrant issued by the court. The petitioner Nos. 2 to 5 who were released on bail by the High Court during the pendency of their appeal did not surrender in the jail immediately after their appeal was dismissed on 8.12. They surrendered themselves to the Magistrate only on 16.2. 1979 to serve out the remaining part of their sentence. As such, it cannot be said that they have surrendered in jail for undergoing their unexpired period of sentence immediately after their appeals were dismissed and so they are not eligible for remissions as envisaged in the said Government order dated 14.8. 1977 referred to hereinbefore. It appears that the respondent No. 3. the Inspector General of Police, Haryana, Chandigarh issued a letter being D.O. No. 4665/ 1983 GI/G4/R. 10 84 dated 24.4. 1985 to all Superintendents of Jails including the Superintendent of District Jail, Bhiwani, drawing their attention to paragraph 2 of the letter dated 11/14 1 1985 from the State Government to the Jail Department which is to the following effect: 1114 "Attention of all Superintendents of Jails is drawn to para 4 of the Government letter under which Government have affirmed that convicts who are on bail and whose sentences have been suspended are excluded from the remissions systems in. view of the provisions of para 637 of the Punjab Jail Manual. " This D.O. letter has been annexed as Annexure 'A ' to the writ petition. The letter dated 11/14 January, 1985 issued by the Gover nor of Haryana to the respondent No. 3 is an nexed as Annexure 'R5 ' to the writ petition. The relevant excerpt of it is set out herein below: "It has been decided that such remissions will be granted only in the following cases: (i) All the convicts, convicted by the civil courts with criminal jurisdiction in the Haryana State and were present in the jails on the date and time of the visit of the Jail Minister or other high dignitaries. (ii) All the convicts who were on parole/furlough from that jail on the date and time of the visit of the Jail Minister subject to the condition that they surrender at the Jail on the due date after the expiry of parole/furlough period for undergoing the unexpired portions of their sentences. . . . 4. Your attention is also invited to para 637 of the Punjab Jail Manual which provides that convicts who are on bail and whose sentence has been suspended are excluded from the remission system. " It is clear and evident from this letter that convicts who were on parole from jail on the date and time of the visit of the Chief Minister to the Jail will be granted remissions on condition that they surrender at the jail on the due date after expiry of parole period for undergoing the unexpired period of their sentence. This means that a convict in order to get the benefit of remission as directed by the said order issued under Article 16 1 of the Constitu tion of India has to surrender voluntarily at the Jail after expiry of bail. In the instant case, petitioner No. 1 did not surrender in jail or before the Magistrate after his appeal was dismissed by the High Court and the petitioner No. 1 had been 1115 arrested under warrant of arrest as he did not surrender in jail after his appeal was dismissed. Petitioners who were on bail also did not surrender immediately after dismissal of their appeal but they surrendered themselves after two months of dismissal of their appeal. In such circumstances, it cannot be said that the petitioners are entitled to the remissions as envisaged in the said Government order dated 11/14 January, 1985. The letter of the respondent No. 3 the Inspector General of Prisons, Haryana, Chandigarh i.e.D.O. Letter No. 4665/1983 GI/G4/R10 84 dated 24.4.1985 is quite in accordance with the Government order made on 11/14 Janu ary, 1985 and the respondent No. 3 in fact quoted paragraph 2 of the said letter which contains the necessary requisite for grant of remissions from sentence. The said D.O. letter of the respondent No. 3 cannot therefore be challenged as in violation of paragraph 637 of the Punjab Jail Manual nor it is contrary to the directions contained in the aforesaid order. In the premises aforesaid, this writ petition is dis missed. There will be no order as to costs. N.P.V. Petition dis missed.

The petitioner No. 1 and petitioners Nos. 2 to 5, were convicted in two separate incidents for offence under Sec. 302 Indian Penal Code and were undergoing life imprisonment awarded to them. They were directed to be released on bail by the High Court during the pendency of their appeals. The appeal of the first petitioner was dismissed on 28.9.78 and he was arrested on 29.1.79. The appeal of the petitioners Nos. 2 to 5 was also dismissed on 8.12.78 and they surren dered before the Magistrate on 16.2.79 for serving out the remaining part of their sentence. By an order dated August 14, 1977, special remission was granted by the Governor of Haryana to prisoners who were in confinement on 14th August, 1977 on the occasion of the first visit of the then Chief Minister of the State to jail, and who had been subsequently released on bail. All the petitioners were given remissions of 19 months and 12 days during the period they remained on bail. The petitioners were informed by the third respondent, by letter dated 24.4.1985 to the second respondent that the convicts who were on bail and whose sentences were suspended would be excluded from the remissions purported to have been earned by them while they were on bail. In the writ petition, the petitioners assailed the guidelines and instructions laid down in the impugned letter as contrary to the provisions contained in Para 637 of the Punjab Jail Manual. They contended that since they surren dered themselves before the jail authority after 1108 the dismissal of their appeal by the High Court they were entitled to have the period of remissions earned by them during the period they were on bail to be counted for con sidering the total period of sentence undergone for their premature release, under the aforesaid para. A counter affidavit affirmed by the second respondent was filed stating that no remission of period of sentence was permissible under paragraph 637 or any other provision of the Punjab Jail Manual, as applicable in Haryana, for the period that the convict remained on bail or his sentence was otherwise under suspension, that the special remission under State Government orders on visit of Minister for Jails was allowed only to those prisoners who were convicted before the visit and released on bail subsequently and the convicts surrendered to undergo the unexpired period of sentence and that the petitioners were not entitled to the benefit claimed as they had not surrendered in the jail. Dismissing the writ petition, this Court, HELD: 1.1 The impugned letter of the third respondent is quite in accordance with the Government order made on 11/14 January, 1985 and, therefore, cannot be challenged as in violation of paragraph 637 of the Punjab Jail Manual nor it is contrary to the directions contained in the aforesaid order. [1115B C] The remissions that were inadvertently given to the petitioners cannot be taken into account in considering the total period of sentence undergone by them while considering their premature release from imprisonment under para 637 of the Punjab Jail Manual. [1112H, 1113A] 1.2 On a reading of para 637 of the Punjab Jail Manual, it is manifest that a prisoner who was released on bail or whose sentence was temporarily suspended and was re admitted in jail afterwards would be brought under the remission system on the first day of the calendar month next following his readmission. In other words, a prisoner is not eligible for remission of sentence during the period he was on bail or his sentence was temporarily suspended. [ 1112F G] 1.3 The special remission was granted by the order of the Governor dated 14th August, 1977, to only those peti tioners who were in confinement on 14th August, 1977 on the occasion of the first visit of the then Chief Minister of the State to jail, and who had been subsequently released on bail. It is clear and evident from the letter dated 11/14th January, 1985 issued by the Governor that convicts who were 1109 on parole from jail on the date and time of the visit of the Chief Minister to the Jail will be granted remissions on condition that they surrender at the jail on the due date after expiry of parole period for undergoing the unexpired period of their sentence. In order to get the benefit of remission as directed by the said order issued under Article 161 of the Constitution of India, a convict has to surrender voluntarily after expiry of bail at the jail. [1113B, 1114G] In the instant case, the petitioners, though convicted prior to the visit to the jail of the Chief Minister, were granted bail before the said date. Further, all the peti tioners did not surrender in jail immediately after their appeals were dismissed. While petitioner No. 1 did not surrender till he was arrested after four months in pursu ance of the warrant issued by the Court, petitioners No. 2 to 5 surrendered themselves to the Magistrate only after 2 months. Therefore, they were not eligible for remissions as envisaged in the Government orders dated 14.8.1977 and 11/14th January, 1985. [1113D F]

CIVIL APPEALS Nos. 170 to 176 and 178 to 183 of 1953. Appeals from the Judgment and Order dated the 22nd August, 1952, of the High Court of Judicature at Madras in Civil Miscellaneous Petitions Nos. 13386, 13388,13390, 7812, 12003, 13188, 13262, 7822, 13123, 13347, 13341, 12997, 12494 of 1950 and Order dated 8th September, 1952, in C.M.P. No. 13936 of 1950. K. section Krishnaswamy lyengar (K. g. Champakesa lyengar, with him) for the appellants. V. K.T. Chari, Advocate General of Madras (R. Ganapathy lyer and V.V. Raghavan, with him) for the respondent (State of Madras) in Civil Appeals Nos. 170 to 176 and 178 to 181. M. Seshachalapathi for the respondent (State of Andhra) in Civil Appeals Nos. 182 and 183. February 5. The Judgment of the Court was delivered by MUKHERJEA J. I2 95 S.C. I./59 762 MUKHERJEA J. These consolidated appeals, numbering fourteen in all, are directed against a common judgment of a Division Bench of the Madras High Court dated the 23rd of August, 1952, by which the learned Judges dismissed the petitions of the different appellants made under article 226 of the Constitution. The appellants are landholders of Madras, holding zamindaries within that State, and in their applications under article 226 of the Constitution they prayed for writs in the nature of mandamus, directing the State of Madras to forbear from notifying and taking over possession of the estates held by them and also to cancel the notifications already issued, in exercise of its powers under the Madras Estates (Abolition and Conversion into Ryotwari) Act, (Act XXVI of 1948). This Act, the constitutional validity of which has been assailed by the appellants, was passed by the Provincial Legislature of Madras functioning under the Government of India Act, 1935, and it received the assent the Governor General of India on the 2nd of April, 1949. The avowed object of the Act is to abolish the zamindary system by repealing the Madras Permanent Settlement Regulation of 1802, to acquire the rights landholders in the permanently settled and other ,estates and to introduce the Ryotwari system in all such estates. After the advent of the Constitution, the Act was reserved for certification of the President and it was certified on the 12th of April, 1950. In the petitions presented by the appellants, a large number of grounds were put forward by way of attacking the validity of the legislation which was characterised as confiscatory in its character and subversive of the fundamental right of property, which the petitioners had in the zamindaries held by them under the Permanent Settlement Regulation. Pending the disposal of these petitions, the Constitution (First Amendment) Act of 1951 was passed on 1st of June, 1951, and this amendment introduced two new articles namely, article 31 A and 31 B in the Constitution, apparently with a view to protect the 'various laws enacted for acquisition of estates from being challenged under the relevant articles of Part III of the 763 Constitution. Article 31 B specifically refers to a number of statutes mentioned in the ninth Schedule to the Constitution and it declares expressly that none of them shall be deemed to be void on the ground that they contravened any of the fundamental rights, notwithstanding the decision of a court or tribunal to the contrary. It is not disputed that Madras Act XXVI of 1948 is one of the statutes included in this schedule. It may be remembered that an attempt was made to impeach the validity of the Constitution (First Amendment) Act itself before this court in the case of Shankari Prasad Singh Deo vs Union of India (1). The attempt failed and after the pronouncement of this court in Shankari Prasad 's case, the grounds upon which the writ petitions of the appellants were sought to be supported became for the most part unavailing. It appears that at the time of the final hearing of the applications the arguments actually advanced on behalf of the petitioners were aimed not at invalidating the enactment as a whole, but only some of its provisions, firstly on the ground that there was no public purpose behind the acquisition of some of the items of property mentioned therein and secondly, that the provisions for compensation in certain aspects were colourable exercise of legislative powers and constituted a fraud upon the Constitution Act of 1935. These arguments were sought to be supported entirely on the authority of the majority decision of this court in the case of The State of Bihar vs Maharajadhiraja Sir Kameshwar Singh (2) to the extent that it pronounced two of the provisions of the Bihar Land Reforms Act. 1950 a legislation similar in type to the Madras Act 1948 to be unconstitutional. These contentions did not find favour with the learned Judges of the High Court who heard the petitions and holding that the principles enunciated by the majority of this court in the Bihar case referred to above were not applicable to the impugned provisions of the Madras Act, they dismissed all the petitions. Certificates, however, were granted by the High Court to the petitioners (1) ; (2) 764 under article 132(1) of the Constitution and it is on the strength of these certificates that the appeals have ' come before us. Mr. Ayyangar, appearing in support of these appeals, has taken his stand solely upon the doctrine of ' 'colourable legislation ' as enunciated by the majority of this court in the Bihar case referred to above. He has very properly not attempted to make any point as to the absence of a public purpose in regard to any of the items of acquisition, since it is clear that according to the majority view of this court, as explained in Narayan Deo vs State of Orissa (1), the existence of a public purpose is not a justiciable issue in case of an enactment which having fulfilled the requirements of clause (4) of article 31 of the Constitution enjoys the protection afforded by it. The contentions of Mr. Ayyangar, in substance, are that the provisions of 'section 27(i) as well as of section 30 of the impugned Act are colourable legislative provisions which have been enacted in fraud of the Constitution Act of 1935. It appears that in determining the amount of compensation, that is to be paid under the Act, in respect of an acquired estate, it is necessary, first of all, to ascertain what has been described as the 'basic annual sum ' in regard to that estate. The ' basic annual sum comprises several items or parts which have been set out in section 27 and the subsequent sections of the Act, and it is upon the amount of the basis annual sum determined in accordance with the provisions of these sections that the total amount of compensation money payable to a proprietor is made to depend. Mr. Ayyangar contends that section 27(i) of the Act, which lays down that in computing the basic annual sum only one third of the gross annual Ryotwari demand of specified kinds is to be taken into account, is a colourable provision which, ignores altogether the actual income derived from the property and introduces an artificial and an arbitrary standard for determining the income or profits which has absolutely no relation to facts. Similarly, in computing the net miscellaneous revenue, which is an (x) [1945] S.C.R. A.I.R. x953 8. G. 375 at P. 380. 765 element in the computation of the basic annual sum, what is to be taken into account under section 30 is not the average of net annual income which the proprietors themselves derived from the sources, mentioned in the Act, when they were in possession of the estates, but which the Government might derive from them in future years after the date of notification. 'Thus if on account of mismanagement or for other reasons the Government does not derive any income from these sources, the proprietor would not have any compensation under this head at all. It is argued that these are mere devices or contrivances aimed at , confiscation of private property and they neither lay down nor are based upon any principle of compensation. Whatever the merits of these contentions might be, it appears to us that there is an initial and an insuperable difficulty in the way of the learned counsel 's invoking the authority of the majority decision of this court in the case of The State of Bihar vs Maharajadhiraja Sir Kameshwar Singh(1) to the circumstances of 'the present case. The Bihar Land Reforms Act, 'which was the subject matter of decision in that case, was a legislation which was pending at the time when the Constitution came into force. It was reserved for consideration of the President and received his assent in due course and consequently under clause (4)of article 31 of the Constitution it was immune from judicial scrutiny on the ground that the compensation provided by it was inadequate or unjust. With regard 'to two of the provisions of the Act, however, which were embodied in sections 4 (b) and 23(f) of 'the Act, it was held by the majority of this court that they were void as they really did not come within entry 42 of List III of Schedule VII of the Constitution, under which they purported to have been enacted. Entry 42 of List III speaks of "principles on which compensation for property acquired or requisitioned for the purposes 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 (1) [1952] s.c. R. 889. 766 to be given. " It was pointed out that entry 42 was undoubtedly the description of a legislative head and in deciding the competency of a legislation under this entry, the court was not concerned with the justice or propriety of the principles upon which the determination of the compensation was to be made or the form or manner in which it was to be given. But even then, the legislation must rest upon some principle of giving compensation and not of denying or withholding it, and a legislation could not be supported which was based upon something which was non existent or was unrelated to facts and consequently could not have a conceivable bearing on any principle of compensation. The initial difficulty in the way of invoking this doctrine in the present case lies in the fact that the legislation, which is impugned here, was passed by the Madras Provincial Legislature functioning under the Government of India Act, 1935, and ' there was no entry in any of the lists attached to the Act of 1935 corresponding to entry 42 in List I1I of the Indian Constitution. The only entry relevant to. this point in the Act of 1935 was entry9 of List I1 which spoke merely of 'compulsory acquisition of land '; and it is clear that a duty to pay compensation or of ' laying down any principle regarding it was not inherent in the language of that entry. The guarantee for payment of compensation, so far as the Constitution Act of 1935 is concerned, was contained in section 299 clause (2) which was worded as follows: "Neither the Federal Legislature nor a Provincial Legislature shall have power to make any law ' authorising the compulsory acquisition for public purposes of any land, or any commercial or industrial ' undertaking . . unless the law provides for the payment of compensation for the property acquired and either fixes the amount of the compensation, or specifies the principles on which, and the manner in which it is to be determined. " The appellants could have very well relied upon this guarantee if a bar had not been created in their way by the provision of article 31(6) of the Constitution. That clause of article 31 stands of follows: 767 "Any law of the State enacted not more than eighteen months before the commencement of this Constitution may within three months from such commencement be submitted to the president for his certification; and thereupon, if the President by public notification so certifies, it shall not be called in question in any court on the ground that it contravenes the provisions of clause (2) of this article or has contravened the provisions of sub section (2) of section 299 of the Government of India Act, 1935. " It is not disputed that the Madras Act XXVI of 1948 does fulfil all the requirements mentioned above. Consequently, it is not possible for us to allow the appellants to raise the contentions which the learned counsel on their behalf wants to raise. The result is that the appeals would stand dismissed, but in the circumstances of this case we shall make no order as costs. Appeals dismissed.

The Madras Estates (Abolition and Conversion into Ryotwari) Act, (Act XXVI of 1948) was passed by the Provincial Legislature of Madras functioning under the Government of India Act, 1935 and it received the assent of the Governor*General of India on the 2nd of April, 1949. After the advent of the Constitution, the Act was reserved for the certification of the President and it was certified on the 12th of April, 1950: Held, that in view of the provisions of article 31(6) of the Constitution the validity of the Act could not be challenged on the ground that it contravened the provisions of section 299(2) of the Government of India Act, 1935. Shankari Prasad Singh Deo vs Union of India ([1952] S.C.R. 89), The State of Bihar vs Maharajadhiraja Sir Kameshwar Singh ([1952] S.C.R. 889) and Narayan Deo vs The State of Orissa ([1954] S.C.R. 1) referred to.

Civil Appeals Nos. 201 and 202 of 1961. 404 Appeals from the judgment and decree dated May, 16, 1958 of the Patna High Court in L. P. As. Nos 13 and 14 of 1957. A. V. Viswanatha Sastri, R. K. Garg, M. K. Ramamurthi, D. P. Singh and section C. Agarwala, for the appellants. M. C. Setalvad, Attorney General for India. B. P. Rajgarhia and K. K. Sinha, for the respondents. December 22. The Judgment of the Court was delivered by DAS GUPTA, J. These appeals raise a question as to the manner in which a creditor company can validly cast its vote at a meeting of the creditors held under the provisions of section 153 of the Indian Companies Act, 1913. The question arises in connection with such a meeting held of the creditors of the Gaya Sugar Mills Ltd. On November 14, 1951, an order was made by the Company Judge in the Patna High Court for the winding up of the Gaya Sugar Mills Ltd. On October 6, 1953, an order was made by the learned Judge for action to be taken under section 153 of the Indian Companies Act. Mr. G. C. Banerjee, who was appointed Chairman to hold the meeting of the creditors held separate meetings of the debenture holders, secured creditors and of the unsecured creditors. In his Report he stated as regards the meeting of the unsecured creditors that "thirty unsecured creditors either in person or through proxy attended and took part in the meeting," and that ultimately a resolution proposed by one of the creditors, the Standard Vacuum Oil Company and seconded by another creditor Shri K. C. Agarwal was passed "by the creditors present by majority in number as well as three fourth in value. " It appears that at this meeting one Arjun Prasad claiming to represent two creditor companies, viz., Bhandani Bros., and the Hindustan 405 Coal Company Ltd., cast his votes on behalf of these two companies, in support of the resolution. No objection was taken at the meeting to the validity of these votes by any of the creditors who opposed the resolution and the Chairman proceeded on the basis that these votes were validly cast. It is not disputed that if these votes were not validly cast the requisite majority of three fourths in value would not be obtained. When the application came up for final hearing before the Court an objection was taken on behalf of creditors who opposed the scheme that the votes cast by Arjun Prasad on behalf of the two creditor companies, viz., Bhandani Brothers and the Hindustan Coal Company were not valid votes and so the requisite majority of three fourths in value of the creditors had not been obtained. The Company Judge was of the opinion that there was no sufficient explanation as to why the objection as to the validity of the votes was not taken earlier and so the objection raised at the late stage could not be entertained. On the merits also he held that the resolution passed by the creditor companies authorising Arjun Prasad, to attend the meeting of the unsecured creditors of the Gaya Sugar Mills Ltd., and vote on behalf of the companies, were sufficient in law to make his attendance at the meeting the attendance of the companies "in person" and his voting on behalf of the companies valid voting of the companies. Accordingly, he rejected this objection. On appeal a Division Bench of the Patna High Court has allowed the objection, being of opinion that the delay in raising the objection would not entitle the Court to ignore the legal defect of the votes and that in law the votes cast by Arjun Prasad were not valid votes of these two creditor companies, viz., Bhandani Brothers and the Hindustan Coal Company. A contention that no appeal 406 lay to the High Court from the order of the Company Judge was rejected. Therefore, the learned Judges set aside the order of the Company Judge as to this part of the case. They, however, gave a certificate that as regards the value and nature of the case, it fulfils the requirements of article 133(1)(a) of the Constitution and is a fit one for appeal to this Court. On this certificate the present appeals have been filed. Three points were raised before us by Mr. Sastri in support of the appeals. The first is that from the decision of the Company Judge, an appeal lay to this Court and not to the High Court. Secondly, it was urged that the objection to the validity of the votes not having been taken earlier should not be allowed to be raised for the first time during arguments at the final hearing of the application. Lastly, it was urged that the votes were valid. As regards the first point it is to be noticed that sub section 7 of section 153, which was added in 1936 provides that an appeal shall lie from any order made by the court exercising original jurisdiction under the section to the authority authorised to hear appeals from the decisions of the Court. It therefore could not be disputed and was not disputed that an appeal did lie from the order made by the Company Judge on October 6, 1953. The controversy is whether the appeal lay to this Court or the High Court. In other words, the question is, which is the authority authorised to hear appeals from the decisions of the Court ? The "Court" here cannot but mean the Court exercising original jurisdiction. When the Company Judge exercises the jurisdiction he does it under the provisions of section 3 of the Companies Act which says that the Court having jurisdiction under this Act shall be the High Court having jurisdiction in the place at which the registered office of the company is situate. The authority authorised to hear appeals from 407 appealable decisions of a Single Judge of the Patna High Court when exercising original jurisdiction lie to the High Court and not to this Court. (Vide Clause 10 of the Letters Patent). It necessarily follows that the appeal from the order of the Company Judge lay to the High Court and not to this Court. There is, therefore, no substance in the first point raised on behalf of the appellant. The next contention that the objection cannot be entertained for the first time at the final hearing of the application appears to us to be equally unsound. It is undoubtedly true that the opposing creditors were guilty of negligence in not drawing the attention of the Chairman to what they considered to be a defect in the voting on behalf of the two creditor companies, viz., Bhandani Brothers and the Hindustan Coal Co., and no less negligence in not bringing this to the Court 's notice at the earliest opportunity. Laches on the part of some creditors cannot however justify the Chairman or the Court in disobeying the requirements of the Act. If in law the two votes cast by Arjun Prasad for these two creditor companies were not validly cast he three fourth majority requisite under section 153, sub section 2, would not be there and so no further action under section 153 could be taken by the Court in the matter. How can the Court turn a blind eye to the fact, if proved, that on the basis of valid votes at the meeting the requisite majority was not obtained, merely because the Chairman 's attention was not drawn to the defect or it was not brought to the Court 's notice earlier ? In our opinion, the learned Judges who heard the appeal were right in thinking that however deplorable the delay by opposing creditors in raising the objection might be, that would not be a sufficient reason for refusing to entertain the objection. This brings us to the main question in controversy, viz., whether the resolutions passed by the 408 two creditor companies, viz., Bhandani Brothers and the Hindustan Coal Company, authorising Arjun Prasad to attend the meeting on their behalf and to vote there on their behalf made Arjun Prasad 's voting valid voting. Section 153(2) of the Indian Companies Act is in these words : "If a majority in number representing three fourths in value of the creditors or class of creditors, or members or class of members, as the case may be, present either in person, or by proxy at the meeting, agree to any compromise or arrangement, the compromise or arrangement shall, if sanctioned by the Court be binding on all the creditors or the class of creditors, or on all members or class of members, as the case may be, and also on the company, or, in the case of a company in the course of being wound up, on the liquidator and contributories of the Company. " The agreement has to be of a majority in number representing three fourths in value of those who are present either in person or by proxy at the meeting. The agreement of those who are not present at the meeting either in person or by proxy cannot be taken into consideration. Any creditor whether a corporation or a natural person can be present at a meeting by proxy. A natural person can of course be present at a meeting "in person". Can a corporation be present at a meeting "in person"? It appears to us that unless there is some special provision by a law, a company which is not a physical person cannot "be present" at any place "in person. " It is true that under the , a company is a "Person", so that whenever the word "person" is used in any statute a company would be included thereunder. The definition in the can however be of no assistance in interpreting the words "to be present in person", and the difficulty in the way of a company being present in person can be obviated only by statutory provisions or rules having the force of law. 409 Nor can the appellant derive any assistance from the English Case In re Kelantan Coco, Limited and Reduced cited by the learned counsel. In that case, the Court was dealing with a petition for reduction of capital. In deciding whether the special resolution to reduce the capital of the company had been duly passed, the Court had to consider whether there was a quorum at the confirmatory meeting, at which one member of the company and one representative appointed under s.68 of the Companies (Consolidation) Act, 1908, to represent a shareholder of the company, the Eastern Development Corporation, Limited, were present. The articles of Association provided: "two members personally present shall be a quorum. " It was held that a representative appointed under section 68 should be taken into account in considering whether there was a quorum. The provisions of section 68 were similar to those of section 80 of the Indian Companies Act, 1913, and thereunder a company which is a member of another company may, act as its representative at any meeting of that other company. The presence of such a representative was taken in the above case to amount to personal presence of a member of the company. The case does not deal with the question of a creditor company. In the , a provision has been introduced under which a company which is a creditor of another company may by resolution of its directors, authorises such person as it thinks fit to act its representative at any meeting of any creditors of the company held in pursuance of the Act and a person authorised in this manner shall be entitled to exercise the same rights and powers (including the right to vote by proxy) on behalf of the company, (section 187(1)(b) and 2). No such provision however is to be found in the Indian Companies Act, 1913. It is unnecessary for us to 410 consider whether under this new provision the attendance of a person authorised in this manner at a meeting of the creditors will amount to attendance of the creditor company "in person". For, the present case is governed by the provisions of the Indian Companies Act, 1913, and not by this new provision. When the Companies Act was amended in 1936, an addition was made in section 246 which empowers the High Court to make rules, concerning the mode of proceedings inter alia "for the holding of meetings of creditors and members in connection with proceedings under section 153 of this Act." Accordingly, a number of Rules were framed by the Patna High Court in exercise of this additional power. Rule 144 of the Rules states that a creditor or contributor may vote either in person or by proxy. Rules 145 to 153 deal with various questions as regards proxies. Of these Rule 150 lays down how a proxy is to be given where a creditor is a corporation. Admittedly, no proxy in accordance with Rule 150 was given by the two creditor companies, Bhandani Brothers and the Hindustan Coal Company, in the present case. There is nothing in these rules which can assist Mr. Sastri 's argument that a resolution by the directors of the company authorising a director or some other person to represent the company at the creditors ' meeting makes him a "present in person" in law for that company at the meeting. Mr. Sastri 's last argument was that as the business of the company has to be managed by the directors and the directors can delegate any of their powers to any one of themselves, the attendance of Arjun Prasad at the meeting should reasonably be construed as the attendance of all the directors and so the attendance of the company "in person". As we have already indicated it does not appear to us that in the Act of 1913 their is any provision 411 for attendance of the company "in person", but apart from that we wish to point out that the resolution made by the two companies do not appear to us to delegate the powers of the directors to Arjun Prasad. The conclusion of the High Court that the votes cast by Arjun Prasad on behalf of the two companies., viz., Bhandani Brothers and the Hindustan Coal Company, were not valid votes in our opinion, correct. The appeals are accordingly dismissed with costs. One set of hearing fee. Appeals dismissed.

Subsequent to an order made for the winding up of a company, the Company Judge made a direction for action to be taken under provisions of section 153 of the Indian Companies At the meeting of the unsecured creditors of the company a resolution was passed by the creditors present, either in person or through proxy, by majority in number as well as three fourths in value. At this meeting the appellant claiming to represent two of the creditor companies cast his votes on behalf of the said companies in support of the resolution. No objection was taken at the meeting to the validity of the votes by any of the creditors who opposed the resolution. When the matter came up for orders before the Company Judge an objection was raised that the votes cast by the appellant on behalf of the two creditor companies were not valid, inasmuch as section 153(2) of the Act requires that the creditors should be present either in person or by proxy at the meeting and that, in the present case, the two creditor companies, being corporations, could not be considered to have been present at the meeting "in person". The Company Judge overruled the objection on the grounds that it was raised at a late stage and that, in any case, the votes were valid because the appellant 's attendance at the meeting amounted to the attendance of the companies "in person". On appeal, a Division Bench of the Patna High Court rejected the contention that no appeal lay to the High Court from the order of the Company Judge but only to the Supreme Court and, on the merits, set aside his order. ^ Held, that: (1) the word "Court" in section 153(7) of the Indian Companies Act, 1913, means the Court exercising original jurisdiction, and. therefore, an appeal from the order of the Company Judge lay to the High Court under cl. 10 of the Letters Patent; (2) though under the , a company is a "person" so that whenever the word "person" is used in any statute a company would be included thereunder, unless there is some special provision by a law a company which is not a physical person cannot "be present" at any place "in person"; and (3) in the present case the votes cast by the appellant were not valid in law and it being admitted that if the votes were invalid the requisite majority of three fourths in value requisite under section 153(2) of the Indian Companies Act, 1913, would not be obtained and therefore no further action could be taken by the Court in the matter, the delay in raising the objection would not entitle the Court to ignore the legal defect of the votes.

ISDICTION: Writ Petition Nos. 60 1 602 of 1980. (Under Article 32 of the Constitution of India). M.K. Ramamurthy, J. Ramamurthy, Mrs. Chandan Ramamurthy and M.A. Krishnamurthy for the Petitioners. K. Parasaran, Attorney General D.N. Mishra, Ms. Meera Mathur, O.C. Mathur, C.V. Subba Rao. R.P. Srivastava. Hemant Sharma and P. Parmeswaran for the Respondents. The petitioners in these Writ Peti tions filed under Article 32 of the Constitution of India have prayed for a declaration that rule 3 of the Rules for Age of Retirement contained in Annexure I to the Central Bank of India (Officers ') Service Regulations, 1979 (herein after referred to as 'the Regulations ') framed under regula tion 19(1) of the Regulations is unconstitutional and void, and to direct the Central Bank of India (hereinafter re ferred to as 'the Bank ') to fix the age of retirement of all the officers of the Bank uniformly at 60 years. They have further prayed for the quashing of the Order dated 25.2. 1980 issued by the Chief Manager of the Bank at its Regional Office, New Delhi retiring Petitioner No. 1, B.S. Yadav from service as being illegal and unconstitutional and for a declaration that Petitioner No. 1, B .S. Yadav continues or shall be deemed to be i. the service of the Bank till he attains the age of 60 years with consequential benefits. The petitions are filed by B.S. Yadav, who was working as an officer of the Bank and the All India Central Bank Employ ees ' Federation. 169 The Bank came to be established under the Banking Compa nies (Acquisition and Transfer of Undertakings) Act, 1970 (hereinafter referred to as 'the Act ') under which the banking business of 14 banking companies was nationalised. At the commencement the process of nationalisation of these banks was not smooth sailing. On the Government of India taking a decision to nationalise the banking business of 14 banking companies the Banking Companies (Acquisition and Transfer of Undertakings) Ordinance 8 of 1969 was promulgat ed by the President on July 19, 1969. The Ordinance provided for the acquisition and transfer of the undertakings of certain banking companies which were 14 in number in order to serve better the needs of development of the economy in conformity with the national policy and objectives and for matters connected therewith or incidental thereto. Under the Ordinance 14 'corresponding new banks ' were established. The Bank which is involved in these cases is the corresponding new bank of the Central Bank of India Ltd. which was one of the banking companies whose undertaking was taken over under the Ordinance. The corresponding new banks were authorised to carry on and transact the business of banking as defined in clause (b) of section 5 of the Banking Regulation Act, 1949 and also to engage in one or more forms of business specified in sub section (1) of section 6 of the Act. The Chairman of the banking company whose business was taken over holding office immediately before the commencement of the Ordinance was appointed as the custodian of the corre sponding new bank. The general superintendence, direction and management of the affairs and business of the corre sponding new bank was vested in the custodian who was to be the Chief Executive Officer of that bank. The above Ordi nance was replaced by the 22 of 1969. The constitutional validity of both the Ordinance and the 22 of 1969 was questioned before this Court in Rustom Cavasjee Cooper vs Union of India, ; By the decision rendered in the said case this Court declared the Ordinance and the 22 of 1969 as invalid and the action taken or deemed to have been taken in exercise of the powers under them as unauthorised. The above judgment of the Court was pronounced on February 10, 1970. The effect of the judgment was that the undertakings of the 14 banking companies, whose business had been acquired by the Central Government trader the authority of the above said Ordinance and the Act, reverted to the banking companies. With a view to resuming control over the business of those banking companies, the President again promulgated on February 14, 1970 the 170 Banking Companies (Acquisition and Transfer of Undertakings) Ordinance, 1970. The provisions of the earlier Act which were struck down by this Court had been duly modified by promulgating the said Ordinance. The said Ordinance provided for the acquisition and transfer of the banking business of the said banking companies with effect from July 19, 1969, i.e., the date on which those undertakings were initially acquired by the Central Government. This Ordinance was replaced by the Act within a short period which was deemed to have come into force from July 19, 1969. By section 3 of the Act 14 corresponding new banks which were mentioned in the First Schedule to the Act came to be established. The paid up capital of the every new bank constituted trader section 3 of the Act was, until any provision was made in that behalf in any scheme made under section 9 of the Act, to be equal to the paid up capital of the existing bank in relation to which it was the corresponding new bank. The existing banks were the banking companies mentioned in the Second Schedule to the Act whose banking business had been earlier taken over on July 19, 1969. The entire capital of each corresponding new bank was vested in and allotted to the Central Government. Every corresponding new bank was treated as a body corporate with perpetual succession and a common seal with power, subject to the provisions of the Act, to acquire, hold and dispose of property, and to con tract and to sue and be sued in its own name. Under the Act the Bank became the corresponding new bank in respect of the Central Bank of India Ltd. Among other provisions, the Act provided for the appointment of officers and employees of the corresponding new bank. Section 12 of the Act reads thus: 12. Removal of Chairman from office (1) Every person holding office, immediately before the commencement of this Act, as Chairman of an existing bank shall, if he becomes Custodian of the corresponding new bank, be deemed, on such commencement, to have vacated office as such Chairman. (2) Save as otherwise provided in sub section (1), every officer or other em ployee of an existing bank shall become, on the commencement of this Act an officer or other employee, as the case may be, of the corresponding new bank and shall hold his office or service in that bank on the same terms and conditions and with the same rights to pension, gratuity and other matters as would have been admissible to him if the undertaking of the existing bank had not been transferred to and vested in the correspond 171 ing new bank and continue to do so unless and until his employment in the corresponding new bank is terminated or until his remuneration, terms and conditions are duly altered by the corresponding new bank. (3) For the persons who immediately before the commencement of this Act were the trustees for any pension, provident, gratuity or other like fund constituted for the offi cers or other employees of an existing bank, there shall be substituted as trustees such persons as the Central Government may, by general or special order, specify. (4) Notwithstanding anything con tained in the , or in any other law for the time being in force, the transfer of the services of any officer or other employee from an existing bank to a corresponding new bank shall not entitle such officer or other employee to any compensation under this Act or any other law for the time being in force and no such claim shall be entertained by any court, tribunal or other authority. " Sub section (2) of section 12, in particular, provided for the transfer of the services of all officers and other employees of an existing bank from the existing bank to the corresponding new bank on the same terms and conditions and with the same rights to pension, gratuity etc. and it stated that any officer or employee of the existing bank whose services were so transferred was to continue to be in the employment of the corresponding new bank until his employ ment in the corresponding bank was terminated or until his remuneration, terms or conditions were duly altered by the corresponding new bank. Section 19 of the Act conferred power on the Board of Directors of a corresponding new bank to frame regulations after consultation with the Reserve Bank of India and with the previous sanction of the Central Government for all matters for which provision was expedient for the purpose of giving effect to the provisions of the Act. Clause (d) of section 19(2) of the Act specifically conferred powers on the Board of Directors to make regula tions with regard to the conditions or limitations subject to which the corresponding new bank might appoint advisers, officers or other employees and fix their remuneration and other terms and conditions of service. After the Bank came to be established there were two classes of officers and employees working in it, namely, officers and employees who had become officers and employees of the Bank under sub section (2) of section 12 of the Act 172 and the officers and employees of the Bank appointed after July 19, 1969. The age of retirement of the officers and employees of the various banks established in India has been the subject matter of several awards and settlements for several years. On the 20th March, 1953 the Sastry Award which was passed on the industrial disputes between certain banking companies and their workmen directed thus: "We direct that after the workman has reached the age of 55 years he may be retired after giving him two months ' notice in writing in case his efficiency is found by the employer to have been impaired; subject to this rule and also subject to any rule under an existing pension fund the workman should not be com pelled to retire before he is 58 years old. " The National Industrial Tribunal (Bank Disputes) Award known as Desai Award, on industrial disputes between certain banking companies and corporations and their workmen took the view as under: "A workman should not be compelled to retire before he is 58 years old. Banks however, will be at liberty, wherever they consider fit, to make rules providing for a higher age of retirement. " The First Bipartite Settlement on industrial disputes between certain banking companies and their workmen entered into on October 19, 1966 provided thus: "In supersession of paragraph 15.13 of the Desai Award, after a workman has reached the age of 57 years, he may be retired after giving him two months ' notice in writing in case his efficiency is found by the employer to have been impaired. " By a circular dated March 11, 1969, the erstwhile Central Bank of India Ltd. directed that as far as possible no member of the staff should be allowed extension in service beyond the retirement age of 60 years. The said circular which is marked as 'Annexure R2 '. and enclosed to the counter affidavit filed by Shri A.S. Jain, Assistant General Manager of the Bank at its Regional Office, New Delhi reads thus: 173 BID/STAFF/69/17 11th March, 1969 (To All Offices in India) Re: Age of Retirement. It has now been decided that as far as possible no member of the staff should be allowed extension in service beyond the re tirement age of sixty. Branches are therefore advised to refrain from recommending the case of any member of the staff for extension in service beyond] the retirement age. Staff members who retire at the age of sixty may, however, be allowed to avail of, from the date of retirement, ordinary leave, if any, due to them, and treated as retired from service from the date of expiry of such leave. P.C. Mevawalla General Manager" It is thus seen that on the eve of the nationalisation of the banking companies the members of the staff of the Central Bank of India Ltd. were entitled to remain in the service of the bank till 60 years and that until the terms and conditions of service were altered under subsection (2) of section 12 of the Act, every officer or employee belong ing to the Central Bank of India Ltd. whose services were transferred under section 12(2) of the Act to the Bank was entitled to the benefit of the said rule relating to the age of retirement. He could, therefore, continue in service till he attained the age of sixty years in the Bank subject to any alteration that might be made by the Bank. Upon nationalisation of the 14 banks it became necessary to nationalise the terms and conditions of service of the employees of the banks, particularly in view of the varying terms and conditions of service that existed in different banks prior to nationalisation which were continued by virtue of sub section (2) of section 12 of the Act. The Government of India, therefore, appointed on July 19, 1973 a committee consisting of five members with Shri V.R. Pillai as the Chairman (which was popularly known as the Pillai Committee) to enquire into and to make recommendations with regard to standardisation of scales of pay, allowances and perquisites of the transferred officers (other than award staff) in the 14 nationalised banks. One of the points referred to the Pillai Committee was the question relating to the age of superannuation of and the nature and quantum of terminal 174 benefits for the officer cadres. The Pillai Committee sub mitted its report in May, 1974. Paragraph 8.18 and 8.22 of the Pillai Committee Report relating to the age of superan nuation read thus; "8.18. According to existing practices, the age of superannuation (or retirement) in eleven of the nationalised banks is 60 years, with a provision that after an officer has attained the age of 57 years he can be retired after giving him two months ' notice in writ ing, if his efficiency is found to have been impaired. In another bank, though the age of superannuation is 60, the proviso about earli er retirement applies only when the officer has attained the age of 58 years. In two other banks the age of superannuation itself is 58 years. In the circumstances, we recommend that the age of superannuation of officers in the banks should be 60 years, with a provision for review at the age of 58 years to adjudge the fitness of the officer for continuance in service. In order to remove uncertainties, the above review may be initiated on the officer attaining the age of 57 years and completed well before he reaches 58 years. " Thereafter in September, 1976 the Government of India appointed a study group, called the Study Group of Bankers, to make suggestions for the implementation of Pillai Commit tee Report. After examining the Report of the Pillai Commit tee and taking into consideration all other aspects the Study Group of Bankers made its recommendations on all questions including the age of superannuation of officers who had become the employees of the banks under section 12(2) of the Act. On receipt of the recommendations of the Study Group of Bankers the Government of India issued guide lines to the nationalised banks to frame appropriate regula tions with regard to the terms and conditions of the service of the officers working in them. Accordingly the Bank pre pared its regulations after consultation with the Reserve Bank of India and submitted them for the approval of the Government of India. The Government of India gave its ap proval to the regulations with some modifications. On re ceipt of the approval of the Central Government on 23rd May, 1979 the Bank brought into force the Regulations with effect from 1st July, 1979. Regulation 19 of the Regulations pro vided as under: 175 "19. Age of Retirement (1) The age of retirement of an officer em ployee shall be as determined by the Board in accordance with the Guidelines issued by the Government from time to time; Provided that the Bank may, at its discretion on review by the Special Committee as provided hereinafter in subregulation (2) retire an officer employee on or at any time after the completion of 55 years of age or on or at any time after the completion of 30 years of total service as an officer employee or otherwise, whichever is earlier; . . " In accordance with the guidelines issued by the Central Government, the Board determined the Rules for Age of Re tirement as follows: "The age of retirement of an officer in the Bank on or after the appointed date shall be determined as under: 1. An officer employee of the Bank recruited/promoted prior to 19th July, 1969 shall retire on completion of the 60 years of age. An officer employee of the Bank recruited prior to 19th July, 1969 but promoted as an officer on or after 19th July. 1969 shall retire on completion of 60 years of age. An officer employee of the Bank recruited whether as an Award Staff or as an officer employee on or after 19th July, 1969 shall retire on completion of 58 years of age. " Rules 1 and 2 of the Rules for Age of Retirement relate to an officer employee who had been recruited or promoted as an officer prior to July 19, 1969, i.e., prior to the date on which the banking business of the former banking compa nies was nationalised and to an employee recruited prior to nationalisation but promoted as an officer thereafter. Rule 3 of the Rules for Age of Retirement relates to an officer employee of the Bank recruited whether as an award staff or an officer employee on or after July 19, 1969. The officer employees who had been recruited or promoted prior to July 19, 1969 or recruited prior to July 19, 1969 but promoted as officers, after July 19, 1969 were allowed to retire trader the Rules for Age of Retirement on completion of 60 years of age. All other officer employees recruited whether as an award staff or an officer employee on or after July 19, 1969 were 176 required to retire on completion of 58 years of age. The difference between the age of retirement of officer employ ees failing under rules 1 and 2 of the Rules for Age of Retirement and the age of retirement of the officer employ ees falling under rule 3 thereof arose on account of the decision taken by the Government of India and the Bank not to alter to their prejudice the right which the employees of the Bank who had been recruited prior to July 19, 1969 had acquired under the circular issued by the Central Bank of India Ltd. on March 11, 1969 before nationalisation of the banks. Section 12(2) of the Act, as already stated, provided that any employee of the Bank whose services were trans ferred to the corresponding new bank could hold his office in that bank on the same terms and conditions and with the same rights to pension, gratuity, etc. until they were duly altered by the corresponding new bank. Since there was no alteration of the condition relating to the age of superan nuation, the said officers continued to enjoy the benefit of the condition of service relating to retirement which was in existence prior to nationalisation of banks. But as regards employees who were recruited after July 19, 1969 the Bank fixed the age of superannuation at 58 years having regard to the prevailing age of superannuation of the members belong ing to the various services in public sector corporations, Central Government and many of the State Governments. The 1st petitioner was appointed on 13th August 1972 as an officer in the post of Chief Cashier in the Bank. The letter of appointment issued in his case contained a clause which read as follows: "You will be governed by the terms and condi tions of service as applicable to the other officer staff of the Bank. " On the Regulations coming into force in 1979 the 1st Petitioner was served with a notice dated 25.2. 1980 issued by the Chief Manager of the Bank stating that he would be treated as finally retired from the Bank 's service after the close of business on February 29, 1980 on completion of 58 years of age. The above writ petitions were filed in April, 1980 questioning the order of retirement issued in the case of the 1st petitioner and praying inter alia for a declara tion, as mentioned above, that all officers including the 1st petitioner should be permitted to continue in service till the completion of 60 years of age as in the case of officers failing trader rules 1 and 2 of the Rules for Age of Retirement. The principal grounds urged in support of the writ petitions were that there could not be two different ages of retirement in the case of officers of the Bank and that since rule 3 of the Rules for 177 Age of Retirement required the officers, who were recruited subsequent to July 19, 1969, to retire on completion of 58 years of age while others falling under rules I and 2 of the said Rules could continue till 60 years of age, rule 3 was liable to be struck down as being violative of Articles 14 and 16 of the Constitution. The petitions were opposed by the Bank and the Union of India. It was pleaded by them that since the employees whose services were transferred to the Bank under subsection (2) of section 12 of the Act were entitled to continue in service till 60 years of age by virtue of the conditions of service prevailing in the Cen tral Bank of India Ltd. prior to nationalisation of banks, the Bank and the Government found that it would be unjust and unfair to reduce the age of superannuation from 60 years in the case of such employees and, therefore, did not alter the said condition of service. In the absence of any altera tion they were entitled to continue to be in service till they attained 60 years of age even after nationalisation by virtue of sub section (2) of section 12 of the Act. The officers and employees other than the award staff recruited after the nationalisation of the basks were required to retire on completion of 58 years of age which was the age of superannuation generally prevailing in the services of all public sector corporations, Central Government and many of the State Governments. It was urged that since the employees recruited prior to July 19, 1969 belonged to a different class altogether, it could not be said that there had been violation of Articles 14 and 16 of the Constitution, and the difference in the ages of retirement of the two classes of officers was due to historica reasons. It is no doubt true that the order of appointment in the case of the 1st petitioner stated that he would be governed by the terms and conditions which were applicable to other officers of the Bank. That condition, however, did not prevent the Bank from making a regulation which was applica ble exclusively to the officers recruited after July 19, 1969. In the case of officers falling under rules 1 and 2 of the Rules for Age of Retirement no extra benefit was con ferred on them. They were only permitted to carry the bene fit of the Rules for Age of Retirement which was prevailing in the former banking company which was taken over by the Government on nationalisation. We are of the view that there was good reason to make a distinction between the employees who had entered service prior to nationalisation and those who joined thereafter. At the time of nationalisation the corresponding new banks did not have their own employees to run the vast business taken over under the Act. There was, therefore, necessity to secure the services of the employees of the former banking companies without causing much dissat isfaction to them. There was also need for standardising the con 178 ditions of service of all such employees belonging to the 14 banks. The Government of India took the advice of the Pillai Committee and the Study Group of Bankers and after due deliberation evolved a uniform pattern of conditions for the transferred employees keeping in view the conditions of service of the employees prevailing in the majority of the banking companies which were nationalised. Insofar as the employees recruited after nationalisation were concerned the Government applied the rules generally applicable to all its employees in other spheres of Government service. We have given detailed reasons in our judgment in the Life Insurance Corporation of India & Anr. vs S.S. Srivastava & Others, (Civil Appeal Nos. 1076 1077 of 1987) decided on 5.5.1987 justifying the existence of a rule fixing different ages of retirement to different classes of employees of the Life Insurance Corporation of India in the circumstances existing there. The circumstances prevailing in this case are almost the same. Those reasons are equally applicable to the present case too. In Govindarajulu vs The Management of the Union Bank of India & Others, (Writ Peti tion No. 5486 of 1980) decided on 21.11.1986 the High Court of Madras has rejected the contentions similar to those which are raised before us. In that case a regulation framed by the Union Bank of India which was similar to the one in this case was upheld. That decision has been approved by us in the Life Insurance Corporation of India & Anr. vs S.S. Srivastava & Others, (supra). In Dr. Nikhil Bhushan Chandra vs Union of India & Ors., (1983 LAB I.C. NOC 109 Calcutta) similar regulations framed by the United Commer cial Bank which was also nationalised under the Act came up for consideration before the High Court of Calcutta. The High Court rejected the theory of discrimination put forward on the basis that fixing 60 years as age of retirement for those who were recruited prior to July 19, 1969 and 58 years of age who joined after that date lacked an intelligible differentia. The Calcutta High Court pointed out that the terms and conditions of the service of the employees of the banks which were taken over under the Act had been protected by the Act and it was not possible to hold that there had been any hostile discrimination against the petitioner in that case. We are of the view that the decisions of the Madras High Court and the Calcutta High Court, referred to above, lay down the correct principle. It is true that if the nationalised banks wanted to reduce the age of retire ment of the transferred employees they could have done so But they have tried to standardise their conditions of service and to bring about some uniformity without giving room for much discontent or dissatisfaction. The question involved in this matter is not one of mere 179 competence. It involves justice and fairness too. Having regard to all aspects of the matter, the nationalised banks have tried to be fair and just insofar as the question of the age of retirement is concerned. We cannot say in the circumstances that the Bank 's attitude is unreasonable, particularly when the age of retirement of the new entrants is quite consistent with the conditions prevailing in almost all the sectors of public employment. We are of the view that the classification of the em ployees into two categories i.e., those falling under rules 1 and 2 of the Rules for Age of Retirement and those falling under rule 3 thereof satisfies the tests of a valid classi fication laid down under Articles 14 and 16 of the Constitu tion. We do not, therefore, find any ground to declare rule 3 of the Rules for Age of Retirement, which is impugned in this case, as unconstitutional. The Writ Petitions are, therefore, dismissed. There shall, however, be no order as to costs. P.S.S. Petitions dismissed.

Before nationalisation of banking companies, the members of the staff of the Central Bank of India Ltd. were entitled to remain in the service of the bank till 60 years by virtue of the circular dated March 11, 1969. Section 12(2) of the upon nationalisation provided that any employee of the Bank whose services were transferred to the correspond ing new bank could hold his office in that bank on the same terms and conditions and with the same rights to pension, gratuity, etc. until they were duly altered by the corre sponding new bank. Clause (d) of section 19(2) of the Act specif ically conferred powers on the Board of Directors of the corresponding new bank to make regulations with regard to the conditions or limitations subject to which the corre sponding new bank might appoint officers or other employees and fix their remuneration and other terms and conditions of service. Regulation 19 of the Central Bank of India (Officers ') Service Regulations, 1979, empowered the Board of Directors to determine the 166 age of retirement of officer employees of the Bank. Rule 1 of the Rules for Age of Retirement contained in Annexure I to the Regulations requires an officer employee of the Bank recruited/promoted prior to the 19th July, 1969 (the date on which banking business was nationalised) to retire on com pletion of the 60 years of age; rule 2 requires an officer employee of the Bank recruited prior to 19th July, 1969 but promoted as an officer on or after 19th July, 1969 to retire on completion of 60 years of age, while rule 3 requires an officer employee of the Bank recruited on or alter 19th July, 1969 to retire on completion of 58 years of age. The 1st petitioner was appointed on 13th August, 1972 as Chief Cashier in the Bank. The letter of appointment con tained a clause which stated that he will be governed by the terms and conditions of service as applicable to the other officer staff of the Bank. He was served with a notice dated 25th February, 1980 stating that he would be treated as finally retired from the Bank 's service after the close of business on February 29, 1980 on completion of 58 years of age. In the writ petitions assailing the order of retirement it was contended for the petitioner, that there could not be two different ages of retirement in the case of officers of the Bank, and that since rule 3 of the Rules for Age of Retirement required the officers, who were recruited subse quent to July 19, 1969 to retire on completion of 58 years of age while others falling under rules 1 and 2 could con tinue till 60 years of age, rule 3 was liable to be struck down as being violative of articles 14 and 16 of the Constitu tion. For the respondents, it was contended that the employees whose services were transferred to the Bank under sub section (2) of section 12 of the Act were entitled to continue in service till 60 years of age by virtue of the conditions of service prevailing in the Central Bank of India Ltd. prior to the nationalisation of bank, that the officers and employees other than the award staff recruited after the nationalisa tion of the banks were required to retire on completion of 58 years of age, which was the age of superannuation gener ally prevailing in the service of all Public Section Corpo rations, Central Government and many of the State Govern ments, and that since the employees recruited prior to July 19, 1969 belonged to a different class altogether, it could not be said that there had been violation or ' articles 14 and 16 of the Constitution. Dismissing the writ petitions, the Court, 167 HELD: 1. The classification of the employees into two categories, i.e. those falling under rules 1 and 2 of the Rules for Age of Retirement and those tailing under rule 3 thereof satisfies the test of a valid classification laid down under articles 14 and 16 of the Constitution. Rule 3 of the Rules for Age or Retirement, therefore, cannot be de clared as unconstitutional. [179BC] 2. The difference between the age of retirement of officer employees tailing under rules 1 and 2 of the Rules for Age of Retirement, and the age of retirement of the officer employees tailing under rule 3 thereof arose on account of the decision taken by the Government of India and the Bank not to alter to their prejudice the right which the employees of the Bank who had been recruited prior to July 19, 1969 had acquired under the circular issued by the Central Bank of India Ltd. on March 11, 1969 before nation alisation of the banks. Since there was no alteration of the condition relating to the age of superannuations. the said officers continued to enjoy the benefit of the condition of service relating to retirement. But as regards employees who were recruited after July 19, 1969, the Bank fixed the age of superannuation at 58 years having regard to the prevail ing age of superannuation of the members belonging to the various services in public sector corporations, Central Government and many of the State Governments. [176AD] 3. At the time of nationalisation the corresponding new banks did not have their own employees to run the vast business taken over under the Act. There was necessity to secure the services of the employees of the former banking companies without causing much dissatisfaction to them. The terms and conditions of the service of the employees of the banks which were taken over under the Act had, therefore, been protected by the Act. Insofar as the employees recruit ed after nationalisation were concerned the Government applied the rules generally applicable to all its employees in other spheres of Government service. The Bank 's attitude cannot be said to be unreasonable particularly when the age of retirement of the new entrants is quite consistent with the conditions prevailing in almost all the sectors of public employment. There cannot, therefore, be said to be any hostile discrimination against the petitioner. [177G; 178F; B; 179AB;] Life Insurance Corporation of India & Anr. vs S.S. Srivastava & Others, (Civil Appeal Nos. 1076 1077 of 1987), applied. Nikhil Bhushan Chandra vs Union of India & Ors., (1983 LABI.C. NOC 109 Cal.), approved. 168 4. Though the order of appointment in the case of the first petitioner stated that he would be governed by the terms and conditions which were applicable to other officers of the Bank. it did not prevent the Bank from making a regulation which was applicable exclusively to the officers recruited after July 19, 1969. In the case of officers tailing under rules 1 and 2 of the Rules for Age of Retire ment no extra benefit was conferred on them. They were only permitted to carry the benefit of the rules for Age of Retirement which was prevailing in the former banking compa ny, which was taken over by the Government on nationalisa tion. [177EG]

Appeal No. 1869 of 1968. Appeal under section 116 A of the Representation of the People Act, 1951 from the judgment and order dated August 12, 1968 of the Rajasthan High Court in Election Petition No. 16 of 1967. section V. Gupte, M. M. Tiwari, H. K. Puri, Bishamber Lal, M. K. Garg, K. K. Jain and section P. Vij, for the appellant. M. C. Chagla and section M. Jain, for respondent. Niren De, Attorney General, G. C. Kasliwal, Advocate General. Rajasthan and K. B. Mehta, for the State of Rajasthan. The Judgment of section M. SiKRi, A. N. RAY and P. JAGANMOHAN REDDY, JJ.was delivered by SIKRI, J., M. HIDAYATULLAH, C.f. and G. K. MITTER, J. gave a separate opinion. Hidayatullah, C.J. We regret our inability to agree that the appellant Mrs. Kanta Kathuria was not holding an office of profit under the Government of Rajasthan when she stood as a candidate for election to the Rajasthan Legislative Assembly from the Kolayat Constituency. Mrs. Kathuria is an advocate practicing at Bikaner. She contested the above election held on February 18, 1967 against seven other candidates. She was declared elected on February 22, 1967. One of the defeated candidates filed the election petition, from which this appeal arises, questioning her election on several grounds. We are concerned only with one of them, namely, that on the date of her nomination and election she was disqualified to be chosen to fill the seat as she held the office of Special Government Pleader, which was an office of profit under the Government of Rajasthan. 838 Article 191 of the Constitution, which is relevant in this connection, reads : "191 : Disqualifications for membership (1) A person shall be disqualified for being chosen as, and for being, a member of the Legislative Assembly or Legislative Council of a State (a) if he holds any office of profit under the Government of India or the Government of any State specified in the First Schedule, other than an office declared by the Legislature of the State by law not to disqualify its holder; Mrs. Kathuria was appointed by the Government of Rajasthan as Special Government Pleader to conduct arbitration cases between the Government and Modern Construction Company arising out of the construction of Rana Pratap Sagar Dam and Jawahar Sagar Dam. The order was passed on June 26, 1965 (exhibit 1). The order reads: "ORDER Sub: Construction of R.P.S. Main Dam Contract of M/s. M.C.C. (Pvt.) Ltd., Arbitration in disputes arising out of. In pursuance of Rule 8 (b) of Order XXVII of the First Schedule to the Code of Civil Procedure, 1908 read with clause (7) of Section 2 of the Code, the Governor is pleased to appoint Smt. Kanta Kathuria, Advocate Bikaner as Special Government Pleader to conduct the above noted case on behalf of the State of Rajasthan alongwith Shri Murali Manohar Vyas, Government Advocate, Jodhpur. By order, Sd. D. section Acharya 26 6 65 (D. section Acharya) Joint Legal Remembrancer". By subsequent orders, which we do not consider necessary to quote here, her remuneration was fixed at Rs. 1501 per day for each date of hearing, Rs. 75/ per day for days of travel and dates on which the case was adjourned, and days spent on preparation of the case. Mrs. Kathuria began appearing in the case from March 27, 1965. It is an admitted fact that she was paid for work between that date and November 28, 1966 a sum of 839 Rs. 26,325/ and again from February 26, 1967 to March 2, 1967 a sum of Rs. 900/ and that the arbitration proceedings were continuing on the date of the filing of the election petition. Therefore for over two years she was employed as Special Government Pleader and was still employed when her election took place. It is also admitted by her that prior to this employment, she had never paid income tax in excess of Rs. 1200/ in any year. On these facts, the High Court held that Mrs. Kathuria was disqualified. Before this appeal came on for hearing before us, the Governor of Rajasthan by Ordinance 3/68 (December 24, 1968) removed the disqualification retrospectively. The Ordinance was followed by Act V of 1968 (April 4, 1969). The operative portions of the Act which are the same as of the Ordinance read "Prevention of disqualification of membership of the State Legislative Assembly (1) It is hereby declared that none of the following offices, in so far as it is an ' office of profit under the State Government, shall disqualify or shall be deemed ever to have disqualified the holder thereof from being chosen as, or for being, a member of the Rajasthan Legislative Assembly, namely (a) the office of a Government Pleader or Special Government Pleader or Advocate for the Government, appointed specially to conduct any particular suit, case or other proceeding by or against the State Government, before any court, tribunal, arbitrator or other autho rity; (b) the office of a Government Pleader, a Special Government Pleader or Advocate for the State Government, appointed specially to assist the Advocate General, Government Advocate or Pleader, or Special Government Pleader, or Advocate for Government, in any particular suit, case or other proceeding by or against the State Government before any court, tribunal, arbitrator or other authority; (c) the office of a panel lawyer if the holder of such office is not entitled to any retainer or salary, by whatever named called; (4) the office of a Pradhan or Pramukh as defined in the Rajasthan Panchayat Samitis and Zila Parishads Act, 1959 (Rajasthan Act 37 of 1959). 840 (2) Notwithstanding any judgment or order of any Court or Tribunal, the aforesaid offices shall not disqualify or shall be deemed never to have disqualified the holders thereof for being chosen as, or for being, members of the Rajasthan Legislative Assembly as if this Act had been in force on the date the holder of such office filed his nomination paper for being chosen as a member of the Rajasthan Legislative Assembly. " The Ordinance and the Act seem to have been passed to nullify the decision in this case. One of the contentions of the answering respondent is that the Legislature of Rajasthan could not remove the disqualification retrospectively since the Constitution contemplates disqualifications existing at certain time in accordance with the law existing at that time. We shall deal with this matter later. When the Government of Rajasthan appointed Mrs. Kathuria it bad two courses open to it. Firstly, Government could have engaged Mrs. Kathuria to conduct the particular arbitration case or cases, or even to assist the Government Advocate in those cases. Alternatively Government could create a special office of Special Government Pleader and appoint Mrs. Kathuria or any other lawyer to that office. It is obvious that Government did not choose the first course. There were as many as 26 arbitration cases then pending and more were likely to arise. Government thought that they should be conducted by the Government Advocate but as the work involved was too much as additional office had to be created and given to a lawyer. An office was therefore, created and given to Mrs. Kathuria. In a recent case (Civil Appeal No. 1832 of 1967 Mahadeo vs Shantibhai &, Others s decided on October 15, 1968), we held that a panel lawyer engaged to watch cases on behalf of the Central & Western Railway Administrations, held an office of profit. The duty of the panel lawyer was to watch cases coming up for hearing against the Railways at Ujjain and to appear in court and ask for an adjournment. The lawyer was paid Rs. 51 for each such adjournment if he was not entrusted with the case later. In dealing with this matter reliance was placed by us on the meaning to the word 'office ' given in the Statesman (P) Ltd. vs H. R. Deb & Ors(1) In the Statesman case, this Court approved of the observations of Lord Wright in Mcmillan vs Guest(2) to the following effect : "The word 'office is of indefinite content. Its various meanings cover four columns of the New English (1) ; (2) 841 Dictionary, but I take as the most relevant for purpose of this case the following 'A position or place to which certain duties are attached, especially one of a more or less public character. " Our brother Sikri has also relied upon the same case and has referred to the observations of Lord Atkin where he approved of the observations of Rowlatt, J. in Great Western Railway Co. vs Baler(1). Justice Rowlatt said thus : "Now it is argued, and to my mind argued most forcibly, that shows that what those who use the language of the Act of 1842 meant, when they spoke of an office or employment which was a subsisting permanent, substantive position, which had an existence independent from the person who filled it, which went on and was filled in succession by successive holders, and if you merely had any man who was engaged on whatever terms, to do duties which were assigned to him, his employmen t to do those duties did not create an office to which those duties were attached. He hereby was employed to do certain things and that is an end of it, and if there was no office or employment existing in the case as a thing, the so called office or employment was merely an aggregate of the activities of the particular man for the time being". We say with profound respect for this most succinct exposition, that we entirely agree. The distinction that we are making is precisely the distinction which has been brought out by Rowlatt, J. If Mrs. Kathuria had been briefed as a lawyer and given all the Government litigation in Rajasthan to conduct on behalf, of the Government she could not have been described as holding an office of profit. The aggregate of her work and her activities could not have created an office nor could she have been described as anything but an advocate. What happened here was different ' An office was created which was that of a Special Government Pleader. Now it is admitted that the office of a Government Pleader is an office properly so called. Therefore an office going under the names 'Additional Government Pleader ', 'Assistant Government Pleader ', 'Special Government Pleader ' will equally be an office properly so called. It matters not that Mrs. Kathuria was to conduct a group of arbitration cases and against the same party. For that matter Government is always at liberty to create offices for special duties. They might have even created another office of Special Government Pleader for Land Acquisition cases (1) 8 Tax Cases 231, 235. 842 or a group of cases or Railway cases or a group of cases arising out of a particular accident and so on and so forth. What matters is that there was an office created apart from Mrs. Kathuria. It is in evidence that it was first held by Mr. Maneklal Mathur another advocate. It is likely that if Mrs. Kathuria had declined some one else would have been found. Therefore, there was an office which could be successively held; it was independent of Mrs. Kathuria who filled it was a substantive position and as permanent as supernumerary offices are. Every one of the tests laid down by Rowlatt, J. is found here. We would, therefore, hold that the High Court was right in its conclusion that Mrs.,Kathuria held an office. Since there is no dispute that it was for profit and under the State, the election of Mrs. Kathuria must be held to be void as she was disqualified to stand for the election. This brings us to the next question. Does the Act of the Rajasthan Legislature remove the disqualification retrospectively, in other words; can such a law be passed by the Legislature after, the election is over ? The first question is whether the new law is remedial or declaratory. If it was declaratory then it would be retrospective; if remedial only, prospective unless legally made retrospective. That it has been made expressly retrospective lends support to its being remedial. Its retrospective operation depends on its being effective to remove a disability existing on the date of nomination of a candidate or his election. Of course, there is no difficulty in holding the law to be perfectly valid in its prospective operation. The only dispute is in regard to its retrospective operation. Our brother Sikri has cited an instance of the British Parliament from May 's well known treatise when the Coatbridge and Springburn Elections (Validation) Bill was introduced to validate the irregular elections. Halsbury 's Laws of England (3rd Edn. 14 p. 5) has the following note : "If a person is elected when disqualified, his dis qualification for being a member of Parliament may be remedied or he may be protected from any penal consequences by an Act of Validation or indemnity. " The position of the British Parliament is somewhat different from that of the Indian Parliament and the Legislatures of the States. British Parliament enjoys plenary sovereignty and the7 Acts of the British Parliament no court can question. In India the sovereignty of the Indian Parliament and the Legislatures is 843 often curtailed and the question, therefore, is whether it is in fact so curtailed. At the hearing our attention was drawn to a number of such Acts passed by our Parliament and the Legislatures of the States. It seems that there is a settled legislative practice to make validation laws. It is also well recognised that Parliament and the Legislatures of the States can make their laws operate retrospectively. Any law that can be made prospectively may be made with retrospective operation except that certain kinds of laws cannot operate retroactively. This is not one of them. This position being firmly grounded we have to look for limitations, if any, in the Constitution. Article 191 (which has been quoted earlier) itself recognises the power of the Legislature of the State to declare by law that the holder of an office shall not be disqualified for being chosen as a member. The Article says that a person shall be disqualified if he holds an office of profit under the Government of India or the Government of any State unless that office is declared by the Legislature not to disqualify the holder. Power is thus reserved to the Legislature of the State to make the declaration. There is nothing in the words of the article to indicate that this declaration cannot be made with retrospective effect. It is true that it gives an advantage to those who stand when the disqualification was not so removed as against those who may have kept themselves back because the disability was not removed. That might raise questions of the propriety of such retrospective legislation but not of the capacity to make such laws. Regard being had to the legislative practice in this country and in the absence of a clear prohibition either express or implied we are satisfied that the Act cannot be declared ineffective in its retrospective operation. The result, therefore, is that while we hold that Mrs. Kathuria held an office of profit under the State Government, we hold further that this disqualification stood removed by the retrospective operation of the Act under discussion. As regards the supplementary point that the petition was bad for non joinder of Mr. Mathura Das Mathur against whom cor rupt practices were alleged in the petition, we are of opinion that section 82 of the Representation of People Act, 1951, in its clause (b) speaks of candidates at the same election and not persons who are candidates at other elections. As Mr. Mathur was a candidate from another constituency he need not have been made a party here. For the above reasons we would allow the appeal but make no order about costs since the election of the appellant is saved 844 by a retrospective law passed after the decision of the High Court. Sikri, J. This appeal arises out of an election petition filed under section 80 of the Representation of the People Act, 1951, hereinafter referred to as the 1951 Act, by Shri Manik Chand Surana, a defeated candidate, challenging the election of Smt. Kanta Kathuria, before the High Court. The High Court (Jagat Narayan, J.) allowed the election petition on the ground that the appellant held an office of profit within the meaning of article 191 of the Constitution on the day on which she filed the nomination paper and was thus disqualified for being chosen as a member of the Rajasthan Legislative Assembly. This judgment was given on August 12, 1968. An appeal was filed in this Court on August 20, 1968. During the pendency of the appeal, the Rajasthan Legislative Assembly Members (Prevention of Disqualification) Act, 1969 (Act No. 5 of 1969) (hereinafter referred to as the impugned Act), was passed, which received the assent of the Governor on April 4, 1969. The impugned Act inter alia provides : "2. Prevention of disqualification of membership of the State Legislative Assembly. (i) It is hereby declared that none of the following offices, in so far as it is an office of profit under the State Government shall disqualify or shall be deemed ever to have disqualified the holder thereof from being chosen as, or for being, a member of the Rajasthan Legislative Assembly, namely : (a) the office of a Government Pleader or Special Government Pleader or Advocate for the Government, appointed specially to conduct any particular suit, case or other proceeding by or against the State Government, before any court, tribunal, arbitrator or other authority; (b) the office of a Government Pleader, a Special Government Pleader or Advocate for the State (Government appointed specially to assist the Advocate General, Government Advocate or Pleader, or Special Government Pleader, or Advocate for Government in any particular suit, case or other proceeding by or against the State Government before any court, tribunal, arbitrator or other authority; 845 (2) Notwithstanding any judgment or order of any Court or Tribunal, the aforesaid offices shall not disqualify or shall be deemed never to have disqualified the holders thereof for being chosen as, or for being, members of the Rajasthan Legislative Assembly as if this Act had been in force on the date the holder of such office filed his nomination paper for being chosen as a member of the Rajasthan Legislative Assembly. " We may note another fact on which an argument is sought to; be made by the learned Counsel for the appellant. It was alleged in the election petition that the appellant was a close friend of one Shri Mathura Dass Mathur who was a Minister in the Slate of Rajasthan at the time of the election, who contested elections as a candidate in a constituency different from that of the appellant. Shri Mathur visited the constituency during the election very frequently and during these visits the appellant accompanied by Shri Mathur visited several places in the Constituency where. Shri Mathur in the presence of the appellant offered and promised to get several works done in those areas if the electors were to cast votes for the appellant at ' the said election. In spite of these allegations of corrupt practice, Shri Mathur was not made a party to the petition. The learned Counsel for the appellant, Mr. Gupte, contends that the High Court erred in holding that the appellant held an office of profit within the meaning of article 191 of the Constitution. In the alternative he contends that the Rajasthan Act No. 5 of 1969 is retrospective and the disqualification if it existed, cannot now be deemed to have existed because of this Act. The last point raised by him is that the petition was not in accordance with law as the respondent, Shri Surana, had not impleaded Shri Mathur as respondent to the petition. The facts relevant for appreciating the first point are these The appellant was an advocate at all material times. Disputes arose between M/s. Modern Construction, Company Private Ltd. and the State of Rajasthan in connection with some works relating to the Rana Pratain Sagar Dam. These disputes were referred to arbitration. Shri Murli Manohar Vyas, Government Advocate in the High Court of Rajasthan at Jodhpur was appointed by the Government to represent it in these arbitration proceedings. The Government Advocate wanted one more advocate to assist him. On his suggestion, Shri Manak Lal Mathur advocate was appointed to assist the Government Advocate. As there was a possibility that Shri Manak Lal Mathur may not be available to 846 help the Government Advocate, the appellant was, on the suggestion of the Government Advocate, appointed to assist him in the ,absence of Shri Mathur. proposal was approved by the Rajasthan Law Minister on March 30, 1965 and on June 26, 1965, and the Government issued the following order : "Sub : Construction of R.P.S. Main Dam Con tract of M/s M.C.C. (PVT) Ltd. Arbitration in dispute arising out of In pursuance of rule 8 (b) of Order XXVII of the First Schedule to the Code of Civil Procedure, 1908 read with clause (7) of section 2 of the Code, the Governor is pleased to appoint Smt. Kanta Kathuria Advocate, Bikaner, as Special Government Pleader to conduct the above noted case on behalf of the State of Rajasthan along with Shri Manohar Vyas, Government Advocate Jodhpur. " Later, on Sept. 3, 1965, the Government laid down the fees payab le to the appellant. It was stated in the order dated Sept. 3, 1965 that" Smt. Kanta Kathuria who has been appointed to assist the Government advocate in the absence of Shri Mathur will get her share of fee in proportion to the assistance rendered by her out of the daily fee of Rs. 150/ to Shri Manak Lal Mathur." As Shri Manak Lal Mathur was not able to appear in the case, on Nov. 18, 1965 the Governor sanctioned the payment of daily fee of Rs. 1501 to the appellant instead of Shri Manak Lal Mathur, for days of actual hearing. The appellant appeared from March 27, 1965 to November 28, 1966, but she did not appear from Nov. 29, 1966 to Feb. 25, 1967. She again started appearing in the case from February 26, 1967. The appellant claimed travelling allowance, incidental charges and daily allowance, but the Government decided that the appellant was not entitled to any travelling allowance or daily allowance in addition to the fees. By a notification, the Election Commission of India called upon the electors of the Kolayat Assembly Constituency of the Rajasthan Legislative Assembly to elect a member to the Rajasthan Legislative Assembly and invited nomination papers for the elections to be held on February 18, 1967. The appellant was declared duly elected by the Returning officer on, February 22, 1967, the appellant having secured 11926 and the respondent having secured 8311 votes. 847 The relevant portion of article 191 reads as follows 191. (1) A person shall be disqualified for being chosen as, and for being, a member of the Legislative Assembly or Legislative Council of a State (a) if he holds any office of profit under the Government of India or the Government of any State specified in the First Schedule, other than an office declared by the Legislature of the State by law not to disqualify its holder; (e) if he is so disqualified by or under any law made by Parliament. (2) For the purposes of this article, a person shall not be deemed to hold an office of profit under the Government of India or the Government of any State specified in the First Schedule by reason only that he is a Minister either for the Union or for such State. It seems to us that the High Court erred in holding that the appellant held an office. There is no doubt that if her engagement as Special Government Pleader amounted to appointment to an office, it would be an office of profit under the State Government of Rajasthan. The word 'office ' has various meanings and we have to see which is the appropriate meaning to be ascribed to this word in the context. It seems to us that the words 'its holder ' occurring in article 191 (1 ) (a), indicate that there must be an office which exists independently of the holder of the office. Further, the very fact that the Legislature of the State has been authorised by article 191 to declare an office of profit not to disqualify its holder, contemplates existence of an office apart from its holder. In other words, the Legislature of a State is empowered to declare that an office of profit of a particular description or name would not disqualify its holder and not that a particular holder of an office of profit would not be disqualified. It seems to us that in the context, Justice Rowlatt 's definition in Great Western Railway Company vs Bater(l) is the appropriate meaning to be applied to the word 'office ' in article 191 of the Constitution. Justice Rowlatt observed at page 235 "Now it is argued, and to my mind argued most forcibly, that shows that what those who use the (1) 8 Tax Cases 231. 848 language of the Act of 1842 meant, when they spoke of an office or an employment, was an office or employment which was a subsisting, permanent, substantive position, which had an existence independent from the person who filled it; which went on and was filled in succession by successive holders; and if you merely had a man who was engaged on whatever terms, to do duties which were assigned to him, his employment to do those duties did not create an office to which those duties were attached. He merely was employed to do certain things and that is an end of it; and if there was no office or employment existing in the case, as a thing the so called office or employment was merely an aggregate of the activities of the particular man for the time being. And I think myself that is sound. I am not going to decide that, because I think I ought not to in the state of the authorities, but my own view is that the people in 1842 who used this language meant by an office, a substantive thing that existed apart from the holder. " This definition was approved by Lord Atkinson at page 246. This language was accepted as generally sufficient by Lord Atkin and Lord Wright in McMillan vs Guest (H.M. Inspector of Taxes) (1). Lord Atkin observed at page 201 : "There is no statutory definition of 'office '. Without adopting the sentence as a complete definition, one may treat the following expression of Rowlatt, J., in Great Western Railway Co. vs Baler, [1920] 3 K.B., at page 274, adopted by Lord Atkinson in that case, [1922] 2 A.C., at page 15, as a generally sufficient statement of the meaning of the word : an office or employment which was a subsisting, permanent, substantive position, which had an existence independent of the person who filed it, which went on and was filled in succession by successive holders. " Lord Wright at page 202 observed "The word 'office ' is of indefinite content; its various meanings cover four columns of the New English Dictionary, but I take as the most relevant for purposes of this case the following : A position or place to which less public character. This, I think, rough corresponds with such approaches to a definition as have (1) 24 Tax Cases 190. 849 been attempted in the authorities, in particular Great Western Railway Co. vs Abater, [1922] 2 A.C. I. where the legal construction of these words, which had been in Schedule E since 1803 (43 Geo. 111, c. 122, Section 175), was discussed. " In Mahadeo vs Shantibhai & Ors.(1) Mitter J. speaking for this Court, quoted with approval the definition of Lord Wright. In our view there is no essential difference between the definitions given by Lord Wright and Lord Atkin. The Court of Appeal in the case of Mitchell vs Ross(2), thought that both the noble and learned Lords had accepted the language employed by Rowlatt J. as generally sufficient. In Mahadeo 's case(1), this Court was dealing with a panel of lawyers maintained by the Railway Administration and the lawyers were expected to watch cases. Clause (13) of the terms in that case read as follows : "You will be expected to watch cases coming up for hearing against this Railway in the various courts at UJB and give timely intimation of the same to this office. If no instructions regarding any particular case are received by you, you will be expected to appear in the court and obtain an adjournment to save the ex parte proceedings against this Railway in the court. You will be paid Rs. 51 for every such adjournment if you are not entrusted with the conduct of the suit later on." That case in no way militates against the view which we have taken in this case. That case is more like the case of a standing Counsel disqualified by the House of Commons. It is stated in Rogers [on Elections Vol. [1] at page 10 : "However, in the Cambridge case (121 Journ. 220), in 1866, the return of Mr. Forsyth was avoided on the ground that he held a new office of profit under the Crown, within the 24th section. In the scheme submitted to and approved by Her Majesty in Council was inserted the office of standing counsel with a certain yearly payment (in the scheme called 'salary ') affixed to it, which Mr. Forsyth received, in addition to the usual fees of counsel. The Committee avoided the return. It is urged that there can be no doubt that the Government Pleader holds an office and there is no reason why a person who assists him in the case should also not be treated as a holder of 1) (2) 850 office, specially as the notification appointed the appellant as Special Government Pleader. We see no force in these conten tions. Rule 8B. of Order 27, C.P. Code reads as follows :7 "In this Order unless otherwise expressly provided 'Government ' and 'Government leader ' mean respectively (a) in relation to any suit by or against the Central Government or against a public officer in the service of that Government, the Central Government and such pleader as that Government may appoint whether generally or specially for the purposes of this Order; (c) in relation to any suit by, or against a State Government or against a public officer in the service of a State, the State Government and the Government pleader, as defined in Clause 7 of Section 2 or such other pleader as the State Government may appoint, whether generally or specially, for the purposes of this Order." This rule defines who shall be deemed to be a Government Pleader for the purpose of the Order. 'Government Pleader ' is defined in Sec. 2 of Clause (7) C.P. Code thus "(7) 'Government Pleader ' includes any officer appointed by the State Government to perform all or any of the functions expressly imposed by this Code on the Government Pleader and also any pleader acting under the directions of the Government Pleader :" It follows from reading Order 27 rule 8B and Clause (7) of Sec. 2 C.P. Code together that even if a pleader who is acting under the directions of the Government Pleader would be deemed to be a Government Pleader for the purpose of Order 27. Therefore, no particular significance can be attached to the notifica tion made under rule 8B appointing the appellant as Special Government Pleader. We cannot visualise an office coming into existence, every time a pleader is asked by the Government to appear in a case on its behalf. The notification of his name under rule 8B, does not amount to the. creation of an Office '. Some reliance was also placed on rule 4 of Order 27 C.P. Code, which provides that "The Government Pleader in any Court shall be the agent of the Government for the purpose of receiving 851 processes against the Government issued by such Court. " This rule would not apply to the facts of this case because the appellant was appointed only to assist the Government Advocate in a particular case. Assuming it applies, it only means that processes could be served on the appellant, but processes can be served on an Advocate under Rule 2 of Order XLV of the Supreme Court Rules, 1966. This does not mean that an Advocate on Record would hold an office under the client. The learned Counsel for the respondent, Mr. Chagla, urges that we should keep in view the fact that the object under lying article 191 of the Constitution is to preserve purity of public life and to prevent conflict of duty with interest and give an interpretation which will carry out this object. It is not necessary to give a wide meaning to the word "office" because if Parliament thinks that a legal practitioner who is being paid fees in a case by the Government should not be qualified to stand for an election as a Member of Legislative Assembly, it can make that pro vision under article 191 (1) (e) of the Constitution. The case of Sakhawat Ali vs The State of Orissa(1) provides an instance where the Legislature provided that a paid legal practitioner should not stand in the municipal elections. In view of the above reasons, we must hold that the appellant was not disqualified for election under article 191 of the Constitution. But assuming that she held an office of profit, this disqualification has been removed retrospectively by the Rajasthan Legislative Assembly by enacting the impugned Act. Mr. Chagla, learned Counsel for the respondent, contends that the Rajasthan State Legislature was not competent 'to declare retrospectively ' under article 191 (1) (a) of the Constitution. It seems to us that there is no force in this contention. It has been held in numerous cases by this Court that the State Legislatures and Parliament can legislate retrospectively subject to the provisions of the Constitution. Apart from the question of fundamental rights, no express restriction has been placed on the power of the Legislature of the State, and we are unable to imply, in the context, any restriction. Practice of the British Parliament does not oblige us to place any implied restriction. We notice that the British Parliament in one case validated the election : [Erskine May 's Treatise on the Law, Privileges Proceedings & Usage of Parliament Seventeenth (1964) Edition] "After the general election of 1945 it was found that the persons elected for the Coatbridge Division of (1) SupCI 9 852 Lanark and the Springbourn Division of Glassgow were disqualified at the time of their election because they were members of tribunals appointed by the Minister under the Rent of Furnished Houses Control (Scotland) Act, 1943, which entitled them to a small fee in respect of attendance at a Tribunal. A Select Committee reported that the disqualification was incurred inadvertently, and in accordance with their recommendation the Coatbridge and Springburn Elections (Validation) Bill was introduced to validate the irregular elections [H.C. Deb. (1945 46) 414, c. 564 6]. See also H.C. 3(1945 46); ibid. 71 (1945 46) and ibid.92 (1945 46). " We have also noticed two earlier instances of retrospective legislation, e.a., The House of Commons (Disqualification) 1813 [Halsbury Statutes of England p. 467] and Sec. 2 of the Re election of Ministers Act, 1919 (ibid. p. 515). Great t stress was laid on the word 'declared ' in article 191(1) (a), but we are unable to imply any limitation on the powers of the Legislature from this word. Declaration can be made effective as from an earlier date. The apprehension that it may not be a healthy practice and this power might be abused in a particular case are again no grounds for limiting the powers of the State Legislature. It is also urged that by enacting the impugned Act the State Legislature has amended the 1951 Act. We are unable to appreciate this contention. The State Legislature has exercised its powers under article 191 to declare a certain office not to have ever disqualified its holder. The impugned Act does not amend or alter the 1951 Act, in any respect whatsoever. It is said that under the 1951 Act as it existed before the impugned Act was passed, the appellant was not qualified to be chosen for this particular election. By enacting the impugned Act the appellant 's disqualification has been removed and the 1951 Act is, so to say, made to speak with another voice. But that is what the State Legislature is entitled to do, as long as it does not touch the wording of the 1951 Act. The answer given by the 1951 Act may be different but this is because the facts on which it operates have by valid law been given a different garb. It is further urged that the impugned Act violates article 14 of the Constitution because the Central Government might have appointed Government Pleaders under rule 8B of Order 27 and the impugned Act nowhere mentions the alleged offices held by 853 them. No material has been placed to show that any such offices exist. We cannot, therefore, entertain this point. In view of the above reasons We are of the opinion that the impugned Act is valid and removes the disqualification if it existed before. There is force in the third point raised by the learned counsel for the appellant. Section 82 of the Representation of the People Act, 1 of 1951, reads as follows "81. A petitioner shall join as respondents to his petition (a) where the petitioner, in addition to claiming a ,declaration that the election of all or any of the returned candidates is void, claims a further declaration that be himself or any other candidate has been duly elected. all the contesting candidates other than the petitioner and where no such further declaration is claimed, all the returned candidates; and (b) any other candidate against whom allegations of any corrupt practice are made in the petition. In this context the words 'any other candidate ' plainly mean a candidate in the election for the constituency which is the subject matter of the petition. In the result the appeal is allowed, the judgment of the High Court set aside and the petition dismissed. In the circumstances of the case the parties will bear their own costs throughout. V.P.S. Appeal allowed.

Disputes between the State of Rajasthan and a company were referred to arbitration and the Government Advocate was appointed to represent the State. Another advocate was appointed to assist the Government Advocate but as the advocate was table to appear, the appellant was no appointed under 0.27, r. 8B of the Civil Procedure Code, as Special Government Pleader. The appellant then stood for election to the State Legislative Assembly and was declared elected. The election was challenged and one of the grounds of challenge was that the appellant held an office of profit within the meaning of article 191 of the Constitution. The High Court set aside the election. While the appeal was pending in this Court, Rajasthan Act 5 of 1969 was passed declaring among others that the holder of the office of a Special Government Pleader was not disqualified from being chosen or for being a member of the State Legislative Assembly; and by section 2(2), the Act was made retrospective removing the appellant 's disqualification retrospectively. On the questions : (1) Whether the appellant was holding an office of profit and hence was disqualified; (2) Whether the disqualification was removed by Act 5 of 1969; and (3) Whether the election petition was in accordance with law, because, another candidate from another constituency, again t whom corrupt practices were alleged, was not impleaded as a party, HELD : (1) (Per Sikri, Ray and Jaganmohan Reddy, JJ.) : The appellant was not holding an office of profit. (a) Before a person becomes subject to the disqualification in article 191(1) there must be an office which exists independently of his being the holder of the office. The word 'office ' means an office or employment which was a subsisting, permanent, substantive position which had an existence independent of the person who filled it, which went on and was filled in succession by successive holders; but if a person was engaged on whatever terms to do the duties which were assigned to him, his employment to do those duties did not create an office to which those duties were attached. Hence an office does not come into existence every time a pleader is asked by the Government to appeal, in a case on its behalf. A B; 850 G H] Cl/70 8 836 (b) A reading of section 2(7) and 0.27, r. 8B of the Civil Procedure Code A shows, that even an advocate who is. acting under the directions of the Government Pleader could be deemed to be a Government Pleader. Therefore, the notification of the appellant 's name under r. 8B as Special Government Pleader did not amount to the creation of an office. [850 F G] (c) Assuming that a Government Pleader is an agent of the Government for purposes of receiving processes against the Government, the fact that processes could be served on an advocate, would not mean that the advocate was holding an office under his client. [851 A B] (d) It is not necessary to give a wider meaning to the word 'office ' because, if Parliament thinks that a legal"practitioner who is being paid fees in a case by the Government should not be qualified to stand for an election as a member of the Legislative Assembly, it can make that provision under article 191 (1) (e) of the Constitution. [851 C D] Great Western Railway Co. vs Bater, 8 Tax Cases 231 and McMillan vs Guest (H. M. Inspector of Taxes) 24 Tax Cases 190, applied. Mahadeo vs Shantibhai & Ors. [1969]2 S.C.R. 422 distinguished. Sakhawat Ali vs State of Orissa, , referred to. (Per Hidayatullah, C.J. and Mitter, J. dissenting) : The High Court was right in holding that the appellant held an office of profit. [842 C] It was not a case of the appellant merely being briefed as a lawyer and given the Government litigation. On the other hand an office, that of Special Government Pleader was created, and since the office of a Government Pleader is an office of profit, the office of Special Government Pleader will equally be an office of profit. It was an office which could be successively held, it was independent of its holder, it was a substantive position and as permanent as other supernumerary offices. [841 FG; 842B] Mahadeo vs Shantibhai & Ors. and The Statesman (P.) Ltd. vs H. R. Deb & Ors. ; applied. McMillan vs Guest, and Great Western Railway Co. vs Bater, 8 Tax Cases 231, 235, referred to. (2) (By Full Court) : The Act 5 of 1969 has removed the disqualification retrospectively. Per Hidayatullah, C.J. and Mitter, J. : It is well recognised that Parliament and the Legislature of a State can make their laws operate retrospectively subject to limitations, if any, in the Constitution. Any law that can be made prospectively may be made with retrospective operation except those which cannot operate retroactively. In article 191 itself, power is reserved to the State Legislature to make a declaration that the holder of an office shall not be disqualified and there is nothing in the words of the Article to indicate that such a declaration cannot be made with retrospective effect, therefore, whatever may be the propriety of such legislation regard being had to legislative practice and the absence of a clear prohibition, express or implied. the Act must be declared to have retrospective effect. [843 B C, D F] 837 Per Sikri, Ray and Jaganmohan Reddy, JJ. : Parliament and the State legislatures can legislate retrospectively subject to the provisions of the Constitution. No limitation on the powers of the Legislature to make a declaration validating an election, effective from an earlier date, is expressly stated nor could it be implied in article 191(1). ]851 F G; 852 D E] The apprehension that it may not be a healthy practice and might be abused is no ground for limiting the powers of the State Legislature. [852 B] The impugned Act does not amend or alter the Representation of the People Act, 1951, in any respect whatsoever. By enacting the impugned Act, the disqualification if any, which existed in the 1951 Act has been removed, but that is what the State Legislature is entitled to do under article 191 so long as it does not touch the wording of the 1951 Act. [852 F G] (3) (By Full Court) : The words 'any other candidate ' in section 82(b) of the Representation of the People Act, 1951, who should be impleaded, refers to a candidate in the election for the constituency which is the subject matter of the petition, and not to a candidate from another constituency. [843 G H; 853 D E]

Appeal No. 503 of 1966. Appeal by special leave from the Award dated November 10, 1964 of the Industrial Tribunal, Andhra Pradesh in Misc. Petition No. 32 of 1964 in Industrial Dispute No. 4 of 1964. R. H. Gokhale, B. K. Seshu, Parameshwara Rao, Jyotana R. Melkote and R. V. Pillai, for the appellant. M. K. Ramamurthi, Shyamala Pappu and Vineet Kumar, for the respondent. The Judgment of the Court was delivered by Vaidialingam, J. This appeal, by special leave, is directed against the award, dated November 10, 1964, of the Industrial Tribunal, Andhra Pradesh, Hyderabad, accepting a complaint, filed by the respondent, under section 33A, of the (Act XIV of 1947) (hereinafter called the Act). The respondent was, at the material time, working in the main branch of the appellant, at Belgaum. By order dated March 8, 1963, the respondent was transferred to Bhatkal branch, as a 'C ' rank Officer, to work there, as an accountant. He was also informed that he was being relieved, so as to enable him to proceed to duty, at the place of transfer, by March 18, 1963. He was allowed three days ' joining time. On March 13, 1963, the Manager of the Branch at Belgaum informed the respondent that he was relieved, with effect from that date, to join duty at the Bhatkal branch, by March 18, 1963. The respondent, by letter dated March 14, 1963, after setting out the various matters therein, applied for privilege leave, for ninety days, from March 14, 1963 to June 11, 1963, so as to enable him to improve his health and also to attend to certain domestic matters. But the Bank, the appellant herein, desired him, by their letter dated March 23, 1963, to join duty and then apply for leave, if necessary. Some further correspondence ensued, between the Bank and the respondent, the respondent again making a request for sanction of his leave and the appellant Bank insisting upon his joining duty, according to the order of transfer, and then applying for leave. But, as the respondent did not join duty at the Bhatkal branch, though he was relieved from the Belgaum office, the appellant, by their communication, dated July 23, 1963, desired the respondent to offer explanation for not obeying the order of transfer. The respondent sent a reply, on July 29, 1963, stating what, according to him, were the reasons for his not joining duty at the transferred office. The appellant Bank, not satisfied with the explanation, given by the respondent, framed two charges against him, and communicated the same, on August 7, 1963. The charges were to the effect that (a) the respondent, by wilfully disobeying the lawful and reasonable transfer order of 329 the management, has committed gross misconduct, for which the punishment is dismissal from service; and (b) the respondent had absented himself from duty from March .14, 1963, without leave, which again, is a minor misconduct for which also punishment can be imposed. The respondent was also directed to submit his explanation, if any, to the charges, on or before August 25, 1963. The respondent offered his explanation to the charges, by his letter, dated August 21, 1963. The appellant informed the respondent, on October 1, 1963, that an enquiry would be conducted against him, in respect of the charges, on October 5, 1963 and desired him to be present at the enquiry, with the necessary evidence, in support of his defence. The inquiry was conducted by the Enquiry Officer, in which the respondent participated. The Enquiry Officer sent a report to the Managing Director of the Bank, dated October 28, 1963, substantially finding the respondent guilty of both the charges. In respect of the first charge of gross misconduct, for wilfully disobeying the order of transfer, the Enquiry Officer had proposed that the respondent should be dismissed and, in respect of the second charge, of absenting without leave, it was proposed in the report that the increment be stopped, for a period of six months, with effect from April 25, 1963. Certain consequential proposals were also made, as to how exactly the respondent 's absence, was to be dealt with. The Managing Director of the Bank, after considering the re port submitted by the Enquiry Officer, as well as the further explanation, offered by the respondent, in respect of the findings recorded in the said report, by his order dated November 12, 1963, agreed with the recommendation of the Enquiry Officer, dismissed the respondent from the service of the Bank with immediate, effect, for the offence of wilful disobedience of the order of transfer. The respondent was also informed that he might appeal, against the order of dismissal, to the working committee of the Directors of the Bank, within forty five days of receipt of the order. The respondent filed an appeal, ,on December 17, 1963, be fore the working committee of the Directors, wherein he attacked the various proceedings, culminating in the order of dismissal, passed against him. Intimation of the hearing of the appeal was given to the respondent. But, it is seen that on the date when the appeal was taken up for hearing, viz., March 20, 1964, the respondent was not present either in person or through authorised representative of his. In consequence, the working committee of the Directors dismissed the appeal on March 20, 1964. In the appellate order, the working committee has elaborately considered the various circumstances necessitating the conduct of the en quiry, the enquiry proceedings and the answers given by the respondent; and it has, ultimately, agreed with the findings recorded 330 in the enquiry proceedings that the respondent had wilfully disobeyed the lawful orders of the management transferring him. The result was that the order of dismissal, passed by the Managing Director on November 12, 1963, was confirmed. At this stage it may be mentioned that the Central Govern ment had referred, on January 8, 1964, for adjudication, to the Industrial Tribunal, of which Dr. Mir Siadat Ali Khan was appointed as the presiding officer, with headquarters at Hyderabad, the question as to whether action, by the appellant Bank, in discontinuing pigmy collection and payment thereof to the workmen, was justified. This was numbered as I. D. No. 4 of 1964, and the award, in this dispute, was given on August 26, 1964, and the Central Government published the same, in the Gazette of India, on September 7, 1964. The respondent filed a complaint, under section 33A of the Act, on June 4, 1964, before the Central Government Industrial Tribunal, at Hyderabad, attacking the enquiry proceedings, conducted against him, and the order of dismissal, passed by the appellant. Apart from attacking the inquiry proceedings, on merits, as mala fide, the respondent contended that the order of dismissal had been passed against him, without the appellant Bank complying with the provisions of the proviso to section 33(2)(b), of the Act. According to him, inasmuch as the order of dismissal had been passed, during the pendency of 1. D. No. 4 of 1964, the management should have asked the Industrial Tribunal for approval of their action, and they should have paid him one month 's wages. Therefore, inasmuch as these things were not done, the appellants have contravened the provisions of section 33 of the. The appellant Bank, in their counter statement, pleaded that the domestic enquiry, conducted by the management, was very fair and that the action of the management, in dismissing the respondent, was perfectly justified. In this connection, the appellant raised the contention that the respondent was not a 'workman ', and that, in any event, he was not a workman concerned with the dispute covered by I.D. No. 4 of 1964, and therefore he was not entitled to file an application, under section 33A. They further contended that there was no contravention 'of section 33 of the Act, because, at the time when the order dismissing the respondent was passed, on November 12, 1963, there was no industrial dispute pending, so as to make it obligatory on the part of the appellant, to take action, in accordance with the proviso to section 33(2)(b), of the Act. The Industrial Tribunal, by its order, under attack, has overruled all the objections, raised by the management. The Tribunal has held that the respondent was a 'workman ' and that he was also a workman concerned in 1. D. No. 4 of 1964, and therefore 331 he was competent to file an application, under section 33A. The Tribunal has also held that the dismissal of the respondent became effective only on March 20, 1964, when the working committee of the Directors of the appellant Bank disposed of the appeal, filed by the respondent. As this date fell within the period, between January 8, 1964 and October 8, 1964, (during which 1. D. No. 4 of 1964 was pending) the management was bound to comply with the proviso to section 33(2)(b) of the Act. As this proviso had not been complied with, the Tribunal held that there was a contravention of the provisions of section 33 of the Act, which gives a right to the respondent to invoke the jurisdiction of the Tribunal, under section 33A of the Act. After having held that there is a contravention, of section 33 of the Act, the Tribunal then considered the attack levelled, as against the domestic enquiry proceedings, by the respondent, and recorded a finding to the effect that it was not fair to consider that the, respondent had wilfully disobeyed the order of transfer, passed by the management. The tribunal, therefore held, on both the findings, that the respondent should be reinstated, with continuity of service and back wages. The same contentions, that were raised before the Industrial Tribunal, on behalf of the management, have been urged before us, by the appellants ' learned counsel, Mr. Gokhale. Counsel urged that the respondent is not a 'workman ' and, in any event, he is not a workman concerned with the dispute in I.D. No. 4 of 1964. Counsel further pointed out that even assuming that the findings of the Tribunal, recorded against the appellant, were correct, the application, under section 33A, was not maintainable, inasmuch as there was no contravention, by the management, of any of the provisions of s, 33, 'of the Act. In this connection, counsel pointed out, that the order of dismissal, having been passed by the Managing Director, on November 12, 1963, long before January 8, 1964, the date when I.D. No. 4 of 1964, was referred, there was no obligation, on the part of the management, to ask for approval of the Tribunal, in respect of their action, or of paying one month 's wages to the respondent. Counsel also urged that even if these questions were answered against the appellant, the award would have to be set aside, because the Industrial Tribunal had really constituted itself as a Court of appeal, when it set aside the order of dismissal, passed by the management, which was based on the findings recorded in a proper domestic enquiry. Mr. M. K. Ramamurthy, learned counsel, appearing for the respondent, has supported the views, expressed by the Tribunal, on all aspects. If the contention of the appellant, that there was no Indus trial dispute, pending at the time, when the order of dismissal was passed, is accepted, then, quite naturally, it follows that no question of contravention of section 33, of the Act, arises, in which 332 case, the complaint, under section 33A, is not maintainable, in law. In an enquiry, under section 33A, the first question that the Tribunal will have to consider, is regarding the contravention, by the employer, of the provisions of section 33 of the Act. If this issue is answered against the employee, nothing further can be done, under section 33A, of the Act. This position has been settled, by the decisions of this Court, in Equitable Coal, Ltd. vs Algu Singh (1) and The Punjab National Bank Ltd. vs Its Workmen (2). After hearing arguments, on this aspect, we are inclined, in the instant case, to accept the contention of the appellant, in this regard, and hence, no other questions arise, in the application filed, by the respondent under s.33A of the Act. There is no controversy, in this case, that the appellant did not seek the approval of the Industrial Tribunal concerned, nor did they offer or pay one month 's wages to the respondent. There is also no controversy that I.D. No. 4 of 1964, can in law be considered to be pending only from January 8, 1964, to October 8, 1964. The order of the Managing Director, dismissing the respondent from service, was made on November 12, 1963, which date, admittedly, falls outside the duration of the pendency of I.D. No. 4 of 1964. The order of the working committee of Directors, rejecting the respondent 's appeal, which was passed on March 20, 1964, certainly falls within the period when I.D. No. 4 of 1964 was pending. Therefore, the question that arises for con sideration, in this case, is as to when, it can be stated, that the respondent was dismissed, i.e., by the order of November 12, 1963, of the Managing Director, or by the appellate order of March 20, 1964, passed by the working committee of Directors. According to the appellant, the order which has to be taken into account, for considering whether there is a contravention of section 33 of the Act, is the original order passed, by the Managing Director, on November 12, 1963, whereas, according to the respondent, the appellate order, passed on March 20, 1964, is the effective order, dismissing him. The respondent 's contention, in this regard, is briefly as follows. Under the National Industrial Tribunal (Bank Disputes) Award, 1962 (known as the Desai Award), a workman, in such cases, has got a right of appeal, to the appropriate authority, and he has got a period of 45 days, for filing the appeal. In this case, the order of the Managing Director, dated November 12, 1963, also states that respondent is entitled to file an appeal, against that order, to the working committee of the Directors, within 45 days of receipt of that order. The respondent, admittedly, filed an appeal, on December 17, 1963, well within the time. The appeal was disposed of, on March 20, 1964. The language of section 33(2), counsel points out, is to the effect that the employer has (1) [1958] I L.L.J. 793. (2) ; 333 been enabled to take action, 'in accordance with the standing orders applicable to a workman concerned, in such dispute '. Inasmuch as the standing orders, in this case, give a right to appeal, to the workman, any order that is passed, by the management, in respect of which a right of appeal is given to a workman, cannot be considered to be an effective or operative order, till the appellate decision is made known. It will be open to the appellant to take action, in accordance with the proviso to section 33(2)(b), at the time when the appellate order was passed, on March 20, 1964, as the appellate order is the effective and binding order. So far as the par ties are concerned, the order of dismissal, in this case, must be considered to have been passed only on March 20, 1964, which date squarely falls within the period, during which I.D. No. 4 of 1964, was pending. We are not inclined to accept the contentions of the learned counsel, for the respondent, in this regard. It has been laid down by this Court, in Strawboard Manufac turing Co. vs Govind(1), in construing the proviso to section 33(2)(b) of the Act, that the three things contemplated, viz., dismissal or discharge, payment of the wages and making of the application, should be part of the same transaction. Therefore, in our view, there must be a fixed and certain point of time which will be applicable to all managements and workmen, when construing the provisions of section 33 of the Act. The management must definitely know, as to when they have to take the necessary action, under the proviso to section 33(2)(b), and the workman also should, likewise, know the definite time when the management should have complied with the requirements of the proviso to section 33(2)(b), so that he could approach the Industrial Tribunal, by way of a complaint,, under section 33A, of the Act. A reading of the material provisions of section 33 shows that the expressions used are 'discharge or punish, whether by dismissal or otherwise ', and they clearly indicate, in. our opinion, the point of time, when the order of discharge or dismissal is passed, by the authority concerned. An order of discharge or. dismissal, in our opinion, can be passed, only once; and, in this case, the order of dismissal is the one passed, by the Managing Director, on November 12, 1963. No doubt, either by virtue of the Standing Orders, or by virtue of a, contract, of service, a right of appeal may be given to a workman concerned, to challenge an order of dismissal. But the appellate authority only considers whether the order of dismissal has to be sustained, or whether it requires modification. Therefore, there is no question of the appellate authority passing, again, an order of dismissal. We are not concerned, in construing the provisions of section 33, as to the finality of the orders passed, by the authority concerned, in the first instance, in passing orders of dismissal or discharge. Further, the proviso to section 33(2)(b), when it, refers to payment of wages for one month, also indicates that it relates to an (1) [1962] Supp. 3 S.C.R. 618, 630. CI S 334 order of discharge or dismissal, which comes into effect immediately, which, in this case, is the order passed, on November 12, 1963. The payment of one month 's salary or wages, is to soften the rigour of unemployment that will face the workman, against whom an order of discharge or dismissal, has been passed. If the management has to wait for the minimum period prescribed for filing an appeal, and also await the termination of the appeal when one is filed, considerable time would have lapsed from the date of the original order, during which period the workman would not have received any salary. It will be anomalous to hold that even after the lapse of such a long time, the payment of one month 's salary would satisfy the requirements of the section. In this case, if the contention of the respondent is accepted, it will lead to very anomalous results, and the time when a management has to comply with the proviso to section 33(2)(b), will radically differ. For example, according to the respondent, the management, in this case, will have to wait for the minimum period of 45 days, which is the time given for the respondent, to file an appeal. If an appeal is filed, according to the respondent, the management will have to wait further, and await the disposal of the appeal. That means, in such a case, the proviso will come into effect only at the time when the appeal is disposed of. On the other hand. if, after the expiry of 45 days, the workman concerned does not file an appeal, the management, according to the respondent, will have to comply with the proviso immediately after the period of limitation is over. That is, the point of time when the proviso to section 33(2)(b) will have to be complied with, by the management, will depend upon the filing or non filing of an appeal, by the workman concerned. Further, if at the time, when the original order of dismissal is passed, there is no dispute pending, and when the appeal against the order of dismissal is pending, a dispute is referred for .adjudication, it will be open to the management to prolong its decision, in the appeal. till after the Industrial dispute 'has come to an end. It cannot be the intention of the Legislature that such variable and indeterminate periods are contemplated in construing the proviso to section 33(2)(b). The natural and reasonable in terpretation, to be placed on section 33, is, in our opinion, that the order of discharge or dismissal, is the original or the very first order passed by the management , which in this case is the one passed. by the Managing Director, on November 12, 1963. It follows that on that date, I. D. No. 4 of 1964. had not even been referred,. for adjudication, which, as we 'have already indicated. was by an order of Government, dated January 8, 1964. Hence there is no contravention of section 33, in this case. Before we close the discussion, it is necessary to state that Mr. Ramamurthy, learned counsel for the respondent, referred us to two decisions of this Court. in The Management of Hotel Imperial V. Hotel Workers ' Union (1) and Collector of Customs, (1) ; 335 Calcutta vs East India Commercial Co. Ltd.(1). In the first decision, this Court has recognised that a term should be implied, by Industrial Tribunals, in the contract of, employment, that, if the master has held a proper enquiry and come to the conclusion that the servant should be dismissed, and in consequence, suspends him, pending the permission, required under section 33 of the Act, he has the power to order suspension, thus suspending the. contract of employment temporarily, so that there is no obligation on him ' to pay wages, and no obligation on the servant, to work. In the second decision, this Court held that in cases where an authority reverses the order under appeal, or, modifies or merely dismisses the appeal and thus confirms the order appealed against without any modification, the operative order is the order of the appellate authority. :In our opinion, these decisions do not assist the respondent and the principles laid down. therein, have no bearing on the point to be determined in the instant case. The result is that the award of the Industrial Tribunal is set aside and the application, filed by the respondent before it, will stand dismissed. The appeal is, accordingly, allowed, but without costs. Y.P. Appeal allowed.

After holding a domestic enquiry the Managing Director of the appellant Bank dismissed the respondent employee with immediate effect. The employee was informed that he might appeal against this order to the working committee of the Directors within certain days. The respondent filed the appeal which the working committee dismissed. Subsequent to the filing of the appeal but prior to its dismissal, the Central Government referred to an Industrial Tribunal the question as to whether action, by the appellant Bank, in discontinuing pigmy collection and payment thereof to the workmen, was justified. The respondent filed a complaint to the Industrial Tribunal alleging that the appellant contravened section 33 of the Industrial Dispute Act as the order of dismissal had been passed during the pendency of an Industrial Dispute, the management should have asked the Industrial Tribunal for approval of their action, and they should have paid him one month 's wages. The Industrial Tribunal held that the dismissal of the respondent became effective only after the. working committee disposed of the appeal, and as during this period an Industrial Dispute was pending the management was bound to comply with the proviso to section 33 (2) (b) of the Act. In appeal to this Court. Held:There was no contravention of section 33. An order of discharge or dismissal, can be passed only once; and, in thus case, the order of dismissal was the original or very first passed by the Managing Director, on which date the Industrial Dispute had not even been referred, for adjudication. No doubt, either by virtue of the Standing Orders, or by virtue of a contract, of service, a right of appeal may be given to a workman concerned, to challenge an order of dismissal. But the appellate authority only considers whether the order of dismissal has to be sustained or whether it requires modification. Further, the proviso to section 33(2) (b) when it refers to payment of wages for one month, also indicates that it relates to an order of discharge or dismissal which comer, into effect immediately. The payment of one month 's salary or wages, is to soften the rigour of unemployment that will face the workman, against whom an order of discharge or dismissal, has been passed. If the management has to wait for the minimum period prescribed for filing an appeal, also await the termination of the appeal when one is filed, considerable time would have elapsed from the date of the original order, during which period the workman would not have received any salary. [333F 334B] Equitable Coal Ltd. vs Tlgu Singh The Punjab National Bank Ltd. vs Its Workmen [1960] 1 S.C.R. 806, and Straw. board Manufacturing Co. vs Gobind [1962] Supp. 3 S.C.R. 618 relied 328 The Management of Hotel Imperial vs Hotel Workers ' Union ; , and Collector of Customs, Calcutta vs East India Commercial Co. Ltd. held inapplicable.

Appeal No. 1109 of 1965. Appeal from the judgment and decree dated December 3, 1962 of the Patna High Court in Appeal from Original Decree No. 300 of 1959. section Mitra and R.C. Prasad, for the appellant. 621 K.K. Sinha, for respondent No. 2. The Judgment of the Court was delivered by Bachawat, J. The plaintiff Bank lent moneys to defendant No. 1 Damodar Prasad on the guarantee of defendant No. 2 Paras Nath Sinha. On the date of the suit Damodar Prasad was indebted to the plaintiff for Rs. 11,723.56 nP on account of principal and Rs. 2,769.37 nP on account of interest. In spite of demands neither he nor the guarantor paid the dues. The plaintiff filed a suit against them in the Court of the Subordinate Judge, 1st Court, Patna, claiming a decree for the amount due. The Trial Court decreed the suit against both the defendants. While passing the decree, the Trial Court directed that the "plaintiff bank shall be at liberty to enforce its dues in question against defendant No. 2 only after having exhausted its remedies against defendant No. 1". The plaintiff filed an appeal challenging the legality and propriety of this direction. The High Court dismissed the appeal. The plaintiff has filed the present appeal after obtaining a certificate. The guarantee bond in favour of the plaintiff bank is dated June 15, 1951. The surety agreed to pay and satisfy the liabilities of the principal debtor upo Rs. 12,000/ and interest thereon two days after demand. The bond provided that the plaintiff would be at liberty to enforce and to recover upon the guarantee notwithstanding any other guarantee security or remedy which the Bank might hold or be entitled to in respect of the amount secured. The demand for payment of the liability of the principal debtor was the only condition for the enforcement of the bond. That condition was fulfilled. Neither the principal debtor nor the surety discharged the admitted liability of the principal debtor in spite of demands. Under sec. 128 of the Indian Contract Act, save as provided in the contract, the liability of the surety is coextensive with that of the principal debtor. The surety became thus liable to pay the entire amount. His liability was immediate. It was not deferred until the creditor exhausted his remedies against the principal debtor. Before payment the surety has no right to dictate terms to the creditor and ask him to pursue his remedies against the principal in the first instance. As Lord Eldon observed in Wright V. Simpson(1). "But the surety is a guarantee; and it is his business to see whether the principal pays, and not that of the creditor. " In the absence of some special equity the surety has no fight to restrain an action against him by the creditor on the ground that the principal is solvent or that the creditor may have relief against the principal in some other proceedings. (1) ; 734: ; , 1282. 622 Likewise where the creditor has obtained a decree against the surety and the principal, the surety has no right to restrain execution against him until the creditor has exhausted his remedies against the principal. In Lachhman Joharirmal V. Bapu Khandu and Surety Tukaram Khandoji(1) the judge of the Court of Small Causes, Ahmedabad, solicited the opinion of the 13Bombay High Court on the subject of the liability of sureties. The creditors having obtained decrees in two suits in the Court of Small Causes against the principals and sureties presented applications for the, imprisonment of the sureties before levying execution against the principals. The judge stated that the practice of his court had been to restrain a judgment creditor from recovering from a surety until he had exhausted his remedy against the principal but in his view the surety should be liable to imprisonment while the principal was at large. Couch, C.J. and Melvell, J. agreed with this opinion and observed : "The court is of opinion that a creditor is not bound to exhaust his remedy against the principal debtor before suing the surety and that when a decree is obtained against a surety, it may be enforced in the same manner as a decree for any other debt. " It is now suggested that under Order XX r. 11 (1 ) and sec. 151 of the Code of Civil Procedure the Court passing the decree had the power to impose the condition that the judgment creditor would not be at liberty to enforce the decree against 'the surety. until the creditor has exhausted his remedies against the principal. Order XX r. 11 ( 1 ) provides that "where and in so far as a decree is for the payment of money, the Court may for any sufficient reason at the time of passing the decree order that payment of the amount decreed shall be postponed or shall be made by instalments, with or without 'interest, notwithstanding anything contained in the contract under which the money is payable. " For making an order under O. XX r. 11 (1 ) the Court must give sufficient reasons. The direction postponing payment of the amount decreed must be clear and specific. The injunction upon the creditor not to proceed against the surety until the creditor has exhausted his remedies against the principal is of the vaguest character. It is not stated how and when the creditor would exhaust his remedies against the principal. Is the creditor to ask for imprisonment of the principal ? Is he bound to discover at his peril all the properties of the principal and sell them; and if he cannot, does he lose his remedy against the surety ? Has he to file an insolvency petition against the principal ? The Trial Court gave no reasons for this extraordinary direction. The Court rejected the prayer of the principal debtor for payment of the decretal amount in instalments as there was no evidence to show (1) (1869) 4 Bom. High Court Reports. 623 that he could not pay the decretal amount in one lump sum. It is therefore said that the principal was solvent. But the solvency of the principal is not a sufficient ground for restraining execution of the decree against the surety. It is the duty of the surety to pay the decretal amount. On such payment he will be subrogated to the rights of the creditor under sec. 140 of the Indian Contract Act. and he may then recover the amount from the principal. The very object of the guarantee is defeated if the creditor is asked to postpone his remedies against the surety. In the present case the creditor is a banking company. A guarantee is a collateral security usually taken by a banker. The security will become useless if his rights against the surety can be so easily cut down. The impugned direction cannot be justified under O. XX r. 11 (1). Assuming that apart from O. XX r. 11 ( 1 ) the Court had the inherent power under section 151 to direct postponement of execution of the decree, the ends of justice did not require such postponement. In the result, the appeal is allowed, the direction of the court below that the "plaintiff bank shall be at liberty to enforce its dues in question against defendant No. 2 only after having exhausted its remedies against defendant No. 1" is set aside. The respondent Dr. Paras Nath Sinha shall pay to the appellant costs in this Court and in the High Court. Y.P. Appeal allowed.

The appellant creditor lent moneys to the first respondent on the guarantee of the second respondent. , The appellant filed a suit against the respondents for recovery of the amount due. and the suit was decreed. While passing the decree, the Trial Court directed that the appellant would not be at liberty to enforce the decree against the second respondent ' until he had exhausted his remedies against the first respondent. The appellant challenged this direction. The High Court dismissed the appeal. In appeal on certificate, this Court : HELD: The direction must be set aside. In the absence of some special equity the surety has no right to restrain execution against him until the creditor has exhausted his remedies against the principal. For making an order under O.XX r. 11 (1 ) of C.P.C. the court must give specific reasons. The direction postponing payment of the amount decreed must be clear and specific. The injunction upon the creditor not to proceed against the surety until the creditor has exhausted his remedies against the principal was of the vaguest character. It was not stated how and when the creditor would exhaust his remedies against the principal. [622 A, F G] It is the duty of the surety to pay the decretal amount. On such payment he will be subrogated to the rights of the creditor under section 140 of the Indian Contract Act. and he may then recover the amount from the principal. The very object of the guarantee is defeated if the creditor is asked to postpone his remedies against the surety. In the present case the creditor is banking company. A guarantee is a collateral security usually taken by a banker. The security will become useless if his rights against the surety can be so easily cut down. The impugned direction cannot be justified under O.XX r. 11 (1). Assuming that apart from O.XX r. 11(1) the Court had the inherent power under section 151 to direct postponement of the execution of the decree, the ends of justice did not require such postponement. [623 A C] Lachhman ,Joharimal V. Bapu Khandu and Surety Tukaram Khandoji, (1869) 4 Bom. High Court Reports, 241.

Civil Appeals Nos. 185 to 187 of 1961. Appeals by special leave from the judgment and order dated May 13, 1959, of the Patna High Court in Misc. Judicial Case No. 352 of 1957. WITH Petitions Nos. 163 to 165 of 1959. Petitions Under article 32 of the Constitution of India for the enforcement of Fundamental Rights. M. C. Setalvad, Attorney General of India, Veda Vyasa and Naunit Lal, for the appellants/petitioners. A. section R. Chari, D. P. Singh., M. K. Ramamurthi, R. K. Garg and section C. Agarwala, for the respondents. 500 1961. November 20. The Judgment of the Court was delivered by KAPUR, J. The principal question raised in these appeals and petitions under article 32 of the Constitution is whether sugar cane falls within the term "green vegetables" and is therefore exempt from sales tax under the exemption given by the notification dated August 28, 1947, issued under section 6 of the Bihar Sales Tax Act 1947, (Bihar 19 of 1947), hereinafter called the 'Act '. After hearing the arguments in these appeals and petitions we announced our decision dismissing them with costs and we now proceed to give our reasons for the same. The three appeals by special leave are brought by the assessee and relate to assessment of sales tax for three years, 1950 51, 1951 52 and 1952 53 for which the amount of sales tax levied was Rs. 28,866, Rs. 23,383 and Rs. 23,298 respectively. Besides the three appeals the assessee company has filed three petitions under article 32 challenging the constitutionality of the assessments. In this judgment the appellant and the petitioner is a private limited company and it will be termed "appellant" and the State of Bihar which is respondent will be termed the "respondent". The appellant took an objection to the assessment and filed appeals to the Deputy Commissioner of Commercial taxes and then a revision to the Board of Revenue and then at its instance the following question was referred by the Board of Revenue to the High Court for opinion: "Whether sugar cane is a green vegetable within the meaning of item 6 of notification No. 9884 FT dated 28 8 47 and as such exempt from taxation. " The High Court answered the question against the appellant and held that "sugar cane" was not 501 included in the term "green vegetables" and it is the correctness of that answer which has been canvassed before us. In the petitions under article 32 of the Constitution it was contended that the appellant being a producer of sugar cane was not a "dealer" within the meaning of the Act and therefore no tax was payable on sale of sugar cane by it. The exemption under the Act is provided under section 6 of the Act which, at the relevant time, was as follows: section 6 "No tax shall be payable under this Act on the sale of any goods or class of goods specified in this behalf by the (State) Government by notification in the Official Gazette, subject to such conditions as may be mentioned in the notification: Provided no notification shall be issued under this section without giving in the Official Gazette such previous notice as the State Government may consider reasonable, of its intention to issue such notification. " Under section 6 of the Act the notification relied upon was issued on August 28, 1947. This was notification No. 9884 FT which was in the following terms: "In exercise of the powers conferred by section 6 of the Bihar Sales Tax Act, 1947 (Bihar Act XIX of 1947), and in supersession of the previous notifications on the subject the Governor of Bihar is pleased to direct that no tax shall be payable under the said Act on the sale of goods specified in the second column of the schedule hereto annexed subject to the exceptions, if any, set out in the corresponding entry in the third column thereof. 502 THE SCHEDULE Serial Description Exception subject to which the No. of goods. exemption has been allowed. 1. . . . 2. . . . 3. . . . 4. . . . 5. . . . 6 Green vegetables Except when sold in sealed other than pota containers. . . . . . . . . . . ." The question raised is that sugar cane falls within the term "green vegetables" in entry 6 of the Schedule and is therefore exempt from assessment to Sales tax. In support of this contention counsel for the appellant relied upon a judgment of the for the appellant relied upon a judgment of the Bombay High Court, The State of Bombay vs R. section Phadtara (1) where it was held that sugar cane is "fresh vegetable" and is therefore exempt from sales tax under a similar notification issued under the Bombay Sales Tax Act. Changla C. J., there observed at page 496 as follows: "In its plain and natural meaning a "vegetable" clearly is wide enough to cover "sugar cane"; but what is urged by the Advocate General is that we must not give it that wide meaning but must give it the popular meaning as under stood by people who deal in vegetables or eat vegetables, and it is urged that from that narrow and restricted point of view sugar cane is not vegetable. This is a taxing statue and if in favour of that construction which gives relief to the subject. That was exactly the 503 approch of the Sales Tax Tribunal and in our opinion that approach was a very proper one." This observation is not in accord with the opinion given by this Court in Ramaytar Badhriprasad vs Assistant Sales tax Officer, Akola (1) in which under an almost identical entry it was held that "betel leaves" is not included in the term "vegetables". After quoting with approval a passage from the judgment of the Nagpur High Court, Madhya Pradesh pan Merchants Association vs State of Madhya Pradesh (2) this court said: "the word "vegetable" in taxing statutes is to be understood as in common parlance i.e. denoting class of vegetables which are grown in a kitchen garden or in a farm and are used for the table. " If that is the meaning of the word "vegetables" sugar cane cannot fail within entry 6 which relates to green vegetables. In Webster 's dictionary "sugar cane" has been defined as "a grass extensively grown in tropical and warm regions for its sugar" and in Oxford dictionary it is defined as "a tall peronnial grass cultivated in tropical and sub tropical countries and forming the chief source of unmanufactured sugar". Therefore it cannot be said that sugar cane falls within the definition of the words "green vegetables". The second question which was raised before us and which arises in the petitions under article 32 is that the appellant company is not a "dealer" within the meaning of the word as defined in section 2(c) of the Act which is as follows: " "dealer" means any person who sells or supplies any goods (including goods sold or supplied in the execution of a contract) 504 whether for commission, remuneration or otherwise and includes any family or a Hindu joint family, the Government and any society club or association which sells or supplies goods to its members". The words of this sub section are very wide and cover the case of the appellant and therefore this point is also without substance and must be rejected. But it was argued that the definition of the word "dealer" in the Act which was amended by Bihar Annual Finance Act 1950 is applicable only for the financial year beginning April 1, 1950, and not for subsequent years and for that aid was sought from the preamble to the Bihar Annual Finance Act 1950. That preamble is as follows: "whereas it is expedient to amend the Bihar Sales Tax Act, 1947, and the Bihar Agricultural Income Tax Act, 1948, to levy a tax on passengers and goods carried by public service vehicles and public carries and to lay down rates on Sales Tax payable under Bihar Sales Tax Act 1947 to fix limit of taxable agricultural income to lay down rates of agricultural Income Tax Act and Super Tax chargeable under Bihar Agricultural Income Tax Act, 1948 for the financial year beginning on the 1st day of April 1950 and to make further provisions in connection with the finance of this State of Bihar". The preamble cannot limit or change the meaning of the plain words of s.2(c) of the Act which apply to the case of the appellant and therefore the amended section is applicable to the present case. It is an erroneous approach to the question to say that because of the words "for the financial year beginning on the first of April 1950" in the particular context in the preamble, the definition of the word "dealer" was amended only for one year Nothing has been shown indicating that section 505 (2)(i) of Bihar Annual Finance Act intended to effect a temporary amendment in the previous definition of the word "dealer" in cl(c) of s.2 of the Act. The contention is therefore repelled. It was also submitted that the assent of the President was not given to the Bihar Annual Finance Act 1950. In our opinion that submission is equally without force because tax on sale of goods is a matter entirely within entry 54 of the State List and the amendment made in the definition of the word "dealer" in the Act did not require the assent of the President. In our opinion the appeals and the petitions under article 32 are without merit and are therefore dismissed with costs. One hearing fee. Appeals and writ petitions dismissed.

Under section 6 of the Bihar Sales Tax Act, 1947, the Government issued a notification exempting certain goods from the 499 payment of sales tax, including "green vegetables other than potatoes, except when sold in sealed containers". The appellant who was a producer of sugar can was assessed to sales tax. He contended that sugar cane was a green vegetables and was exempted from tax and that he was not a dealer as defined in section 2 (c) of the Act and could not be assessed to sales tax. ^ Held, that sugar cane was not a green vegetable and was not exempted under the notification. The word "vegetables" in taxing statutes was to be understood as in common parlance i.e. denoting class of vegetables which were grown in a kitchen garden or in a farm and were used for the table. The dictionaries defined sugar cane as a "grass." Ramavtar Budhaiprasad vs Assistant Sales Tax Officer, Akola, ; , followed. The State of Bombay vs R. section Phadtare, [1956] 7 section T. C. 495, disapproved. Held, further, that the appellant was a dealer within the definition in section 2(c). Section 2(c) was amended by the Bihar Annual Finance Act, 1950. The amended was not a temporary amendment for only one year; the amended section was applicable to the present case. The amending Act did not require the assent of the President as the matter fell entirely within entry 54 of the State List.

ON: Civil Appeals Nos. 289 to 311 of 1965 and 999 to 1001 of 1967. Appeals from the judgments, and orders dated July 13, 1964 Of Panjab High Court in Civil Writs Nos. 587 D, 590 D, 592 595 D, 643 D, 851 D, 852 D, 1163, 1164, 1167 and 1196 of 1963, 45 D of 1964, and 994, 588 D, 589 D, 591 D,593 D,594 D, 1165, 1166, 1168, 1169, 1197, 1240, 1216 and 1155 of 1963 respectively and writ Petition No. 212 of 1966. Petition under article 32 of the Constitution of India for the enforcement of fundamental rights. S.V. Gupte, Rameshwar Nath and Mahinder Narain, for the appellants (in C.As. 289 to 311 of 1965). Rameshwar Nath and Mahinder Narain, for the appellants (in C.A. No. 999 of 1967). S.Sorabji, 'D. section Dang and Ravinder Narain, for the appellants (in C. A. No. 1000 of 1967). S.V Gupte and K. K. Jain, for the appellants (in C.A. No. 1001 of, 1967);. 23 N, A.Palkhivala, F. N. Kaka, O. P. Malhotra O. C. Mathur and Ravinder Narain, for the 'petitioner (in W.P. No, 212 Of 1966). C.K. Daphtary, Attorney General, B. Sen, R. H.Dhebar and S.P. Nayar, for the respondents (in W. P. No. 212 of 1966) and the respondents (in, C.A. Nos,. 289 to 311 of 1965). C. K. Daphtary, Attorney General, and R. H. Dhebar for the respondents (in C.As. 999, 1000 and 1001 of 1967). N. A. Palkhivala, 0. C. Mathur and Ravinder, Narain, for the intervener (in C.As. 289 to 311 of '1965). The Judgment of the Court *as delivered by Shelat, J. These appeals, by certificate, are against the common judgment of the High Court of Punjab which dismissed, the writ petitions filed by the appellant companies challenging the legality of excise duty levied against them, under Item 14 H in ' Sch. 1 to the Central Excise and Salt Act, 1 of 1944. Writ Petition 212 of 1966 by Tata Chemicals Ltd. also raises die same. question. As both the appeals and the writ petition raise a common question of law they were heard together and are disposed of by this common judgment. The appellant companies manufacture sugar by carbonation process as against sulphitation process employed by some other manufacturers of sugar and pay excise duty on the sugar manufactured by them under Item 1 of Sch. 1 to the Apt. According to the affidavit of V. J. Bakre, Deputy Chief Chemist of the Central, Revenue Control Laboratory, these manufacturers bum limestone with coke in a lime kiln with a regulated amount of air and generate a mixture of gases consisting of carbon dioxide, nitrogen, oxygen and a small quantity of carbon monoxide. Most of the oxygen from the air is used up by the coke in the process of burning itself. The coke so burnt supplies the heat which decomposes the limestone so as to generate carbon dioxide. The gas thus produced is sucked,by a pump through a pipe which connects the kiln with the inlet side of the pump. The gas enters the chamber of the pump and is then immediately compressed by means of the compression stroke of the pump. At this stage the gas is forced into a narrower space and as a result of the compression stroke it acquires pressure exceeding the atmospheric pressure. The gas so compressed is let into the delivery pipe, which connects the outlet side of the pump with the tank containing the sugarcane juice and enters. the sugarcane juice with the acquired pressure behind it. But for the compression resulting in pressure the gas would not bubble in the sugarcane juice. In the 24 tank there, is besides the sugarcane juice milk of lime which is mixed so as to remove the impurity in and refine the juice. Thus, it is carbon dioxide which reacts on the lime and what is produced is an insoluble content known as calcium carbonate. The other gases viz., nitrogen, 'oxygen, carbon monoxide do not contribute in the process of clarification of the sugarcane juice. These are innocuous so far as the process of clarification of sugarcane juice is concerned and escape into the atmosphere by a vent provided in ' the sugarcane juice tank. Along with these gases a certain amount of carbon dioxide which remains unabsorbed also escapes. The carbon dioxide content in the mixture of gases ranges from 27 to 36.5%. Thus, the process involves the forcing of impure carbon dioxide into a narrower space within the chamber of the pump where it is compressed and pushed first into the delivery pipe and then into the, tank containing the juice. The respondents ' case therefore was that the process employed by the appellant companies involves compressing carbon dioxide with the pressure achieved pushing it through sugarcane juice. The 'appellant companies therefore produced carbon dioxide through the lime kiln which was taken first to the Co2 pump and there compressed and then pushed into the tank. The Tata Chemicals Ltd. manufactures among other products soda ash by solvay ammonia soda process. The solvay process as described by the said V. J. Bakre is as follows First common salt is dissolved in water and ammonia gas is passed through such dissolved salt called brine. The ammonia gas gets absorbed in the brine. The solution so formed is called AB solution, that is, ammoniated brine. The AB solution is introduced at the top of a carbonating tower and passed from section to section. from the top to the bottom of the tower. At the bottom of the tower compressed carbon dioxide is forced through at a pressure of 40 to 50 pounds per square inch and is bubbled through the liquid in all the sections of the tower. The chemical reactions involved in the tower are: (i) Ammonia Gas plus, (ii) Carbon dioxide plus, (iii) water of the brine solution. These react together to form ammonium bicarbonate which reacts with salt in brine to produce sodium bicarbonate and ammonium chloride. The sodium bicarbonate thus formed being much less soluble in the liquid is precipitated and is then taken out from the bottom of the tower. It is then filtered and the sodium bicarbonate in moist condition is left on the bed of the filter and the solution which is mostly of ammonium chloride is pumped to ammonia reaction tower where ammonia is produced. Moist sodium bicarbonate is then washed and is heated in a calciner at 200 ' centigrade. , The sodium bicarbonate, gets decomposed to give soda ash, water and carbon dioxide. Carbon 25 dioxide thus produced is reutilised in the cycle of manufacture of soda ash. It contains 85% pure carbon dioxide (according to the Company 's expert 50 to 60%) and is mixed with carbon dioxide sucked by the compressor from the lime kiln. The whole mixture, which contains about 60% of pure carbon dioxide is compressed in the compressor to a pressure of 40 to 45 lbs. per inch Thus carbon dioxide is essential in the production of soda ash and is produced by burning limestone with coke in a kiln in the same manner as by the, sugar manufacturing concerns which employ carbonation process. The carbon dioxide so produced in the kiln is first compressed in the compressor during the compression stroke, and thereafter the piston compresses the. gas in the said cylinder at pressure of more than 40 to 50 pounds per square inch. The gas so compressed is compressed carbon dioxide which comes out of another valve in the cylinder and comes into the delivery side of the compressor admixed with carbon dioxide from the calciner. This gas is throughout at a pressure of 40 to 45 lbs. per sq. inch. This gas so manufactured is independent of soda ash. The compressed carbon dioxide so produced does not lose its identity of being compressed carbon dioxide. Pure compressed carbon dioxide is isolated from the admixture of gases in the carbonating tower where chemical reaction takes place and is used in the manufacture of soda ash. According to the Revenue the processes employed by the appellant companies and by Tata. Chemicals Ltd. thus involve produc tion of compressed carbon dioxide which is amenable to excise duty. Item 14 H of Sch. I reads as follows "14 H. Compressed, liquefied or solidified gases, the following (iv) Carbon acid Fifty per cent Fifty per cent (carbon dioxide) ad valorem By a notification dated March 2, 1963 issued under r. 8 (1 ) of the Central Excises Rules, 1944 the Central Government exempted as from April 24, 1962 carbonic acid utilised in manufacture of sugar within the factory of production for clarifying and bleachin sugarcane juice or syrup from so much of the excess of Rs. 25/ per metric tonne. The contentions raised on behalf of the appellant companies and Tata Chemicals Ltd. may be summarised as follows : (1) that the lime kiln is maintained to generate a mixture of gases and not carbon dioxide; 4Sup. C.I./168 3 26 (2) that at no stage in the process of generating this mixture and sucking it into the sugarcane juice for refining, carbon dioxide which forms one of the contents of the said mixture is either compressed, liquidified or solidified; (3) that the mixture of gases so generated is not carbon dioxide as known to the market; (4) that according to the specifications laid down by the Indian Standards Institution carbon dioxide content has to be at least 99%; (5) that the mixture of gases so generated has no other use except for processing sugarcane juice; (6) that the said mixture is neither sold nor is marketable nor known to the trade; (7) that the excise duty sought to be recovered on the con tent of carbon dioxide in the said mixture of gases cannot fall under Item 14 H; (8) that these concerns are not manufacturers of carbon dioxide as carbon dioxide is not separated from the said mixture of gases by any process nor is the carbon dioxide content in the said mixture compressed, liquefied or solidified; (9) that the mere fact that the said mixture of gases is passed through a conduit pipe by a process of suction cannot mean that carbon dioxide becomes compressed carbon dioxide at that or any other stage; (10) that the term "compressed" in Item 14 H contemplates the form in which the article sought to be levied is manufactured. There is no separation of carbon dioxide from the said mixture at any stage nor is it compressed or stored as carbon dioxide in cylinders; and lastly (11) that the duty being, on goods it can be charged only on goods known as carbon dioxide in the trade and marketable as such. The contentions of the Revenue, on the other hand, were (1) that the mixture of gases generated as aforesaid is nothing but impure carbon dioxide in the sense that during the process of burning limestone with coke a small quantity of carbon monoxide is released by the burning of coke, the other gases in the mixture being nitrogen and oxygen derived from the ' air which is let into the kiln to aid combustion; 27 (2) that these concerns require carbon dioxide for refining sugarcane juice and manufacture it out of limestone and coke. The other gases which get mixed up are unavoidable on account of the process employed by them; (3) that these extraneous gases can be separated and the manufacturers would separate them if what they require is pure carbon dioxide. They do not do so because carbon dioxide mixed with other gases produces the same effect in the process of refining as without them; (4) that the fact that in the process Of its manufacture carbon dioxide gets mixed up with other gases does not mean that carbon dioxide which is intended to be and is in fact produced loses its characteristics as such. The gas thus produced contains 30 to 35% carbon dioxide; (5) that the specifications laid down by the Indian Standards Institution are not relevant as they are for cylindered carbon dioxide bought and sold in the market as pure carbon dioxide; (6) that carbon dioxide produced by these concerns can be sold in the condition in which it is produced and used by other sugar mills and by factories manufacturing soda ash by solvay process. In support of their contentions the appellant companies as also the Tata Chemicals Ltd. relied on the specifications laid down by the Indian Standards Institution and the several affidavits made by concerns using carbon dioxide for the manufacture of their respective goods. As most of them are identical, it is sufficient to take the affidavit of one Shantilal Patel as typical. The deponent there asserts that the company of which he is the senior chemist uses carbon dioxide in considerable quantity in manufacturing aerated waters, that carbon dioxide so used contains 99.5% of pure carbon dioxide, that compressed liquidified or solidified carbon dioxide as known to the trade or sold in the market contains a minimum of 99% carbon dioxide conforming to the specifications of the Indian Standards Institution, that such carbon dioxide is contained in steel cylinders under a pressure of minimum of 1000 lbs. per sq. inch and that kiln or calciner gas is not known to the trade as carbon dioxide nor is it marketed as such. Dr. Homi Ruttonji whose affidavit was produced by Tata Chemicals Ltd. states that for the purpose of manufacturing carbon dioxide an elaborate plant shown in the annexure to his affidavit would have to be set up separate from the plant and equipment used in the manufacture of soda ash and refutes the statement of the said Bakre that compressed carbon dioxide is forced through at a pressure of 40 to 45 lbs. per sq. inch or that 28 at the bottom of the said carbonating tower pure compressed carbon dioxide is or can be isolated from the mixture of gases in that tower where chemical reaction takes place. He also refutes the statement that the process of generating kiln gas is independent of the manufacture of soda ash and states that the process of manufacture of soda ash is a continuous and integrated process wherein a certain quantity of kiln gas is released which is directly utilised without removal or storage in the manufacture of soda ash. According to him, kiln gas released during the manufacture of soda ash is never known as carbon dioxide in the market. To, obtain marketable carbon dioxide from kiln gas an elaborate plant would be required for separation and purification and it is such carbon dioxide which becomes marketable after it is compressed at a pressure of 1000 to 1800 lbs. per sq. inch in cylinders of the specifications laid down by the Government of India under Rule II of the Gas Cylinder Rules, 1940. Notwithstanding the divergence of opinion between the two experts one thing is clear and that is that in the case of both sugar and soda ash the manufacturer does require carbon dioxide for the purpose of producing the two articles and sets up lime kiln for that purpose. The question is whether what he actually produces by combusting limestone with coke is carbon dioxide and if so whetheris compressed carbon dioxide as contemplated by Item 14 H. In the Courseof their arguments counsel referred to certain works on Chemistry in general and sugarcane industry in particular. There are observations in some of them which. might throw some light on the question before us. The Handbook of Cane Sugar Engineering by E. Hugot (1960 ed.) at pp. 286 to 289 states that carbon dioxide necessary for the carbonation process is produced at the same time as lime in a lime kiln adjacent to the sugar factory. The combustion of limestone with coke produces kiln gases consisting of carbon dioxide, carbon monoxide, oxygen, nitrogen and a certain amount of moisture. The proportion of carbon dioxide in these kiln gases varies from 25 to 33% averaging about 30%. The carbon dioxide leaving the washer is at a temperature of 60 'C. Its pressure at the suction of the pump varies from 1.6 to 5 in of mercury and the delivery pressure varies from 4 to 10 lbs. per sq. inch. It is also stated that the,pumps known as Co2 pumps are fully analogous to air pumps. (see also Cane Sugar ' Handbook by Guildord L. Spencer and G. P. Meade, p. 138). The carbonation process according to Hugot is one of the cheapest, cleanest *id most reliable process in the sugarcane industry ensuring standard quality of sugar. Roger 's Industrial Chemistry, (6th ed.) p. 415 29 in the chapter dealing with "Alkali and Chlorine production" states thus "The kilns used in the process are built and operated with special precautions to produce as high a concentration of Co., as possible. In practice 41 to 43 per cent of Co2 is. obtained in kiln gases with very little Co or 02, the rest of the gas being N15/2. " At pp. 415 to 417 of the said work, the Solvay process is described in the same terms as in the affidavit in support of the, petition of Tata Chemicals Ltd. J.A. Timm in his General Chemistry (4th ed.), p. 470 states that commercial carbon dioxide can be obtained as a bye product of certain industries, e.g., flue gases R. Norris Shreve in his Chemical Process Industries, (3rd ed.) states that there are three important processes for commercial production of carbon dioxide, viz., flue gases by burning carbonacious material, bye product from fermentation industries through dextrose breakdown into, alcohol and carbon dioxide and bye product of lime kiln operation. He also states that an absorption system is used for concentrating C02 gas obtained from sources 1 and 3 to over 99%, and that in all cases the almost pure carbon dioxide must be given various chemical treatments for the removal of minor impurities which contaminate the gas. Similarly, KirkOthmer in the Encyclopedia of Chemical Technology, (2nd ed.) Vol. 1, p. 722 observe as follows : "The carbon dioxide evolved consists of both that generated by the decomposing limestone and ' that resulting from combustion of the carbon in the coke. The kiln gases are considerably diluted with nitrogen from the air used to burn the coke; they usually con tain 37% to 42% carbon dioxide together with stone dust, coke ash, particles and gaseous impurities. The gas is cooled to some extent in the kiln itself by the upper layers of stone; it is further cooled and purified in water scrubbers until it is absolutely free from dust and tarry matters, and then, in the more modern plants which make a very pure soda ash, the gas is finally purified electrostatically." Arthur and Elizabeth Rose, in their Condensed Chemical Dic tionary, (7th ed.) p. 178 divide commercial carbon dioxide into two grades, both of them having at least 99% carbon dioxide. Such carbon dioxide when solidified is packed in 50 lbs. blocks 'in insulated boxes and is at a temperature of 109 ' below zero. When liquified it is packed in steel cylinders. The uses of solidified or liquefied carbon dioxide are refrigeration of foods, carbonated beverages, industrial refrigeration, fire extinguishers, welding etc. 30 These extracts show that commercial carbon dioxide as brought to the market for being bought or sold and used for the purposes enumerated above has content of at least 99% of carbon dioxide and is either compressed and packed in steel cylinders or liquefied or solidified. As the Revenue argued these concerns undoubtedly require carbon dioxide in the processes employed by them while manu facturing sugar and soda ash and to meet, their requirement they have set up lime kilns by which they produce kiln gas which includes carbon dioxide to the extent of about 30 to 35%, which they in fact use after compressing it through a pump or otherwise, at one stage or the other in their manufacturing processes. Nonetheless, is it possible to say that the lime kilns set up for the aforesaid purpose produce carbon dioxide and even if it be so, that at one stage or the other, through the pump or otherwise, the carbon dioxide so produced becomes compressed carbon dioxide as envisaged by the legislature when it decided to introduce Item 14 H in the First Schedule ? It cannot be gain said that by burning limestone with coke in the kiln the manufacturer actually produces kiln gas of which one of the constituents undoubtedly is carbon dioxide and which he utilises while producing his ultimate excisable goods. But if it is possible to say that what he produces is carbon dioxide during the process which Mr. Palkhiwala termed as an integrated and continuous manufacturing process or separately as the Revenue insisted, it is equally possible to say that the combustion of limestone with coke results in the manufacture of nitrogen, whose content in the kiln gas is about 53%. As the text books produced before us and the affidavits show, the correct picture is that what is produced is kiln gas which consists of several gases, viz., carbon dioxide, carbon monoxide, oxygen and nitrogen, the last one being in a larger quantity than carbon dioxide. The mixture of gases so generated is known as kiln gas in the trade, i.e. to those who manufacture sugar and soda ash. The affidavits of concerns which use carbon dioxide definitely assert that kiln gas is never known in the market as carbon dioxide nor is it a marketable article in the sense that it is loose and is not transportable nor is it brought to the market for being bought and sold unless carbon dioxide is extracted out of it. Such extraction requires an elaborate plant. After extraction it would have to be compressed in cylinders of certain specifications or liquefied or solidified before it can become a marketable article. It is true as the Revenue contended that the gas produce through the kiln can be made marketable in the sense that it car be sold in the very same condition in which it is produced to concerns interested in the carbonation process through" for example, pipes. But, apart from such a method of disposal being 31 uneconomic and hardly likely to be employed by the trade, though it is possible in theory, what would be transported is that which is produced through the kiln, viz., the kiln gas containing among other things a certain quantity of carbon dioxide. As one of the text books points out carbonation process is employed by manufacturers of sugar because it is one of the cheapest methods to ensure production of sugar of standard quality. The fact is that in employing carbonation process the manufacturer who requires carbon dioxide produces kiln gas and as that mixture of gases contains carbon dioxide he pumps through a pipe that mixture of gases and not carbon dioxide alone ex tracted from it. Therefore, in truth and in fact what he uses is the kiln gas produced by him in the lime kiln. Even assuming that this gas is compressed either through a narrow pipe what is compressed is the kiln gas and it is that kiln gas containing no doubt a certain percentage of carbon dioxide which is inducted in the sugarcane juice for refining. The same must also be said of the solvay process used in the production of soda ash though in that case the percentage of carbon dioxide is larger than in the case of refining sugarcane juice. The Act charges duty on manufacture of goods. The word "manufacture" implies a change but every change in the raw material is not manufacture. There must be such a transformation that a new and different article must emerge having a distinctive name, character or use. The duty is levied on goods. As the Act does not define goods, the legislature must be taken ,to have used that word in its ordinary, dictionary meaning. The dictionary meaning is that to become goods it must be something which can ordinarily come to the market to be bought and sold and is known to the market. That it would be such an article which would attract the Act was brought out in Union of India vs Delhi Cloth & General Mills Ltd.(1) The contention there was that in the course of manufacture of vanaspati, a vegetable product from groundnut and til oil, the respondents brought into existence at an intermediate stage of manufacturing refined oil which fell within the description of "vegetable nonessential oil, all sorts," in Item 23 of the First Schedule. The contention would seem to assume that the goods subjected to duty must be goods known as such in the market. The contention was that the respondents, after they bought raw oil with all its impurities, manufactured, by application of certain processes of refinement, refined oil which was the same as refined Oil available in the market and that it was "refined oil" which became after further processes the ultimate, vegetable product. It was argued that the fact that the vegetable product was the ultimate (1) [1963] Supp. 1 S.C.R. 586. 32 product and was chargeable to duty did not alter the position that at an earlier stage, the respondents manufactured "refined oil" as known to the market and that the fact that they did not put this "refined oil" in the market but used it to produce the finished product did not affect their liability. This Court held that if a new substance was brought into existence from raw materials and that substance was the same as "refined oil" as known to the market it would be subject to duty. The question, therefore, was, was the substance sought to be charged "refined oil" known to the market ? The affidavits showed that deodorization was necessary before the product could be called "refined oil". It was not in dispute that that process was employed after hydrogenation and not at the stage when what was called "refined oil" came into existence at an intermediate stage. No evidence was produced by the Union of refined oil being brought to the market without deodorization. It was held that raw oil purchased by the respondents for the purpose of manufacturing vanaspati did not become at any stage "refined oil" as known to the consumers and the commercial community. The affidavits filed in the instant cases and the scientific works referred to above show that the mixture of gases produced from the kiln is known both in trade and in science as kiln gas and not as carbon dioxide. 'The Revenue has not produced any affidavit of persons dealing in carbon dioxide to show that kiln .gas is known to the market as carbon dioxide. The aforesaid affidavits show that carbon dioxide known to and brought in the market for being bought and sold for its diverse uses is carbon dioxide compressed, liquefied or solidified as Item 14 H describes it. The analogy given by the learned Attorney General of a manufacturer of cotton cloth also producing at an intermediate stage cotton yarn and such cotton yarn being liable to excise duty would not help the Revenue as cotton yarn obtained by such a manufac turer is known as such in the commercial community and brought to the market for being bought and sold. That cannot be said of kiln gas. If kiln gas were to be offered in discharge of a contract to supply carbon dioxide it would certainly be rejected on the ground that it is no+, carbon dioxide but is kiln gas. It is also not correct to say that because the sugar manufacturer wants carbon dioxide for carbonation purpose and sets up a kiln for it that he produces carbon dioxide and not kiln gas. In fact what he produces is a mixture known both to trade and,, science as kiln gas, one of the constituents of which is, no doubt, carbon dioxide. The kiln gas which is generated in these cases is admittedly never liquefied nor solidified and is therefore neither liquefied nor solidified carbon dioxide, assuming that it can be termed carbon dioxide. It cannot be called compressed carbon dioxide as 33 understood in the market among those who deal in compressed carbon dioxide. Compressed carbon dioxide is understood generally as carbon dioxide compressed in cylinders with pressure ranging from 1000 to 1800 lbs. per sq. inch. The mere fact that at one stage or the other kiln gas is pressed at 40 to 45 lbs. per sq. inch by a pump or otherwise cannot mean that it is compressed carbon dioxide. At the same time the duty being on manufacture and not on sale the mere fact that kiln gas generated by these concerns is not actually sold would not make any difference if what they generate and use in their manufacturing processes is carbon dioxide. The fact that the gas so generated has carbon dioxide below 99% and does not conform to the specifications of the Indian Standards Institution also would not matter for the gas may be sub standard, provided what is produced is carbon dioxide. In our view, the gas generated by these concerns is kiln gas and not carbon dioxide as known to the trade i.e., to those who deal in 'it or who use it. The kiln gas in question therefore is neither carbon dioxide nor compressed carbon dioxide known as such to the commercial community and therefore cannot attract Item 14 H in the First Schedule. In this view it is not necessary for us to consider certain other contentions raised by the appellants and the petitioners in the writ petition. In the result, the appeals and the writ petition must allowed and the orders passed by the High Court in the appeals must be set aside. We hold that the demand notices served on these concerns are illegal and must be quashed. The respondents in these appeals as also in the writ petition will pay costs to the appellants and the petitioner in the writ petition. The costs will be one hearing fee for the appeals and a separate set of costs in respect of the writ petition. R.K.P.S. Appeals and Petition allowed.

The appellant companies manufactured sugar by carbonation process. land paid excise duty on sugar manufactured by them under item 1 of Sch. 1 to the Central Excise and Salt Act, 1944. According to an affidavit filed on behalf of the respondents, these manufacturers employed a process of burning lime stone with coke in a lime kiln with a regulated amount of air whereby a mixture of gases was generated consisting of carbon dioxide, nitrogen, oxygen and a small quantity of carbon monoxide. The gas thus produced was thereafter compressed so as to achieve pressure exceeding atmospheric pressure and then passed through a tank containing sugarcane juice so as to remove impurities from it and to refine the juice. For this process of refining it was only the carbon dioxide in the gas which was used and the other gases i.e. nitrogen, oxygen and carbon monoxide escaped into the atmosphere by a vent provided for the purpose. The carbon dioxide content in this mixture of gases ranged from 27 to 36.5%. Similarly, another company manufactured soda ash by solvay ammonia soda process for which also carbon dioxide is required and this was produced by the petitioner by burning lime stone with coke in a kiln in the same manner as the appellant 'sugar manufacturing companies employing the carbonation process. The respondents regarded all the companies as manufacturers of compressed carbon dioxide and levied excise duty on them under Item 14 H in Sch. 1 to the Act. The appellants filed writ petitions in the High Court challenging the validity of this excise duty but these petitions were dismissed. It was contended, inter alia, on behalf of the appellants that the lime kiln was maintained to generate a mixture of gases and not carbon dioxide and at no stage in the process of generating this mixture and passing it through the sugarcane juice was carbon dioxide which formed one of the contents of the mixture either compressed, liquidified or solidified. The mixture of gases so generated was not carbon dioxide as known to the market nor was it according to the specifications laid down by the Indian Standards Institution which required the carbon dioxide content to be at least 99%. Therefore the excise duty sought to be recovered on the content of carbon dioxide in the mixture of gases could not fall under Item 14 H. Furthermore the duty being on goods it could be charged only on goods known as carbon dioxide in the trade and marketable as such. 22 HELD : The gas generated by the appellant companies was kiln gas and not carbon dioxide as known to the trade, i.e., to those who deal in it or who use ' it. The kiln gas in question. therefore is neither carbon. dioxide nor compressed carbon dioxide known as such to the commercial community and therefore cannot attract Item 14 H in the First Schedule. It was not correct to say that because the sugar manufacturer wants carbon dioxide for carbonation purposes and sets up a kiln for it that he produces carbon dioxide and not kiln gas. In fact what he produces is a mixture known both to trade and science as kiln gas one of the constituents of which is, no doubt, carbon dioxide. The kiln gas which is generated in these is admittedly never liquified nor solidified and is therefore neither liquified nor solidified carbon dioxide, assuming that it can be termed carbon dioxide. It cannot be called compressed carbon dioxide as understood in the market among those who deal in compressed carbon dioxide. Compressed carbon dioxide is understood generally as carbon dioxide compressed in cylinders with pressure ranging from 1,000 to 1,800 lbs. per sq. inch. The mere fact that at one stage or the other kiln gas is pressed at 40 to 45 lbs. per sq. inch by a pump or otherwise cannot mean that it is compressed carbon dioxide. At the same time the duty being on manufacture and not on sale the mere fact that kiln gas generated by these is not actually sold would not make any difference if what they generate and use in their manufacturing processes is carbon dioxide. The fact that the gas so generated has carbon dioxide below 99% and does, not conform to the specifications of the Indian Standards Institution also would not matter for the gas may be sub standard, provided what is produced is carbon dioxide. [32 D H] Union of India v, Delhi Cloth & General Mills Ltd. [1963] Supp. I S.C.R. 586, referred to.

Appeal No. 30 of 1957. Appeal by special leave from the judgment and order dated September 1, 1955, of the Bombay High Court in Income tax Reference No. 37 of 1952. N. A. Palkhivala and I. N. Shroff, for the appellant. K. N. Rajagopala Ayyangar and D. Gupta, for the respondent. December 7. The Judgment of the Court was delivered by HIDAYATULLAH, J. The Raghuvanshi Mills Ltd., Bombay (a public limited Company), has filed this appeal by special leave against the judgment and orders of.the High Court of Bombay dated March 10, 1953, and September 1, 1955. By the first order, the Bombay High Court directed the Income tax Tribunal to submit a supplementary statement in the case in the light of its judgment, giving the parties liberty to lead further evidence, if any. By the second order, the High Court re framed the question, and answered it against the assessee. The assessee Company 's issued and subscribed capital was, at the material time, Rs. 10,00,000 divided into 10,000 shares of Rs. 100 each. Prior to 980 November 14, 1941, one Maganlal Parbhudas, who was a Director of the Company, held 6,344 shares. On November 14, 1941, he made a gift of 1,000 shares to each of his five sons, Ravindra, Surendra, Bipinchandra, Hareshchandra and Krishnakumar. We are concerned with the account year of the Company, April 1, 1942, to March 31, 1943, the assessment year being 1943 44. In that year, the dividend which was declared at the Annual General Meeting held on December 17, 1943, was less than what was required under section 23A of the Indian Income tax Act. The question, therefore, arose whether the Company could be said to be one to which section 23A(1) of the Act was applicable, regard being had to the third proviso and the Explanation under it. During the accounting period, the Company had eight Directors, whose names along with the shares respectively held by them are given below: Shares (1) Shri Maganlal Parbhudas 1,344 (2) Ravindra Maganlal 1,168 (3) Surendra Maganlal. 1,100 (4) Amritlal Chunilal (jointly with Babulal Chunilal). 833 (5) Babulal Chunilal. 100 (6) Bhagwandas Harakchand. 50 (7) Haridas Purshottam. 50 (8) Sir Chunilal B. Mehta (jointly with Lady Tapibai Chunilal) 50 Total 4,695 Out of the balance of the shares, 4,754 shares were held by the relatives of some of the above named Directors, as stated below: Shares (1) Shrimati Kantabai Maganlal (wife of a Director) 771 (2) Shri Bipinchandra Maganlal 1,000 (3) Shri Hareshchandra Maganlal (son of a Director) 1,000 (4) Shri Krishnakumar Maganlal (do) 1,000 981 (5) Shrimati Dhanlaxmi Mohanlal (6) Srimati Prabhavati Nanalal Harilal (5 and 6 daughters of a Director) 50 (7) Shri Hirjibhai Purshottam and Haridas Purshottam (brothers of a Director) 25 (8) Shri Dhanjibhai Purshottam and Haridas Purshottam (brothers of a Director) 25 (9) Shri Chimanlal Vithaldas (cousin of a Director) 833 Total 4,754 The remaining 551 shares were held by the members of the public, who were not connected with the Directors of the Company in any way. Before March, 1942, Messrs. Ravindra Maganlal and Bros. were the Managing Agents of the Company. Maganlal Parbhudas was the sole proprietor of that firm. On March 7, 1942, the Company appointed Ravindra Maganlal & Co. Ltd. as the Managing Agents for. a period of 20 years. The Managing Company had a total issued and subscribed capital of Rs. 5,000 and the five sons of Maganlal Parbhudas who have been named before had subscribed that capital equally. During the account year, Maganlal Parbhudas and two of his sons, Ravindra Maganlal and Surendra Maganlal, were three of the Directors of the Company. Ravindra, Surendra and Bipinchandra were Directors of the Managing Company. On these facts, the Income tax Officer applied section 23A (as it stood prior to its amendment by the Finance Act, 1955) to the Company, holding that this was not a Company in which the public were substantially interested. The order of the Income tax Officer was confirmed on appeal, both by the Appellate Assistant Commissioner and the Tribunal. The Tribunal also refused to state a case under section 66(1) of the Incometax Act, but the High Court of Bombay acting under section 66(2) called for a statement of the case on the question: "Whether on the facts and circumstances of the 124 982 case the provisions of section 23A of the Indian Income tax Act (XI of 1922) are applicable to the petitioners?" In stating the cases the Tribunal pointed out that probably the question ought to have been: "Whether on the facts and circumstances of the case 1,000 shares each held by Bipinchandra, Haresh chandra and Krishnakumar in the capital of the assessee Company are held by members of the public within the meaning of the Explanation to the third proviso to section 23A?" The members of the Tribunal in deciding the appeal before them, gave slightly different reasons. According to the Accountant Member, the shares held by persons interested in the Managing Company were under the control of the Directors of the appellant Company, and those persons could not be considered to be members of the public. The Judicial Member held that the Directors were controlling the shareholders of the Company, that their relatives were mere nominees, whose voting power was controlled by the Directors, and that the public could not, therefore, be said to be substantially interested, as required by the Explanation to the third proviso to the section. When the High Court heard the case, the learned Judges addressed themselves to the question, what was the proper meaning of the expression "held by the public" in the Explanation. They came to the conclusion that the object of the third proviso and the Explanation was that the voting power to be exercised by the public should be independent of the control of the Directors, and that the word "Public" was used in contradistinction to the Directors. They apparently thought that a holding by a Director could not be described, in any event, as a holding by the public. The High Court came to the tentative opinion that both the tests stated by the Accountant Member and the Judicial Member were incorrect, and held that what the law required was de facto control, 4 c a control which is, in fact, exercised," and that no finding appeared to have been given on that point by the Tribunal. The case was accordingly remitted to 983 the Tribunal for submission of a fresh statement of the case whether the Directors were exercising de facto control. over any of the other shareholders, who belonged to the second category mentioned by us above. The Tribunal thereupon re stated the case, and after examining further evidence, gave the finding that the Directors, particularly the three sons of Maganlal Parbhudas who formed the Directors of the Managing Company were under the de facto control of their father. At no stage in the case did the Tribunal alter the finding reached by the Department that the shares of the Company were not, in fact, freely transferable by the holders to members of the public. The High Court then reheard the case, and came to the conclusion that there was evidence on which the Tribunal could hold that Maganlal Parbhudas exercised de facto control over his three sons. In view of this finding, the High Court held that the order made by the Tribunal was correct, and answered the question in the negative, re framing it as follows: "Whether on the facts and circumstances of the case the shares held by Bipinchandra, Harishchandra and Krishnakumar can be considered to be shares held by members of the public within the meaning of the explanation to the third proviso to Section 23A?" The High Court refused to grant a certificate; but the Company has obtained special leave from this Court, and has filed this appeal. It is first contended that the test that the shares held by the Directors of a company are not shares in which the public are substantially interested is incorrect. According to learned counsel, all the authorities, the Tribunal and the High Court have proceeded on this wrong assumption, and have failed to apply the proper test laid down by the Explanation to the third proviso. It may be pointed out that there is no dispute that 551 shares, were, in fact, held by the public. The total shares of the Company being 10,000, the Company can only avoid the application of section 23A, if the public hold shares carrying not less than 25 per cent. of the voting power, that is to say, 2,500 shares. The Directors between them hold 4,695 shares. These 984 have been held by the High Court to be shares, which cannot be said to be beneficially held by the public. Even so, if the rest of the shares can be said to be held by the public, then the minimum 25 per cent. would still be reached. It was in this context that the shares of the sons of Maganlal, Bipinchandra, Harishchandra and Krishnakumar, were considered. If those shares can be said to fall outside the category of shares beneficially held by the public, then those shares along with the shares held by the Directors reduced the number of shares held by the remaining shareholders to less than 25 per cent. It was on this view that the case was remitted to the Tribunal by the High Court to obtain a further statement whether Maganlal Parbhudas was de facto controlling these three shareholders. Two questions, therefore, arise in this appeal. The first is whether the shares held by the Directors must always be regarded as not held by the public. The second is what is the meaning of the provision: "a company shall be deemed to be a company in which the public are substantially interested, if its shares carrying not less than twenty five per cent. of the voting power have been allotted unconditionally to, or acquired unconditionally by, and are at the end of the previous year beneficially held by the public. " In this connection, we may point out that a ruling of the Privy Council appears to take a different view from that taken by the High Court, in regard to an Uganda Ordinance in pari materia with the proviso and the Explanation. We shall refer to that case as also to a case of the House of Lords, where also a different conclusion in law from that of the High Court has been reached. Section 23A (as it stood prior to its amendment in 1955), omitting the portions not material, read as follows: "23A. Power to assess individual members of certain companies. 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 sixth month after its accounts for that 985 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 income tax 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 divi dend 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 undistributed 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: . . . . . . . Provided further that this sub section shall not apply to any company in which the public are substantially interested or to a subsidiary company of such a company if the whole of the share capital of such subsidiary company is held by the parent company or by the nominees thereof. Explanation. For the purpose of this sub section a company shall be deemed to be a company in which the public are substantially interested if shares of the company carrying not less than twentyfive per cent. of the voting power have been allotted unconditionally to, or acquired unconditionally by, and are at the end of the previous year beneficially held by the public. and if any such shares have in the course of such previous year been the subject of dealings in any stock exchange or are in fact freely transferable by the holders to other members of the public. " It is clear from the third proviso that the sub section 986 does not apply to a company in which the public are substantially interested. The Explanation lays down, among the tests, the minimum interest which can be called substantial ' by saying that shares of the company carrying not less than 25 per cent. of the voting power must be allotted unconditionally to, or acquired unconditionally by, the public and they must be beneficially held by the public. The essence of the Explanation lies not in the percentage which only shows the limit of the minimum holding by the public, but lies in the words "unconditionally" and "beneficially". These words underline the fact that no person who holds a share or shares not for his own benefit but for the benefit of another and who does not exercise freely his voting power, can be said to belong to that body, which is designated 'public '. The word 'Public ' is used in contradistinction to one or more persons who act in unison and among whom the voting power constitutes a block. If such a block exists and possesses more than seventy five per cent. of the voting power, then the company cannot be said to be one in which the public are substantially interested. In Sardar Baldev Singh vs The Commissioner of Income tax, Delhi and Ajmer (1), this Court took the following view: "The section thus applies to a company in which at least 75 per cent. of the voting power lies in the hands of persons other than the public, which can only mean, a group of persons allied together in the same interest. The company would thus have to be one which is controlled by a group. The group can do what it likes with the affairs of the company, of course, within the bounds of the Companies Act. It lies solely in its hands to decide whether a dividend shall be declared or not. " judged from the test we have indicated, it is clear that such a group may be formed by the Directors of a company acting in concert, or by some Directors acting in concert with others or even by some , shareholder or shareholders, none of whom may be a Director. Such a group which may, for convenience, be (1) ; 987 designated a block, must hold a controlling interest, and if the voting power of the block is 75 per cent. or more, then obviously it can do anything at a meeting, whether general or special. When a company starts, the promoters may subscribe a portion of its capital and release the other unconditionally to the public. This is a case of unconditional allotment of shares to the public. The public may also unconditionally acquire a portion of the shares which were previously held by the group which promoted the company. If at the end of the previous year 25 per cent. or more of the voting power is so held by the public, the company can take the benefit of the third proviso. But if more than 75 per cent. of shares have again passed into the hands of a group which acts as a block, the third proviso ceases to apply. In deciding if there is such a controlling interest, there is no formula applicable to all cases. Relationship and position as Director are not by themselves decisive. If relatives act, not freely, but with others, they cannot be said to belong to that body, which is described as 'public ' in the Explanation. But it would be otherwise if they were free. Similarly, if Directors or some of them do not act as a body or in concert with others, the fact that they are Di rectors is of no significance. The case of Tatem Steam Navigation Co., Ltd. vs Commissioners of Inland Revenue (2) illustrates the first proposition. There, the assessing Commissioners had made directions under section 21 of the Finance Act, 1922, against which the Company appealed on the ground that it was a Company in which the public were substantially interested, inasmuch as shares of the Company carrving not less than 25 percent. of the voting power had been allotted unconditionally to or acquired unconditionally by, and were, at the end of the relevant periods, beneficially held by the public and the decision of the Special Commissioners that 16,000 shares given by Lord Glanely to his niece were not allotted to or acquired by the public and that the Company was, therefore, not (1) 988 a Company in which the public were "substantially interested" was erroneous. It was held by Lawrence, J., that merely because she was a niece of Lord Glanely did not make her cease to be a member of the public. The Court of Appeal agreed with Lawrence, J. No doubt, there were other provisions which laid down the kind of relationship which would lead to the inference that the holder was controlled by another, and a niece was not such a relative. The Act we are considering did not lay down the kind of relationship which would show such a control, and the same principle will apply. Mere relationship thus is not of consequence, unless control of the voting power held by such a relative, by another relative, is proved. The other test adopted in the case by the Bombay High Court that Directors stand outside the 'public ' is also not decisive. In Commissioner of Income tax vs H. Bjordal (1), the Judicial Committee dealt with section 21(1) of the Income Tax Ordinance No. 8 of 1940 (Uganda), as amended by section 5 of the Income Tax (Amendment) Ordinance, 1943. That provision of law is completely in pari materia with section 23A. Two brothers, H. Bjordal and section Bjordal, held 73.96 and 25.09 per cent. of the voting power. Five others held 04 per cent. of the voting power. The shares held by section Bjordal were purchased for full value by him from his brother. There was no suggestion that he was a nominee of the respondent or that he was acting in concert with his brother. Both brothers were Directors of the Company. It was held by the Judicial Committee that shareholders in a company who are members of the 'public ' do not cease to be so, because they become Directors. In the Uganda Ordinance also, like our Act, there was no guidance as to the meaning of the word 'public ', as there was in the English statute considered in Tatem 's case (2). It is significant that in Jubliee Mills Ltd. vs Commissioner of Income tax (3), Chagla, C. J., and section T. Desai, J., speaking of the judgment under appeal and (1) (2) (3) , 41. 989 taking into consideration the Privy Council case, observed: "It may be that our view is erroneous; and it may be and very probably it is that the view taken by the Privy Council is the right one. " In our judgment, the test is first to find out whether there is an individual or a group which controls the voting power as a block. If there be such a block, the shares held by it cannot be said to be "unconditionally" and "beneficially" held by members of the public. In the category of shares held by the public, only those shares can be counted which are unconditionally and beneficially held by the public, or, in other words, which are uncontrolled by the group, which controls the affairs. The group itself may be composed of Directors or their nominees or relations in different combinations, but none can be said to be.long to that group, be he a director or a relative unless he does not hold the shares unconditionally and beneficially for himself. It is only such a person, who can fall properly outside the word 'public '. Judged from this point of view, the judgment and orders of the High Court cannot be upheld. Directors cannot, by reason of being Directors, be said not to be members of the public. To that extent, the judgment is erroneous. There is a finding by the Tribunal in the supplementary statement of the case that the shares held by Bipinchandra, Harishchandra and Krishnakumar were under the control of their father, Maganlal Parbhudas. Their holding was 3,000 and with Maganlal 's holding of 1,344 shares, makes up a total of 4,344 shares. Though the question as framed by the High Court appears to have been correctly answered in the negative, it does not dispose of the matter. The, question to be determined still is whether more than per cent. of the shares are not beneficially held by the public. We accordingly set aside the judgment and orders of the High Court, and direct the High Court to decide the question originally framed by it, viz.: "Whether on the facts and circumstances of the 125 990 case the provisions of section 23A of the Indian Income tax Act, XI of 1922, are applicable to the petitioners?" The High Court may call for a supplemental statement of the case from the Tribunal, if it finds it neces sary. The appeal is allowed. The respondents shall bear the costs of this appeal. The costs in the High Court shall abide the result. Appeal allowed.

One Maganlal Parbhudas who was a Director of the assessee company held 6,344 shares out of a total of 10,000 shares of the company and he made a gift of 1000 shares to each of his five sons. During the accounting period the company had eight Directors including the said Maganlal Parbhudas and two of his sons and they held 4695 shares as between themselves. Out of the balance of the shares 4754 shares were held by the relatives of some of the Directors. Three sons of Maganlal Parbhudas were Directors of the Managing Company. The Income tax Officer applied section 23A of the Income tax Act as it stood prior to its amendment by the Finance Act, 1955 to the company holding that this was not a company in which the public were substantially interested. The order of the Income Tax Officer was confirmed on appeal both by the Assistant Commissioner and the Tribunal. The High Court remitted the case to the Tribunal for a statement whether the Directors were exercising de facto control over any of the other shareholders. The Tribunal thereupon gave the finding that the Directors, particularly the three sons of Maganlal Parbhudas who formed the Directors of the Managing Company were under the de facto control of their father. The High Court agreed with the finding of the tribunal and held that on the facts and circumstances of the case the shares held by the three sons of Maganlal Parbhudas could not be considered to be shares held by the members of the public within the meaning of the Explanation to the third proviso to section 23A of the Income Tax Act. On appeal by the assessee company, Held, that in the Explanation the word "public" is used in contradistinction to one or more persons who act in unison and among whom the voting power constitutes a block. If such a block exists and possesses more than seventy five per cent of the voting power, then the company cannot be said to be one in which the public are substantially interested. Sardar Baldev Singh vs Commissioner of Income tax, Delhi and Ajmer, ; , considered. The test is first to find out whether there is an individual or a group which controls the voting power as a block. If there is such a block the shares held by it cannot be said to be held 979 "unconditionally" or "beneficially" by the public. Only those shares which are "unconditionally" and "beneficially" held by the public uncontrolled by the controlling group can be treated as shares held by the public under the Explanation. The group may be composed of Directors or their nominees or relations in different combinations, but none can be said to belong to that c group, be he a Director or a relative unless he does not hold the shares unconditionally and beneficially for himself. It is only such a person who can fall properly outside the word "public". The view that Directors merely by reason of their being Directors stand outside the "public" is erroneous. Commissioner of Income tax vs H. Bjordal, , followed. Mere relationship is of no consequence unless it is proved that the voting power of one relative is controlled by another relative. Tatem Steam Navigation Co. vs Commissioner of Inland Reve nue, , followed.

No. 1113 of 1974. (From the Judgment and Order dated the 15/16/17 1 1974 of the Bombay High Court in S.C.A. No. 815 of 1972) AND CA No. 242 of 1974 (From the Judgment and order dated the 14 7 1973 of the Gujarat High Court in S.C.A. No. 1418 of 1971). C. As. Nos. 285 287 of 1974. (From the Judgment and Order dated the 14 7 1973 of the Gujarat High Court in S.C.A. No. 1418/71, 422/70 & 1099/69 respectively). K. K Singhvi in CA 1113/74, ,4. K. Garg, S.C. Agarwal and V.J. Francis for the appellants in CAs 1113/and 242/74 & for respondents Nos. 2, 3, 5, 6 13 in CA No. 285, Rr. 2 18 in CA 286 and for Rr. 3, 7, 16 23, 28 and 33, 35 39, 41 43 and 45 in CA 287/74. M.C. Bhandare and M.N. Shroff, for respondent 's 1 and 2 in CA 1113/74. M.V. Paranjpe, M.K. Joshi, K. Rajendra Choudhary and Mrs. Veena Devi, for respondent No. 3 in CA No. 1113/74. M.K. Ramamurthi, Vimal Dave and Miss Kailash Mehta, for the appellants in CAs 285 to 287774 and for the respondents No. 2 and 3 in CA 242/74. D.V. Patel, in CA 285 to 287/74, P.H. Parekh and M.N. Shroff for the respondent No. 1 in CAs Nos. 242/74 and 285 to 287 of 1974. The Judgment of the Court was delivered by CHANDRACHUD, J. This is a group of five appeals, one from Maharashtra and four from Gujarat. They involve substantially identical questions and since the appeal from the judgment of the Bombay High Court was argued as the main appeal, we will refer 'to the facts of that appeal and indicate at appropriate places if there is any material difference between those facts and the facts leading to the Gujarat appeals. Civil Appeal No. 1113 of 1974 from Maha rashtra is by certificate granted by the High Court of Bombay under article 133(1) (a) & (b) of the Constitution. Civil Appeals Nos. 242 and 285 287 of 1974 from Gujarat are also by certificate granted by the Gujarat High Court under article 133(1) of the Constitution. Special Civil Application No. 815 of 1972 which has given rise to Civil Appeal No. 1113 of 1974 was disposed of by a Division Bench of the Bombay High Court by its judg ment dated 15th, 16th and 17th January, 1974. The four Gujarat appeals arise out of 781 Special Civil Applications Nos. 1099 of 1969, 422 of 1970 and 1418 of 1971 which were disposed of by a Full Bench of the Gujarat High Court by its judgment dated July 14, 1973. The complexity of the questions involved in these ap peals has been expressed by the Bombay High Court by saying that the writ petitions before it involved "ticklish and complicated questions" and by the Gujarat High Court by saying that though it had many occasions to consider complex problems pertaining to service laws, there was "no case comparable" to the writ petitions filed before it in the instant case. The learned Chief Justice (Bhagwati, J.) who delivered the judgment of the Full Bench obserVes that these questions of "unrivailed complexity" had caused considerable anxiety to the Court in reaching a satisfactory conclusion. We share this anxiety which is further heightened by the diametrically opposite and entirely inconsistent stands taken by the State governments from time to time. Evidently, the State governments did not know their own mind and being unable to take up a firm and consistent stand, they defended the various Writ petitions filed against them by their employees according to the mood of the passing moment. That must be deprecated. The appeals raise the familiar question of seniority in service, the competing groups being promotees on the one hand and direct recruits on the other, to the posts of Deputy Engineers. The writ petitions were filed and de fended by the rival groups in a representative capacity so that, our decision will bind not only the parties thereto but all others whom, under the relevant provisions of the Code of Civil Procedure, they were permitted to represent. Taking the facts of the Maharashtra case, the two appel lants therein were. initially recruited as Overseers in 1953 and were promoted temporarily as Deputy Engineers, in Janu ary 1959 and October 1957 respectively. They were con firmed as Deputy Engineers after the coming into force of certain rules framed on February 19, 1970. The 1st respondent to the appeal is the State of Maharashtra. The 2nd and 3rd respondents were appointed directly on probation as Deputy Engineers. They are Engineering Graduates but so are the appellants. Respondents 2 and 3 qualified for direct appointment after passing a competitive examination in 1963 and 1959 respectively. They were confirmed two years later, in 1965 and 1961 respectively. The grievance of the appellants is that notwithstanding the length of their continuous service as Deputy Engineers since 1959 and 1957, respondents 2 and 3 were shown as senior to them in the Cadre of Deputy Engineers though they were appointed later in 1963 and 1959 respectively. 'The appellants claim that their seniority should have been fixed under the rules framed by the then Government of Bombay on November 21, 1941 as clarified by the Chief Secretary to that Government by his letter dated January 11, 1949. According to them, the rules flamed by the Maharashtra Government on April 29, 1960 cannot take away the right which had accrued to them under the rules existing fat the time of their promotion in 1959 and 1957. They challenge the validity of rule 8(iii) of the 1960 rules and of rule 33 of the 1970 rules aS being violative of articles 14 and 16 of the 782 Constitution. They also challenge the 1970 rules on the ground that they lack approval of the Central Government, thereby violating the proviso to s.81 (6) of the Bombay State Reorganisation Act of 1960. According to the appel lants, the 1960 rules were superseded by the rules dated July 29, 1963 and still the State Government continued to apply the defunct rules of 1960. On these grounds, broad ly, the appellants filed a writ petition in the Bombay High Court on behalf of themselves and all those promoted as Deputy Engineers in Class II of the Maharashtra Engineering Service. Putting it as briefly as one may, the, sum and substance of the stand taken by respondents 2 and 3 is that neither the 1941 rules nor the 1963 rules are applicable to employ ees in Maharashtra Engineering Service. The posts of Deputy Engineers, according to them and according to the State of Maharashtra, were required to be filled in by direct recruits and promotees in the ratio of 75 : 25 under the 1960 rules which had super seded the earlier rules of 1939. Therefore, ac cording to them, the question of seniority of the appellants could not possibly arise until they were con firmed, and seniority has to be fixed from the respective dates of confirmation in terms of rule 8(iii) of the 1960 rules. The Government of Maharashtra contended that the confirmation of appellants depended necessarily on the availability of vacancies allotable to them within the quota of 25% of the total vacancies, and delay in passing orders of confirmation was inevitably caused by the fact that the number of officiating Deputy Engineers was much too large. In order to rectify the somewhat unsatisfactory position, the State Government, according to its contention, framed the 1970 rules, altering the ratio of direct recruits and promotees from 75: 25 to 34: 66, as a result of which sever al promotees were confirmed. Even prior to that, according to the State Government, whenever vacancies occurred in the substantive posts which were required to be filled is ac cording to the prescribed ratio, those vacancies were duly filled in from amongst the officiating Deputy Engineers and they were given anterior dates of, confirmation with effect from the dates when the vacancies had actually occurred. The respondents disputed that rule 8(iii) of the 1960 rules and rule 33 of 1970 rules were unconstitutional or otherwise invalid. Before examining the merits of these contentions it would be necessary, for a proper understanding of the issues involved in the case, to set out briefly the history of the Engineering Service and the background in which the various rules came to be framed. The Engineering Service in the then province 'of Bombay consisted, prior to 1937, of (i) the Indian Engineering Service which was an All India Service, (ii) the Bombay Subordinate Service of Engineers, (iii)Supervisors, both permanent and temporary, and (iv) temporary Engineers, appointed annually. The Bombay Subordinate Service of Engineers consisted of non gazetted Class III employees, in which 2 posts used to be filled in annually by direct re cruitment on the basis of the results of the examination held for Diploma in Civil Engineering. The remaining posts used to be filled in by promotion from the 783 rank of temporary Overseers. On March 22, 1937 the Govern ment of Bombay in the Public Works Department passed a resolution reorganizing the Engineering Service. This resolution contemplated the creation of two new Provincial Engineering Services to be designated as Bombay Engineering Service Class I and Bombay Engineering Service Class 1I. The cadre strength of Class I Service was fixed initially at 36 while that of Class II Service was fixed at 80. Class I Service comprised the apex posts of Chief Engineer, Superin tending Engineer and Executive Engineer, and the junior posts of Assistant Engineers. Class II Service consisted of Deputy Engineers only. On September 21, 1939 the Government of Bombay passed a resolution adopting rules for regulating the methods of recruitment to the posts of Assistant Engineers and Execu tive Engineers in Class I Service and the posts of Deputy Engineers in Class II Service. These rules were made by the Governor of Bombay in exercise of the powers conferred by section 241(2) (b) of the Government of India Act 1935 and were called: "Recruitment Rules of the Bombay Service of Engi neers (Class 1 and Class II). " The rules appear at Item 53 is Section V of A endix C to the Bombay Civil Services Classification and Recruitment Rules under the heading "Bombay Service of Engineers." Rule 2 of the 1939 Rules laid down the method of re cruitment to the Bombay Service. of Engineers, Class I, by providing that such recruitment was to be made either (a) by nomination under the guarantee given to the College of Engineering, Poona, or (b) by promotion from the existing Bombay Service of Engineers or from the Bombay Service of Engineers Class II. Rule 3 provided that as regards the recruitment from source (a), such number of appointments as may be fixed by the Government from time to. time would be made from amongst the students of the College of Engineer ing, Poona, who had passed the examination for the Degree of B.E. (Civil) in First Class. The candidates. so recruited by nomination were to be appointed in the first instance as Assistant Engineers on probation for two years and on completion of the probationary period, they Were to be confirmed as Assistant Engineers. Rule 10 of the 1939 Rules prescribed the method of recruitment to the Bombay Service of Engineers Class II. It provided that recruitment of Class II service shall be made either (a) by nomination under rule 11 under the guar antee given to the College of Engineering, Poona, or (b) by promotion from any of the three prescribed sources. Those sources were (1 ) the Bombay Subordinate Engineering Serv ice, ( 2 ) Permanent or temporary Supervisors and ( 3 ) Temporary Engineers appointed on annual sanction. Rule 11 provided that such number of appointments as may be fixed by the Government from time to time shall be made annually from amongst the students of the College of Engineering, Poona, who have passed the examination for the Degree of B.E. (Civil). Every such candidate recruited by nomination was required by rule 14 to serve intially as a "candidate" for one year on the expiry of which period he would be appointed as a Deputy Engineer on probation for one year. On the satisfactory completion of the probationary period, the candidate would be eligible for confirmation as a Deputy Engineer. 784 The guarantee envisaged by rules 2(a) and 10(a) of the 1939 rules was given by the Government to the students of the College of Engineering, Poona, under a resolution dated July 12, 1940. The guarantee operated in different measures until it was finally withdrawn by a resolution dated May 27, 1947. The last batch of students who obtained the benefit of the guarantee were those that passed the examination for the Degree of B.E. (Civil) in 1949. By a resolution dated November 25, 1950 the Government of Bombay appointed a Committee under the Chairmanship of Shri Gurjar to examine the, question of future recruitment to Engineering Services, Classes I and II. That Committee submitted its recommendations to the Government after prolonged deliberations but since the implementation of the recommendations had to be deferred, the Government started making appointments to both classes of services by direct recruitment through the Public Service Commission. Such appointments were made from the year 1950. As stated earli er, the cadre strength of Class I and Class II Services was fixed initially at 36 and 80 permanent posts respectively. But with the launching of new development projects, the strength of both cadres had to be expanded from time to time by addition to the permanent posts. In fact, for an early and effective achievement of the target it became necessary to make appointments of several temporary Execu tive Engineers and Deputy Engineers. On November 1, 1956 there were 360 temporary posts of Deputy Engineers as against 200 permanent posts. By April 29, 1960 these numbers had risen respectively to 600 and 400. One of, the bones of contention between the parties is whether these temporary posts of Deputy Engineers were additions to Class II cadre, even if temporary, or whether the temporary posts were wholly outside the cadre of Class II Service. It is neces sary to mention at this stage that appointments as officiat ing Deputy Engineers to such temporary posts were made by promotion from amongst the members of the Bombay Subordinate Service of Engineers as also from amongst permanent and temporary Supervisors. But no direct appointments were made by the Government to these temporary posts of officiat ing Deputy Engineers. The direct appointments were made only to permanent posts because such appointees were prom ised confirmation after two years from the date of appoint ment, during which period they were expected to complete their probation. On April 29, 1960 the Government of Bombay in the Public Works Department passed a resolution embodying rules of recruitment to Bombay Service of Engineers Class I and Class II. These rules continued the existing division of Engineering Services into Class I and Class II and they provided that appointments to both classes of service should be made by nomination as well as by promotion. As regards appointments by nomination it was provided that they should be made through competitive examination held by the Public Service Commission and that for both the classes of service there should be a common examination. Candidates recruited directly were to be confirmed after two years in their respective cadres, if otherwise found fit. The resolution of 1960 was signed by Under Secretary to the Government, "By order and in the name of the 'Governor of Bombay. " 785 The rules regarding recruitment to Class I and Class II Engineering Service were set out in the Appendix to the 1960 Resolution. Rule 1 of those rules provided that appointments to both classes of services shall be made either by nomina tion after a competitive examination held by the Public Service Commission or by promotion from amongst the members of the lower cadres concerned, provided however that the ratio of appointments by nomination and promotion shall, as far as practicable, be 75: 25. By rule 2, candidates ap pointed to either of the services by nomination were to be on probation for two years. They were to serve, in the first instance, as Trainees for a period not exceeding one year and thereafter they were to be placed in a probationary capacity in charge of a sub division for a period of not less than one year. On the expiry of the aforesaid period of two years they were to be confirmed as Assistant Engi neers in Class I or as Deputy Engineers in Class II, as the case may be, if favourably reported upon by their superiors. Rule 2 further provided that Assistant Engineer would be confirmed as Executive Engineer after 9 years ' service unless the period was extended by the Government. Under rule 3, candidates securing higher places in the competi tive examinations were to be appointed in Class I service according to the number of vacancies declared for such recruitment in that cadre while candidates securing the next higher places were to be offered appointments to Class II service. Rule 6 of the 1960 Rules read thus: "6. (i) The number of posts to be filled in the Bombay Service of Engineers, Class I, by promotion of officers from the Bombay Service of Engineers Class II shall be about 25 per cent of the total number of superior posts, in the Bombay Service of Engineers, Class I cadre. This percentage 'should be aimed at for confirmations made after 1st November, 1956, subject of course, to Class II officers of the requisite fitness and length. of serv ice being available. (ii) For absorption into Class I, a Class II officer must be in the permanent Bombay Service of Engineers, Class II cadre, should have at least 15 years ' service to his credit in Class II in temporary and permanent capacities, and should be holding an officiat ing divisional rank, at the time of such absorption. On such absorption, the Class II officer shall be confirmed as an Executive Engineer. (iii) The seniority of the Class II promo tees shall be fixed below the bunch of the Assistant Engineers, any one of whom is duo for confirmation as Executive Engineer during the calendar year, provided that an Class II promotee shall be placed senior to a direct recruit to Class I Assistant Engineer who has been officiating as Executive Engineer from a date earlier than the class II promo tee. In the latter ease, the Class II promo tee though holding a post and lien as a confirmed Executive Engineer shall be 786 shown both under Permanent Executive Engineers and also along with the directly recruited Class I Assistant Engineers, with a suitable remark under the permanent Executive Engi neers list. This is also subject to further conditions as in paragraph 7 below." In spite of the provisions contained in rules 2 and 6, sufficient number of direct recruits ,to Class I service were not available, which caused the apprehension that for the next few years it may not be possible to fill 75% of the superior posts from amongst direct recruits to Class I. In order to meet this. situation, it was provided by rule 7 that, as far as possible, promotions as officiating Execu tive Engineers shall be so made that the promotee under consideration from Class II has to his credit at least 6 years ' longer service than a promotee under consideration from Class I, subject, generally, to the condition that a Class I officer shall not hold a divisional rank at less than 4, and a Class II officer at less than 7 years ' serv ice. Clause (iii) of rule 7 emphasised that if any promo tions were made from Class. II to Class I service to the confirmed posts of Executive Engineers beyond the quota available to Class II service personnel, there, would have to be a consequent reduction in the promotion of Class II employee.s to Class I appointments in the following years in order to work up the overall percentage of 75:25. Clause (iv) of rule 7 provided that if any confirmation is made from the bunch of temporary Executive Engineers. who had no lien on any cadre, such confirmation shah be counted against the quota of 25% which was meant for the non direct recruits to Class I service. Since the challenge to the vires of rule 8(iii) has occupied the best part of the arguments and since the High Court of Bombay and Gujarat have differed on that question it would be necessary to set out the whole of rule 8. (i) The Sub Divisional posts in the Department are at present manned by direct recruits. to Bombay Service of Engineers, Class II cadre, Deputy Engineers confirmed from subordinate Service of Engineers, the temporary Deputy Engineers recruited by the Bombay Public Service Commission, Officiating Deputy Engineers and similar other categories. These various categories are being compiled into two lists only, viz. Bombay Service of Engineers Class 11 cadre of permanent Deputy Engineers and a list of officiating Deputy Engineers. The future recruitment to Bombay Service of Engineers, Class II cadre, shall be made by nomination of candidates recruited direct by competitive examination, held by the Commission and by promotion from the list of officiating Deputy Engineers. The number of such promotions shall be about one third the number of direct recruits appointed in that year. (ii) All direct recruitment, of temporary Deputy Engineers having been stopped, further officiating vacancies will be 787 manned from the ranks of the subordinate Service of Engineers. For this purpose, a State wide Select Seniority list will be maintained of members of the Subordinate Service of Engineers cadre, considered fit to hold sub divisional charges. The list shall be compiled as on 30th June each year. For inclusion in this list, a graduate shall have to, his credit not less than 3, a Diploma holder not less than 8, and a non qualified person not less than 13 years ' service as Overseer. For confirmation as a Deputy Engineer, the officer would be expected to have put in not less than 3 years ' service as officiating Deputy Engineer. (iii). The probationers recruited directly to the Bombay Service of Engineers, Class II cadre in any year shall, in a bunch, be placed senior to promotees confirmed during that year." The Rules of 1960 were made by the Government of Bombay on April 29, 1960 and within two days thereafter, that is, on May 1, 1960 State of Bombay was bifurcated into the States of Maharashtra and Gujarat. With a view to avoiding any administrative difficulty, the Government of Gujarat passed a resolution on May 1, 1960 providing that all rules, regulations, circulars, etc. prevailing in the former State of Bombay will continue to operate in the new State of Gujarat until changed or modified by that Government. The Rules of 1960 were amended by the Government of Gujarat by a notification dated August 21, 1965 issued in the exer cise of powers conferred by the proviso to article 309 of the Constitution. By that notification, the Government of Gujarat introduced a new clause, clause 10, in the Rules of 1960 providing that candidates selected through the competi tive examination and appointed to posts in the Gujarat Service of Engineers, Class I and Class II, shall if so required, be liable to serve in any Defence Service or post connected with the defence of India, provided that such a candidate shall not be required to serve as aforesaid after the expiry of ten years from the date of his appointment or after attaining the age of 40 years. The terms of this Gujarat amendment are not the subject of controversy but it became necessary to refer to the amendment since it is argued that even if the Rules of 1960, being in the nature of executive instructions, did not have statutory force, those rules acquired a statutory character by being recognised and amended by the notification of August 21, 1965 which was issued under the proviso to art, 309 of the Constitution. On the bifurcation of the State of Bombay, 181 permanent and 220 temporary posts of Deputy Engineers were allocated to the state of Gujarat. In practice however, 99 permanent posts of Deputy Engineers were vacant in the State of Guja rat against which confirmation had to be made by that Gov ernment. Some of the Deputy Engineers who were promoted to those posts from lower ranks were also allocated to the Stare of Gujarat and several of them having 788 completed three years ' qualifying service had become eligi ble for confirmation under rule 8(ii) of the 1960 Rules. But they were denied confirmation in spite of their long service and in spite of the existence of clear vacancies in substantive posts of Deputy Engineers. Since the quantum of pension also depended in those days on the average substan tive pay, the denial of confirmations to the promotee Deputy Engineers led to great dissatisfaction amongst them. Some, who had officiated in those appointments for several years, had to retire without being confirmed. On March 28, 1961 the Government of Gujarat passed an order provisionally confirming 37 officiating Deputy Engineers with effect from May 1, 1960. On August 7 1968 it confirmed another batch of 26 officiating Deputy Engineers with retrospective effect from May 1, 1960 and directed that the order of provisional confirmation dated March 28, 1961 shall be treated as final. In so far as the Gujarat appeals are concerned there are no further rules or resolutions to be considered. But the Government of Maharashtra issued two. resolutions after the bifurcation of the State of Bombay. On July 29, 1963 it passed a resolution laying down principles of seniority and on December 19, 1970 it passed a resolution superseding the resolution passed by the Government of Bombay on April 29, 1960. Rule 33 of the 1970 rules provides: "Seniority 33. There shall be two parts of the seniority list in each cadre in Class I and Class 11 viz. Part A of confirmed officers and Part B of those who are not confirmed. (a) In Part A the names shall be arranged with reference to the year of confirmation. (b) The confirmed officers shall be treated as senior to the unconfirmed Officers in the respective cadre. (c) In Part B of the seniority list of any cadre, the names shall be arranged with refer ence to the date of continuous officiation except where a promotion in an officiating capacity was by way of purely temporary or local arrangement. " In Gujarat, there are no resolutions corresponding to, those of 1963 and 1970 issued by the Maharashtra Government. Civil Appeal No. 1113 of 1974 by the promotees arises court of the judgment dated January 17, 1974 of the Bombay High Court dismissing SpeCial Civil Application No. 815, of 1972 filed by them against the State and the direct re cruits. Four Special Civil Applications were filed in the Gujarat High Court which were disposed of by it by a common judgment dated July14, 1973. S.C. As. 1099 of 1969. 422 of1970 and 957 of 1970 were filed by the direct recruits while S.C.A. No. 1480 of 1971 was filed by the promotees. ' The promotees failed in the Bombay High Court but succeeded in the Gujarat High Court. Both the High Courts have granted certificates of fitness for filing appeals in tiffs Court. 789 Before us, Mr. K.K. Singhvi and Mr. R.K. Garg appeared for the promotees while Mr. M.V. Paranjpe and Mr. M.K. Ramamurti appeared for the direct recruits. Mr. M.C. Bhandare appeared for the State of Maharashtra and Mr. D.V. Patel for the State of Gujarat. Mr. Patel took a non contentious attitude, which highlights how difficult it was for the State counsel to support any particular cause in view of the shifting stand taken up by both the State Gov ernments from time to time. Several points were raised be,fore us and a large number of decisions were cited in support thereof, but the main question for decision in these appeals is whether departmen tal promotees and direct recruits appointed as Deputy Engi neers in the Engineering Services of the Governments of Maharashtra and Gujarat belong to the same class so that they must be treated with an even hand or whether they belong to different classes or categories and can justifia bly be treated unequally. Concededly, they are being treated unequally in the matter of seniority because whereas, promo tees rank for seniority from the date of their confirmation the seniority of direct recruits is reckoned from the date of their initial appointment. The disparity is indeed so glaring that though direct recruits have to successfully complete a two years ' probationary period before confirma tion, even that period is not excluded while counting their seniority. A promotee ranks below the direct recruit even if he has officiated continuously as Deputy Engineer for years before the appointment of the direct recruit is made and even if he, the promotee, could have been confirmed in an available substantive vacancy before the appointment of the direct recruit. Learned counsel for the direct recruits have stoutly defended the preferential treatment accorded to them by contending, inter alia, that since the promotees do. not belong to Class II service until they are confirmed, they have no fight to. rank for seniority along with the direct recruits who enter that class or cadre on the very date of their initial appointment. The fact that the Government did not confirm a particular promotee even though a substan tive vacancy was available in which he could have been confirmed cannot, according to the direct recruits, make any difference to that position. For facilitating a proper understanding of this problem it is necessary to take bird 's eye view of the various rules and resolutions which were passed by the two State Govern ments, most of which we have already noticed. In this be half, attention has to be called particularly to: (1) The rules framed by the Government of Bombay on September 21, 1939 under section 241 (2)(b).of the Government of India Act, 1935; (2) The rules framed by the Government of Bombay on November 21, 1941 regarding fixation of seniority (3) The letter dated January 11, 1949 written by the Chief Secra tary, Government of Bombay, to the Honorary Secretary, Bombay Civil Service Association: (4) The Resolution of the Government Of Bombay dated April 29, 1960 containing Rules regarding recruitment of Class I and Class II Engineering Services and regarding fixation of seniority; (5) The 790 Resolution of the Government of Maharashtra dated July 29, 1963 laying down principles of seniority; (6) The Notifi cation dated August 21, 1965 issued by the Government of Gujarat under the proviso to. article 309 of the Constitu tion, introducing clause 10 in the Rules of 1960; (7) The Resolution of the Government of Maharashtra dated December 19, 1970 superseding the Resolution of April 29, 1950 and framing new rules of seniority; and (8) The Circulars dated January 12, 1961, March 15, 1963 and October 18, 1968 issued by the Government of Maharashtra, converting a cer tain number of temporary posts into permanent posts from time to time. It is common ground that except the Bombay Rules dated September 21, 1939 and the Gujarat Notification dated August 21, 1965 the rest of the rules are in the nature of execu tive instructions. The Rules of 1941, 1960, 1963, 1965 and 1970 were not framed by the State Government concerned in the exercise of constitutional or statutory power. The Rules of 1960 and 1970 were issued "By order and in the name of the Governor," but that does not lend support to the construction faintly suggested on behalf of the direct recruits that the two sets of rules must be deemed to have been made under article 309 of the Constitution. All execu tive action of the Government of a Stale is required by article 166 of the Constitution to be taken in the name of the Governor. The appeals have therefore to be disposed of on the basis that except for the Bombay rules dated September 21, 1939 and the Gujarat Notification dated August 21, 1965 the remaining rules, whether of recruitment or of seniority, are in the nature of executive instructions. These in structions, unlike rules regulating recruitment and condi tions of service framed under the proviso to article 309 of the Constitution or section 241(2)(b) of the Government of India Act, 1936, cannot have any retrospective effect. The 1939 rules called "Recruitment Rules of the Bombay Service of Engineers (Class I and Class II)" have constitu tional authority but being rules made to regulate the methods of recruitment", they afford no assistance in finding a solution to the rival claims to seniority laid by the promotees and direct recruits. The rules neither fix a quota for recruitment from the two, avenues nor do they provide, in any other manner, a guideline for fixation of seniority as between appointees recruited from different sources. Rule 10 on which the promotees rely as affording to them a guarantee in the matter of promotion is also beside the point because the crux of their grievance is not that they are denied opportunities of promotion but that they are discriminated against in the matter of seniority in comparison with the direct recruits. By its resolution dated November 21, 1941 the Government of Bombay, Political and services Department, directed that in the case of direct recruits appointed substantively on probation, the seniority should be determined with reference to the date of appointment on probation while in the case of officers promoted to "substantive vacancies", the seniority should be determined with reference to the date of their promotion to the substantive vacancies, pro vided there has been no break in their service prior to their confirmation in those vacancies. This Reso lution expressly 791 governed the seniority of direct recruits and promoted officers in all provincial services except the Bombay Serv ice of Engineers, Class I Since Deputy Engineers do not belong to Class I Service, their seniority was governed by the Resolution. The wording of the Resolution leaves no doubt that the Government of Bombay applied: two different standards for fixing inter se seniority of direct recruits and promotees appointed as Deputy Engineers. The former were entitled to reckon their seniority with effect from the. date of their initial appointment on probation while the seniority of the latter had to be determined with reference to the date of their promotion to, substantive vacancies, subject to the further qualification that there was no break in their service prior to their confirmation in those vacancies. Thus, for purposes of seniority, the promo tees had to depend firstly on the availability of substan tive vacancies and secondly on the arbitrary discretion of the Government to confirm or not to confirm them in those vacancies. The fact that a substantive vacancy had arisen and was available did not, proprio vigore, confer any right on the promotee to be confirmed in that vacancy. The 1941 Rules contained the real germ of discrimination because the promotees had to depend upon the unguided pleasure of the Government for orders of confirmation. In the pre Consti tution era, such hostile treatment had to be suffered si lently as a necessary incident of government service. It is curious that though the 1941 rules expressly recite that the principles contained therein should be observed in determining the seniority of direct recruits and promoted officers in the provincial Services except the Class I Bombay Service of Engineers, Shri L.M. Ajgaonkar, Deputy Secretary to the Government of Maharashtra says in his affidavit dated July 25, 1973 that in practice the Rules of 1941 were never applied to Class II officers in the Engineering Service and that their seniority used to be determined by the same rules by which the seniority of Class I officers was determined. It is difficult to accept this bare statement which is not even supported by a proper verification. Shri Ajgaonkar 's affidavit contains an omni bus and rolled up clause of verification at the end, which detracts from the weight of his assertion. Turning next to the letter dated January 11, 1949 writ ten by the Chief Secretary, Government of Bombay, to the Honorary Secretary, Bombay Civil Service Association, we find it difficult to uphold the claim of the _promotees that the Rules of 1941 were modified by that letter. The letter was written in answer to, the representation dated July 28, 1948 made by the Bombay Civil Service Association to, the Government of Bombay regarding emergency recruitment to the Indian Administrative service and "other matters". Paragraph 2 of the letter says that promotees can have no grievance in the matter of seniority since the seniority of a direct recruit to the cadre of "Deputy Collectors" vis a vis a promoted officer is determined not according to the date of confirmation but according to the principles laid down in the Rules of 1941, i.e. with reference to the date of first appointment on probation in the case of direct recruits and of continious officiation in the ease of pro moted officers. In the first place, 792 this part of the letter on which the promotees rely deals expressly and exclusively with the case of Deputy Collectors which makes it difficult, without any further data, to extend the benefit of what is said therein to Deputy Engi neers, working in an entirely different branch of govern ment service. The Chief Secretary 's letter is a reply to the Association 's letter which the promotees did not pro duce. The Association had addressed its letter not to the Ministry which handled problems of Engineering Services but to the Ministry of Home and Revenue, the latter of which was concerned to consider the grievance of Deputy Collectors. Lastly the opening sentence of paragraph 2 of the Chief Secretary 's reply shows that he was referring to a class of service in which a quota system was then operating. Admit tedly, the quota system properly so called, did not apply either under the 1939 or under the 1941 rules to Engineering Services. The Chief Secretary 's reply cannot, therefore improve the promotees ' case. But we disapprove that instead of explaining the circumstances in which the reply was sent, the State Government should merely say through Shri Ajgaon kar 's affidavit that it craves "leave to refer" to the reply for its "true effect". The Government could surely have produced the letter of the Association which would have set this part of the controversy at rest. That takes us to the 1960 Rules which are the meat of the matter. We have already extracted rules 6 and 8 fully but it will be necessary to recapitulate briefly the scheme of the 1960 rules. Under these rules, the,ratio of ap pointment by nomination and promotion of both Class I and Class II Engineering Services was fixed, as far as practica ble, at 75: 25. Candidates appointed by nomination, i.e. direct recruits, were to be on probation for two years out of which, normally, one year was to be spent on training. On satisfactory completion of probation, the direct recruits were to be confirmed as Assistant Engineers in Class I or as Deputy Engineers in Class II, as the case may be. For ab sorption in Class I, a Class II officer had to be in the permanent Bombay Service of Engineers, Class II cadre. He was further required to have at least 15 years ' service to his credit in Class II in temporary and permanent capaci ties. In addition to these qualifications, he has to be holding, at the time of his absorption in Class 1, an offi ciating divisional rank. On such absorption the Class II officer was to be confirmed as an Executive Engineer. The Rules of 1960 show that the seniority of Class II promotees was to be fixed below the bunch of Assistant Engineers, any one of whom was due for confirmation as an Executive Engi neer during the calendar year. But no Class II promotee could be placed above a direct recruit recruited to Class I, who was officiating as Executive Engineer from a date earlier than the Class II promotee, Rule 8(1) says that the various categories which manned the Class I sub divisional posts were being compiled into. two lists: (i) One list of Bombay Service of Engineers Class 1I cadre of permanent Deputy Engineers and (ii) the other list of officiating Deputy Engineers. The future recruit ment to Class II cadre was to be made by (a) nomination of candidates recruited directly by competitive examination and (b) promotion from the list of officiating Deputy Engineers, 793 in the ratio of 2/3rd and 1/3rd respectively. After recit ing that direct recruitment of temporary Deputy Engineers was stopped, rule 8(ii) provides that further officiating vacancies would be manned from the ranks of the Subordi nate Service of Engineers. For this purpose a statewise Select Seniority List was to be maintained of members to the Subordinate Service of Engineers, considered fit to hold subdivisional charge. For inclusion in this list graduates, diploma holders and non qualified persons had to have to their credit Service of not less than 3, 8 and 13 years respectively. For confirmation as a Deputy Engineer the officer was expected to have put in not less than three years ' service as officiating Deputy Engineer. Then comes the much debated clause (iii) of rule 8: "(iii) The probationers recruited directly to the Bombay Service of Engineers, Class II cadre in any year shall, in a bunch, be placed senior to promotees con firmed during that year. It is patent that this clause is highly discriminatory against promotees and accords a preferential treatment to direct recruits. Its principal justification is said to be that persons who are promoted as officiating Deputy Engi neers do not belong to Class II cadre so long as they are not confirmed as Deputy Engineers, whereas direct recruits appointed on probation as Deputy Engineers enter that class or cadre on the very date of their appointment since, on satisfactory completion of probation, confirmation is gua ranteed to them. This contention needs careful examination. There is no universal rule, either that a cadre cannot consist of both permanent and temporary employees or that it must consist of both. ' That is primarily a matter of rules and regulations governing the particular service in relation to which the question regarding the composition of a cadre arises. For example, in Bishan Sarup Gupta vs Union of India(1) the cadre of Income Tax officers Class I, Grade II was held by this Court to consist of both permanent and temporary pests. Similarly, in A.K. Subraman vs Union of India, (2) while holding that the cadre of Executive Engi neers in Class I Central Engineering Service consisted both of permanent and temporary posts, it was pointed out by this Court that a cadre may consist of permanent posts only or "sometimes, as is quite common these days, also of temporary posts". Counsel for direct recruits relied upon a decision of this Court in Ganga Ram & Others vs Union of India(3) for showing that a cadre cannot consist of temporary posts but that decision rested on the finding, arising out of the rules contained in the Indian Railway Establishment Manual, that direct recruits and promotees constitute different classes. The question which we have to consider at this stage is not whether direct recruits and promotees appointed as Deputy Engineers in the Bombay and Gujarat service of Engineers belong to different classes but Whether officiat ing Deputy Engineers belong to class II cadre at all. (1) ; (2) [1975] 2 S.C.R. 979 (3) ; 794 On the state of the record in the Bombay and Gujarat appeals, such as it is, we find it difficult to hold that officiating Deputy Engineers do not belong to Class 1I cadre of the Bombay and Gujarat Service of Engineers. In the Maharashtra writ petition, 815 of 1972, as many as four affidavits. were filed on behalf of the State Government by Shri L.M. Ajgaonkar. These are dated July 25, December 17, December 21, 1973 and January 17, 1974. The question whether officiating Deputy Engineers belong to Class II cadre was of the essence of the dispute in the High Court and was squarely raised by the promotees. Yet, in none of the affidavits did the State Government say that they did not belong to Class II cadre. The last affidavit dated January 17, 1974 was filed after the High Court had dictated its judgment in open Court for three days, and even then the affidavit is significantly silent on the question. The only explanation of this can be that according to the State Government, officiating Deputy Engineers belong to Class II cadre. The resolution dated November 8, 1962 issued by the Government of Maharashtra. Buildings and Communications Department, shows unmistakably that even temporary posts of Deputy Engineers were treated as temporary additions to Class II cadre. An additional Division with four subdivi sions was sanctioned by that resolution for construction of a section of National Highway No. 8. Temporary posts had therefore to be created for that project for a period of one year. The resolution says that "The posts of Executive Engineers and Deputy Engineers should be treated as tempo rary additions to their respective cadres." In so far as the Gujarat appeals are concerned, Shri N.S. Nagrani, Under Secretary to the Government of Gujarat, P.W.D., filed an affidavit dated April 28, 1970 in one of the writ petitions, 422 of 1970. He says in that affidavit that "temporary posts are to be treated as temporary additions to the respective cadres of B.S.E. Class I and Class II", that "permanent posts are not created anew but come into existence by the conversion of the existing tempo rary posts into permanent posts" and that "both the tempo rary posts and permanent posts are two categories of posts belonging to the same cadre". To the similar effect is the affidavit dated June 22, 1970 made in another writ petition, 1099 of1969, by Shri A.R. Bhatt, Under Secretary to, the Government of Gujarat, P.W.D. He says therein that "there are no separate categories of permanent and temporary posts of Deputy Engineers. Temporary post of Deputy Engineers are treated as temporary additions to the G.S.E. Class II cadre. " Pleading on behalf of the Gujarat Government, Shri Bhatt stoutly resisted the claim of direct recruits that they had prior claim for consideration for promotion to the posts of Executive Engineers on the ground that they belong to the Class II cadre while the officiating Deputy Engineers do not. We cannot ignore these sworn assertions made solemnly by officers of the Maharashtra and Gujarat Governments. The fact that the permanent strength of the. cadre was deter mined on the basis of permanent posts at any given time, as for example when the Bombay 795 Government passed resolutions on March 22, 1937 and April 13, 1945 cannot detract from the position that even tempo rary posts of Deputy Engineers were treated as additions, though temporary, to Class II cadre. The government offi cers who swore the affidavits knew of these resolutions and yet they were instructed to state, a position Which they contended for more then once, that officiating Deputy Engineers belonged to Class II cadre. The learned counsel for the direct recruits laid great emphasis on the lists referred to in clauses (i) and (ii) o[ rule 8 for showing that officiating Deputy Engineers do not belong to Class 11 cadre of Engineering Service. This contention has to be rejected since the point is concluded by a decision of this Court in P.Y. Joshi vs State of Maharashtra. (1) It was contended in that case on behalf of direct recruits that officiating Deputy Engineers could only be considered as promoted to the grade of Deputy Engi neers on confirmation and therefore the 7 years ' qualifying service which they had to put in before being promoted as officiating Executive Engineers must be reckoned from the ' date of their confirmation as Deputy Engineers in support of this contention reliance was placed in that case on clause (ii) of rule 8 and it was argued that no person could be "promoted" as a Deputy Engineer unless he was first put in the list of officiating Deputy Engineers. This argument was squarely dealt with and repelled by this Court by hold ing that the list referred to in clause (ii) of rule 8 is the same list which is referred to in the latter part of clause (i) of that rule which speaks of "future recruitment". Consequently, a promoted officiating Deputy Engineer, who belonged to Class II cadre, was held entitled to be considered for promotion under rule 7 to the post of officiating Executive Engineer if he had put in 7 years ' qualifying service. The eligiblity for promotion did not require that the officiating Deputy Engineer must have put in 7 years ' service after the date of his confirmation. It must necessarily follow that "promotion" which the latter part of rule 8(i) relating to future recruitment speaks of means promotion as an officiating Deputy Engineer from the Select List prepared under clause (ii) of rule 8. A person thus promoted from the Select List as an officiat ing Deputy Engineer is as full and complete a member of the Class II cadre as a person directly appointed as a Deputy Engineer. In tiffs view of the matter, the prescription contained in the closing sentence of rule 8(i) that "the number of such promotions shall be about 1/3rd the number of direct recruits appointed in that year" would apply to initial appointments and cannot govern the confirmation of those who have already been appointed to Class II cadre. In other words, direct recruits and promotees have to. be appointed in the proportion of 75: 25 to Class II cadre, the former as Deputy Engineers and the latter as officiating Deputy Engineers, but once that is done, the quota rule would cease to apply with the result that confirmations in the posts of Deputy Engineers are not required to be made in the proportion in which the initial appointments had (1) 796 to be made. Thus rule 8(i) only requires that for every three direct recruits appointed as Deputy Engineers only one promotee can be appointed as officiating Deputy Engineer. The rule cannot be construed to mean that. for every three confirmations, of Deputy Engineers, not more than one promo tee can be confirmed as Deputy Engineer. In A. K. Subraman (supra) it was held by this Court, while interpreting rules relating to Central Engineering Service Class I, that though in cases where recruitment is made from different sources the quota system can be validly applied, the quota rule was to be enforced at the time of initial recruitment to the posts of officiating Executive Engineers and not at the time of their confirmation. The Court further observed that there was a well recognised distinction between promotion and confirmation and that the tests to be applied for the purposes of promotion are entirely different from those that had to be applied at the time of confirmation. If officiating Deputy Engineers belong to Class II cadre as much as direct recruits do and if the quota system cannot operate upon their respective confirmation in that cadre, is there any valid basis for applying different standards to the members of the two group for determining their seniori ty? Though drawn from two different sources, the direct recruits and promotees constitute in the instant case a single integrated cadre. They discharge identical functions, bear similar responsibilities and acquire an equal amount of experience in their respective assignments. And yet clause (iii) of rule 8 provides that probationers recruited during any year shall in a bunch be 'treated as senior to promo tees confirmed in that year. The plain arithmetic of this formula is that a direct recruit appointed on probation say in 1966, is to be regarded as senior to a promotee who was appointed as an officiating Deputy Engineer, say in 1956, but was confirmed in 1966 after continuous officiation till then. This formula gives to the direct recruit even the benefit of his one year 's period of training and another year 's period of probation for the purposes of seniority and denies to promotees the benefit of their long and valuable experience. If there was some intelligible ground for this differentiation bearing nexus with efficiency in public services, if might perhaps have been possible to sustain such a classification. It is interesting that time and again the State Governments themselves found it difficult to justify the hostile treatment accorded to the promotees. In various affidavits filed on their behalf, entirely contra dictory contentions were taken, sometimes in favour of the promotees and sometimes in favour of direct recruits. In stead of adopting an intelligible differentia, rule 8 (iii) leaves seniority to be determined on the sole touchstone of confirmation which Seems to us indefensible. Confirmation is one of the inglorious uncertainities of government serv ice depending neither on efficiency. of the incumbent nor on the availability of substantive vacancies. A glaring in stance widely known in a part of our country is of a distin guished member of the judiciary who was confirmed as a District Judge years after he was confirmed as a Judge of the High Court. It is on the record of these writ petitions that officiating Deputy Engineers were not confirmed even though substantive vacancies were available in which they could have been confirmed. It shows that confirmation does not have to conform to any set rules and whether an employee should be confirmed or not depends on the sweet will and pleasure of the government. 797 There is no substance in the plea that direct recruits must be given weightage on the ground that the engineering services require the infusion of new blood since it is a highly specialised service. Were it so, the Government would not have itself reduced the proportional representa tion gradually so as to tilt the scales in favour of promo tees. Besides, the plea that engineering service is a spe cialised service is made not by the Government but by direct recruits who, obviously, are interested in so contending. Nor indeed is the apprehension justified that the higher echelons of engineering services will in course of time be manned predominantly by promotees. Those recruited directly as Assistant Engineers in Class I can, under the rules, officiate as Executive Engineers after 4 years ' service and are eligible for confirmation as Executive Engineers after a total service of 9 years. Promotees can hardly ever match with that class in terms of seniority. Learned counsel for direct recruits relied on the deci sion of this Court in B.S. Gupta vs Union of India(1) where it was observed that when recruitment is made from several sources, it may be necessary in the public interest to depart from the normal rule of seniority and to provide that dates other than the dates of appointment will determine inter se seniority of officers. These observations have to be understood in the context which the Court itself clari fied by saying that the, problem before it was not of dis crimination in the matter of promotion from an integrated service constituted from two sources but the problem was of integrating two sources in one service by adjusting inter se seniority (p. 115). Besides, the rule of seniority pre scribed in that case was not shown to suffer from the in firmity from which rule 8 (iii), suffers. Reliance was also placed by the direct recruits on another decision of this Court in V.B. Badami vs State of Mysore,(2) in which it was held that in cases where rules prescribe a quota between direct recruits and promotees, confirmations for substantive appointments can only be made in clear vacancies occurring in the permanent strength of the cadre and that confirmed persons have to be treated as senior to those who are officiating. This decision is distinguishable because it is based on the consideration that rule 9 of the Probation Rules of 1957 provided for confirmation of a probationer as a full member of the serv ice in any substantive vacancy in the permanent cadre and that rule established the exclusion of temporary posts from the cadre (p.822). Since the cadre consisted of permanent posts only, confirmation in permanent posts necessarily determined the inter se seniority of officers. Rule 8(ii) in the instant case adopts the seniority cum merit test for preparing the statewise Select List of seniority. And yet clause (iii) rejects the test of merit altogether. The vice of that clause is that it leaves the valuable right of seniority to depend upon the mere accident of confirmation. That, under articles 14 and 16 of the Constitution, is impermissible and therefore we.must strike down rule g(iii) as being unconstitutional. (1) ; (2) [1976]1 S.C.R. 815 798 On July 29, 1963 the Government of Maharashtra in its General Administration Department passed a resolution super seding the rules of November 21, 1941 and framing new rules for determining the inter se seniority of direct recruits and promotees. Paragraph A of the 1963 resolution provides that the seniority of direct recruits and promoted officers should be determined according to the date of appointment on probation in the case of direct recruits and according to the date of promotion to officiate continuously in the case of those appointed by promotion, irrespective of whether the appointments are made in temporary or in permanent vacan cies. Paragraph B of the resolution says that a list of services in respect of which special orders for fixation of seniority are in force and to which the resolution will not apply would be issued in due course. It is contended on behalf of the Maharashtra promotees that the rules of 1963 superseded the 1960 rules by neces sary implication and therefore the State Government had no power or authority to apply the criterion of seniority fixed under the 1960 rules after their repeal by the 1963 rules. This contention has not only the merit of plausibility but is apparently supported by an observation in P. Y. Joshi (supra) case. We are however satisfied that the Bombay High Court was right in rejecting the contention. The quota system was the very essence of 1960 rules and if it was desired to abrogate that system it is unlikely that the 1963 rules will not even refer to those of 1960. The rules of 1941 having been expressly superseded by the 1963 rules, it is difficult to accept that along with the 1941 rules the resolution of 1963 would not have referred to the 1960 rules also. Secondly, the resolution dated December 19, 1970 of the Government of Maharashtra expressly superseded the 1960 rules which shows that the latter were in force until 1970 and were not superseded by the 1963 rules. In fact, the resolution of 1970 refers to all previous resolutions except the resolution of 1963 which shows that the latter was not applicable to engineering services. It is true that in P.Y. Joshi 's case (supra) it was observed that the 1963 rules repealed those of 1960 but that is a mere passing observa tion. The question in regard to such repeal did not arise for decision in that case and it appears that no argument whatsoever was addressed to the Court on this question. None of the considerations mentioned by us were placed before the Court in that case. We therefore agree with the High Court that the 1960 rules were not superseded by those of 1963. We have already indicated that in Gujarat there is no resolution corresponding to that of 1963. In the Gujarat writ petitions it was argued that the 1960 rules, though originally in the nature of executive instructions, acquired a statutory force and character by reason of their amendment by the rules of 1965 which were made by the Governor of Gujarat in exercise of the power under the proviso to article 309 of the Constitution. This argument was rightly rejected by the High Court because all that was done by the rules of 1965 was to introduce a new rule, rule 10, in the 1960 rules. The rules of 1960 were neither reiterated nor re enacted by the rules of 1965 and the new rule introduced into the rules of 1960 is not of such a character as to compel the inference that the rule making authority had applied its mind to be rules of 1960 with a view to 799 adopting them. In Bachan Singh vs Union of India(1), on which the direct recruits rely, the amendment made vital changes in the main fabric of the original rules which led this Court to the conclusion that the original rules became statutory rules by incorporation. This question is not relevant in the Maharashtra appeal since there are no rules in Maharashtra corresponding to those of 1965 in Gujarat. The challenge to rule 33 of the rules dated December 19, 1970 framed by the Government of Maharashtra is based on grounds identical with those on which the validity of rule 8(iii) of the 1960 rules was assailed. The rules of 1970, which supersede the rules of 1960, were framed in order (i) to alter the ratio between direct recruits and promotees which was "causing hardship" to promotees; (ii) to correct the manifest error resulting from the fact that "A large number of temporarily promoted officers both in Class I and Class II could not be confirmed in spite of permanent vacan cies being available"; and (iii) to ensure the efficiency of the engineering services as a whole. Rule 6 provides briefly that officers who are confirmed in or who have a lien on a post will be members of the Maharashtra Service of Engineers Class I or Class II as the case may be Those who do not have such a lien and who may be officiating in any one of the cadres of Class I or Class II will be treated as temporary members of their respective cadres. Rules 7 to 11 deal with direct appointments to the posts of Assistant Engineers Class I and Assistant Engineers Class II. By rule 11, such appointees are to be confirmed after a training of one year and a further probation for a period of not less than one year in their respective cadres. Rules 12 to 23 deal with appointments by promotion to Class 11 service. Rule 12(a) as amended by the Government resolution dated January 20, 1972 provides that the cadre of Deputy Engineers will consist of (i) all officers confirmed upto the date of commencement of the rules as Deputy Engineers, whether actually working in or only having a lien on the posts; (ii) all direct recruits who have been appointed upto the date of commencement of the rules on probation against permanent posts of Deputy Engineers (iii) all officers who were offi ciating as Deputy Engineers on 30th April, 1960, provided their promotions prior to 30th April, 1960 are not deemed to be fortuitous; and (iv) those who were not promoted prior to 30th April, 1960, but who have been included in the Select Lists for the period prior to 30th April 1900 of Overseers fit to be Deputy Engineers. RuIe 12(c) fixes the ratio between direct recruits and promotees at 34: 66 instead of 75: 25 as under the 1960 rules. Rule 33 called "Seniority", which we have extracted already, provides that there shall be two parts of the seniority list in each cadre in Class I and Class Ii, part A of confirmed officers and part B of those who are not confirmed. In part A the names are to be arranged with reference to the year of confirmation. Con firmed officers are to be treated as senior to the uncon firmed officers in the respective cadres. In part B the names are to be arranged with reference to the date of continuous officiation except where promotion in an offici ating capacity is by way of a purely temporary or local arrangement. (1) ; 800 Rule 33, in so far as it makes seniority dependent upon the fortuitous circumstance of confirmation, is open to the same objection as rule 8(iii) of the 1960 rules and must be struck down for identical reasons. The circulars dated January 12, 1961, March 15, 1963 and October 18, 1969 which the promotees want to be enforced are issued by the Finance Department and being in the nature of inter departmental communications, they cannot confer any right on the promotees. The Bombay High Court was therefore right in not accepting this part of the promo tees ' case. We also agree with the view taken by the High Courts of Bombay and Gujarat, for the reasons mentioned by them, that the rules under consideration do not in any manner violate the provisions of the Bombay Reorganisation Act, 11 of 1960. The proviso to section 81 (6) of that Act says that the condi tions of service applicable to any person allotted to the States of Maharashtra or Gujarat shall not be varied to his disadvantage except with the previous approval of the Cen tral Government. Neither the rules of 1960 and much less the rules of 1970 alter the conditions of service of Deputy Engineers to their disadvantage within the meaning of the proviso. We are not unmindful of the administrative difficulties in evolving a code of seniority which will satisfy all conflicting claims. But care ought to be taken to avoid a clear transgression of the equality clauses of the Constitu tion. The rules framed by the State Governments were con stitutionally so vulnerable that the administration was compelled to adopt inconsistent postures from time to time leaving the employees no option save to resort to courts for vindication of their rights. In this process, courts, high and low, had to discharge functions which are best left to the expertise of the appropriate departments of the Govern ment. Having struck down certain rules, we do not want to take upon ourselves the task of framing rules of seniority. That is not the function of this Court and frankly it lacks the expertise and the data to do so. We how. ever hope that the Government will bear in mind the basic principle that if a cadre consists of both permanent and temporary employees, the accident of confirmation cannot be an intelligible criterion for determining seniority as between direct re cruits and promotees. All other factors being equal, con tinuous officiation in a non fortuitous vacancy ought to receive due recognition in determining rules of seniority as between persons recruited from different sources, so long as they belong to the same cadre, discharge similar functions and bear similar responsibilities. Saying anything beyond this will be trespassing on a field which does not belong to the courts. We would like to clarify that the list of seniority, for the period till November 1, 1956, prepared by the Maharash tra Government by its resolution dated April 10, 1970 has been approved by the Government of India. That list would therefore govern the seniority of direct recruits and promo tees as on November 1, 1956. Secondly, it seems to us difficult to uphold the direction given by the Gujarat High Court that interim promotions made during the pendency of writ petitions should not be disturbed until the expiration of one month from the date of the seniority as finally fixed by the Government and intimated to the con 801 cerned parties. Interim promotions which do not comply with the constitutional requirements and which under the judgment of the Gujarat High Court are bad cannot be permitted to stand. We accordingly set aside that direction. These then are our reasons in support of the order which we passed on January 31, 1977. That order reads thus: "Civil Appeal No. 1113 of 1974 is filed by the promo tees and it arises out of special Civil Application No. 815 of 1972 filed by them in the Bombay High Court. We set aside the judgment of the High Court and allow the appeal. Civil Appeal No. 286 of 1974 is filed by direct re cruits and it arises out of Special Civil Application No. 1099 of 1969 filed by them in the High Court of Gujarat. We confirm the judgment of the High Court and dismiss the appeal. Civil Appeal No. 287 of 1974 is filed by direct re cruits and it arises out of Special Civil Application No. 422 of 1970 filed by them in the High Court of Gujarat. We confirm the judgment of the High Court and dismiss the appeal. Civil Appeal No. 242 of 1974 and Civil Appeal No. 285 of 1974 are cross appeals. Both of these appeals arise out of Special Civil Application No. 1418 of 1971 which was field by the promotees in the High Court of Gujarat. Civil Appeal No. 242 of 1974 is filed by the promotees in this Court challenging the decision of the Gujarat High Court to the extent to which they failed. Civil Appeal No. 285 of 1974 is filed by the direct recruits challenging the afore said decision to the extent to which the High Court allowed the reliefs claimed by the promotees. We allow Civil Appeal No. 242 of 1974 partly and dismiss Civil Appeal No. 285 of 1974. The reasons in support of the conclusions to which we have come in these appeals will be given later. The extent to which the appeals are allowed or dismissed will become clear from those reasons.

In exercise of the power conferred by section 241(2)(b) of the Government of India Act, 1935 the Governor of Bombay framed rules called Recruitment Rules of the Bombay Service of Engineers (Class I and Class II 1939), Rule 2 laid down the method of recruitment to Class I of the Service by direct recruitment and by promotion from the existing Bombay Service of Engineers or from the Bombay Service of Engineers Class II. Rule 10 provided that recruitment to Class II service shall be either by direct recruitment or by promo tion from (i) the Bombay Subordinate Engineering Service (ii) permanent or temporary supervisors and (iii) tempo rary engineers. In 1941 the Government of. Bombay passed a resolution directing that in the case of direct recruits appointed substantively on probation, seniority should be determined with reference to the date of appointment on probation, while in the case of officers promoted to substantive vacan cies, seniority should be determined with reference to the date of their promotion to the substantive vacancies provid ed there had been no break in their service prior to their confirmation in these vacancies. In 1949 the Chief Secretary to the Government of Bombay in reply to a representation made by the Bombay Civil Service Association regarding emergency recruitment to the I.A.S. and "other matters" stated that promotees could have no grievance in the matter of seniority since the seniority of a direct recruit to the cadre of Deputy Collector vis a vis a promoted officer was determined not according to the date of confirmation but according to the principles laid down in the Rules of 1941, i.e., with refer ence to the date of first appointment on probation in the case of direct recruits and of continuous officiation in the case of promoted officers. In April 1960, a resolution embodying the rules of recruitment to Bombay Service of Engineers Class I and Class II was passed by the Government and signed by the Under Secretary to the Government "by order and in the name of the Governor of Bombay". They provided for direct recruitment through common competitive examination conducted by the State Public Service Commission for both classes of service as well as by promotion. Direct recruits were to be con firmed after two. years in their respective cadets. The rules also provided that the ratio of appointments by nomi nation and promotion to both classes shall, as far as prac ticable, be 75:25. Rule 8(i) says that the various catego ries which manned the Class II sub divisional posts were being compiled into two lists: (i) of Bombay Service of Engineers, Class 11 cadre of permanent Deputy Engineers and (ii) of officiating Deputy Engineers. The future recruit ment to Class II cadre was to be made by (a) nomination of candidates recruited directly by competitive examination and (b) promotion from the list of officiating Deputy Engineers in the ratio of 2: 1. Rule 8(ii) provides that further officiating vacancies would be manned from the ranks of the Subordinate Service of Engineers. For this purpose of state wise Select Seniority List was to be maintained of members of the Subordinate Service of Engineers, considered fit to hold sub divisional charge. For inclusion in this list graduates. diploma holders and non qualified persons had to have to their credit service of not less than 3, 8 and 13 years respectively. For confirmation as a Deputy 776 Engineer the officer was expected to have put in not less than three years ' service as officiating Deputy Engineer. Rule 8(iii) provides that the probationers recruited di rectly to the Bombay Service of Engineers, Class II cadre in any year shall, in a bunch, be placed senior to promotees confirmed during that year. On July 29, 1963 the Government of Maharashtra passed a resolution superseding the 1941 rules and framing new rules for determining inter se seniority of direct recruits and promotees. On December 19, 1970 the State Government passed a resolution superseding the resolution of 1960. Rule 33 of the 1970 rules provides that the seniority list in respect of each of Class I and Class II shall consist of: Part A confirmed officers and Part B, not confirmed officers, that Part A shall be arranged with reference to the year of confirmation and confirmed officers shall be treated as senior to the unconfirmed officers in the respective cadre and Part B, names shall be arranged with reference to the date of continuous officiation except where a promotion in an officiating capacity was by way of purely temporary or local arrangement. Immediately after the 1960 rules were made by the Government of Bombay the State of Bombay was bifurcated into the State of Maharashtra and Gujarat. The Government of Gujarat passed a resolution on May 1, 1960 providing that all rules, regulations, circulars etc., prevailing in the former State of Bombay will continue to operate in the new State of Gujarat until changed or modified. In 1965 the Government of Gujarat modified the 1960 rules in exer cise of the powers conferred by the proviso to article 309 of the Constitution and introduced a new clause 10 in the 1960 rules. On the bifurcation certain permanent and temporary posts of Deputy Engineers were allocated to the State of Gujarat. Some of the promotee Deputy Engineers from the lower ranks were also allocated to the State of Gujarat and several of them having completed three years ' qualifying service had become eligible for confirmation under r. 8(ii) of the 1960 rules but were not confirmed. The two appellants who were recruited as Overseers in 1953 were promoted temporarily as Deputy Engineers in 1959 and 1957 and were confirmed as Deputy Engineers in 1970. Respondents Nos. 2 and 3, who were direct recruits, were appointed as Deputy Engineers in 1963 and 1959 and were confirmed in 1965 and 1961. The two appellants alleged that though they had been in continuous service as Deputy Engineers since 1959 and 1957, respondents 2 and 3, who were appointed in 1963 and 1959 were shown as senior to them and that their (the appel lants ') seniority should have been fixed under the 1941 rules. In any case the 1960 rules could not take away the right accrued to them under the rules existing at the time of their promotion in 1959 and 1957 and that r. 8(iii) of the 1960 rules and r. 33 of the 1970 rules were ultra vires articles 14 and 16 of the Constitution. The respondents on the other hand contended that neither the 1941 rules nor 1963 rules had any application to them and that under the 1960 rules which superseded the 1939 rules, posts of Deputy Engineers were required to be filled in by direct recruits and promotees in the ratio of 75:25 and the question of seniority of the appellants could not arise until they were confirmed and their seniority fixed from the date of confirmation in terms of r. 8(iii) of the 1960 rules. HELD:I (a) Except the Bombay Rules of 1939 and the Gujarat notification dated August 21, 1965 the rest of the rules are in the nature of executive instructions, which, unlike rules regulating recruitment and conditions of serv ice framed under the proviso of article 309 of the Constitution or section 241(2)(b) of the Government of India Act, 1935 cannot have any retrospective effect. The rules of 1941, 1960, 1963, 1965 and 1970 were not framed by the State Government in the exercise of constitutional or statutory power. The rules of 1960 and 1970 were issued "By order and in the name of the Governor" but that 777 does not mean that the two sets of rules must be deemed to have been made under article 309 of the Constitution. All executive action of the Government of a State is required by article 166 to be taken in the name of the Governor. [790 B E] (b) The 1939 rules have constitutional authority but being rules made "to regulate the methods of recruitment" they afford no assistance in finding a solution to the problem. They neither fix a quota for recruitment from the two avenues nor do they provide in any other manner a guide line for fixation of seniority as between appointees re cruited from different sources. Rule 10 is beside the point because the crux of the promotees ' grievance is not that they are denied opportunities of promotion but that they are discriminated against in the matter of seniority in compari son with the direct recruits. [790 E G] (c) The departmental promotees are being treated un equally in the matter of seniority because whereas, promo tees rank for seniority from the date of their confirmation, seniority of direct recruits is reckoned from the date of their initial appointment. The disparity is so glaring that though direct recruits have to successfully complete a two year probationary period before confirmation, even that period is not excluded while counting their seniority. A promotee ranks below the direct recruit even if be has officiated continuously as a Deputy Engineer for years before the appointment of the direct recruit is made and even if the promotees could have been confirmed in an avail able substantive vacancy before the appointment of the direct recruit. [789 B D] 2(a) The 1941 resolution expressly. governed the senior ity of direct recruits and promoted officers in all provin cial services except the Bombay Service Engineers, Class I. Since Deputy Engineers do not belong to Class service, their seniority was governed by the Resolution. [791 A] (b) The wording of the Resolution leaves no doubt that the Government of Bombay applied two different standards for fixing inter se seniority of direct recruits and promo tees appointed as Deputy Engineers, The former were enti tled to reckon their seniority with effect from the date of their initial appointment on probation while the seniority of the latter had to be determined with reference to the date of their promotion to substantive vacancies subject to the further qualification that there was no break in their service prior to their confirmation in those vacancies. Thus, for the purposes of seniority, the promotees had to depend firstly on the availability of substantive vacancies and secondly on the arbitrary discretion of the Government to confirm or not to confirm them in those vacancies. The fact that a substantive vacancy had arisen and was available did not proprio vigore, confer any right on the promotee to be confirmed in that vacancy. The 1941 rules contained the real germ of discrimination because the promotees had to depend upon the unguided pleasure of the Government for orders of confirmation. In the pre Constitution era, such hostile treatment had to be suffered silently as a necessary incident of government service. [791 B D] (c) It is difficult to uphold the claim of the promotees that the 1941 rules were modified by the letter dated Janu ary 11, 1949. The Chief Secretary 's letter cannot improve the promotees ' case. [791 G] (d) The part of the letter on which the promotees rely deals exclusively with the case of Deputy Collectors which makes it difficult to extend the benefit of what is said therein to Deputy Engineers, working in an entirely differ ent branch of government service. The Association had addressed its letter, not to the Ministry which handled problems of Engineering Services, but to the Ministry of Home and Revenue, the latter of which was concerned to consider the grievance of Deputy Collectors. The opening sentence of paragraph 2 of the Chief Secretary 's reply shows that he was referring to a class of service in which a quota system was then operating, which did not apply either under the 1939 or under the 1941 rules to Engineering Serv ices. [792 A C] 778 3(a) Clause 8(iii) is highly discriminatory against promotees and accords preferential treatment to direct recruits and must be struck down as unconstitutional. (b) There is no Universal rule either that a cadre cannot consist of both permanent and temporary employees or that it must consist of both. That is primarily a matter of rules and regulations governing the particular service in relation to which the question regarding the composition of a cadre arises. [793 E] Bishan Sarup Gupta vs Union of India, [1973] 3 S.C.C. 1 and A. K. Subraman vs Union of India, [1975] 2 S.C.R. 979 referred to. Ganga Ram & Ors. vs Union of India, ; distinguished. (c) It is difficult to hold that the officiating Deputy Engineers do not belong to Class II of the Bombay and Gujarat Service of Engineers. [794 A] (d) The contention that in view of cll. (i) and (ii) of r. 8 of the 1960 rules officiating Deputy Engineers do not belong to Class Ii cadre of the Bombay and Gujarat Service of Engineers must be rejected since the point is concluded by the decision of this Court in P.Y. Joshi vs State of Maharashtra It was held in that case that the list referred to in cl. (ii) of r. 8 is the same list which is referred to in the latter part of cl. (i) of that rule which speaks of "future recruitment". Consequent ly a promoted officiating Deputy Engineer, who belonged to Class II cadre, was held entitled to be considered for promotion under r. 7 to the post of officiating Executive Engineer if he had put in 7 years ' qualifying service. The eligibility for promotion did not require that the offici ating Deputy Engineer must have put in 7 years ' service after the date of confirmation. [795 B E] (e) It must necessarily follow that "promotion" with the latter part of r. 8(i) relating to future recruitment speaks of means promotion as an officiating Deputy Engineer from the Select List prepared under r. 8(ii). A person thus promoted from the Select List as an officiating Deputy Engineer is as full and complete a member of the Class II cadre as a person directly appointed as a Deputy Engineer. In this view of the matter, the prescription contained in the closing sentence of r. 8(i) that "the number of such promotions shall be about 1/3rd the number of direct re cruits appointed in that year" would apply to initial ap pointments and cannot govern the confirmation of those who have already been appointed to Class II cadre. In other words, direct recruits and promotees have to be appointed in the proportion of 75: 25 to Class II cadre, the former as, Deputy Engineers and the latter as officiating Deputy Engi neers, but once that is done, the quota rule would cease to apply with the result that confirmations in the post of Deputy Engineers are not required to be made in the propor tion in which the initial appointments had to be made. Thus r. 8(i) only requires that for every three direct recruits appointed as Deputy. Engineers only one promotee can he appointed as officiating Deputy Engineer. The rule cannot be construed to mean that for every three confirmations of Deputy Engineers not more than one promotee can be confirmed as Deputy Engineer. [795 F H, 796 A] A. K. Subraman vs Union of India [1975] 2 S.C.R. 979 fol lowed. (f) Though drawn from two different sources, the direct recruits and promotees constitute in the instant case a single integrated cadre. They discharge identical func tions, bear similar responsibilities and acquire an equal amount of experience in their respective assignments. Yet clause (iii) of r. 8 provides that probationers recruited during any year shall in a bunch be treated as senior to promotees confirmed in that year. This formula gives to the direct recruit even the benefit of his one year 's period of training and another year 's period of probation for the purposes of seniority and denies to promotees the benefit of their long and valuable experience. If there was some intelligible ground for this differentiation bearing nexus with efficiency in public services, it might perhaps have been possible to sustain such a 779 classification. Instead of adopting an intelligible differentia, r. 8 (iii) leaves seniority to be determined on the sole touchstone of confirmation. Confirmation is one of the inglorious uncertainties of government service de pending neither.on efficiency of the incumbent nor on the availability of substantive vacancies. In the instant case officiating Deputy Engineers were not confirmed even though substantive vacancies were available in which they could have been confirmed. [796 C G] (g) There is no substance in the plea that direct recruits must be given weightage on the ground that the engineering services require the infusion of new blood since it is a highly specialised service. Were it so, the Government would not have itself reduced the proportional representa tion gradually so as to tilt the scales in favour of promotees. Besides, the plea that engineering service is a specialised service is made not by the Government but by recruits who are interested in so contending. Nor is the apprehension justified that the higher echelons of engi neering service will in course of time be manned predomi nantly by promotees. Those recruited directly as Assistant Engineers in Class I can, under the rules, officiate as Executive Engineers after four years ' service and are eligible for confirmation as Executive Engineers after a total service of 9 years. Promotees can hardly ever match with that class in terms of seniority. [797 A C] B.S. Gupta vs Union of India ; and V.B. Badami vs State of Mysore [1976] 1 S.C.R. 815 distin guished. In the instant case rule 8(ii) adopts seniority cure merit test for preparing the state wise Select List of seniority and yet cl. (iii) rejects the test of merit altogether. The vice of that clause is that it leaves the valuable right of seniority to depend upon the mere accident of confirma tion. That under articles 14 and 16, is impermissible and, therefore, r. 8(iii) must be struck down as unconstitu tional. [797 G H] 4. The High Court was right in rejecting the contention of the promotees that the 1963 rules superseded the 1960 rules by implication and, that, therefore, the State Government had no power or authority to apply the criterion of seniori ty fixed under the 1960 rules, after their repeal by 1963 rules. The quota system was the very essence of 1960 rules and if it was desired to abrogate that system it is un likely that the 1963 rules will not even refer to those of 1960. The rules of 1941 having been expressly superseded by 1963 rules, it is difficult to accept that along with the 1941 rules the resolution of 1963 would not have re ferred to the 1960 rules also. Secondly, the resolution of 1970 of the Government of Maharashtra expressly superseded the 1960 rules which shows that the latter were in force until 1970 and were not superseded by the 1963 rules. The resolution of 1970 refers to all previous resolutions except the resolution of 1963 which shows that the latter was not applicable to engineering services. [798 C E] 5. Rules 33 of the 1970 rules in so far as it makes seniority dependent upon the fortuitous circumstance of confirmation, is open to the same objection as r. 8(iii) of the 1960 rules and must be struck down for identical rea sons. [800 A B] 6. The circulars dated January 12, 1961, March 15, 1963 and October 18, 1968 which the promotees want to be enforced were issued by the Finance Department and being in the nature of inter departmental communications they cannot confer any right on the promotees. [800 A B] 7. The High Courts were right on the view that the rules under consideration do not in any manner violate the provisions of the Bombay Reorganisation Act. 11 of 1966. [800 B] 8. The argument in the Gujarat Writ Petitions that though originally the 1960 rules were in the nature of executive instructions they have acquired a statutory force and character by reason of their amendment by the rules of 780 1965 was rightly rejected by the High Court, because all that was done by the 1965 rules was to introduce a new rule, r. 10, in the 1960 rules. The rules of 1960 were neither reiterated nor reenacted by the rules of 1965; and the new rule introduced into the rules of 1960 is not of such a character as to compel the inference that the rule making authority had applied its mind to the rules of 1960 with a view to adopting them. [798 G H, 799 A] Bachan Singh vs Union of India, ; inap plicable.

Civil Appeal No. 2377 of 1970. On appeal by certificate from the Judgment and Order dated 9/10.7.69 of the Gujarat High Court in Special Civil Application No. 624 of 1964. D.K. Sen, V.C. Mahajan and R.N. Poddar for the appellants. K.K. Venugopal, D.N Misra, T M Ansari and P.K. Rana for the respondent. The Judgment of the Court was delivered by VENKATARAMIAH, J. This appeal by certificate under Article 133(1) (a) of the Constitution is filed against the judgment and order dated July 9/10,1969 in Special Civil Application No. 624 of 1964 on the file of the High Court of Gujarat filed under Article 226 of the Constitution by M/s. The Atul Products Ltd., the respondent in this appeal. The respondent is the owner of a factory at Atul in the State of Gujarat in which it has been carrying on the business of manufacturing dyes, chemicals and pharmaceuticals from a number of years. By the Finance Act of 1961`synthetic organic dyestuffs (including pigment dyestuffs) and synthetic organic derivatives used in any dyeing process ' were added as Item 14D in the First Schedule to the Central Excise and Salt Act, 1944 (hereinafter referred to as `the Act ' with effect from March 1, 1961 and consequently the respondent became liable to pay excise duty imposed by the Act on two of its products known as cibagenes and cibanogenes which were being 837 manufactured by it by virtue of section 3 of the Act which provided that excise duty prescribed by the Act was leviable on all excisable goods specified in the First Schedule to the Act. Item 14D in the First Schedule during the relevant period read thus: "14D, Synthetic organic dyestuffs (including pigment dye stuffs) and synthetic organic derivatives used in any dyeing Thirty per cent process. ad valorem. But on November 23, 1961, the Central Government issued a notification under Rule 8(1) of the Central Excise Rules, 1944 (hereinafter referred to as 'the Rules ') exempting the dyes specified in the Schedule annexed thereto from the whole of the excise duty leviable thereon if and only if such dyes had been manufactured from any other dye on which excise duty or countervailing customs duty had already been paid. The notification read thus: D "Government of India Ministry of Finance (Department of Revenue) New Delhi, dated the 23rd November 1961 the 2nd Agrahayana, 1813 S.E. NOTIFICATION Central Excise GSR. In exercise of the powers conferred by sub rule (1) of Rule 8 of the Central Excise Rules, 1944, as in force in India, and as applied to the State of Pondicherry, the Central Government hereby exempts the dyes specified in the schedule annexed hereto, falling under Item No. 14D of the First Schedule to the Central Excises and Salt Act, 1644 (1 of 1944) from the whole of the excise duty leviable thereon if and only if, such dyes are manufactured from any other dye on which excise duty or countervailing customs duty has already been paid. 838 Schedule 1. Solubilised Vats, 2. Rapid fast colours, 3. Rapidogenes, 4. Fast Colour Salts. (180/61) sd/ (B.N. Banerji)" It may be stated here that cibagenes and cibanogenes which were being manufactured by the respondent belong to the class of dyes referred to in the Schedule annexed to the above said notification. After the above notification was issued, the respondent wrote a letter dated December 22, 1961 to the Superintendent of Excise, Bulsar Division, Bulsar which read as follows: "Dear Sir, You are aware that under the Notification No. 180/61 of the 23rd November, 1961 issued by the Government of India, Min. Of Finance (Dept. of Revenue), Rapidogenes/Rapid fasts colour bases are exempted from the excise duty provided dyes are manufactured from other dyes on which excise duty or countervailing customs duty has already been paid. During the course of discussions we had on the 20th December, 1961 with the Collector of Central Excise and yourself, we pointed that we purchase Fast Colour Bases, required in the production of Rapidogenes/Rapid fasts either from the manufacturer in Bombay or from the open market. The material which the local manufacturer has offered us was produced before, the imposition of excise duty on dyes. He is, therefore, willing to sell us the material without the recovery of excise duty. We now propose to pay the excise duty on the fast colour bases which we will purchase from the local manufacturer so that we do not have to pay 839 excise duty on the final products produced viz. Rapidogenes/ Rapid fasts. Similarly we propose to purchase some quantity of imported fast colour bases from the open market. We will present the materials thus purchased to you for the recovery of excise duty @15%. We have now to request you to advise your Inspector at ATUL to accept the excise duty on the fast colour Bases, which we will purchase either from the local manufacturer or from the open market. Thanking you in meanwhile, we remain. Yours faithfully, for the ATUL PRODUCTS LTD. (section K Soman)" The Superintendent of Central Excise, Bulsar Division, Bulsar sent a reply dated January 4/6, 1962 to the above letter stating that there was no objection to the payment of excise duty on fast colour bases purchased by the respondent and that if evidence of payment of excise duty on fast colour bases was produced the dyes manufactured by using those fast colour bases would not be liable to duty under the notification referred to above. He also instructed the Deputy Superintendent of Central Excise to receive duty on such fast colour bases which went into the production of cibagenes or cibanogenes (processed dyes) by the respondent. The respondent accordingly paid the duty and was exempted from payment of duty on cibagenes and cibanogenes manufactured by it. The departmental audit party later on noticed that the concession shown to the respondent was not in order since it was only when duty had been paid on the basic dyes at the time of their manufacture when they were chargeable to duty and they had been purchased by the respondent would get exemption from the duty payable on the products manufactured by it by employing such basic dyes. The audit party was of the view that the respondent which had purchased the basic dyes at the time when duty was leviable on them could not claim exemption from payment of excise duty on the final products manufactured by it by using such basic dyes, by voluntarily paying duty on the basic dyes after March 1, 1961 in accordance with law in force then. The audit party was further of the view that there was short levy of excise duty on account of the above mistake since 840 the respondent had paid excise duty on the basic dyes at 30% ad valorem whereas it was liable to pay duty at 30 % ad valorem on the products manufactured by it which were costlier than the basic dyes. The Assistant Collector of Central Excise at Surat there fore issued five notices under Rule 10 A of the Rules to the respondent all on May 20, 1964 calling upon it to show cause as to way the deficit amount of excise duty should not be recovered in respect of the excisable goods manufactured by it at different periods before that date. We reproduce below one of such notices, the contents of which were more or less the same except with regard to the amount claimed and the number of the relevant demand notice: "INTEGRATED DIVISIONAL OFFICE: CUSTOMS & CENTRAL EXCISE, SURAT No. VI (RR) 21 13/62/II/(iv) Surat, the 20th May 1964 NOTICE Whereas it has been reported that M/s Atul Products Limited, Atul have manufactured Synthetic Organic Dyes namely Cibagenes and Cibanogenes from basic dyes Lying in stock as on 28 2 61 / 1 3 61 with them purchased from the market and having voluntarily paid duty on all such basic dyes in stock/purchased from the market as referred to above manufactured and cleared from 23 11 61 onwards the processed dyes (final product) without payment of duty at the time of clearance from their factory, 2. The Deputy Superintendent, Central Excise, Atul has raised demand No 10175 dated 6 1 64 for the amount of Rs. 2,930,22 for the recovery of duty as a result of the assessment of the final processed dyes; because the processed dyes were not eligible for exemption from duty only on the ground that the duty was voluntarily paid on the basic dyes which were in stock/purchased from the market as on 28 2 61 when such payment of duty on the stock of basic dyes as on 28 2 61 was not warranted. M/s. Atul Products Ltd. Atul have represented this dispute vide their letter No. SL/437/9581 dated 25 3 64 against Demand No. 10175 dated 6 1 64. 841 4.M /s. Atul Products Ltd. Atul should show cause to the undersigned as to way the demand referred to above issued by the Deputy Superintendent,Central Excise,Atul should not be confirmed. Atul Products Ltd. Atul are further directed to produce at the time of showing cause all the evidence upon which they intend to rely in support of their defence. 6 M/s. Atul Products Ltd. Atul should also indicate in the written explanation whether they wish to be heard in person before the assessment dispute is finalised. If no cause is shown against the action proposed to be taken within ten days of the receipt of this notice or they do not appear before the undersigned when the case is posted for hearing the case will be decided ex parte. sd/ H. H. Dave 20 5 64 Assistant Collector. " The particulars of the demand notices and the amounts claimed in the said five notices were as follows: Demand Notice No. Date Amount Period of Rs. clearance 1. 10163 24.10.63 18,349,21 1.1.62 to 31 5 63 2. 10166 11.11.63 8,142,06 3.8.63 to 13.11.63 3. 10174 6.1.64 1,80,593.47 30 12 61 to 30 5 62 4. 10175 6.1.64 2,930.22 Supplementary to 10163 and 10166 5. 10179 25.2.64 8,349.00 24.12.64 2,18,363.96 The respondent sent a common reply to the above notices on June 19, 1964. The respondent contended that it had cleared the 842 products manufactured by it namely cibagenes and cibanogenes in accordance with the Rules. It pleaded that there was no justification to conclude that it had paid excise duty on fast colour bases used by it in manufacturing the said goods voluntarily as the Superintendent, Central Excise, Bulsar had confirmed that according to Government of India 's notification dated November 23, 1961 it was required to pay excise duty on the fast colour bases before they were used in the production of the said processed dyes and also had written that the Dy. Superintendent of Central Excise, Atul was being instructed to recover duty on the said fast colour bases. The respondent also pleaded that Rule 10 A of the Rules was not applicable to the case and hence no demand could be made. After considering the representations made by the respondent to the above notices, the Assistant Collector overruled the objections of the respondent by his orders dated July 20,1964 and directed it to pay the amounts which had been demanded in the notices by issuing appropriate notices f demand. Aggrieved by the said orders passed by the Assistant Collector of Central Excise and the notices of demand the respondent filed a writ petition under Article 226 of the Constitution before the High Court of Gujarat questioning their correctness and praying for an order directing the excise authorities not to recover the amounts claimed in the notices from the respondent. The High Court held that the respondent was entitled to the exemption under the notification in respect of the goods manufactured by it as excise duty had been paid on the dyes used in the manufacture of the said goods. The High Court, therefore, allowed the writ petition quashing the orders of the Assistant Collector and the notices of demand impugned in the writ petition and directing the y excise authorities not to recover the sums mentioned therein by its judgment dated July 9/10, 1969. This appeal is filed by the Union of India against the Judgment of the High Court. The two principal questions which arise for consideration before us in this appeal are: (i) whether the respondent was entitled to the benefit of the exemption notification dated November 23, 1961 when the dyes said to have been used by the respondent in the manufacture of other dyes were not liable for payment of excise duty when they were manufactured, that is, before the introduction of Item 14D into the First Schedule to the Act even though duty may have been paid on them after the introduction of item 14D and (ii) whether the demands made in this case fall within the scope of Rule 10 A of the Rules or under Rule 10 thereof. 843 It is not disputed that the dyes in respect of which duty had A been paid in this case had been manufactured at a time when no duty was leviable on them. This case actually began with the letter written by the respondent on December 22, 1961 within one month after the exemption notification dated November 23, 1961 was issued. In the said letter the respondent no doubt stated 'the material which the local manufacturer has offered us was produced before the imposition of excise duty on dyes '. But it was followed by the sentence 'We now propose to pay the excise duty on the Fast Colour bases . . '. In that letter there was a request made to the superintendent of Central Excise to accept excise duty on the fast colour bases which the respondent would purchase either from the local manufacturer or from the open market. The letter did not contain any particulars about the quantity of such dyes which the respondent wished to purchase or its value . The Superintendent of Central excise in his reply stated that there was no objection to the to the payment of excise duty on fast colour bases purchased by the respondent and that if evidence of payment of exercise duty on fast colour bases was produced, the dyes manufactured by using those fast colour bases would not be liable to duty under notification. The above reply was intended to convey in effect what the notification stated. It was perhaps assumed that payment of excise duty would arise only when it was payable Under law. The language of the notification left no room for doubt at all. It stated that if and only if such dyes were manufactured from any other dye on which excise duty or countervailing customs duty had already been paid, they would be exempted from duty Payment of excise duty on dyes was possible only if they had been manufactured after the introduction of Item 14D into the First Schedule to the Act. Admittedly in this case the dyes which were used by the respondent had been manufactured prior to that date. In reaching its decision the High Court, however, relied on the decision of this Court in Innamuri Gopalan & Ors. v State of Andhra Pradesh & Anr.(1) In that case the Court had to construe a notification issued by the Government of Andhra Pradesh granting exemption to textile goods from the levy of sales tax under the Andhra Pradesh General Sales Tax Act, 1957 (A P. 6 of 1957). But it, however, contained a proviso that in the case of any class of such goods in respect of which additional duties are leviable by the Central Government under clause 3 of the Additional Duties (1) 844 of Excise (Levy and Distribution) Bill, 1957 read with Section 4 of the (Central Act XVI of 1931) the exemption would be subject to the dealer proving to the satisfaction of the assessing authority that additional duties of excise had been so levied and collected on such goods by the Central Government. In the above said case certain dealers who had sold textile goods which were not subject to additional duties of excise claimed that they were entitled to the exemption even though they had not paid such additional excise duty. The State Government pleaded that the dealers would be entitled to claim exemption if and only if such additional excise duty had been levied and collected and since the goods in question were not liable to such additional excise duty, they were not entitled to claim the exemption. This Court rejected the contention of the State Government and held that on a plain reading of the notification relied on in that case all varieties of textile goods had been generally exempted from payment of sales tax but where any additional excise duty had been levied in respect of any kind of textile goods then the dealer had to show proof of levy and payment of such duty. Accordingly the case of the dealers was upheld. In the case before us, the notification relied on by the respondent is couched in a different language. It specifically states that if and only if the dyes are manufactured from any other on which excise duty or countervailing customs duty has already been paid, the exemption can be availed of by the manufacturer of such dyes. The above decision of this Court is, therefore, clearly distinguishable from the present case. With great respect to the High Court it should be stated that the distinction pointed out above was not noticed by it. The decision in Hansraj Gordhandas vs H. H. Dave, Assistant Collector of Central Excise & Customs, Surat & two Ors (1) does not also have any bearing on this case. There the Court was concerned with the meaning of the notification in question which had granted exemption from payment of excise duty on cotton fabrics manufactured on powerlooms owned by cooperative societies registered prior to March 31 1961. The appellant had produced with his own hired labour cotton fabrics on the powerlooms owned by a cooperative society under a contract. Still the Court found that the appellant was entitled to the benefit of exemption since he had manufactured the goods on the powerlooms owned by a cooperative (1) 845 society as per the notification. The crucial question in all such A cases is whether the case falls within the scope of the law granting exemption or not and there can be no dispute about that principle. The difficulty arises only when the said principle is to be applied to the facts of a given case. As mentioned earlier, in this case of the respondent did not fall under the notification granting exemption since the basic dyes used by it in producing other processed dyes were not subject to levy of excise duty when they were manufactured and cleared. We do not agree that in this case the principle of promissory estoppel can be pleaded as a bar against the contention of the Department. The respondent had not done anything prejudicial to its interest relying upon any representation made on behalf of the Department. It is not the case of the respondent that it would not have manufactured the dyes but for the advice given by the Department. On the other hand it is obvious that the respondent had before it the exemption notification which alone could be the basis for its actions. The Department was not also expected to tender legal advice to the respondent on a matter of this nature. After giving our earnest consideration to the case before us we are of the view that under the notification exemption could be claimed only where the dyes used in the manufacture of other dyes were liable to, payment of excise duty when they were manufactured and such duty had been paid. A voluntary payment of excise duty on dyes which were not liable for such payment would not earn any exemption under the notification. The finding re p73 corded by the High Court on the above question is, therefore, liable to be set aside. The next question relates to the appropriate provision of law under which action could have been taken in this case by the Central Excise authorities. This question was not decided by the High Court in view of its finding on the liability of the respondent to pay excise duty on the products manufactured by it. Since we have not agreed with the decision of the High Court on this point, it has become necessary for us to decide this question in this appeal. While the Department asserts that it was open to it to proceed under Rule 10 A of the Rules, the respondent contends that even if there was any short levy, the proper Rule applicable to its case was Role 10 and not Rule 10 A. Rule 10 and Rule 10 A of the Rules during the relevant period ran as follows: 846 10 Recovery of duties or charges short levied, or erroneously refunded When duties or charges have been short levied through inadvertence, error, collusion or misconstruction on the part of an officer, or through mis statement as to the quantity, description or value of such goods on the part of the owner, or when any such duty or Charge, after having been levied, has been owing to any such cause, erroneously refunded, the person chargeable with the duty or charge, so short levied, or to whom such refund has been erroneously made, shall pay the deficiency or pay the amount paid to him in excess, as the case may be, on written demand by the proper officer, being made within three months from the date on which the duty or charge was paid or adjusted in the owners account current, if any or from the date of making the refund. 10 A. Residuary powers for recovery of sums due to Government Where these Rules do not make any specific provision for the collection of any duty, or of any deficiency in duty if the duty has for any reason been short levied, or of any other sum of any kind payable to the Central Government under the Act or these Rules, such duty, deficiency in duty or sum shall, on a written demand made by the proper officer, be paid to such person and at such time and place, as the proper officer may specify. " The points of difference between the above two Rules were that (i) whereas Rule 10 applied to cases of short levy through inadvertence, error, collusion or mis construction on the part of an officer, or through mis statement as to the quantity, description or value of the excisable goods on the part of the owner, Rule 10 A which was a residuary clause applied to those cases which were not covered by Rule 10 and that (ii) whereas under Rule 10, the deficit amount could not be collected after the expiry of three months from the date on which the duty or charge was paid or adjusted in the owners account current or from the date of making the refund, Rule 10 A did not contain any such period of limitation. The scope of these two Rules has been considered by this Court in two decisions i.e. N. B. Sanjana. Assistant Collector 847 Of Central Excise, Bombay & Ors. vs Elphinstone Spinning & Weaving Mills Co. Ltd.(1) and Assistant Collector of Central Excise, CALCUTTA Division vs National Tobacco Co. Of India Ltd.(2) In addition to the above two points of distinction between Rule 10 and 10 A of the Rules, this Court further held in Sanjana 's case (supra) following the decision in Gursahai Saigal vs Commissioner of Income tax, Punjab(3) that in calculating the period of limitation, the expression 'paid ' in Rule 10 should not be literally construed as 'actually paid ' but as 'ought to have been paid ' in order to prevent a person, who had not paid any excise duty at all which he should have paid from escaping, from the net of Rule 10 of the Rules. In National Tobacco Co ' section case (supra) this Court observed at pages 836 837 thus: Rules 10 and 10A, placed side by side, do raise difficulties of interpretation. Rule 10 seems to be widely worded as to cover any" inadvertence, error, collusion or mis construction on the part of an Officer", as well as any" mis statement as to the quantity, description or value of such goods on the part of the owner" as causes of short levy. Rule 10 A would appear to cover any "deficiency in duty if the duty has for any reason been short levied" except that it would be outside the purview of Rule 10 A if its collection is expressly provided for by any Rule. Both the rules, as they stood at the relevant time dealt with collection and not with assessment. They have to be harmonised. In N. B. Sanjana 's case (supra) this Court harmonised them by indicating that Rule 10 A which was residuary in character, would be inapplicable if a case fell within a specified category of case mentioned in Rule 10. It was pointed out in Sanjana s case (supra) that the reason for the addition of the new Rule 10 A was a decision of the Nagpur High Court in Chhotabhai Jethabhai Patel vs Union of India (A. I R so that a fresh demand may be made on a basis altered by law. The Excise authorities had then made a fresh demand, under (1) ; (2) [1973] I S.C.R. 822. (3) ; 848 the provisions of Rule 10 A, after the addition of that Rule, the validity of which challenged but upheld by Full Bench of the High Court of Nagpur. This Court in Chhotabhai Jethabhai Patel & Co. vs Union of India [1962] Supp. 2 section C R. 1. also rejected the assessee 's claim that Rule 10 A was inapplicable after pointing out that the new rule had been specifically designed "for the enforcement of the demand like the one arising in the circumstances of the case. " We think that Rule 10 should be confined to cases where he demand is being made for a short levy caused wholly by one of the reasons given in that Rule so that an assessment has to be reopened." This Court further observed at page 840: "Although Rule 52 makes an assessment obligatory before goods are removed by a manufacturer, yet, neither that rule nor any other rule, as already indicated above, has specified the detailed procedure for an assessment. There is no express prohibition anywhere against an assessment at any other time in the circumstances of a case like the one before us whore no "assessment. " as it is understood in law; took place at all. On the other hand, Rule 10A indicates that there are residuary powers of making a demand in special circumstances not foreseen by the framers of the Act or the rules. If the assessee disputes the correctness of the demand an assessment becomes necessary to protect the interests of the assessee. A case like the one before us falls more properly within the residuary class of unforeseen cases. We think that, from the provisions of section 4 of the Act read with Rule 10A, an implied power to carry out or complete an assessment, not specifically provided for by the rules, can be inferred. " In the instant case there has been no assessment of the manufactured goods at all as contemplated by Rule 52 of the Rules and the delivery of the goods has taken place contrary to Rule 52 A of the Rules. Rule 52 and Rule 52 A as they stood at the relevant period are set out below: "52. Clearance on payment duty 849 When the manufacturer desires to remove goods on A payment of duty, either from the place or a premises specified under rule 9 or from a store room or other place of storage approved by the Collector under rule 47, he shall make application in triplicate unless otherwise by rule or order required to the proper officer in the proper form and shall deliver it to the officer at last twelve hours or such other period as may be elsewhere prescribed or as the Collector may in any particular case require or allow before it is intended to remove the goods. The officer, shall, thereupon, assess the amount of duty due on the goods and on production of evidence that this sum has been paid into the Treasury or paid in the account of the Collector in the Reserve Bank of India or the State Bank of India, or has been despatched to the Treasury by money order shall allow the goods to be cleared. 52 A (1) Goods to be delivered on a Gate pass No excisable goods shall be delivered from a factory except under a gatepass in the proper form or in such other form as the Collector may in any particular case or class of cases prescribe signed by the owner of the factory and countersigned by the proper officer. ." The facts of this case indicate that the Department was virtually inveigled into a trap by the respondent suggesting that it was too eager to pay excise duty on certain goods which to the knowledge of the respondent were not liable for excise duty with the object of getting the benefit of the right to clear its products which were liable for higher excise duty because of their increased value without paying any duty at all. Rule 10 of the Rules deals with four kinds of mistakes on the part of an officer which bring a case within its sweep. Of them 'inadvertence ' 'error ' and ' mis construction ' are mistakes which can be committed unilaterally by the officer himself. `Collusion ' involves a pact between two or more persons to defraud the Government This case does not involve any such unilateral mistake on the part of an officer or collusion as explained above. Nor is this a case where through mis statement as to the quantity, description or value of such goods on the part of the owner short levy has occasioned. Further the error in this case has not taken place at the time of the assessment or at the time 850 when assessment ought to have been made under Rule 52. The discussion and correspondence between the assessee and the officers concerned had taken place on December 20, 1961 and January 416, 1962 was in the nature of an advice and not an assessment as contemplated under Rule 52. Hence this case is not covered by Rule 10 of the Rules at all. Rule 10 A of the Rules which is a residuary provision is, therefore, necessarily attracted. Hence the plea of limitation raised on the basis of Rule 10 of the Rules does not survive. In the result we set aside the judgment of the High Court and dismiss the writ petition filed by the respondent. The Department may now proceed to recover the sums demanded under the impugned notices issued to the respondent. For the foregoing reasons, the appeal is accordingly allowed with costs. N. V. K. Appeal allowed.

The respondent was the owner of a factory carrying on the business of manufacturing dyes, chemicals and pharmaceuticals from a number of years. By the Finance Act of 1961 'synthetic organic dyestuffs (including pigment dyestuffs) and synthetic organic derivatives used in any dyeing pro 833 cess ' were added as Item 14D in the First schedule to the Central Excise and Salt Act, 1944 with effect from March 1,1961, and consequently the respondent became liable to pay excise duty imposed by the Act on two of its products known as cibanogenes which were being manufactured. On November 23, 1961, the Central Government issued a notification under Rule 8(1) of the Central Excise Rules, 1944 exempting the dyes specified in the Schedule annexed thereto from the whole of the excise duty leviable thereon if and only if such dyes had been manufactured from any other dye on which excise duty or countervailing customs duty had already been paid. Cibagenes and cibanogenes which were being manufactured by the respondent belonged to the class of dyes referred to in the Schedule annexed to the said notification. In pursuance to the correspondence exchanged between the respondent and the Superintendent of Central Excise, the Deputy Superintendent was instructed to receive duty on such fast colour bases which went into the production of Cibagenes or cibanogenes (processed dyes) by the respondent, and the respondent accordingly paid the duty and was exempted from payment of duty on cibanogenes manufactured by it. The departmental audit party, later on noticed that the concession shown to the respondent was not in order, since it was only when duty had been paid on the basic dyes at the time of their manufacture when they were chargeable to duty and they had been purchased by the respondent there after, the respondent would get exemption from the duty payable on the products manufactured by it by employing such basic dyes. It was further of the view that there was short levy of excise duty on account of the above mistake since the respondent had paid excise duty on the basic dyes at 30 % ad valorem whereas it was liable to pay duty at 30% ad valorem on the products manufactured by it which were costlier than the basic dyes. In pursuance to the aforesaid objection, the Assistant Collector issued five notices under Rule 10 A of the Central Excise Rules to the respondent calling upon it to show cause as to why the deficit amount of excise duty should not be recovered The respondent, denied its liability and contended that it had cleared the products manufactured by it in accordance with the Rules and pleaded that there was no justification to conclude that it was required to pay excise duty on the fast colour bases used by it in manufacturing the said goods voluntarily and that Rule 10 A of the Rules was not applicable to the case and so demand could be made. The Assistant Collector overruled the 834 objections or the respondent and directed it to pay the amount which had been demanded in the notices by issuing appropriate notices of demand. Aggrieved by the demand notices, the respondent filed a writ petition questioning their correctness, and for an order directing the excise authorities not to recover the amounts. The High Court, allowed the writ petition and held that the respondent was entitled to the benefit of the exemption under the notification in respect of the goods manufactured by it, as excise duty had been paid on the dyes used in the manufacture of the said goods, and directed the excise authorities not to recover the sums mentioned in the Demand notices. In the appeals to this Court, on the questions (i) Whether the respondent was entitled to the benefit of the exemption notification dated November 23, 1961 when the dyes said to have been used by the respondent in the manufacture of other dyes were not liable for payment of excise duty when they were manufactured and (ii) Whether the demands fell within the scope of Rule 10 A or under Rule 10 of the Central Excise Rules 1944. Allowing the Appeal, ^ HELD: 1. (i) The exemption notification dated November 23. 1961 specifically states that if and only if the dyes are manufactured from any other dye on Which excise duty or counter vailing customs duty has already been paid, the exemption can be availed of by the manufacturer of such dyes. [ 843B; E] (ii) Payment of excise duty on dyes was possible only if they had been manufactured after the introduction of Item 14D into the First Schedule to the Act. [843F] In the instant case, the dyes which were used by the respondent had been manufactured prior to that date. [843F] Innamuri Gopalan & Ors. vs State of Andhra Pradesh, , distinguished. Hansraj Gordhandas vs H. H. Dave, Assistant Collector of Central Excise & Customs, Surat & two Ors. , inapplicable. (iii) A voluntary payment of excise duty on dyes which were not liable for such payment would not earn any exemption under the notification. [845F] IN the instant case, the principle of promissory estoppel cannot be pleaded. The respondent had not done anything prejudicial to its interest relying upon any representation made on behalf of the department. It is 835 not the case of the respondent, that it would not have manufactured the dyes but for the advice given by the Department. The respondent, had before it the exemption notification which alone could be the basis for its actions The Department was not expected to tender legal advice to the respondent on a matter of this nature. [845C D.] 2. (a) The points of difference between Rule 10 and 10 A of the Rules are that: (i) Rule 10 applies to cases of short levy through inadvertence, error, collusion or mis construction on the part of an officer, or through mis statement as to the quantity, description or value of the excisable goods on the part of the owner. Rule 10 A a residuary clause applies to those cases not covered by Rule 10, and (ii) Under Rule 10, the deficit amount could not be collected after the expiry of three months from the date on which the duty or charge was paid or adjusted in the owners account current or from the date of making the refund, Rule 10 A does not contain any such period of limitation. [846P H] (b) In calculating the period of limitation, the expression `paid ' in Rule 10 should not be literally construed as `actually paid ' but as `ought to have been paid ' in order to prevent a person who had not paid any excise duty at all which be should have paid from escaping, from the act of Rule 10 of the Rules. [847B C] N.B. Sanjana Assistant Collector of Central Excise, Bombay & Ors. vs Elphinstone Spinning & Weaving Mills Co. Ltd. ; , Assistant Collector of Central Excise, CALCUTTA Division vs National Tobacco Co. Of India Ltd., and Gursahai Saigal vs Commissioner of Income tax, Punjab; , referred to. In the instant case, there has been no assessment of the manufactured goods at all as contemplated by Rule 52 of the Rules and the delivery of the goods has taken place contrary to Rule 52A of the Rules. The Department was virtually inveigled into a trap by the respondent suggesting that it was too eager to pay excise duty on certain goods which to the knowledge of the respondent were hot liable for excise duty with the object of getting the benefit of the right to clear its products which were liable for higher excise duty because of their increased value without paying any duty at all. Rule 10 of the Rules deals with four kinds of mistakes on the part of an officer which bring a case within its sweep. Of them `inadvertence ', `error ' and `mis construction ' are mistakes which can be committed unilaterally by the officer himself. `Collusion ' involves pact between two or more persons to defraud the Government. This case does not involve any unilateral mistake on the part of an officer or collusion nor where through mis statement as to quantity, description or value of goods on the part of the owner short levy has occasioned. Further, the error in this case has not taken place at the time of the assessment or at the time when assessment ought to have been made under Rule 52. [848H; 849F H] 836 In the instant case, the discussion and correspondence between the assessee and the officers had taken place on December 20, 1961, December 22, 1961 and January 4/6, 1962 without reference to the actual goods. The goods were actually manufactured and cleared afterwards. The reply of the Superintendent of Central Excise dated January 4/6, 1962 was in the nature of advice and not an assessment as contemplated under Rule 52. This case is not therefore covered by Rule 10 at all. Rule 10 A which is a residuary provision is, therefore, necessarily attracted. The plea of limitation raised on the basis of Rule 10 of the Rules does not therefor survive. [850A B]

iminal Appeal No. 12 of 1972. From the Judgment and Order dated the 1st May, 1971 of the Madhya Pradesh High Court in Crl. Appeal No. 653 of 1970. 2 470SCI/75 520 R. K. Bhatt for the appellant. Ram Punjwani, H. section Parihar and 1. N. Shroff, for the respondent. The, Judgment of the Court was delivered by BEG, J. The sole appellant Ram Kumar Pandey, aged 45 years, was tried together with Suresh Kumar aged 20. years, and Mulkraj, aged 45 years, and Ramesh Kumar, aged 17 years, on two charges framed against him. These were : "Firstly; That you on or about the 23rd day of March 1970 at Raipur, did an act, to wit, hit Uttam Singh with a knife with such intention or. knowledge and under such circumstances, that if by that act, you had caused the death of Uttam Singh you would have been guilty of murder and that you caused grievous hurt to Uttam Singh by the said act and that you thereby committed an offence, punishable under Section 307 I.P.C. and; Secondly : That at the said time and place, you or some other persons did commit murder by intentionally or knowingly causing the death of Harbinger Singh and the said act was done in furtherance of the common intention of all and thereby committed an offence punishable under Section 302 read with Section 34 of the Indian Penal Code and within the cognizance of the Court of Sessions. " Suresh Kumar, Mulkraj and Ramesh Kumar, were accused of ,offences punishable under Sections 307/114 and Section 302 read with Section 34 and 114 Indian Penal Code. The Sessions ' Judge of Raipur, who had tried the case, found Suresh Kumar guilty of the murder by stabbing of Harbinder Singh, aged about 16 years, and sentenced him to life imprisonment. He convicted the appellant under Section 324 I.P.C. only for the injury inflicted on Uttam Singh and sentenced him to one year 's rigorous imprisonment, but acquitted him of other charges. He also acquitted the accused Ramesh and Mulkraj of all charges leveled against him. The State of Madhya Pradesh appealed against the acquittal of the appellant Ram Kumar Pandey of the charge under Section 302/34 I.P.C., and of Mulkraj and Ramesh Kumar of all charges. Suresh Kumar, the son of Mulkraj appealed against his conviction under Section 302 simplicitor, but this appeal was dismissed by the High Court which maintained his life imprisonment. The High Court also allowed the States appeal against the acquittal of Ram Kumar Pandey for injuries caused to Harbinder Singh, and, convicting him under Section 302/34 I.P.C., it sentenced him to life imprisonment. It convicted Mulkraj of an offence punishable only under Section 323 I.P.C. and sentenced him to a fine of Rs. 200/ , and, in default of payment of fine, to rigorous imprisonment for two months. It, upheld the acquittal of Ramesh Kumar Ahuja of all charges. This appeal has come up before us after a certificate granted by the High Court under Article 134(1) (c) of the Constitution, but the 521 certificate says that the appellant is entitled to it under the , strictly speaking, no certificate of the High Court is required for such an appeal where an acquittal has been converted into a conviction finder Section 302/34 I.P.C., and a sentence of life imprisonment imposed upon an accused person. Thus appeal, in such a case, lies as a matter of right to this Court under the Act of 1970. The only question before us now is whether the appellant, who had not appealed at all to the High Court against his conviction under Section 324 I.P.C., which stands, was rightly convicted by the High Court under Section 302/34, I.P.C., after setting aside his acquittal for the graver offence for injuries resulting in the death of Harbinder Singh. The well settled rule of practice in a case of an appeal against an acquittal is that the appellate Court should not interfere with the acquittal merely because it can take one of the two reasonably possible views which favours conviction. But, if the view of the Trial Court is not reasonably sustainable, on the evidence on record, the appellate Court will interfere with an acquittal. If the Appellate Court sets aside an acquittal and convicts, we have to be satisfied, after examining the prosecution and defence cases, and the crucial points emerging for decision from the facts of the case, that the view taken by the Trial Court, on evidence on record, is at least as acceptable as the one taken by the High Court, before we could interfere with the High Court 's judgment. The prosecution case, as set out in the First Information Report was ; Uttam Singh, PW 1, residing at Ganj Parao, on the first floor went home at about 3.30 p.m. on 23 3 1970 and was preparing to have a bath when Suresh Ahuja came down from an upper storey of the house and complained that Uttam Singh had been quarreling with members of his family. Uttam Singh requested him to take his seat and promised to look into the matter. This angered Suresh Ahuja. Thereafter, his, elder brother arrived and started quarreling with Uttam Singh 's daughter. At this stage, the landlord Mulkraj Ahuja, accompanied by the appellant Ram Kumar Pandey, who lives with his family in a side room on the ground floor, entered and immediately gave him a blow on his eye ,brow. Uttam Singh fell down. As Uttam Singh got up, the appellant struck him with a knife from behind. Mukhraj asked Pandey to run down stairs. Both the accused tried to run away. Uttam Singh tried to catch them but failed. Uttam Singh when asked his son Harbinder Singh to make a telephone call. At this point, Suresh, son of Mulkraj, stabbed Harbinder Singh who fell down in the lane. Uttam Singh saw Harbinder Singh lying near the house of Saudager Shah with an injury on his chest which was bleeding profusely. Harbinder Singh was carried to a hospital on a cart and Gurcharan Singh telephoned the police. Joginder Singh also came while the injuries were being inflicted. Uttam Singh 's daughters Amarit Kaur and Taranjit Kaur saw Uttam Singh wrapping a chadar an the wound of Harbinder Singh. Raj Jaggi had seen Harbinder 522 Singh falling down. The motive for this incident was that Mulkraj Ahuja, the landlord, wanted his house vacated by Uttam Singh. Harbinder Singh had died while being taken to hospital. The above mentioned First information Report was lodged at Police Station Ganj on 23 3 1970 at 9.15 p.m. The time of this incident is stated to be 5 p.m. The only person mentioned as an eye witness to the murder of Harbinder Singh is Joginder Singh. The two daughters Taranjit Kaur, PW 2, and Amarjit Kaur, PW 6, are mentioned in the F.I.R. only as persons who saw the wrapping of the chadar on the wound of Harbinder Singh, What is most significant is that it is nowhere mentioned in the F.I.R. that the appellant had stabbed Harbinder Singh at all. It seems inconceivable that by 9.15 p.m. it would not be known to Uttam Singh, the father of Harbinder Singh, that the appellant had inflicted one of the two stab wounds on the body of Harbinder Singh. No doubt, an F.I.R. is a previous statement which can, strictly speaking, be only used to corroborate or contradict the maker of it. But, in this case, it had been made by the father of the murdered boy to whom all the important facts of the occurrence, so far as they were, known up to 9.15 p.m. on 23 3 1970, were bound to have been communicated. If his daughters had seen the appellant inflicting a blow ' on Harbinder Singh, the father would certainly have mentioned it in the F.I.R. We think that or missions of such important facts, affecting the probabilities of the case, are relevant under Section 11 of the Evidence Act in judging the veracity of the prosecution case. Even Joginder Singh, PW 8, was not an eye witness of the, occurrence. He merely proves an alleged dying declaration. He stated that Harbinder Singh (described by his pet name as "Pappi") rushed out of his house by opening its door, and held his hand on his chest with blood flowing down from it. He deposed that, when he asked Pappi what had happened, Pappi had stated that Suresh and Pandey had injured him. It is clear from the F.I.R. that Joginder Singh had met Uttam Singh before the F.I.R. was made. Uttam Singh did not mention there that any dying declaration indicating that the appellant had also injured Harbinder Singh. was made by Harbinder Singh. The omission to mention any injury inflicted on Harbinder Singh by the appellant in the F.I.R. seems very significant in the circumstances of this case. Indeed, according to the version in the F.I.R., Joginder Singh, who was in the lane, is said to have arrived while Harbinder Singh was being injured. Therefore, if this was correct, the two injuries on Harbinder Singh must also have been inflicted in the lane outside. Satwant Kaur, PW 7, the wife of Uttam Singh, who claimed to have been an eye witness of the whole occurrence, was also not mentioned in the F.I.R. Suresh had, according to her, stabbed Harbinder Singh on the right side of the chest at the door of the kitchen, and thereafter, Pandey was said to have attacked him. 523 Again, we find that Taranjit Kaur, PW 2, and Amarjit Kaur, PW 6, daughters of Uttam Singh, have figured as eye witnesses of the whole occurrence including the stabbing of Harbinder Singh by the appellant. As already indicated, they are not mentioned in the F.I.R. as eye witnesses of the murder. This is also very significant in the present case. They have been mentioned only as witnesses of wrapping a chadar on the wound of Harbinder Singh who was then said to be lying in the lane after the occurrence. In order to explain how Harbinder Singh, said to have been attacked near the kitchen of Uttam Singh on the first floor, was found lying in the lane in a pool of blood, the persecution version is that, after the attack with knives by Suresh and the appellant, Harbinder Singh ran and rushed down the steps into the lane. It was pointed out that, in view of the nature of two injuries sustained, by Harbinder Singh and the medical evidence about them, it was not possible for Harbinder Singh either to have rushed down, or, in any case, to have made a dying declaration. The injuries on Harbinder Singh found by Dr. section C. Vishnoi were as follows : "(i) An incised wound on the left side of the chest placed anteriorly and measuring 1 1/2" x 1" x 1 1/2" deep. In the fifth intercostal space closed to the lateral border of the left side of the sternum. It had clean cut and blood stains margins. (ii) An incised wound on the right side of back in the 8th intercostal space 2" below the inferior angle of scapula. It had measured 1" x 1" x 1". It had clean cut and bloodstains margins. There was found difficulty in probing through this wound". The Doctor said about the first injury "This injury had entered the cavity of the right ventrical. It was a very serious injury. Right ventrical is an important part of the heart. Generally such an injury would result in an instantaneous death. Injury to the right ventrical and the paricardium had resulted in profused hemorrhage". He also said : Injury to the lobe of the right lung and the pleura as found in this case will result in shock. Ordinarily such a injury would immediately be fatal". The main points for decision which emerged from the evidence in the case were: 1. Where was Harbinder Singh stabbed? 2. Who could have been the witness of the stabbing? 3. Could the alleged eye witnesses be believed? 4. Could the dying declaration, said to have been made, to 524 Joginder Singh, be made the sole basis of the conviction of the appellant under section 302/34 IPC if the evidence ,of alleged eye witnesses was to be discarded? As regards the place where the stabbing ' took place, the High Court had itself felt highly dissatisfied with the manner in which the case was investigated. The site plans do not show any place where the blood was found. if blood marks had been shown and blood had been taken from spots where it had fallen, it would have afforded very valuable evidence on the question whether any stabbing of Harbinder Singh did take place at door of the kitchen and whether he ran after that. The site plans did not show even where the kitchen was. Therefore, we cannot know, by looking at these, whether the three ladies, who are alleged to be eye witnesses at the trial, could have seen the occurrence in the room in which Uttam Singh was injured as well as at the door of the kitchen. Taking all the relevant evidence on this point into account, it is far 'more likely that, as the Sessions ' Judge had guessed, the deceased had been stabbed by Suresh twice in the lane, probably once from the front and again while he fell or was trying to run away. He could not have moved far from the scene where he was stabbed. The High Court 's reasons to dislodge this inference are insufficient. As regards the second and third points, we are unable to give credence to the version of the three alleged eye witnesses as they were not mentioned as eye witnesses in the F.I.R. made in the circumstances indicated above. Lastly, the alleged dying declaration is also not mentioned in the F.I.R. On the other hand, the F.I.R., mentions Joginder Singh, who tried to prove the dying declaration as an eye witness. It may be pointed out that the charge against the appellant for offences under Section 302/34 I.P.C. is also defective inasmuch as it shows that either the appellant "or some other person" committed the murder. It does not show how or even mention that the appellant acted in concert with anyone else. However, no grievance has been made of any defect in the charge or any prejudice to the appellant from it. We therefore, ignore it. It may also be mentioned that the High Court had itself recorded the following finding: "All the eye witnesses have admitted that the four accused did not come together ;it the same time in the room where the incident happened. Suresh Kumar came in that room first, Ramesh Kumar then entered the room and some time after they were followed by Mulkraj and Ram Kumar Pandey. There is nothing to show that there was a preconcert between the four accused to commit any particular offence in the room. It appears that the whole incident took an ugly and unexpected turn and the most unfortunate result 525 was that Harbinder Singh was killed. We are of the view that the trial Court was right in reaching the conclusion that Ram Kumar Pandey and Suresh Kumar were individually responsible for their acts". It is difficult, after this finding to follow the reasoning of the High Court in coming to the conclusion that the appellant was guilty of an offence punishable under Section 302/34 I.P.C. Consequently, we allow this appeal and set aside the conviction and sentence of the appellant under Section 302/34 I.P.C. If the appellant has already served the sentence awarded under Section 324 I.P.C., as is stated on his behalf, he will be released forthwith. V.M.K. Appeal allowed.

The appellant was charged with two offences, (i) under section 307 I.P.C. with respect to one person, and (ii) under section 302/34, I.P.C. for having, along with other accused, caused the death of another. The trial court convicted him under s.324 I.P.C. on the first charge and acquitted him of the other charge. The appeal by the State against the acquittal on the second charge was allowed by the High Court and the appellant was convicted under s.302/34 I.P.C. and sentenced to life imprisonment. Allowing the appeal to this Court, HELD : (1) In the case of an appeal against an acquittal the appellate court should not interfere with the acquittal merely because it can take one of the two reasonably possible views which favours conviction. But if the view of the trial court is not reasonably sustainable, on the evidence on record. the appellate court will interfere with the acquittal. If the High Court sets aside an acquittal and convicts, this Court has to be satisfied, after examining the prosecution and defence cases, and the crucial points emerging for decision from the facts of the case, that the view taken by the trial court, on the evidence on record, is atleast as acceptable as the one taken by the High Court, before this Court could interfere with the decision of the High Court. [521D] (a) The First Information Report is a previous statement which, strictly speaking, can be only used to corroborate or contradict the maker of it. In the present case, the F.I.R. was made by the father of the deceased to whom all the important facts of the occurrence were bound to have been communicated. But, though the F.I.R. was given about 4 hours after the incident, it was not mentioned therein that the appellant had stabbed the deceased. The omission of such an important fact affecting the probabilities of the case is relevant under s.11 of the Evidence Act in judging the veracity of the prosecution case. [522D] (b) The evidence, shows that the deceased was stabbed by one or the other accused; that the place of occurrence had been shifted by the witnesses for the prosecution; that the version of the alleged eye witnesses is not credible; and that the alleged dying declaration is unreliable. [524B D] (2) The High Court, having found that the appellant and the other accused were individually responsible for their acts, erred in finding the appellants guilty on the basis of common intention, of an offense under section 302/34 I.P.C. [524FG] (3) An appeal to this Court by the accused, in a case where his acquittal had been converted into a conviction and the sentence of life imprisonment was imposed upon him, lies as a matter of right under the , and no certificate of the High Court is necessary. [521A]

Civil Appeal No. 310 of 1960. Appeal by special leave from the judgment and decree dated July 24, 1954, of the Board of Revenue (Uttar Pradesh) Allahabad, in Revision No. 20A of 1952/53. section P. Sinha and J. P. Goyal, for the appellants, N. N. Keswani, for respondent No. 2. 1962. December 7. The Judgment of the Court was delivered by AYYANGAR, J. This is an appeal by special leave against an order of the Board of Revenue, Uttar Pradesh which declined to order restitution under section 144, Civil Procedure Code in the following circumstances. The father of the 1st respondent was the Zamindar who filed a suit in the court of SubDivisional Officer, Tehsil Iglas at Aligarh for the eviction of Ram Prasad father of the appellants from certain plots of land situated in village Kanchiraoli in The district of Aligarh. The suit was decreed and in execution of that decree the Zamindar took possession. Thereafter Ram Prasad filed an appeal to the Additional Commissioner but this was dismissed in November, 1944. He then preferred a further appeal to the Board of Revenue but before it came on for hearing the dispute was settled and on March 28 1948 an application was filed for recording this compromise. The term of the compromise which is of relevance to the present appeal is that Ram Prasad was to be recognised as tenant of the land in dispute; in other words, the order for evicton 830 was nullified. The compromise was recorded and a decree in terms thereof was passed. Some attempt was made by the Zamindar to have the compromise set aside on grounds which it is not necessary to mention, but these attempts failed with the result, that it left the compromise decree passed by the Board in full force. It might however, be mentioned that the Zamindar immediately obtained possession in execution of the decree of the Sub Divisional officer, admitted one Data Ram and certain others as tenants and put them in possession of the property and this has led to all the subsequent complications in this case. On the strength of the compromise decree Ram Prasad applied for restitution of possession under section 144 of the Civil Procedure Code. This application was resisted particularly by Data Ram and others who had been inducted as tenants on the land, while the eviction proceedings were pending before the Additional Commissioner on appeal. The trial court allowed the application on the ground that Data Ram and others were bound by the rule of lis pendens and were not, therefore, entitled to retain the possession which they obtained during the proceedings for ejectment. From this order an ' appeal was taken by Data Ram and others to the additional commissioner who, for reasons which it is not necessary now to canvass, held that the newly inducted tenants could not be dispossessed and that Ram Prasad was entitled only to Symbolical possession as against the Zamindar. This order was taken to the Board in revision where, however, it was dismissed. It is to challenge the correctness of this order that this appeal has been filed. Learned Counsel for the respondent raised two preliminary objections to the hearing of this appeal The first objection was that this appeal was barred by res judicate. To understand this objection it is 831 necessary to state a few more facts. When the Board of Revenue upheld the order of the Additional Commissioner declining the prayer of the appellants for restitution they filed an application for review and when this was dismissed they brought the matter before the High Court by an application made to it under article 226 of the Constitution. The actual judgment rendered by the High Court is not on record but it was admitted before us by learned Counsel for the appellant that the High Court dismissed the petition after 'elaborately discussing the merits of the contentions raised and on that ground Data Ram and others who had been let into possession by the Zamindar obtained a statutory right to possession under the U. P. Zamindari & Land Reforms Act, 1950 and could not therefore be evicted by the application of the rule of lis pendens. No attempt was made by the appellant to prefer any appeal against this judgment by either applying to that court and obtaining a certificate of fitness or by moving this Court for the grant of special leave. The result is that there is now a decision of the High Court which has become final and binding on the parties. Learned Counsel for the respondent therefore contends that without the correctness of the decision of the High Court being challenged before us and the finality of that judgment impaired, the appellant is not entitled to bypass that decision and seek to practically obtain a reversal of it by attacking the correctness of the decision of the Board of Revenue. We consider this preliminary objection wellfounded. Learned Counsel for the respondent relied in supportof his submission on the decision of this Court in Daryao vs The State of U. P. (1). The question before the Court was whether, when the High Court dismissed a writ petition under article 226 after hearing a matter on the merits on the ground that no fundamental right was proved or contravened, (1) ; 832 a subsequent petition to the Supreme Court under article 32 of the Constitution on the same facts and for the same reliefs filed by the same party was permissible. This Court held that where such a petition was heard on the merits and dismissed by the High Court the decision pronounced was binding on the parties unless it was modified or reversed in appeal or by other appropriate proceedings. If thus the rule of res judicata were a bar even to a petition under article 32 which is a Constitutionally guaranteed right, it looks to us that it would be afortiori so as regards an appeal under article 136 where the right to relief is discretionary. Learned Counsel for the appellant invited our attention to the decision of this Court in Chandi Prasad Chokhani vs State of Bihar (1) as lying down a rule not quite so inflexible as the decision in Daryao 's case ' would suggest, that it depended upon the facts of each case and that in a proper case dependent upon the discretion of the Court, this Court was competent to waive this rule and here the appeal notwithstanding that it meant that the decision of the High Court was bypassed. No doubt, there are a few observations of section K. Das, J., who spoke for the Court which are capable of being understood in the manner suggested by learned Counsel but as ultimately the learned judges upheld the preliminary objection and dismissed the appeal, these observations are only by way of obiter and cannot outweigh the expressdecision on the point in Daryao 's case. We might, however, point out that in Indian Aluminium Co.Ltd. vs Commissioner of Income tax, West Bengal (2) in which also the judgment was delivered by section K. Das,J., the reasoning of the learned judge who upheld a similar preliminary objection is more in line with the decision in Daryao 's(3) case though the latter judgment which was delivered on the same day as in the Indian Aluminium Co. 's case (2) is not naturally referred to. The learned judge observed : (1) ; (3) [1962) I S.C.R, 574. 833 "The question which has arisen in this appeal by way of a preliminary objection is whether in the circumstances set out above (no appeal was preferred against the order of the High Court refusing to make a reference under section 66(2) of the Income Tax Act) special leave to appeal from the decision of the Tribunal dated May 29, 1956, was properly given under article 136 of the Constitution and whether the appellant is entitled to ask this Court to exercise its discretion under the said article when it did not move against the subsequent orders of the Board and the High Court under section 66 of the Act. . . . We hold that special leave to appeal from the decision of the Tribunal dated May 29, 1956, was not properly granted in this case and the appellant is not entitled to ask us to exercise our power under article 136 of the Constitution, when it did not move against the subsequent orders of the Board and the High Court." This preliminary objection therefore has to be upheld. The other preliminary objection raised was this. The application for special leave filed by the appellant was out of ' time and the delay in filing it was condoned by this Court without notice to the respondent. Learned Counsel sought to urge that there were no grounds for condoning the delay and that for this reason the leave granted should be revoked. In view, however, of our decision on the first objection raised we do not consider it necessary to deal with this. The result is that the appeal failes and is dismissed with costs.

The father of respondent No. 1, who was the Zamindar, filed a suit for the eviction of Ramprasad, the father of appell ants, from certain plots of land. The suit was decreed and the Zamindar took possession of the land. Ramprasad filed an appeal before the Additional Commissioner but the same was dismissed . He preferred a second appeal before the Board of Revenue during the pendency of which the matter was compromised whereunder he was recognised as tenant of the land in dispute and the order of eviction was; thus nullified. He applied for restitution of possession under section 144 of the Code of Civil Procedure. The application was resisted by Dataram and others who had been inducted as tenants on these plots of land during the pendency of the appeals. The trial court allowed the application but its order was reversed by the Additional Commissioner who held that the newly inducted tenants could not be dispossessed. Its order was affirmed by the Board of Revenue in revision. Thereafter fie filed a petition under article 226 of the Constitution in the High Court challenging the decision of the Board of Revenue, but that petition was dismissed on merits. No appeal was attempted to be filed against the order of the High Court either by applying for a certificate or moving this Court for special leave under article 136. The appellants have instead come to this Court in appeal by special leave against the order of the Board of Revenue. A preliminary objection was raised on behalf of of the respondent that the appeal was not maintainable as it was barred by res judicata. Held, that the appeal was barred by res judicata as the decision of the High Court was on merits and would bind the parties unless it was modified or reversed in appeal or by other appropriate proceedings. 829 Daryao vs State of U. P., [19621 1 section C. R. 574 and Indian Aluminium Co. Ltd. V. The Commissioner of Income tax, West Bengal, (1961) 43 , relied on. Chandi Prasad Chokhani vs State of Bihar, [1962] 2 section C. R. 276, explained.

Appeal No. 328 of 1961. Appeal by special leave from 'the judgment and order dated February 2, 1961, of the Punjab High Court (Circuit Bench), at Delhi 'in Civil Revision Application No. 135 D of 1957. Din Dayal Sharma and N, N. Keswami, for the appellant. K. Daphtary, Solioitor General of India, V. D. Mahajan and T.M. Sen, for the respondent. September 25. The Judgment of the Court was delivered by GAJENDRAGADKAR, J. The principal point which this appeal by special leave raises for our decision relates to the construction of sections 32 and 33 of the (10 of 1940) (hereafter called the Act). That question arises in this way. The respondent, Union of India, filed a petition in the Court of the First Class Sub Judge at Delhi against the appellant M/s J. Burman & Co., through its proprietor Jawahar Lal Burman under sections 33 and 28 of the Act. The respondent alleged that a concluded contract had been entered into between the parties on August 31, 1949 for supply of 170 1/2 Cwt. of cocoanut oil by the appellant to the respondent. The respondent had advertised in the Indian Trade Journal for the said supply and the appellant had submitted its tender No. SM I/1104524. 772 This tender was accepted by the respondent which concluded a contract between the parties. The respondent 's case 'was that the said contract was governed by general conditions of contract Form W. 'S.B. 133. , These conditions included an arbitration 'agreement, 'Disputes arose between the parties regarding the said contract, and so in pursuance of the arbitration agreement they were referred to the two arbitrators appointed by the parties. After ,the arbitration propeedings had gone. on for, a considerable time before the arbitrators the appellant objected to their jurisdiction to , deal. with the disputes on the ground: that there was No. concluded contract between the parties. This plea made it necessary for the respondent to move the Court for a decision of the question about the; existence and validity of the arbitration 'agreement. It, was on these allegations that the respondent in its petition claimed 'that it may, be held that there was a concluded contract between ': the parties containing a valid arbitration agreement. The petition having been made under section 28 along with section 33 the respondent prayed that suitable extension of time be granted to the Arbitrators for making the, award. The appellant pleaded in defence that no concluded contract had been made between the parties and that there was no jurisdiction: in the Court to grant extension under s 28. The, other allegations made by the respondent in its petition were also traversed. On these pleadings the learned trial judge framed, appropriate issues. He found that a concluded contract had been proved, between the parties as alleged by the respodent. that there was a valid arbitration agreement in the said contract and that the Court had jurisdiction, to. try the petition. Incidentally, it may be pointed out at this stage that no specific point had been raised in the pleadings of the appellant that, the Court had no jurisdiction to entertain the petition under section 33 or. section 32 of the Act,. In fact the trial judge has observed that it was not shown to him how the 773 application was incompetent. Consistently with the findings recorded by him the learned trial judge declared that there was a concluded contract between the parties under which the matter was duly referred to arbitration through an arbitration agreement clause in the contract. As a result of the declaration he held that there was a valid reference to arbitration between the parties. Consequently he granted a month 's time to the arbitrators to make their award. This decision was challenged by the appellant by its revision petition preferred in. the High Court of Punjab at Chandigarh. The High Court has confirmed the finding of the trial court that there was a concluded contract which contained an arbitration agreement. The question of 'jurisdiction under section 33 of the Act was argued before the High Court and its attention was drawn to the conflict of judicial decisions on. the point. The High Court, however, held that since the petition has been filed as a composite application under sections 28 and 33 it was open to the Court under a. 28 to enter upon the question of the existence or validity of the contract and so there was no substance in the point of 'jurisdiction raised by the appellant. In the result the appellant 's revision application was dismissed. It is against this decision that the appellant has come to this Court by special leave ; and on his behalf Mr. Din Dayal has raised the same two points for our decision. He contends that the High Court was in error in holding that the trial court bad jurisdiction to entertain the respondent 's petition, and he argues that even if the point of jurisdiction raised by him fails it should be held that there was no concluded contract between the parties and so. there was no scop or room for making any reference to arbitration. The first of these two contentions has been seriously pressed before us. Before dealing with, the question of jurisdiction it is necessary to recall the material facts which 774 have led to the present dispute. The appellant and the respondent nominated their arbitrators. The arbitrators heard the matter at length and the proceedings bad reached a stage when an award might have been pronounced. It was then that the appellant chose to obstruct the further progress of the proceedings by raising the plea that there was no concluded contract. Even then he refused to apply under section 33 and so a stalemate issued because the arbitrators ' were not entitled to proceed further with the arbitration proceedings in view of the point raised by the appellant. It is necessary to bear in mind this background of the dispute in considering the point of jurisdiction. The question of jurisdiction raised by the appellant has to be answered in the light of the construction which can be reasonably placed on the material provisions of sections 32 and 33 of the Act. It may be conceded at the outset that the question thus raised presents some difficulty. Sections 32 and 33 read thus: "32. Notwithstanding any law for the time being in force, no suit shall lie on any ground whatsoever for a decision upon the existence, effect or validity of an arbitration agreement or award, nor shall any arbitration agreement or award be set aside, amended, modified or in any way affected otherwise than as provided in this Act. Any party to an arbitration agreement or any person claiming under him desiring to challenge the existence or validity of an arbitration agreement or an award or to have the effect of either determined shall apply to the Court and the Court shall decide the question on affidavits: Provided that where the Court deems it just and expedient, ' it may set down the application for hearing on other evidence 775 also, and it may pass such orders for dis covery and particulars as it may do in a suit. " In appreciating the effect of these two provisions it would be relevant to remember that the object of the Legislature in enacting the two sections quite clearly was to prevent the abuse of the process of the Court. Before the present Act was passed experience showed that unscrupulous and dishonest parties to the arbitration agreements frequently chose to deny the existence of the said agreements even after the arbitration proceedings had concluded and ended in awards and that tended to make all arbitration proceedings futile. More often than not these pleas ultimately failed but it meant considerable delay and waste of time and substantial expense. That is why sections 32 and 33 have been enacted with the object of bringing the relevant disputes for decision before the specified Courts in the form of petitions. It is significant that under s.31(2) of the Act all questions regarding the validity, effect or existence of an award or an arbitration agreement between the parties to the agreement or persons claiming under them shall be decided by the Court in which the award under the agreement has been, or may be, filed, and by no other Court. Indeed, s.2(c) defines a Court as meaning a Civil Court having jurisdiction to decide the questions forming the subject matter of the reference if the same had been the subject matter of a suit, but does not, except for the purpose of arbitration proceedings under section 21, include a Small Cause Court. Therefore, stated broadly, it would be correct to assume that the main object of introducing the new provisions of sections 31, 32 and 33 was to entrust the decision of the relevant disputes to the specified Court and to require the parties to bring the ,said disputes for the decision of the said Court in the form of petitions. Remedy by a regular suit is intended to be excluded. 776 Section 32 creates a bar against the institution of suits, and it provides that if the existence effect or validity of an arbitration agreement or award is in dispute on any ground whatsoever no suit shall lie for the adjudication of the said dispute. It also provides that no suit shall lie to set aside, amend or modify or in any way affect an arbitration ' agreement or an award. It would be noticed that the clause "on any ground whatsoever" is very wide and it denotes, inter alia, that if the existence or validity of an arbitration agreement is questioned on any ground whatever it cannot be the subject matter of a suit; the said dispute shall be tried as provided in this Act. Thus there can be no doubt, that if a party affirms the existence of an arbitration agreement or its validity it is not open to the party to file a suit for the purpose of obtaining a declaration about the existence of the said agreement or its validity. Such a suit in terms is barred by section 32. This position is. not disputed. The bar to the suit thus created by section 32 inevitably raises the question as to what remedy it is open to a party to adopt in order to obtain an appropriate declaration about the existence or validity of an arbitration agreement; and it is on the decision of this question that the parties are at issue before us. Before answering this question we may conveniently consider the scope of section 33 and its effect. Section 33 consists of two parts. The first deals with a challenge to the existence or validity of an arbitration agreement or an award, and it provides that the persons there in specified can apply to the Court to have a decision on its challenge to the existence or validity of an arbitration agreement or an award. In other words, there is no doubt that it is only persons who challenge the existence of the arbitration agreement that can apply under the first part of section 33. This position is also not disputed. The second part of the section refers to applications made to have the effect of either the arbitration agreement or the award determined. The question 777 which we have to consider is whether a person affirming an arbitration agreement can apply under the latter part of section 33. Even assuming that the requirement that an application can be made under the first part of section 33 only by persons desiring to challenge the arbitration agreement does not apply to its latter part, it is difficult to hold that an application to have the effect of the arbitration agreement determined can legitimately cover the dispute as to the existence of the said arbitration agreement. It is clear that the first part of section 33 refers to the existence or validity in terms and sections 31 and 32 also refer separately to the existence effect or validity. Therefore, the effect of an arbitration agreement is treated as distinct from the existence of the agreement, and where it was intended to refer to the existence as well as the effect of such an agreement both the words "existence and effect" have been specifically used. Thus, under the latter part of section 33 an application can be made to have the effect or purport of the agreement determined but not its existence. That means that an application to have the effect of the agreement can be made provided the existence of the agreement is not in dispute. Besides, if a person affirming the existence of an agreement is held entitled to apply to the Court under the latter part of s.33 for getting a declaration about the said existing agreement then the first part of section 33 would be wholly superfluous. Therefore, it seems to us that a party affirming the existence of an arbitration agreement cannot apply under section 33 for obtaining a decision that the agreement in question exists. In fairness we ought to add that the learned Solicitor General, who appeared for the respondent, did not dispute this position. If the party affirming the existence of an arbitration agreement cannot apply under s.33 what is the remedy open to him? This question takes us back to section 32. If section 32 has created a bar against the institution of a suit for obtaining 778 a declaration about the existence of an arbitration agreement, unless it is held that the creation of the said absolute bar itself involves the right to make an application under the Act it would lead to the anomalous result that a party is given no remedy to enforce the right ; and it is an ordinary rule of construction that such an unreasonable and unconscionable result should as far as possible be avoided because the Legislature could not have intended such a result. In our opinion, having regard to the scheme of sections 31, 32 and 33 it would not be unreasonable to hold that in matters which fall within the bar created by s.32 if a suit cannot be filed it 119 necessarily intended that an application can be made and such an application can be made under the Court 's powers provided for by s.31 and impliedly recognised by section 32. On this construction section 33 cannot be treated as exhaustive of all cases where applications can be made. The Legislature has provided for the said cases under section 33 because it was thought that they represented the usual type of cases which arise under the arbitration agreements. 'A contrary view would lead either to a stalemate or would in substance compel the party affirming the existence of an agreement to forego the procedure prescribed by the said agreement and sue on the, contract itself. We are satisfied that a fair construction of sections 31, 32 and 33 does not lead to such an anomalous position. Mr, Din Dayal contends that there is really a lacuna in the Act inasmuch as having created a bar by section 32 the Legislature has failed to provide a remedy by way of an application. On reading sections 31, 32 and 33 together we do not think the Court is driven to the conclusion that there is a lacuna in the Act. In this connection it is material to remember that even in dealing with applications under the first part of section 33 the Court may accept the opponent 's plea and hold that the arbitration agreement exists if the challenge to the said existence set out in the petition is rejected. In other words, in many 779 cases applications made under the first part of a. 33 may end in the finding that the arbitration agreement exists. Similarly, in applications made under s.20 of the Act, if a dispute arose as to the existence of the arbitration agreement the Court may find in favour of the existence and make an order of reference as contemplated by a. 24. Thus, it is clear that in the applications expressly provided for by these two sections a party affirming the existence of the agreement would be entitled to prove the said existence, and if he succeeds he would obtain a decision to that effect. Therefore, in holding that section 32 impliedly recognises the inherent jurisdiction of the Court to entertain applications made by the parties affirming the existence of arbitration agreements we are bringing the provisions of s.32 in line with the provisions of sections 33 and 20. Indeed, section 33 is a corollary of section 32 and in a sense deals by way of illustration with the most usual type of cases arising in arbitration proceedings. Section 28 of the Act has no material bearing on the decision of this point. The power to enlarge time for making the award which is the subject matter of the provisions of section 28 cannot be hold to include a power to entertain petitions like the present. Indeed, the learned Solicitor General has not attempted to justify the conclusion of the High Court that s.28 confers such a power. Even if it is held that there is inherent jurisdiction in the Court to entertain an application in support of the existence of an arbitration agreement the question still remains whether an application can be made under such inherent jurisdiction for a declaration that the contract which includes the arbitration agreement as defined by section 2(a) includes cases where the arbitration agreement is made a part of the contract itself. The argument is that though an application may be made under the inherent jurisdiction of the Court to obtain a declaration about the existence or validity of an arbitration agreement, no such application can be 780 made to obtain a declaration about the existence or validity of the main contract itself. In dealing with this argument it would be necessary to have regard to the substance rather than the form of the matter. In the present case the respondent claims that there is a concluded contract between the parties and that the said contract contained a valid arbitration agreement. Looking *at the substance of the matter the prayer was first in regard to the existence and the validity of the main contract leading upto the second and principal prayer that there was a valid arbitration agreement. Quite clearly the decision of this question cannot depend merely on the words used in the petition. Where the challenge to the contract made by the appellant in defence to the claim of the respondent is a challenge common to both the contract and the arbitration agreement, the petition, like the One made by the respondent, must in substance be held to be a petition for a declaration as to the existence of a valid arbitration agreement; and a suit to obtain such a declaration is clearly barred by section 32. Therefore, in our opinion, the fact that an incidental declaration is claimed about the existence and validity of the main contract does not affect the essential character of the application. It is an application for obtaining a declaration about the existence and validity of an arbitration agreement. It is true that an arbitration agreement included in the contract itself is in one sense an integral part of the contract and in another sense it may be distinct from it. As observed by Lord Macmillan in Hayman vs Darwins, Ltd.(1), "the arbitration clause is quite distinct from the other clauses. The other clauses set out the obligations which the parties undertake towards each other hinc inde; but the arbitration clause does not impose on one of the parties an obligation in favour of the other. It embodies the agreement on both the parties that, if any dispute arises with regard to (1) section C. at p. 347. 781 the obligations which the one party has undertaken to the other, such dispute shall be settled by a tribunal of their own constitution. Moreover, there is this very material difference that whereas in any ordinary. contract the obligations of the parties to each other cannot in general be specifically enforced and breach of them results only in damages, the arbitration clause can be specifically enforced by the machinery of the Arbitration Acts". It is, therefore, theoretically possible that a contract may come to an end and the arbitration agreement may not. It is also theoretically possible that the arbitration agreement may be void and yet the contract may be valid; and in that sense there is a distinction between the arbitration agreement and the contract of which it forms a part; but, as we have already pointed out, in the present case, the challenge to the contract itself involves a challenge to the arbitration agreement; if there is a concluded contract the arbitration agreement is valid. If there is not a concluded contract the arbitration agreement is invalid. In such a case a prayer for a declaration of the existence of the contract and its validity inevitably leads to the consequential prayer about the existence and validity of the arbitration agreement. If that is so, a suit cannot lie for a declaration that the arbitration agreement is valid because the prayers that the respondent has made in the present case fall directly within the clause ",on any ground whatsoever". Indeed, we apprehend that in a very largo majority of cases where the arbitration agreement is a part of the main contract itself, challenge to the existence or validity of one would mean a challenge to the existence or validity of the other. We would accordingly hold, though for different reasons, that the High Court was right in coming to the conclusion that the petition made by the respondent was competent under section 32 of the Act and has been properly entertained by the trial Court. 782 This question has been the subject matter of some judicial decisions to which reference may now be made. In Messrs. M. Grulamali Abdulhussain & Co. vs Messrs. Vishwambharlal Ruiya(1) a petition had been filed for a declaration that the respondents had entered into the contract with the petitioners for purchase of 500 bars of silver on or about January 30, 1948 according to the rules and regulations of the Marwari Chamber of Commerce, Ltd., and that the respondents were bound to have all disputes in connection with the same contract decided by the arbitrators as provided by the said rules and regulations. The competence of this petition and the jurisdiction of the Court to enter tain it were disputed. Both the learned trial judge and the Court of Appeal rejected the respondents ' contention and held that there was an inherent jurisdiction in the Court to entertain petitions in respect of matters covered by the bar raised by 32. On the other hand, in Bajranglal Laduram vs Agarwal Brothers(2) as well as in State of Bombay vs Adamjee Hajee Dawood & Co., a contrary view has been accepted. In the latter case, a suit had been filed on the Original Side of the Calcutta High Court claiming a declaration that a certain contract was not made between the parties and was not binding on the plaintiff. A further claim was also made that it should be declared that the defendant was not entitled to make any claim in respect of the said contract and that the contract be adjudged void and delivered up as cancelled. The learned trial judge construed the plaint as one for declaration that the arbitration agreement contained in the contract was invalid and on that view he held that under sections 32 and 33 of the Act the suit was not maintainable. On appeal it was held that the suit was not one for challenging the validity of the arbitration agreement merely; it (1) 1. L. R. (2) A. I. R. (3) 1. L. R. 783 covered other reliefs and so bar of sections 32 and 33 could not be pleaded. We are inclined to think that the decision of the Bombay High Court is substantially correct. That takes us to the next question as to whether there was a concluded contract between the parties or not. We have already noticed that in response to the advertisement published by the respondent in the Indian Trade Journal the appellant submitted its tender. It is common ground that the tender thus submitted was subject to the conditions of contract governing the Department of Supply Contracts which were set out in the Government Publication Form W. section B. 133. Clauses 4(a) and (b) of these conditions are relevant. They deal with the security deposit. Clause 4(a) provides that on acceptance of the tender the contractor shall at the option of the Secretary, Department of Supply and within the period specified by him deposit with him a security deposit therein specified. Clause 4 (b) provides that "if the contractor is called upon by the purchaser to deposit security and the contractor fails to provide the security within the period, such failure will constitute a breach of the contractor and the Secretary, Department of Supply, shall be entitled to make other arrangements at the risk and acceptance of the contractor". It is thus obvious that, the tender offered by the appellant submitted to these terms and that on these terms security deposit is a condition subsequent and not a condition precedent. Clause 4(b) makes it clear that the failure to make the deposit would be a breach of the contract itself. This position is not disputed; but Mr. Din Dayal contends that this position has been substantially varied by the Form in which the appellant 's tender was accepted by the respondent. His argument is that the material words used in the acceptance letter changed the preexisting position and made the security deposit a condition. precedent to the acceptance itself. If this contention is right it would necessarily mean 784 that there was no concluded contract. Thus the decision of this point depends upon the construction of the letter of acceptance issued by the respondent to the appellant after receiving its tender. In this letter written on August 31, 1949 the respondent stated as follows: "Dear Sirs, Ref : Your tender No. and date Nil. Your offer is hereby accepted for a quantity of 1704 Cwts. and 2 qrs. (One thousand seven hundred and four hundred weights and two quarters only) of Oil Cocoanut conforming to specification No. IM. 1370 (d) at Rs. 89/6/ (Rupees eighty nine and annas six only) per Cwt. packed in non returnable sound, strong 45 gallon drums, delivery ex godown at Calcutta, by 30 9 49 or earlier if possible subject to your depositing 10% as security. The security money which comes to Rs. 15,230/ (Rupees fifteen thousand two hundred and thirty only) should please be deposited immediately into a Government Treasury in favour of the Deputy Accountant General, I and section, Akbar Road, New Delhi and the Treasury Receipt forwarded to this office. This security money will be refunded to you after the completion of the contract. The contract is concluded by this acceptance and formal acceptance of Tender will follow immediately on receipt of Treasury Receipt. Kindly acknowledge receipt. Yours etc. " The whole argument is founded on the use of the clause " 'Subject to your depositing. 10% as security. " Prima facie this clause may justify the argument that it is intended to make the security deposit a condition precedent; but in construing the true 785 effect of this clause we must look at the whole of the letter bearing in mind the fact that it has been written not by a lawyer or in consultation with a lawyer but by a Government officer in the ordinary course of the discharge of his duties. The first sentence in the first paragraph clearly shows that the offer was accepted for the quantity therein specified. The second paragraph calls upon the appellant to see that the specified amount is deposited immediately into the Government Treassury. This paragraph is more consistent with clause 4(a) of the general conditions. It reads as if having accepted the tender the appellant is reminded that it has to deposit the amount under the relevant condition, and the letter ends with the categorical statement that the contract is concluded by this acceptance. Mr. Din Dayal is right when he contends that section 7 of the Contract Act requires that the acceptance of the offer must be absolute and unqualified, it cannot be conditional; but reading the letter as a whole we do not think that the Courts below have erred in Coming to the conclusion that this letter amounts to an absolute and unqualified acceptance of the tender or offer made by the appellant. While dealing with this question it may be pertinent to recall that the general conditions of the contract prescribed by Form W.S.B. 133 are made a part of the tender, and the contract itself was intended to be executed expeditiously. The tender shows that the appellant represented that the earliest date by which delivery could be effected would be within twenty days from the date of the receipt of the order and it also said that full quantity of cocoanut oil required was held by it. Therefore, to begin with the tender treated the security deposit as a subsequent condition, the contract was for the immediate supply of goods and the acceptance purports to be in accordance with the relevant government rules and uses the expression that the contract was concluded by the said acceptance. Therefore, in our opinion, reading the letter as a whole it would not be possible to 786 accept the appellant 's argument that the letter was intended to make a substantial variation in the contract by making the deposit of security a condition precedent instead of a condition subsequent. In the result the appeal fails and is dismissed with costs. Appeal dismissed.

The appellant and the, respondent nominated their arbitrator who heard the matter at length and the proceedings had reached a stage when an award might have been pronounced. It was then that the appellant chose to obstruct the further progress of the proceedings by raising the plea that there was no, concluded contract. The appellant refused to apply under section 33 and so a stalemate issued because the arbi trators were, not entitled to proceed further, with the arbitration proceedings. , The respondent moved the court under section 28 along with section 33, for a decision of the question about the existence and validity of the. arbitration agreement and also prayed that extension of time be granted to ' the arbitrators for. making the award. The appellant pleaded in defence that ' there was no concluded contract, and there was no jurisdiction in the court to, grant extension under section 28 of the Act. The High Court confirmed the finding of the trial court that there was a concluded contract which contained a valid arbitration agreement. As for jurisdiction it held that since the petition had been filed as composit application under sections 28 and 33, it was open to the court under section 28 to enter upon the question of the existence or validity of the contract and so there was no substance in the point of jurisdiction raised by the appellant. It is against this decision that the appellant came up by special leave. Section 33 of the Arbitration, Act, :1940 consists of two parts the first part deals with a challenge to the existence or validity. of an arbitration agreement or an award and it provides that only persons who challenge the existence of the arbitration agreement that; can. apply under the first part of the section. The second. part of the section refers to the application made to have the effect of either the arbitra 770 an application can be made to have the effect or purport of the agreement determined but not its existence. That means that an application to have the effect of the agreement can be made provided the existence of the agreement is not disputed. The question is whether a person affirming an arbitration agreement can apply under the latter part of section 33 about the existence of the agreement or its validity. Held, that a party affirming the existence of an arbitration agreement cannot apply under section 33 for obtaining a decision that the agreement in question exists. An application to have the effect of the arbitration agreement determined can however, legitimately cover the dispute as to the existence of the said arbitration agreement. Section 32 of the Act creates a bar against the institution of suits with regard to an arbitration agreement or award on any ground whatsoever. Thus if a party affirms the existence of an arbitration agreement or its validity it is not open to the party to file a suit for the purpose of obtaining a declaration about the existence of the said agreement or its validity. The bar to the suit thus created by section 32. inevitably raises the question as to what remedy is open to a party to adopt in order to obtain a appropriate declaration about the existence or validity of an arbitration agreement. Held, that having regard to the scheme of sections 31, 32, 33 of the Act in matters which fall within the bar created by section 32, if a suit cannot be filed it is necessarily intended that an application can be made under the court 's powers provided for by section 31 and impliedly recognised by section 32 of the Act. Held, further that in holding that section 32 impliedly recogniscs the inherent jurisdiction of the court to entertain an application made by parties affirming the existence of an arbitration agreement the provisions of section 32 is brought it line with the provisions of sections 33 and 20 of the Act. Indeed section 33 is a corollary of section 32 and in a sense deals with the most usual type of cases arising in arbitration proceedings. A question arises whether an application ran be made under such inherent jurisdiction for declaration that the contract which includes the arbitration agreement includes cases where the arbitration agreement is made a part of the contract itself. Held, that where the challenge to the contract made in defence to the claim, is a challenge common to both the contract and the arbitration agreement, the petition in substance is a petition for a declaration as to the existence of a valid arbitration agreement and a suit to obtain such a declaration is clearly barred by section 32. The fact that an incidental declaration is claimed about the existence and validity of the main contract does not affect the essential 771 character of the application. It is an application for obtaining a declaration about the existence and validity of an arbitration agreement. Held, also that the powers to enlarge time for making the award which is the subject matter of section 28 does not include a power to entertain a petition for declaration that there was a concluded contract between the parties containing a valid arbitration agreement. Hayman vs Darwins. Ltd., , referred to. Messrs. M. Gulamali Abdulhussain & Co. vs Messrs. Vishwambharlal Buiya, I.L.R. , approved. Bajranglal Laduram vs Agarwal Brothers, A.I.R. 1950 Cal. 267 and State of Bombay vs Adamjeee Hajee Dawood & Co. Ltd. I.L.R. (1 952) , disapproved.

Civil Appeals Nos. 145/58 and 323/57. Appeals by special leave from the judgment and order dated September 14, 1955, of the Bombay High Court in I.T. References, Nos. 8 and 21 of 1955 respectively. R. Ganapathi Iyer and D. Gupta, for the appellant in C.A. No. 145 of 1958, and respondent in C. A. No. 323 of 1957. N. A. Palkhivala, section N. Andley, J. B. Dadachanji and Rameshwar Nath, for the respondent in C. A. No. 145 of 1958 and appellant in C. A. No. 323 of 1957. , 1960. February, 19. The Judgment of the Court was delivered by KAPUR, J. This judgment will dispose of two appeals, C. A. No. 145/58 and C. A. 323/57. They arise out of the same transaction i.e. Managing Agency Agreement and the result of C. A. No. 323/57 is dependent upon the judgment in C. A. 145158 and we propose to deal with the latter appeal which was argued before us and the former for reasons to be stated later was not pressed. The appellant in C. A. 145/58 is the Commissioner of Income tax, Bombay and the, respondent is the assessee, a registered firm, which on March 8, 1941, was appointed the Managing Agents of Shri Ambica Mills Limited (hereinafter termed the Managed Company) the appellant in C. A. 323/57. The duration of the Managing Agency period was 20 years. By clause (2) of the Managing Agency Agreement it was provided: " (2)(a) The Company shall pay each year to the said Firm either the commission of 5 (five) per cent.on the total sale proceeds of yarn, and of all cloth, manufactured from cotton, silk, jute, wool waste and other fibres and sold by the company, or a commission of three pies per pound avoirdupois on the sale, whichever the said Firm choose to take, and also a commission of 10 (ten) per cent. on the proceeds of sale of all other materials sold by the Company and 10 (ten) per cent. on the bills of any ginning and pressing factories and on any other work done by the Company. 53 (b)If in any year the net profits of the Company shall not be sufficient to enable the Directors, if they think fit, to recommend a dividend of eight per cent. per annum on the capital 'paid up on the ordinary shares for the time being, the same Firm shall be bound to give up from the total amount of commission payable under clause 2(a) hereof such portion thereof as may be necessary to make up the deficit. PROVIDED THAT in no event the amount so given up by the said Firm shall exceed one third of such total amount of commission And by Clause (5) it was provided: " (5) The remuneration payable to the said Firm 'Under Clause 2(a) shall be paid to the said Firm forthwith after the 31st day of December or such other date as the Directors may fix for the closing of the accounts of the Company in each year and after such accounts are passed by the Company in General Meeting ". On December 9, 1950, the Board of Directors of the Managed Company passed a resolution to the effect that the Directors had for some time past been discussing with the Managing Agents the advisability of modifying the terms of the Managing Agency Agreement as to the commission payable under it and that the Managing Agents had agreed to charge 3 per cent. on sales instead of 5 per cent. for the year ending December 31, 1950. A resolution was passed at the Annual General Meeting of the Managed Company on April 22,1951, which was to the same effect. The resolution of the Board of Directors was ratified at an Extraordinary General Meeting of the shareholders of the Managed Company on October 7, 1951, and the same day a formal agreement embodying the terms of the resolution was executed between the Managing Agents and the Managed Company. For the accounting years 1950 and 1951 i.e. assessment years 1951 52 and 1952 53 the Managing Agents were taxed by the Income tax Authorities on the basis that in those two years they had voluntarily relinquished a sum of Rs. 1,69,981 and Rs. 2,10, 53O for the respective assessment years. These sums were added to the income of the Managing Agents for the purpose of income tax. 54 An appeal was then taken to the Income tax Appellate Tribunal and it was held by the Tribunal that the agreement between the Managing Agents and the Managed Company to receive remuneration at 3% on the total sales was a valid one and took effect as from 'January 1, 1950. The second question, whether the commission accrued on the proceeds of every single sale or it accrued only when the assessee firm exercised its option to charge its commission on the total sale proceeds or on the weight of the yarn sold and whether the Managing Agents were to get the amount of commission after the whole profit was determined at the end of the year, was decided in favour of the Managing Agents. A Reference was made to the High Court at the instance of the Commissioner of Income tax and the questions above mentioned were answered in favour of the Managing Agents. This appeal by the appellant has been brought against the judgment of the High Court by special leave. In the connected appeal i.e. C. A. 323/57 by the Managed Company the facts are the same except that the Appellate Tribunal allowed the Managed Company the sum on which the Managing Agents were,to be taxed as allowable deduction. When the Commissioner got the case stated to the High Court the Managing Company also had a case stated. But as the High Court upheld the contention of the Managing Agents the Managed Company did not press its application which was therefore dismissed. The appeal of the Managed Company is brought against that order. In the appeal by the Commissioner of Income tax, i.e. C. A. 145/58, it was argued that according to the terms of the Agency Agreement the Managing Agents were to get the commission on the sales and as the accounts were kept on a mercantile basis, the amount of commission accrued as and when the sales took place and paragraph 5 of agreement was only a machinery for quantifying the amount. It was also argued that the Managing Agents by entering into an agreement with the Mills had voluntarily relinquished a portion of the amount of commission which had accrued to them and therefore the whole of the income from commission which had already accrued was liable to 55 income tax; and reference was made to the cases reported as Commissioner of lncome tax, Madras vs K. R. M. T. T. Thiagaraja Chetty and Co. (1), E. D. Sassoon & Company Ltd. vs The Commissioner of Income tax, Bombay City (2) and to an English case Commissioners of Inland Revenue vs Gardner Mountain & D ' Ambrumnil Ltd. (3). But these cases have no application to the facts of the present case. In the Commissioner of Income tax, Madras vs K. R. M. T. T. Thiagaraja Chetty & Co. (1), the assesses firm was, under the terms of the Managing Agency Agreement, entitled to a certain percentage of profits and in the books of the Company a certain sum was shown as commission due to the assessee firm and that sum was also adopted as an item of business expenditure and credited to the Managing Agents ' commission account but subsequently it was carried to suspense account by a resolution of the Company passed at the request of the assessee firm in order that the debt due by the Firm might be written off. The accounts were kept on mercantile basis and it was held that on that basis the commission accrued to the assessee when the commission was credited to the assessee 's account and subsequent dealing with it would not affect the liability of the assessee to income tax. It was also held that the quantification of the commission could not affect the question as it was not a condition precedent to the accrual of the commission. At page 267 Ghulam Hassan J., observed: " Lastly it was urged that the commission could not be said to have accrued, as the profit of the business could be computed only after the 31st March, and therefore the commission could not be subject to tax when it is no more than a mere right to receive. This argument involves the fallacy that profits do not accrue unless and until they are actually computed. The computation of the profits whenever it may take place cannot possibly be allowed to suspend their accrual. In the case of income where there is a condition that the commission will not be payable until the expiry of a definite period or the making up of the account, it might be (1) ; at 267. (2) ; , 344. (3) , 96. 56 said with some justification, though we do not decide it, that the income has not accrued but there is no such condition in the present case ". This passage does not help the appellant 's case. The question there decided was that the accrual of the commission was not dependent upon the computation of the profits although the question whether it would make any difference where the commission was so payable or was payable after the expiry of a definite period for the making of the account was left undecided . In the case before us the agreement is of a different nature and the above observations are not applicable to the facts of the present case. The next case is E. D. Sasoon & Co., Ltd. vs The Commissioner of Income tax, Bombay City (1). But it is difficult to see how it helps the case of the appellant. If anything it goes against his contention. In that case the assessee Company was the Managing Agent of several Companies and was entitled to receive remuneration calculated on each year 's profits. Before the end of the year it assigned its rights to another person and received from him a proportionate share of the commission for the portion of the year during which it worked as Managing Agent. On the construction of the Managing Agency Contract it was held that unless and until the Managing Agent had carried out one year 's completed service, which was a condition precedent to its being entitled to receive any remuneration or commission it was not entitled to receive any commission. The facts in that case were different and the question for decision was whether the contract of service was such that the commission was only payable if the service was for a completed year or the assessee Company was entitled to receive even for a portion of the year for which it had acted as a Managing Agent. It was held that it was the former. As was observed by Lord Wright in Commissioners of Inland Revenue V. Gardner, Mountain & D Ambrumenil Ltd. (2), " It is on the provisions of the contract that it must be decided, as a question of construction and therefore of law, when the commission was earned The contract in, the present case in para (1) ; , 344. (2) , 96. 57, graph 2 shows that (1) the company was to pay each year; (2) that the Managing Agents were to be paid 5 per cent. commission on the proceeds of the total sales of yarn and of all cloth sold by the Company or three pies per pound ' avoirdupois on the sale, whichever the Managing Agents chose; thus there was an ' option to be exercised at the end of the year; (3) they were also to be paid at 10 per cent. on the proceeds of sales of all, other materials; and (4) the Mills were to pay to the Managing Agents each year after December 31, or such other dale which the Directors of the Company may choose for the closing of the accounts. There was a further clause that if the net profits of the Managed Company, that is, the Mills were not sufficient to enable the Directors to recommend a dividend of 8 per cent. per annum on the paid up capital, then the Managing Agents were bound to forego a portion of their commission upto one third. All these provisions as to payment have to be read together as an indivisible and an integral whole. On a proper construction of this contract, therefore, it is obvious that the Managing Agents were to be paid at the end of the year. They had the option of receiving a percentage on total sales or three pies per pound and this was exercisable at the end of the year. There was also a liability to pay back a portion of the commission in certain contingencies which also could be determined only when the accounts were made up for the year. It is thus clear that there was no accrual of any commission till the end of the year. On this construction of the contract it cannot be held that the commission had accrued as and when the sales took place and that as a result of their agreeing to the modification of the agreement the Managing Agents had voluntarily relinquished a portion of their commission. On the other hand under the original agreement the Managing Agents were entitled to receive commission only at the end of the year and before then the agreement was varied modifying its terms as from the beginning of the accounting year. We are of the opinion, therefore, that the High Court correctly found against the appellant and we therefore dismiss C. A. No. 145 of 1958 with costs. In 8 58 view of this Mr. Palkiwala for the Managed Company did not press C. A. No. 323 of 1957, which is therefore dismissed but the parties will bear their own costs in that case because the result of that appeal is really dependent upon the result in C. A. No. 145 of 1958.

The respondent firm Harivallabhdas Kalidas was appointed the Managing Agent of Shri Ambika Mills Ltd., the appellant in the connected appeal by means of a Managing Agency Agreement the relevant portion of which ran thus: (2)(a) The Company shall pay each year to the said Firm either the commission of 5 (five) per cent on the total sale proceeds of yarn, and of all cloth, manufactured from cotton, 51 silk, jute, wool, waste and other fibres and sold by the company, or a commission of three pies per pound avoirdupois on the sale, whichever the said Firm choose to take, and also a commission of 10 (ten) per cent on the proceeds of sale of all other materials sold by the Company and 10 (ten) per cent on the bills of any ginning and pressing factories and on any other work done by the Company. " And by clause (5) it was provided: " (5) The remuneration payable to the said Firm under clause 2(a) shall be paid to the said Firm forthwith after the 31st day of December or such other date as the Directors may fix for the closing of the accounts of the Company in each year and after such accounts are passed by the company in General Meeting. " Subsequently, at the request of the Managed Company the Managing Agents agreed to charge commission at 3 per cent on sales instead Of 5 per cent for the year ending December 31, 1950 and a resolution to that effect was passed by the Managed Company and a formal agreement to that effect was executed. The income tax Authorities, however, taxed the Managing Agents for two assessment years on the basis that by entering into an agreement with the mills they had voluntarily relinquished certain sums of money as their commission which had accrued to them as income for the purpose of income tax. An appeal was taken to the Income tax Tribunal which held that the agreement between the Managing Agent and the Managed Company to receive remuneration at 3 per cent on the total sale was valid and took effect from January, 1, 1950 and the questions whether the commission accrued on the proceeds of every single sale or only when the assessee firm exercised its option to charge it on the total sale proceeds or on the weight of the yarn sold and whether the Managing Agents would get their commission after the whole profit was determined at the end of the year, were decided in favour of the Managing Agents. The High Court also on a reference made to it at the instance of the Commissioner of Income tax, answered the above mentioned question in favour of the Managing Agents. On appeal by the Incomee tax Commissioner by special leave, Held, that on a proper construction of the agreement, it was clear that there was no accrual of commission till the end of the year and that it did not accrue as and when the sales took place. The Managing Agents were to be paid at the end of the year and by agreeing to the modification of the agreement before then they had not voluntarily relinquished any portion of the commission. Commissioner of Income tax, Madras, vs K.R.M.T.T. Thiagaraja Chetty and Co., ; , E.D. Sasoon and Co. Ltd. vs The Commissioner of Income tax Bombay City, [1955] i S.C.R. 313 and Commissioner of Inland Revenue vs Gardner Mountain and D ' Ambrumenil Ltd., , not applicable.

minal Appeal No. 203 of 1956. Appeal by special leave from the judgment and order dated December 14, 1955, of the Assam High Court at Gauhati in Criminal Appeal No,. 54 of 1955, arising out of the judgment and order dated May 23, 2 1955, of the Court of the Special Judge, Lower Assam Districts at Dhubri in Special Case No. 2 of 1954. Nur ud Din Ahmad and K. R. Chaudhury, for the appellant. Naunit Lal, for the respondent. January 13. The Judgment of the Court was delivered by KAPUR, J. This appeal by special leave is directed against the judgment and order of the High Court of Assam. The appellant before us was tried for an offence under section 165A of the Indian Penal Code for having abetted one Khalilur Rahman in the conimission of an offence by the latter under section 161, Indian Penal Code. Both the appellant and Khalilur Rahman were convicted of the offences with which they were charged and sentenced to one. year 's rigorous imprisonment. On appeal the High Court acquitted Khalilur Rahman but maintained the conviction and sentence of the appellant. The facts of this appeal are that on May 9, 1952, the complainant Narendra Nath Brahma was taking two carts carrying 25 Mds. of paddy for sale to Billashiparabazar along the path which runs by the side of the river Gauranga. When he had gone only a short distance he was stopped by the paddy checking Inspector, Khalilur Rahman, who was accompanied by the appellant and three others. Khalilur Rahman demanded Rs. 200 as bribe and threatened the com plainant that unless the amount demanded was paid his cart and paddy would be seized. In this he was supported by the appellant and three others. The complainant expressed his inability to give that much amount but ultimately he agreed to pay Rs. 150. He borrowed Rs. 100 from one Surajmal Oswal out of which he offered Rs. 80 to Khalilur Rahman who asked him to hand them over to the appellant who counted the money and made it over to Khalilur Rahman. The complainant was also forced to execute a promissory note for a sum of Rs. 70 in favour of the appellant and he promised that the money would be paid the following day after the paddy was sold. The 3 complainant learnt in the bazar that another person Happa ram Rai had been similarly treated but he had only paid Rs. 15. On May 11, 1952, the complainant approached the appellant for the refund of his money and the return of his pronote and although the appellant promised he did not do so. The same day there was a meeting at Futkibari Middle English School where the Deputy Commissioner was present. The complainant presented to him a written complaint describing how he was forced to pay Rs. 80 and made to execute a pronote for Rs. 70. Thereupon both Khalilur Rahman and the appellant were prosecuted, the former under section 161, Indian Penal Code, read with section 5(2) of the Prevention of Corruption Act, 1947 (2 of 1947) and the latter under section 165A and they were convicted and sentenced by the Special Judge as already stated. The evidence of the complainant was that before Rs. 200 was demanded from him, the appellant and Khalilur Rahman " went aside and had some talks and coming together accused Khalilur Rahman demanded Rs. 200 ". He also stated " I told them that I managed to procure Rs. 80 somehow and I wanted to hand over to accused Khalilur Rahman who directed me to hand over to accused Faguna, saying he would take counting, accused Faguna counted the money and then made over the entire money to accused Khalilur Rahman saying that Rs. 80 would not do and I should execute a handnote for the balance of Rs. 70 promising to pay on the following Saturday ". According to the complainant it was Khalilur Rahman who tore out a page from his note book and handed over the same to the complainant and also lent him his fountain pen and after the pronote was executed both the pen and the pronote were handed over to Khalilur Rahman. The Special Judge found: "I am fully convinced that a sum of Rs. 80 was realised from the complainant for forbearing from seizing of the paddy by the accused Khalilur Rahman, being helped and abetted by the accused Faguna Kanta Nath. " 4 He therefore convicted Khalilur Rahman under section 161, Indian Penal Code, but acquitted him of an offence under section 5(2) of the Prevention of Corruption Act, 1947, and convicted the appellant for abetment of that offence. On appeal Deka, J., held that from the complaint made by the complainant it was not clear that any payment was made to Khalilur Rahman. He said: It may be that Khalilur Rahman was a party to squeezing out some money from a dealer in paddy who tried to evade the law, but that falls far short of proving that he had accepted the money through Fagunakanta Nath as alleged now in Court ". The learned Judge accepted the complainant 's story that money was paid to the appellant but he was of the opinion that the evidence was not strong enough to prove payment to Khalilur Rahman and therefore he was "prepared to give the benefit of doubt to Khalilur Rahman and direct that his conviction tinder section 161, Indian Penal Code be set aside ". As to the appellant he was of the opinion that money was taken by him for payment to Khalilur Rahman as illegal gratification and whether he actually paid it to him or not the offence fell under section 165A and therefore he held the appellant guilty under that section. Thus according to the learned Judge the case against Khalilur Rahman was not proved and as money had been paid to the appellant he was guilty of abetment under section 165A, Indian Penal Code. The appellant has come to this Court by special leave. The main argument raised on behalf of the appellant is that as Khalilur Rahman has been acquitted, on the facts and circumstances of this case the conviction of the appellant for abetment cannot be sustained. The evidence of the complainant on which the conviction is based was that the money was demanded by Khalilur Rahman and at his instance it was made over to the appellant who counted the money and handed it over to Khalilur Rahman. The pronote was also written at the instance of Khalilur Rahman and was handed over to him. The part played by the appellant according to the story of the 5 complainant was that before the demand of bribe both Khalilur Rahman and the appellant "went aside" and held a conference and Khalilur Rahman then demanded Rs. 200. Rs. 80 was brought by the complainant and paid to the appellant at the instance of Khalilur Rahman for the purpose of counting and he in turn gave it to Khalilur Rahman who put it in his trouser 's pocket. About this portion of the evidence the trial Court said " it may not be fully true " and the finding of the High Court was that the money re mained with him and was not paid to Khalilur Rahman; the question is whether in these circumstances the offence of abetment can be held to have been made out. Under the Indian law for an offence of abetment it is not necessary that the offence should have been committed. A man may be guilty as an abettor whether the offence is committed or not. Section 165A is as follows: section 165A " Whoever, abets any offence punishable under section 161 or section 165, whether or not that offence is committe in consequence of the abetment, shall be punished with imprisonment of either description for a term which may extend to three years or with fine or with both ". Therefore for a person to be guilty of abetment of an offence under section 161, it is not necessary that the offence should have been committed. Abetment is defined in section 107 arid a person abets the doing of a thing when (1)he instigates any person to do that thing or (2)engages with one or more other person or persons in any conspiracy for the doing of that thing. . or (3) intentionally aids, by any act or illegal omission the doing of that thing. Explanation (2) to section 107 is as follows: " Whoever, either prior to or at the time of the commission of an act, does anything in order to facilitate the commission of that act, and thereby facilitates the commission thereof, is said to aid the doing of that act. " It is not suggested that there was any instigation by the appellant for the commission of the offence. 6 Further the circumstances proved against the appellant did not bring the case under the second part of section 107 because it is not alleged that there was any conspiracy and a charge of conspiracy must necessarily fail if the other alleged conspirator is acquitted: See The King vs Plummer (1) which has received the approval of this Court in Topandas vs State of Bombay (2). In either of these cases it is immaterial hether the person instigated commits the offence or not or the persons conspiring together actually carry out the object of conspiracy. There then remains the third part of section 107 that is abetment by aid. A person abets by aiding when by the commission of an act lie intends to facilitate and does facilitate the commission thereof By the acquittal of Khalilur Rahman the High Court must be deemed to have held that there was no offence under section 161. But it was contended on behalf of the respondent that the acquittal of Khalilur Rahman was wrong and this Court should hold that a wrong acquittal does not prevent the conviction of the appellant for the offence of abetment. Counsel for the respondent referred to Dalip Singh vs State of Punjab (3) where at p. 156 Bose, J., said: " We have taken into consideration the fact that the High Court considers that the portion of Mst. Punnan 's story regarding the lambardars has been falsely introduced by the police, also that both courts have rejected the evidence about the dying declaration. Despite that, we agree with the learned Sessions Judge that Mst. Punnan and Mst. Charni are to be believed regarding the main facts and that they correctly named all seven accused as the assailants. On that finding the conviction under section 302 read with section 149 can be sustained. We accordingly uphold these convictions. The acquittals in the other three cases will of course stand but the mere fact that these persons have, in our opinion, been wrongly acquitted cannot affect the conviction in other cases ". In that case although the High Court had acquitted three accused persons of an offence under section 302 read (1) (2) (3) ; 7 with section 149, Indian Penal Code, yet as in the opinion of this Court the acquittal was wrong section 149 was held applicable in the case of four others who had been convicted by the High Court of section 302 read with section 149. The decision in that case must be circumscribed to the peculiar circumstances of that case. In the present case the person who demanded the illegal gratification for allowing the carts to proceed was Khalilur Rahman who had the authority to do or not to do a particular act and all that the appellant is alleged to have done was to receive the money at the instance of Khalilur Rahman for counting and then paid the money to him. It is not the prosecution case that the appellant abetted the offence by instigating Khalilur Rahman to demand the illegal ratification; nor has the prosecution set up or proved a case of conspiracy between the appellant and Khalilur Rahman for the commission of an offence under section 161. On the findings of the Court the appellant received the money for and on behalf of Khalilur Rahman and the evidence of the complainant is that Khalilur Rahman had asked him to hand over the money to the appel lant. If Khalilur Rahman is acquitted and therefore the offence under section 161 is held not to have been committed, then in this case no question of intentionally aiding by any act or omission the commission of the offence arises. It may be as counsel for the respondent contended that the acquittal of Khalilur Rahman is wrong and it appears and we say so with respect that the findings of the High Court are inconsistent but as the matter of Khalilur Rahman is not before us by way of appeal against acquittal we do not express any opinion on that question. We are of the opinion that on the facts found and circumstances established in this case and as Khalilur Rahman has been acquitted the appellant 's conviction cannot be upheld. We therefore allow this appeal and set aside the order of conviction. The bail bonds shall also stand discharged. Appeal allowed.

The appellant was tried for an offence under section 165A of the Indian Penal Code for having abetted K, an Inspector in charge of checking paddy, in the commission of an offence by the latter under section 161 of the Code. The prosecution case was that while the complainant was taking paddy for sale K demanded Rs. 200/as bribe and threatened him that unless the money was paid the paddy would be seized, that at the instance of K the complainant handed over the bribe money to the appellant for being counted and that the latter after checking the money paid it to K. The Special judge who tried the case accepted the prosecution story and convicted K under section 161 of the Indian Penal Code and the appellant for abetment of the offence. On appeal, the High Court was of the opinion that the evidence was not strong enough to prove payment to K, and set aside his conviction, but confirmed that of the appellant on the ground that money was taken by him for payment to K as illegal gratification and whether he actually paid it to him or not the offence fell under section 165A. Held, that the conviction of the appellant for abetment under section 165A of the Indian Penal Code must under the circumstances be set aside. On the facts found, the appellant received the money in the presence of and for and on behalf of K and if K was acquitted on the ground that no offence under section 161 was committed, then no question of intentionally aiding by any act or omission the commission of the offence arose. Consequently, the appellant 's conviction for the offence of abetment wag not maintainable. Dalip Singh vs State of Punjab, ; , distinguished.

Appeal No. 541 of 1963. Appeal by special leave from the order dated August 23, 1961 of the Punjab High Court in Civil Misc. No. 120 of 1961. Bhagwani Lal, E. C. Agarwala and P. C. Agarwalla, for the appellant. Deepak Dutt Chaudhry and B. R. G. K. Achar, for respondents Nos. 1 to 3. Janardhan Sharma, for respondent No. 4. The Judgment of SUBBA RAO and BACHAWAT, JJ. was delivered by BACHAWAT, J., MUDHOLKAR, J. delivered a separate but con curring Judgment. Bachawat, J. The appellant is a displaced person to whom 105 ordinary acres of land equivalent to 42 standard acres 11 units in village Jamalpur, Tehsil Hansi, District Hissar, were allotted by the Custodian on October 5, 1949 under the conditions published in the Notification of the East Punjab Government No. 4892/S dated July 8, 1949. The Punjab Security of Land Tenures Act, 1953 (Punjab Act No. 10 of 1953), hereinafter 513 ,referred to as the Act, came into force on April 5, 1953. On that date, the aforesaid land was equivalent to 42 standard acres II units, and having regard to proviso (ii) (b) to section 2 (3) of the Act, was permissible area in relation to the appellant, and as the appellant did not own any other land in the State of Punjab, he was a shall landowner within the meaning of section 2(2) of the Act. On October 22, 1955, as a result of consolidation proceedings, the appellant was granted 101.4/5 ordinary acres of land in exchange for the land originally allotted to him in 1949. Respondent No. 4 is a tenant of the appellant in respect of a portion of this land. On February 20, 1958, the appellant filed an application before the Assistant Collector, 1st Grade, Hissar for ejectment of respondent No. 4 under section 9 (1) (i) of the Act on the ground that he is a tenant of the appellant who is a small landowner. On that date, the aforesaid 101.4/5 acres of land owned by the appellant was equivalent to more than 50 standard acres. On February 17, 1960, the Assistant Collector dismissed the application. He held that the appellant was a big landowner, because on the date of the application the land owned by him was equivalent to more than 50 standard acres. On appeal, on May 2, 1960, the Collector of Hissar set aside the aforesaid order, and allowed the application for ejectment. He held that the appellant was a small landowner as he was a displaced person and an allotted of less than 50 standard acres. On August 30, 1960, the Commissioner, Ambala Division, dismissed a second appeal, and on January 2, 1961, the Financial Commissioner dismissed a revision petition filed by respondent No. 4. Following his previous ruling in Pat Ram vs Milawa Ram(1) and Har Chand Singh vs The Punjab State(2), the Financial Commissioner held that the status of the appellant must be determined on the date of the commencement of the Act and subsequent accretions to his holding arising out of consolidation of holdings and improvements due to good husbandry or advent of irrigation should be ignored. On August 22, 1961, the Punjab High Court allowed a petition preferred by respondent No. 4 under article 227 of the Constitution of India and set aside the orders of the Collector, the Commissioner and the Financial Commissioner. The High Court held that the status of the appellant must be determined by evaluating his land in terms of standard acres on the date of the application for ejectment. The appellant now appeals to this Court by special leave. (1) (1961) 40 Lahore Law Times, P. 28. (2) (1961) 40 Lahore Law Times, p. 9. 5 14 The question is whether the appellant is asmall landowner within the meaning of section 9 (1) (i) of the Act. On a combined reading of sections 2, 3, 4, 5, 5A, 5B, 5C, 10A,19A and 19D, the scheme of the Act appears to be as follows : The entire land held by the landowner in the State of Punjab on the date of the commencement of the Act must be evaluated as on that date and the status of the landowner and his surplus area, if any, must be then ascertained. If he is then found to be a small landowner, he continues to be so for the purpose of the Act, until he acquires more land, and on taking into account the value of the land in terms of standard acres on the date of the acquisition, he is found to be a big landowner. The landowner is required to make the necessary reservations or selections and to give the necessary declarations so that his status and the surplus area, if any, held by him may be so determined. If he is a small landowner at the commencement of the Act, his status is not altered by reason of improvements in the value of his land or re allotment of land on compulsory consolidation of holdings. In an unreported decision in Surja vs Financial Commissioner of Punjab and others(1), the Punjab High Court held that the status of the landowner for the purposes of an application under section 14A of the Act should be determined by evaluating his land on the date of the application. On the basis of this ruling, the improvements in the land subsequent to the commencement of the Act could not be ignored; but the legislature considered that this decision had the effect of defeating the purpose of the Act. It is well known that with a view to get rid of this decision, the legislature inserted section 19 F(b) in the Act by the Punjab Security of Land Tenures (Amendment and Validation) Act, 1962 (Punjab Act No. 14 of 1962). The object of this amendment will appear from the following passage in the statements of Objects and Reasons published in the Punjab Gazette (Extr.) dated April 27, 1962 : "Some of the recent judicial pronouncements have the effect of defeating the objectives with which the Punjab Security of Land Tenures Act, 1953 was enacted and amended from time to time. Under the scheme of the parent Act a specific period was allowed for filing of reservations by the landowners the object of which was to find out whether a person was a small landowner or not. Once that was found the intention was that such a person should continue to be treated as (1) Civil Writ No. 486 or 1961. 515 such for the purposes of the Act so long as he did not acquire more lands. In other words, his status was not to be altered on account of improvements made on the land or reallotment of land during consolidation. However, the High Court took a different view in Civil Writ No. 486 of 1961 (Surja versus Financial Com missioner, Punjab and others. ). Accordingly clauses 3, 6 and 7 of the Bill seek to neutralise the effect of the aforesaid decisions. " Clause 7 of the Bill related to sections 19 E and 19 F. The amending Act of 1962 was passed on July 4, 1962 during the pendency of the appeal in this Court. Section 19 F is retrospective in operation and is deemed to have come into force on April 15, 1953. Section 19 F(b) reads : "19 F. For the removal of doubts it is hereby declared, (b)that for evaluating the land of any person at any time under this Act, the land owned by him immediately before the commencement of this Act, or the land acquired by him after such commencement by inheritance or by bequest or gift from a person to whom he is an heir, shall always be evaluated for converting into standard acres as if the evaluation was being made on the date of such commencement, and that the land acquired by him after such commencement in any manner shall always be evaluated for converting into standard acres as if the evaluation was being made on the date of such acquisition. " On a reading of section 19 F(b), it would appear that for the purpose of determining the status of the landowner and evaluating his land at any time under the Act, the land owned by him immediately before the commencement of the Act must always be evaluated in terms of standard acres as if the evaluation was being made on the date of such commencement. It is not disputed that if the land held by the appellant immediately before the commencement of the Act is so evaluated, the appellant would be a small landowner. There is no scope for evaluating the subsequent improvements in the land due to consolidation operations or otherwise. The appellant did not acquire any land after the commencement of the Act. His status as a small landowner was not altered by reason of subsequent improvements or 516 re allotments of land on compulsory consolidation of holdings. On the date of the application for eviction, he, therefore, continued to be a small landowner. The High Court was in error in holding that the status of the appellant should be determined by evaluating his land in terms of standard acres on the date of the application for eviction. In the result, the appeal is allowed. We set aside the order of the High Court and restore that of the Financial Commissioner upholding the orders of the Commissioner and the Collector. We direct that costs throughout will be borne by the parties as incurred. Mudholkar, J. This is an appeal by special leave from a judgment of the High Court of Punjab allowing a writ petition under article 227 of the Constitution and setting aside orders of the Collector, the Commissioner and the Financial Commissioner made under certain provisions of the Punjab Security of Land Tenures Act, 1953 (hereafter referred to as the Act). The relevant facts are briefly these : The appellant Bhagwandas is a displaced person from West Pakistan. He owned 74 standard acres 133 4 units of agricultural land in certain villages in West Pakistan. On October 5, 1949 he was allotted 42 standard acres and 11 units of land in the village Jamalpur, Tehsil Hansi, District Hissar. Subsequently proceedings for consolidation of holdings were taken under the East Punjab Holdings (Consolidation and Prevention of Fragmentation) Act, 1948 (Act 50 of 1948). After those proceedings were finalised the appellant was granted an equivalent area of land in the same village as described in a sanad granted by the President on October 22, 1955 in exchange for the land earlier granted to him. Under the sanad the appellant was granted proprietary rights in the land. On February 20, 1958 the appellant, claiming to be a small holder made an application under section 14 A(i) of the Punjab Security of Land Tenures Act, 1953 before the Assistant Collector, I Grade, Hissar, for the ejectment of respondent No. 4 who was a tenant of the land. In his application the appellant alleged that as 'he held less than 50 standard acres of land he was a "small land owner" and as such had the right to evict the tenant and instead cultivate the land himself. The application was rejected by the Assistant Collector. Unfortunately neither party has placed the order of the Assistant Collector on the record of this appeal. It is, however, common ground that the reason for rejecting the application was that the Assistant Collector found that because of certain improvements the income from the lands 5 17 had risen considerably and that consequently the standard acreage of this land had risen from 42 standard acres to a standard acreage above 50 standard acres and that the appellant 's application was, therefore., untenable under section 14 A. In an appeal preferred by the appellant the Collector, Hissar held by his order dated May 2, 1960 that since the appellant was allotted only 42 standard acres and 11 units he is entitled to be treated as a small owner of the land and since the tenant had more than 5 standard acres under his cultivation in addition to the appellants land he was liable to be ejected from the land belonging to the appellant which was in his possession. The Collectors order was upheld by the Commissioner, Ambala Division by his order dated August 30, 1960. The tenant moved the Financial Commissioner, Punjab in revision against the order of the Commissioner but without success. He then preferred a writ petition before the High Court which, as already stated, was granted. According to the High Court the status of a landlord had to be ascertained as existing on the date of the application under section 14 A of the Act and not on the date of the allotment. Further, according to the High Court, what is "permissible area" available to a landlord under the Act has allow to be determined as obtaining on the date of the application for eviction made by the landlord. In coming to the conclusion the High Court followed a judgment of section B. Capoor J., in a similar matter. In order to appreciate the contentions urged before us on behalf of the par ties, it is necessary to refer to certain provisions of the Act. At the outset I must point out that the object of the Act was to provide to the tenants a security against ejectment by the landlords except for a just cause. The Act has, however, drawn a distinction between "small land owner" and a "large land owner". Sub section (2) of section 2 of the Act defines small land. owner to mean one whose entire land in the State of Punjab does not exceed the permissible area. Now, sub section (3) of section 2 defines permissible area. This definition draws a distinction between a land owner who is not a displaced person and one who, is a displaced person. In so far as the former is concerned the permissible area is 30 standard acres. In so far as the latter is concerned the second proviso to sub section (3) enacts "Provided that (ii) for a displaced person (a) who has allotted land in excess of fifty standard acres, the permissible area shall be fifty standard ip. Cl/66 3 518 acres or one hundred ordinary acres, as the case may be. (b) who has been allotted land in excess of thirty standard acres, but less than fifty standard acres, the permissible area shall be equal to his allotted area. (c) who has been allotted land less than thirty standard acres, the permissible area shall be thirty standard acres, including any other land or part thereof, if any, that he owns in addition. Explanation : For the purposes of determining the permissible area of a displaced person, the provisions of proviso (ii) shall not apply to the heirs and successors of the displaced person to whom land is allotted. " The expression 'standard acre ' is defined thus in sub section (5) of section 2 "Standard acre" means a measure of area convertible into ordinary acres of any class of land according to the prescribed scale with reference to the quantity of yield and quality of soil. " If a land owner is in possession of land in excess of the permissible area he is required to follow a certain procedure for indicating which particular land he wants to be treated as "reserved area". Land in excess of that area is treated surplus area. The former expression means the area lawfully reserved under the Punjab Tenants (Security of Tenures) Act, 1950 while the latter expression is defined in sub section (5 A) of the Act. It is not necessary to set out this definition for the purpose of the discussion of the question before us. Under section 27 of the Act rules have been framed for carrying out the purpose of the Act. There are two sets of rules, one is the Security of Land Tenures Rules, 1953 and the other is Punjab Security of Land Tenures Rules, 1956. The latter are supplementary to the rules of 1953. Rule 2 of the Rules of 1953, which is the relevant rule, is as follows : "Conversion of ordinary acres into standard acres. The equivalent, in standard acres, of one ordinary acre of any class of land in any assessment circle, shall be determined by dividing by 16, the valuation shown in Annexure 'A ' to these rules for such class of land in the said assessment circle 519 Provided that the valuation shall be (a) in the case of Banjar Qadim land, one half of the value of the class previously described in the records and in the absence of any specific class being stated, one half of the value of the lowest barani land; (b) in the case of Banjar Jadid land, seventh eighth of the value of the revelant class of land as previously entered in the records, or in the absence of specified class in the records, of the lowest barani land; and (c) in the case of cultivated that land subject to waterlogging, one eighth of the value of the class of land shown in the records or in the absence of any class, of the lowest barani land". In the table, Annexure A, land is classified under four heads which are: "Irrigated (nehri)", "Irrigated Chahi" "Irrigated" and "Sailab". Irrigated nehri is further classified as "perennial" and "non perennial". In Col. 3 is given the valuation for irrigated nehri land. For Hansi tehsil valuation of the land which is perennially irrigated by canals is given as 16 which means 16 annasing the rupee per acre and of non perennial as 10 annas in the rupee per acre. The valuation for irrigated chahi land in the entire tehsil is 10 annas in the rupee per acre and of un irrigated land as 5 annas in the rupee per acre. There is no valuation for sailab land which apparently means there is no land of this category in the tehsil. From Table, A it would appear that land which falls under one classification at the time of allotment or at the time of coming into force of the Act may well fall under some other head later on because the quantity of yield is liable to vary. For instance, if irrigation facilities come to be provided in land which is unirrigated at the time of coming into force of the Act or making the allotment the land may receive the benefit of irrigation later either perennially or non perennially and its yield therefrom may accordingly increase. Provisions relating to the valuation of lands under the Act are to be found in section 19F thereof which reads thus : "For the removal of doubts it is hereby declared, (a) that the State Government or any officer empowered in this behalf shall be competent and 520 shall be deemed always to have been competent, to determine in the prescribed manner the sur plus area referred to in section 10 A of a landowner out of the lands owned by such land owner immediately before the commencement of this Act; and (b) that for evaluating the land of any person at any time under this Act, the land owned by him immediately before the commencement of this Act, or the land acquired by him after such commencement by inheritance or by bequest or gift from a person to whom he is an heir, shall always be evaluated for converting into standard acres as if the evaluation was being made on the date of such commencement and that the land acquired by him after such commencement in any other manner shall always be evaluated for converting into standard acres as if the evaluation was being made on the date of such acquisition. " Now, surplus area would fall to be determined only where the land owner is in possession of land in excess of the permissible area. I have already given the definition of permissible area. Where, as here, the landlord is a displaced person and the land allotted to him is less than 50 acres the permissible area so far as he is concerned would be the area actually allotted to him. In the case of the appellant it would thus be 42 standard acres and II units. Out of this he alleges that he has sold 18 standard acres. As, however, no argument was advanced before us on this basis I leave this circumstance out of account and proceed on the footing that the appellant is in possession not of an area less than the permissible. area but of an area equal to the permissible area. Surplus area means an area other than the reserved area and, where no area is reserved, the area in excess of the permissible area. Where there is no reserved area or where the area hold by a person is not in excess of the permissible area the provisions of section 4 which deal with, the reservation of area or those of sections 5 A to 5C which deal with selection of permissible area or those of section 10 A which deal with the utilization of surplus area are not attracted. Therefore, the provisions of section 19F(a) which are attracted to a case falling under section 10 A will a so not apply. Moreover the provisions of section 10 A have no bearing on 521 a case like the one before us. For, they contemplate the ascertainment of surplus area held immediately before the commencement of the Act. Obviously, therefore, the determination must refer to the classification of the land at that time. Apart from that, the appellant does not possess any surplus area since what is in his possession is merely the permissible area. The question of utilization of any surplus area cannot thus arise in his case. That being so, no question can arise of evaluating his lands afresh. Indeed, fresh evaluation at any time is permissible only under section 19 F(b), but that provision deals with only special types of cases. It may be mentioned that sections 5 A to 5 C which deal with the selection of permissible area do not contemplate a case where the classification of land held by the landlord has undergone a change because of rise in the yield therefrom and the standard acreage of the land in his possession could be said to have increased. Section 19 A of the Act specifically prohibits the future acquisition by the landlord of land by transfer, exchange, lease., agreement or settlement any land which with or without the land already held by him exceeds the permissible area. Similarly the Act has made specific provisions to deal with a case of augmen tation to the land held by the landlord subsequent to the commencement of the Act by inheritance, bequest or gift. These are to be found in section 19 B. What is to be done in a case of that type is provided for by section 19 F(b). The power to evaluate land conferred by this provision is exerciseable at 'any time ' but obviously that power is exerciseable only in the context of the circumstances set out therein, that is to say where the landlord obtains land after the commencement of the Act by inheritance, bequestor gift and in no other circumstance. It would, therefore, seem that where the provisions of section 19F are not attracted the Revenue Assistant before whom an application under section 14 A for ejectment of a tenant is made by a landlord, is not entitled to evaluate the land of the landlord afresh for ascertaining whether he is in possession of land in excess of the permissible area. Elaborate rules have been framed under the Act and elaborate provisions are also contained in the Act with a view to extend its protection as far as possible to tenants cultivating land. The omission, therefore, to make any provision as to what has to be done, if as a result of improvements made by the landlord or by reason of the rise in the yield of the land through other causes would point only to one conclusion and that is that this circumstance is not to be taken into account for evaluating the land afresh and re calculating the standard acreage. If that is so, then it would follow that the High Court and the Assistant Commissioner were in error whereas 522 the Collector, Commissioner and the Financial Commissioner were right in deciding this case. For these reasons I set aside the order of the High Court and restore that of the Financial Commissioner upholding the orders of the Commissioner and the Collector. In the particular circumstances of the case 1, however, direct that costs throughout will be borne by the parties as incurred. Appeal allowed.

The appellant was a displaced person from West Pakistan. In 1949 he was allotted 42 standard acres and 11 units of land which were later consolidated. In 1958 claiming to be a small holder he made an application under section 14 A(1) of the Punjab Security of Land Tenures Act 1953 before the Assistant Collector for the ejectment of respondent No. 4 who was a tenant of the land. The Assistant Collector rejected application on the ground that because of improvements the income from the lands had risen considerably and consequently the land had become equivalent to more than 50 standard acres, and therefore the applica tion was untenable under section 14 A. In appeal the Collector held that since the appellant was allotted only 42 standard acres and 11 units he was entitled to be treated as a small land holder. The Collector 's order was upheld by the Commissioner and by the Financial Commissioner. The tenant thereupon filed a writ petition before the High Court. According to the High Court the status of a landlord had to be ascertained as existing on the date of the application under section 14 A of the Act and not on the date of the allotment. Farther according to the High Court what is 'permissible area ' available to a landlord under the Act had also to be determined as obtaining on the date of the application for eviction made by the landlord. On this view the High Court allowed the tenant 's writ petition. In appeal by special leave to this Court, HELD: Under the provisions of the Act the entire land held by the landowner in the State of Punjab on the date of the commencement of the Act must be evaluated as on that date and the status of the landowner and his surplus area must then be ascertained. If he is then found to be 'a small landowner, he continues to be so for the purpose of the Act, until he acquires more land and on taking into account the value of the land in terms of standard acres on the date of the acquisition, he is found to be a big landowner. The landowner is required to make the necessary reservations or selections and to give the necessary declarations so that his status and the surplus area, if any, held by him may be so determined. If he is a small landowner at the commencement of the Act, his status is not altered by reason of improvements in the value of his land or re allotment of land on compulsory consolidation of holdings. section 19 F(b) which was introduced into the Act during the pendency of the appeal clarified the position to the same effect. [514 B D; 515 F] The appellant did not acquire any land after the commencement of the Act. His status as a small landowner was not altered by reason of subsequent improvements or re allotments of land on compulsory consolidation of holdings. On the date of the application, he therefore continued to be a small landowner. The High Court was in error in holding that the status of the appellant should be determined by evaluating his 5 12 land in terms of standard acres on the dates of the application for eviction. [515 H; 516 A B] Per Mudholkar J : Provisions relating to the valuation of lands under the Act are to be found in section 19 F(a) and 19F(b). The former did not apply to the present case as it applies only to the ascertainment of ,surplus area ' held by a landowner at the commencement of the Act; the appellant held only 'permissible area ' and no 'surplus are at all. Under section 19 F(b) fresh evaluation of land can take place "at any time" but the power under that section is exercisable only in the context of special circumstances, that is to say, where the landlord owns land after the commencement of the Act by inheritance, bequest or gift. These special circumstances did not exist in the present case. [519 H; 520 H; 521 B, D] When the provisions of section 19F are thus not attracted, the Revenue Assistant before whom an application under section 14 A for ejectment of a tenant is made by a landlord, is not entitled to evaluate the land of the landlord afresh for ascertaining whether he is in possession of land in excess of the permissible area. [521 F] Elaborate rules have been framed under the Act and elaborate provisions are also contained in the Act with a view to extend its protection as far as possible to tenants cultivating land. The omission, therefore, to make any provision as to what has to be done, if as a result of improvements made by the landlord or by reason of the rise in the yield of the land through other causes would point only to one conclusion and that is that this circumstance is not to be taken into account for evaluating the land afresh and recalculating the standard acreage. [521 G H] It would follow that the High Court was in error and its order must be set aside.

iminal Appeal No. 26 of 1965. Appeal by special leave from the judgment and order dated August 10, 1964 of the Patna High Court in Criminal Appeal No. 66 of 1962. R.K. Garg, section C. Agarwala and D. P. Singh, for the appel lants. D. Goburdhun, for the respondent. The Judgment of the Court was delivered by Hidayatullah, J. B in order pronounced on May 7, 1965, we ordered the dismissal of this appeal but reserved our reasons which we now proceed to give. The five appellants were tried on a complaint by the respon dent Janardan Prasad before the Honorary Magistrate. First Class, Jehanabad for offences under sections 420, 468, 406, 465/471, Indian Penal Code. They were acquitted on August 31, 1962. The complainant obtained special leave of the High Court at Patna under section 417(3) of the Code of Criminal Procedure and filed an appeal against their acquittal. The High Court set aside the acquittal and remanded the case to the District Magistrate of Gaya with a direction that the case be inquired into under Chapter XVIII of the Code from the stage of taking evidence under section 208, with a view to their committal to the Court of Session. The appellants now appeal by special leave against the judgment and order of the High Court. The facts of the prosecution case may now be stated briefly. Janardban Prasad and his brother Jangal Prasad were separate, having, prior to the present occurrence, partitioned their lands by metes and bounds. Plots Nos. 1810 and 1811 in village Kalpa Kalan fell to the share of Jangal and plot No. 1699 in the same village fell to the share of Janardan. Jangal Prasad 's plots lie close to the dalan of Matukdhari and his brothers Rameshwar Singh and Dhanukdhari Singh (the first three appellants) and they coveted them. Janardhan alleged that they forged a sale deed in respect of half the area of those two plots and presented the documents for registration. Janardhan was aggrieved but on the intercession of Deoki Lal and Chhedi Lal (appellants 4 and 5) 257 the dispute was compromised and it was agreed that Janardhan would execute a sale deed for plot No. 1699 and half of another plot No. 1491 while Matukdhari and his brother Dhanukdhari Singh agreed to sell in return O.10 acre in one of their plots (No. 1797) to him. The complainant executed two sale deeds in respect of the two said plots and Dhanukdhari Singh executed a sale deed in respect of plot No. 1797 as it was in his name. The latter sale deed was taken in favour of Janardhan 's son. All documents were scribed by Deokilal with the help of Chhedi Lal and were presented for registration. The receipts obtained from the Registration Office were left with Deokilal till the result of the first registration case (which was fixed for February 8, 1960) was known. When Janardhan asked for the receipts he was put off. He found later that the two documents had already been withdrawn by forging his signature. Matukdhari had withdrawn the deed executed by Janardhan and Dhanukdhari the sale dead executed by himself. The complainant was assured by Deokilal and Chhedilal that the deed executed in favour of his son would be returned by Rameshwar Singh with whom, it was said to be lying, but Rameshwar Singh refused to do so. The complaint was, therefore, filed. The Sub Divisional Officer, Jehanabad took cognizance under sections 468, 406 and 420, Indian Penal Code and sent the case to the Hony. Magistrate for disposal. The Hony. Magistrate drew up charges against all the accused under section 420, Indian Penal Code. In addition, Chhedilal and Deokilal were charged under section 468, Indian Penal Code and section 406, Indian Penal Code respectively. Matukdhari was charged under sections 465/471, Indian Penal Code. These charges could be tried by the Honorary Magistrate. No charge under section 467, Indian Penal Code was framed against any of the appellants. If it had been framed the case had to be committed to the Court of Session. On March 29, 1962 the complainant, by a written application, asked that action under Chapter XVIII of the Code be taken but the Magistrate declined to commit the accused. Another application dated June 28, 1962, for the same purpose was also rejected. The learned Magistrate held that the evidence of entrustment of the receipts from the office of the Registrar was not satisfactory and Deokilal could not be convicted under section 406, Indian Penal Code. He further held, mainly on the ground that no handwriting expert was examined, that it was not possible to say that there was forgery of the signatures or that Matukdhari had used the receipts knowing them to, be forged. On these findings the appellants were acquitted. 258 In his appeal before the High Court the complainant con tended that the trial before the Magistrate was without jurisdiction as the Magistrate should have acted under Chapter XVIII with a view to committing the accused to the Court of Session for trial as the facts disclosed an offence under section 467, Indian Penal Code, which is triable exclusively by the Court of Session. He contended that the offence was made out on his evidence and as registration receipts were valuable securities under section 30 of the Indian Penal Code a charge under section 467, Indian Penal Code should have been framed. This argument found favour with the High Court and it was held that although section 467, Indian Penal Code was not mentioned in the complaint, a charge under that section ought to have been framed. The High Court pointed out that it was the duty of the Magistrate to apply the correct law and if the facts disclosed an offence exclusively triable by the Court of Session he ought to have framed that charge and not assumed jurisdiction over the case by omitting it. In the opinion of the High Court a prima facie case existed for framing a charge under section 467, Indian Penal Code, which meant that the case ought to have been committed to the Court of Session. The acquittal was, accordingly, set aside and retrial ordered. In this appeal the judgment is assailed as erroneous and against the principles laid down by this Court for dealing with appeals against acquittals. Mr. Garg relies strongly upon two cases of this Court. They are Abinash Chandra Bose vs Bimal Krishna Sen and Anr.(1) and Ukha Kolhe vs State of Maharashtra(1). He contends that the trial before the Magistrate, in so far as it went, was with jurisdiction and it could not be set aside merely because the High Court thought that a charge under section 467, Indian Penal Code might have been framed. He contends that such a proceeding is not contemplated under section 423(1)(a). Criminal Procedure Code as explained by this Court in the two cases cited above. He further refers to Barhamdeo Rai and others vs King Emperor(3), Balgobind Thakur and others vs King Emperor (4 ) and K. E. V. Razya Bhagawanta(5) as instances where, the trial being with jurisdiction, no retrial was ordered even though it was submitted to the High Court that some other offences triable exclusively by the Court of Session with which accused could be charged, were also disclosed. These cases need not detain us. They do not deny the power of the High Court to order a retrial. The High Courts in those cases (1) ; (2) ; (3) A.I.R. 1926 Pat. (4) A.I.R. 1926 Pat. 393. (5) 259 did not order a retrial because the accused were convicted of lesser offences and the sentences imposed were considered adequate in all the circumstances of those cases. The two cases of this Court were considered by us in Rajeshwair Prasad Misra vs State of West Bengal(1). We have pointed out there that a retrial may be ordered for a variety of reasons which it is hardly necessary or desirable to state in a set formula and the observations of this Court are illustrative but not exhaustive. The Code gives a wide discretion and deliberately does not specify the circumstances for the exercise of the discretion because the facts of cases that come before the courts are extremely dissimilar. We pointed out that it would not be right to read the observations of this Court (intended to illustrate the meaning of the Code) as indicating in advance the rigid limits of a discretion which the Code obviously intended should be developed in answer to problems as they arise. We gave some illustrations of our own which fell outside those observations but which might furnish grounds, in suitable cases, for an order of retrial. This case also furnishes an example which may be added to that list. The High Court pointed out that there was evidence that the endorsements on the receipts were not made by Janardhan. Janardhan denied on oath that he had written them and stated that they were written by one of the respondents, with whose handwriting he claimed to be familiar. There was prima facie evidence to show that the two deeds which were presented for registration were taken out on the strength of forged receipts. No suggestion was made to Janardhan in cross examination that he had endorsed the receipts in favour of Matukdhari or Dhanukdhari. If he had not written the endorsements, some one else must have done so. No doubt handwriting experts could have been examined. The Magistrate could have taken action under section 73 of the Indian Evidence Act but this was not done. If the Magistrate had applied his mind to the problem he would have seen easily that a prima facie case of forgery was made out. He should then have considered whether the receipts were valuable security or not. If he had done that he would have seen that the main offence would prima facie be one under section 467, Indian Penal Code read with section 471 and the other offences were subsidiary. It was thus not proper for him to choose for trial only such offences over which he had jurisdiction and to ignore other offences over which he had none. His duty clearly was to frame a charge under section 467, Indian Penal Code (1)[1966] 1 S.C.R. 178. 260 and to commit the appellants to stand their trial before the Court of Session. It was open to the High Court, while hearing an appeal under section 417(3) of the Code to direct the Magistrate to frame a charge for an offence which was prima facie established by the evidence for the prosecution and also to order that the accused be committed to the Court of Session. It is wrong to contend that the High Court had no jurisdiction in the matter because the trial before the Honorary Magistrate (in so far as it went) was with jurisdiction. If it were so there would be no remedy whenever a Magistrate dropped serious charges ousting him of his jurisdiction and tried only those within his jurisdiction. The High Court followed a case of the Sind Chief Court reported in Dr. Sanmukh Singh Teja Singh Yogi vs Emperor(1) where retrial was ordered in very similar circumstances. We were referred to that ruling and on reading it we do not think the High Court was wrong in accepting it as a correct precedent. For, however hesitant the High Court may be to set aside an order of acquittal and to order retrial, it has jurisdiction under the Code to do so, if the justice of the case clearly demands it and a case of omission from the charge of a serious offence prima facie disclosed by evidence, is one of those circumstances in which the power can properly be exercised particularly when the charge for the offence, if framed, would have ousted the court of trial of its own jurisdiction. Mr. Garg submitted finally that acquittals are not set aside in other jurisdictions and cited the example of English Criminal Law. He submitted further that the setting aside of an acquittal with a view to holding a second trial robs the accused "of the reinforcement of the presumption of innocence which is the result of the acquittal". As to the first submission it is sufficient to say that in our criminal jurisdiction a retrial is possible and we need not be guided by other jurisdictions. No doubt the High Court must act with great care and caution and use the power sparingly and only in cases requiring interference. As to the second it is not necessary to consider how the presumption of innocence is reinforced by an acquittal and to what extent. The phrase in any event is hardly apt to describe a case where the accused is acquitted perversely, or without jurisdiction. All that can be said is that these appellants were presumed to be innocent at their first trial (1) 261 and will not be thought less so at their second trial till their guilt is established legally and beyond all reasonable doubt. In our judgment the High Court acted within its jurisdiction when it set aside the acquittal of the appellants and made an order for their retrial in the terms it did.

The appellants were tried on a complaint by the respondent before an Honorary Magistrate for offences under sections 420, 468, 406 and 465/471 Indian Penal Code and acquitted. The Magistrate rejected the complainant 's request to frame a charge under section 467 Indian Penal Code, and commmit the accused to the Court of Sessions. The complainant appealed to the High Court against the acquittal. The High Court held that the evidence prima facie disclosed an offence under section 467 and even though the complaint did not mention that section it was the duty of the Magistrate to commit the case to sessions. It accordingly set aside the acquittal, and ordered a retrial. The appellants came to this Court by special leave. It was contended on behalf of the appellants that the trial before the Magistrate, in so far as it went, was with jurisdiction and it could not be set aside merely because the High Court thought that a charge under section 467 might be framed, and that such a proceeding is not contemplated. by section 423(1) of the Code of Criminal Procedure. HELD: (i) If the Magistrate had applied his mind to the relevant evidence he would have seen that the main offence was under section 467 read with section 471and the other offences were subsidiary. It was thus not proper for him tochoose for trial only such offences over which he had jurisdiction andto ignore the other offence over which he had none. His duty clearly wasto frame a charge under section 467 and to commit the appellants to stand their trial before the Court of Sessions. [259 G] (ii)It is wrong to contend that the High Court had no jurisdiction in the matter because the trial before the Honorary Magistrate (in so far as it went) was with jurisdiction. If it were so there would be no remedy whenever a Magistrate dropped serious charges ousting him of his jurisdiction and tried only those within his jurisdiction. [260 B C] Dr. Sanmukh Singh Teja Singh Yogi vs Emperor, , approved. However hesitant the High Court may be to set aside an order of acquittal and to order retrial, it has jurisdiction under the code to do so if the justice of the case clearly demands it and a case of omission from the charge of a serious offence prima facie disclosed by the evidence, is one of those circumstances in which the power can properly be exercised particularly when the charge for the offence it framed would have ousted the jurisdiction of the trial court. [260 D E] Abinash Chandra Bose vs Bimal Krishna Sen, A.I.R. 1963 S.C. 316, Ukha Kolhe vs State of Maharashtra, A.I.R. 1963 S.C. 1531, Barhamdeo 256 Rai and others vs King Emperor, A.I.R. 1926 Pat. 36 Balgobind Thakur and others vs King Emperor, A.I.R. 1926 Pat 393 and K.E.V. Razya Bhagwanta, , referred to.

Civil Appeal No. 897 of 1987 From the Judgment and order dated 5.8.1986 of the Central Administrative Tribunal, New Delhi in Regn. No. T 853 of 1985 (CWP No. 2709 of 1985). G. Ramaswamy, Additional Solicitor General, P. Parmeshwaran and B. Parthasarthy for the Appellant. Harish N. Salve, Pramod Dayal and Badri Dass Sharma for the Respondents. The Judgment of the Court was delivered by VENKATARAMIAH, J. The short question involved in this case is whether the members of the All India Services who had retired prior to 1.1.1973 are entitled to payment of gratuity as a part of retirement benefits at the rates specified in the Notification No. 33/12/73 AIS (ii) dated 24.1. This appeal by special leave is filed against the decision of the Central Administrative Tribunal dated August 5, 1986 declaring that rule 28(6) of the All India Services (Death cum Retirement Benefits) Rules, 1958 insofar as it tended to restrict pensioners to retirement benefits to which they were entitled on the date of their retirement and sought to deny them the benefits of the liberalised pension and 700 gratuity in the amended notification No. 33/12/73 AIS (ii) dated 24.1.1975 was violative of Article 16 of the Constitution of India and further directing that all the members of the All India Services would be entitled to liberalised pensionary benefits including gratuity as per the said notification irrespective of whether they had retired prior to 1.1.1973 or thereafter. The above decision was given by the Central Administrative Tribunal, New Delhi in REGN No. T 853/85 (C.W. No. 2709185) which was a petition filed by the All India Services Pensioners Association (Rajasthan) and one R.D. Mathur, an IAS officer who had retired from service prior to 1.1.1973. The Union of India, the appellant herein, has not questioned the order of the Central Administrative Tribunal insofar as its liability to pay the pension in accordance with the judgment of the Tribunal is concerned. This appeal by special leave is confined only to that part of the order of the Tribunal by which the Union of India is directed to pay gratuity in accordance with the aforesaid notification even to those members of the All India Services who had retired prior to 1.1.1973. The crucial point for consideration in this appeal is whether the members of a service who had retired prior to the date on which there is an upward revision of the gratuity on retirement to the members of such service would also be entitled to claim the difference between the gratuity payable to members of such service on such upward revision and the gratuity which had been actually paid to them on their retirement, even though the Government order revising the gratuity does not either expressly or by necessary implication state that the members of the service who had retired earlier should also be paid gratuity at the revised rates because of the decision of this Court in D.S. Nakara vs Union of lndia; , A similar question came up for consideration before this Court in the State Government Pensioners Association & others vs State of Andhra Pradesh., [1986] 3 S.C.C. 501. The facts of that case are these The Government of Andhra Pradesh by its order G.O.Ms. No. 88 dated 26.3.1980 directed that retirement gratuity was payable to the officers to whom the said Government order was applicable as follows: "Retirement gratuity may be 1/3rd of pay drawn at the time of retirement for every six monthly service subject to maximum of 20 months ' pay limited to Rs.30,000. " The said order was made effective from April 1, 1978. The question which arose for consideration in some writ petitions filed in the High Court of Andhra Pradesh was whether the pensioners who had 701 retired prior to 1.4.1978 would also be entitled to the payment of gratuity in accordance with the provision made in the aforesaid notification. The High Court of Andhra Pradesh held that the decision of this Court in D.S. Nakara 's case (supra) was not applicable to the payment of gratuity and that pensioners who had retired prior to April 1, 1978 would not be entitled to claim the difference between the gratuity payable under the Government order and the gratuity which they had actually received at the time of their retirement. In the Special Leave Petitions filed before this Court against the said decision two of the learned Judges of this Court Thakkar and Ray, JJ. affirmed the view taken by the High Court of Andhra Pradesh and dismissed the petitions. In the course of their order the learned Judges observed as follows: "We fully concur with the view of the High Court. The upward revision of gratuity takes effect from the specified date (April 1, 1978) with prospective effect. The High Court has rightly understood and correctly applied the principle propounded by this Court in Nakara 's case . . . . An illustration will make it clear. Improvements in pay scales by the very nature of things can be made prospectively so as to apply to only those who are in the employment on the date of the upward revision. Those who were in employment say in 1950, 1960 or 1970, lived, spent, and saved, on the basis of the then prevailing cost of living structure and pay scale structure, cannot invoke article 14 in order to claim the higher pay scale brought into force say, in 1980. If upward pay revision cannot be made prospectively on account of Article 14, perhaps no such revision would ever be made. Similar is the case with regard to gratuity which has already been paid to the petitioners on the then prevailing basis as it obtained at the time of their respective dates of retirement. The amount got crystalized on the date of retirement on the basis of the salary drawn by them on the date of retirement. And it was already paid to them on that footing. The transaction is completed and closed. There is no scope for upward or downward revision in the context of upward or downward revision of the formula evolved later on in future unless the provision in this behalf expressly so provides retrospectively (downward revision may not be legally permissible even). It would be futile to contend that no upward revision of gratuity amount can be made in har 702 mony with Article 14 unless it also provides for payment on the revised basis to all those who have already retired between the date of commencement of the Constitution in 1950, and the date of upward revision. There is therefor no escape from the conclusion that the High Court was perfectly right in repelling the petitioners ' plea in this behalf. " When the above decision was brought to the notice of the Tribunal in the case out of which the present appeal arises the Tribunal declined to follow it and gave the following reasons for doing so: "We must, however, observe that the Supreme Court in that case was dismissing Special Leave Petition (Civil) Nos. 14179 and 14180 of 1985 and was not disposing of an appeal. Further, the Supreme Court, in that case was considering the Andhra Pradesh Pension Rules and not rule 28(6) of the All India Services (Death cum Retirement Benefit) Rules, 1958 and the liberalisation pension scheme of Andhra Pradesh notified on 24.1.1985 and not the notification dated 24.1.1975 amending the All India Services (Death cum Retirement Benefit) Rules, 1958 with which we are now concerned in this application. Moreover, the Special Leave Petition against the Andhra Pradesh High Court 's judgment was rejected by a Bench of two Judges while the judgment in V.P. Gautam 's case which expressly dealt with Rule 28(6) and the liberalised pension scheme notified on 24.1.1975 in respect of Members of All India Services was the subject matter of an appeal before a bench of three judges of the Supreme Court. The relevant portion of the judgment of the High Court of Punjab and Haryana which must be deemed to have been affirmed by the three member Bench of the Supreme Court when it dismissed Civil Appeal Nos 2738 and 2739 of 1985 on 12.2.1985 reads as follows: In other words, the provisions of rule 28(6) of the retirement benefits rules, 1958 in so far as they were entitled on the date of their retirement and seeks to deny them liberalised pension under the amended rules referred to above which came into effect subsequent to that date are unconstitutional and are also accordingly struck down. It follows that the liberalised pensionary benefits including death 703 cum retirement gratuity granted to pensioners by the amendment made in 1975 and 1979 shall be payable to all persons entitled to pensionary benefits under the Retirement benefits rules, 1958 irrespective of the date of the retirement from service. It has been repeatedly laid down by the Supreme Court that the decision of the larger Bench prevails over the decision of the smaller benches vide Ganapati Sitaram Balvalkar vs Waman Shripad Mage, A.I.R. 1981 S.C. 1956; Mattulala vs Radhe Lal, A.I R. ; Union of India vs K.S. Subramanian, A.I.R. 1976 S.C. 433. Even assuming that some aspects have not been taken into account by the Supreme Court, no Court or Tribunal of India can take a view different from that taken by the Supreme Court. As held by the Supreme Court in T. Govindaraja Mudaliar vs State of Tamilnadu, ; "merely because the aspect presented in the present appeal was not expressly considered or a decision given, that will not take away the binding effect of those decisions of the Supreme Court. " Vide Somavanti vs State of Punjab; , It may be pertinent to note that even in the Andhra Pradesh State Government Pensions Association case the judgment in V.P. Gautam 's was specifically referred to but the Supreme Court did not state that it was not correctly decided. Further, in all the above cases special leave applications were rejected following the principle laid down in Nakara 's case. In Gautam 's case the appeal filed by the Union of India was dismissed applying Nakara 's case. In dealing with the claim of the other members of the All India Services who like V.P. Gautam had retired prior to 1.1.1973, we cannot hold otherwise in construing rule 28(6 ' in the context of the liberalised pension scheme of 1975, The conflict if any must be resolved by the Supreme Court. We must follow the decision in V.P. Gautam 's case which is directly in point. " With great respect to the Tribunal it should be stated that the way in which it has tried to ignore the decision of this Court in the Andhra Pradesh State Government Pensioners Association case 704 (supra) is not correct. In the above decision the two learned Judges, who decided that case have given reasons for not applying the rule in D.S. Nakara 's case (supra) insofar as the liability of the Government to pay gratuity on retirement is concerned. The first ground relied on by the Tribunal not to follow the said decision is that it had been rendered by this Court while dismissing some special leave petitions. This is a wholly untenable ground. The special leave petitions were not dismissed without reasons. This Court had given reasons for dismissing the special leave petitions. When such reasons are given the decision becomes one which attracts Article 141 of the Constitution which provides that the law declared by the Supreme Court shall be binding on all the courts within the territory of India. The second ground given by the Tribunal is that the decision was one rendered in a case involving a notification issued by the Andhra Pradesh Government but not one touching the notification dated 24.1.1975 involved in this case. This is also not tenable. The Supreme Court was considering the question of applicability of the principle enunciated in D.S. Nakara 's, case to the case of gratuity. The views expressed by this Court should, therefore, apply to all cases of gratuity where similar features exist and it should apply to the present case too. If what the Tribunal has held is correct then D. section Nakaras case will not be applicable to any order of pension passed by any State Government. That would indeed be a startling proposition with which we do not agree. As regards the third ground it is no doubt true that the High Court of Punjab & Haryana in its decision in V. P. Gautama vs Union of India and Ors., [1984] Labour and Industrial Cases 154 had observed that "it follows that the liberalised pensionary benefits including death cum retirement gratuity granted to pensioners by the amendment made in 1975 and 1979 shall be payable to all persons entitled to pensionary benefits under the Retirement Benefits Rules, 1958 irrespective of the date of the retirement from service". But at the end of its decision the High Court passed the following order: "In the result, a writ of mandamus is issued to the Union of India and the other respondents directing them to compute and pay pensionary benefits to the petitioner along with interest on the amounts becoming payable to him in terms of this order. The petitioner shall also be entitled to the costs of this petition. " When the Special Leave Petition was filed against the said decision this Court passed the following order: 705 "Special leave to appeal was confined only to two questions (1) whether the enhanced pension under the liberalised pension scheme was payable with effect from 1st October, 1974 and (2) whether the High Court had any jurisdiction to award interest at 12% per annum. So far as the first question is concerned, it is fully covered by D.S. Nakara & Ors. vs Union of India. We are not inclined to go into the second question in the present appeals. The appeals are therefore, dismissed. No costs. " The above decision was rendered by a bench of three Judges of which one of us was a member. It is seen from the above order that there is no reference to the liability of the Union of India and the State of Haryana to pay the gratuity to the pensioner who was involved in that case. The first question considered related to the payment of enhanced pension. It is not known whether the question relating to gratuity was pressed before this Court or not. There is no reference to the liability to pay gratuity in the said order. The only point considered by this Court by the above order was the point involved in question No. 1, referred to therein, namely, whether the enhanced pension under the liberalised pension scheme was payable with effect from 1st October, 1974 and insofar as that question was concerned, the view taken by the High Court of Punjab & Haryana was affirmed. It may be that the decision of the High Court of Punjab and Haryana may be binding on the parties to that petition as res judicata. But the above order of this Court cannot be considered as a precedent under Article 141 of the Constitution to hold that the liability to pay gratuity was also governed by the decision in D.S. Nakara 's case. It may be pointed out that in M.L. Abhyankar and others etc. vs Union of India, (Writ Petition (Civil) Nos. 3531 34 of 1983 and connected cases decided on April 24, 1984) a bench of three Judges of this Court, which consisted of two of the Judges who dismissed the appeal filed against the judgment of the High Court of Punjab & Haryana referred to above, has observed thus: "In view of our decision in D.S. Nakara vs Union of India; , and for the reasons mentioned by the Allahabad High Court in Writ Petition No. 3201 of 1979 dated 21311983 in the case of Bidhubhushan Malik and others vs Union of India which we have accepted as correct in Special Leave Petition No. 9616 of 1983 just now dismissed by us we allow the writ petitions. The judges of the High Court and of the Supreme Court will be entitled to the pensionary benefits under the amended Act of 1973 706 irrespective of the dates of their retirement. They will be so entitled with effect from 1.10.1974. Arrears of pension calculated under the provision of the new Act will be paid to those to whom it is due within four months from today. In the case of Judges who have died after 1.10.1974 the amounts due will be paid to the legal heirs of the Judges within four months from today. The family pension due to the widows will be calculated under the provisions of the 1976 Amending Act and paid to them. Ad hoc payments made, if any, will be adjusted while making such payments. The writ petitions are disposed of accordingly. What we have said about pensionary benefits does not apply to payment of gratuity. " (underlining by us) From the foregoing it is clear that this Court has made a distinction between the pension payable on retirement and the gratuity payable on retirement. While pension is payable periodically as long as the pensioner is alive, gratuity is ordinarily paid only once on retirement. No other decision of this Court which has taken a view contrary to the decision of Thakkar and Ray, JJ. in the Andhra Pradesh State Government Pensioners Association 's case (supra) and to the decision in M. L. Abhyankar 's case (supra) has been brought to our notice. The observations made in these two cases are binding on us insofaras the applicability of the rule in D.S. Nakara 's case (supras to the liability of the Government to pay gratuity on retirement. We respectfully agree with the views expressed in those decisions. It is also not shown that the Government notification in question either expressly or by necessary implication directs that those who had retired prior to 1.1.1973 would be entitled to any additional amount by way of gratuity. The Tribunal was, therefore, in error in upholding that gratuity was payable in accordance with the Government Notification No. 33/12/73 AIS(ii) dated 24.1.1975 to all those members of the All India Services who had retired prior to 1.1.1973. The Judgment of the Tribunal is set aside to the extent indicated above. We make a declaration that the members of the All India services who had retired prior to 1.1.1973 are not entitled to claim gratuity on the basis of the Notification referred to above. The appeal is allowed to the above extent. There will be no order as to costs. N.V.K. Appeal allowed.

% In a petition filed by the All India Services Pensioners ' Association, and an I.A.S. Omcer who had retired from service prior to l.1.1973 (respondents in the Appeal) the Central Administrative Tribunal by its decision dated August 5, 1985, declared that Rule 28(6) of the All India Services (Death cum Retirement Benefits) Rules; 1958 insofar as it tended to restrict pensioners to retirement benefits to which they were entitled on the date of their retirement, and sought to deny them the benefit of the Iiberalised pension and gratuity in the amended Notification No. 33/12/73 AIS (ii) dated January 24, 1975 was violative of Article 16 of the Constitution, and directed that all the members of the All India Service would be entitled to liberalised pensionary benefits including gratuity as per the said Notification irrespective of whether they had retired prior to January 1, 1973 or thereafter. The Appellant Union of India in its appeal by Special Leave to this Court had not questioned the Tribunal 's order insofar as its liabil H 698 ity to pay pension was concerned, but sought leave against the direction to pay gratuity in accordance with the Notification even to those members of the All India Services who had retired prior to January 1, 1973. On the question: whether the members of the All India Services who had retired prior to January 1, 1973 are entitled to payment of gratuity as a part of retirement benefits at the rates specified in the Notification No. 33;12 73 AIS (ii) dated 24. 1. 1975. Allowing the appeal, ^ HELD:1. In the Andhra Pradesh State Government Pensioners ' Association vs State of Andhra Pradesh, [1986] 3 SCC 501 this Court had given reasons for not applying the rule in D.S. Nakara vs Union of India, [1983]2 SCR 165 insofar as the liability of the Government to pay gratuity on retirement is concerned. [704A B] 2. The views expressed by this Court apply to all cases of gratuity where similar features exist and it should apply to the instant case too. [704D] 3. The way the Tribunal in the instant case, has tried to ignore the decision of this Court in the Andhra Pradesh State Government Pensioners ' Association case is not correct. The first ground relied on by the Tribunal not to follow the said decision is that it had been rendered by this Court while dismissing some special leave petitions is a wholly untenable ground. The second ground given by the Tribunal that the decision was one rendered in a case involving a Notification issued by the Andhra Pradesh Government and not one touching the Notification dated January 24, 1975 is also not tenable. [704C D] 4. When reasons are given for dismissing Special Leave Petitions the decision becomes one which attracts Article 141 of the Constitution which provides that the law declared by the Supreme Court shall be binding on all the courts within the territory of India. [704B C] 5. This Court has made a distinction between the pension payable on retirement and the gratuity payable on retirement. While pension is payable periodically as long as the pensioner is alive, gratuity is ordinarily paid only once on retirement. [706C D] 6. The observation made by this Court in Andhra Pradesh State Government Pensioners ' Association case and in M.L. Abhyankar vs U.O.I, are binding insofar as the applicability of the 699 rule in D.S. Nakara 's case to the liability of the Government to pay gratuity on retirement. [706D E] 7.(i) The Government Notification No. 33/12/73 AIS (ii) dated January 24, 1975 neither expressly nor by necessary implication directs that those who had retired prior to January 1, 1973 would be entitled to any additional amount by way of gratuity. [706E F] 7.(ii) The Tribunal was in error in upholding that gratuity was payable in accordance with the Government Notification No. 33/12/73 AIS (ii) dated January 24, 1975 to all those members of the All India Services who had retired prior to January t, 1973. It is declared that the members of the All India Services who had retired prior to January 1, 1973 are not entitled to claim gratuity on the basis of the said Notification. [706F G]

Appeals Nos. 206 to 210 of 1964. Appeals from the judgment and orders dated September 26, 1961 of the Calcutta High Court in income tax Reference No. 24 of 1957. Niren De, Additional Solicitor General, Ganapathy Iyer and R.N. Sachthey, for the appellants. Sampat lyengar, B.R.L. Iyengar and D.N. Gupta, for the respondents. The Judgment of the Court was delivered by Sikri, J. These appeals by certificate granted by the High Court of Calcutta under section 66(A)(2) of the Indian Income Tax Act, 1922, are directed against the judgment of the said High Court answering two questions referred to it against the Revenue. The questions are: (1) Whether the profit arising to the assessee company from miscellaneous insurance transactions of mutual character was assessable under the Indian Income Tax Act, and (2) If the answer to question No. (1) is in the affirmative, whether on the facts and in the circumstances of the case the balance of the profits as disclosed in the assessee company 's profit and loss account after deducting the various reserves should be the taxable profits within the meaning of Section 2(6C) read with Rule 6 of the Schedule of the Indian Income Tax Act. The relevant facts and circumstances are as follows: The respondent. the Calcutta Hospital and Nursing Home Benefits Association Limited, hereinafter referred to as the assessee, is a mutual insurance concern carrying on miscellaneous insurance business. The principal objects for which the Association was established were: (1) By means of insurance on the mutual principle to provide, or help towards providing, anywhere in the world for the expense of accommodation and treatment in hospitals 634 and nursing homes and of private nursing for members and their dependants; (2) To organise insurance on the mutual principle under Rules and Regulations to be framed for the purpose with the object of providing such hospital, medical, surgical, nursing and allied services as before mentioned, of supporting and assisting hospitals, in Calcutta or elsewhere; of relieving members or then dependants, in whole or in part from the payment of hospital and other charges while in receipt of such hospital, medical, surgical, nursing and allied services; and of reimbursing and repaying to members or their dependants in whole or in part, all payments for such hospital and other charges which they may have incurred or made which in receipt of such hospital, medical, surgical, nursing and allied services. The members were required to pay a monthly premium, but there was a waiting period of four months for all bench its other than maternity, for which the waiting period was one year. Benefits and privileges became available as from the first day of the fifth calendar month of registration (in respect of Maternity the 13th month) and continued to be available thereafter so long as the subscriptions were not in arrear. These appeals are concerned with the assessment years 1949 50 to 1953 54 and the relevant accounting years ended on December 31, 1948, December 31, 1949, December 31, 1950, December 31, 1951 and December 31, 1952, respectively. In the statement of the case, the Appellate Tribunal describes the accounts maintained by the assessee thus: "The assessee 's published revenue accounts contained three classifications, viz. (i) miscellaneous insurance business revenue account, (ii) profit and ' loss account and (iii) profit and loss appropriation account. In the miscellaneous insurance business revenue accounts were included subscriptions from the members, gross premia from the members and from such amounts were deducted general reserve and or contingency reserve. Reserve so made were transferred to the balance sheet as credit accounts. The claims paid or payable and the expenses of management were deducted from this revenue account. The balance of the miscellaneous insurance business revenue account was transferred to the profit and loss account to the credit of which was further added interest on investments and the debits included provision for taxation, interest on loan, contribution to provident fund and depreciation. The balance of this account being the balance of profit and loss account was transferred. to the profit and toss appropriation account. Therefrom, in one year, ended 635 31st December, 1949, further deduction was made against contingency reserve and the balance either loss or profit was carried forward. " We may now set out the facts regarding 1949 50 assessment. It is not necessary to state the facts regarding other assessment years. The Income Tax Officer for the assessment year 1949 50 added the reserve for taxation, Rs. 1000/ , to the net profit as per profit and loss account, which showed a profit of Rs. 1,653/ , and after deducting depreciation, he assessed the total income at Rs. 2,651/ . On appeal, the Appellate Assistant Commissioner upheld the order of the Income Tax Officer. Following the decision of the Bombay High Court in Bombay Mutual Life Assurance Society Ltd., vs Commissioner of Income Tax, Bombay City (1) he held that the income was assessable to income tax and that under Rule 6 of the Schedule to the Income Tax Act it was permissible for the Income Tax Officer to add the reserves to the income disclosed in the profit and loss account. On further appeal, the Appellate Tribunal found no difficulty in holding that section 2(6C) of the Income Tax Act, according to its true interpretation, included income or the profits of any insurance company of mutual assurance and the said profits shall be taken to be balance of the profits disclosed by the annual accounts. Regarding the reserve, the Tribunal held that the provision for reserve was not an expense to be deducted from the profits disclosed by the assessee company in order to arrive at the profits within the meaning of r. 6, and the Income Tax Officer was entitled to add back the reserve. The High Court held that the surplus, miscalled profit, arising to the assessee company from the miscellaneous insurance transactions of mutual character was not assessable under the Indian Income Tax Act and that, in any event, the assessee was entitled to deduct the reserve. The High Court distinguished Bombay Mutual Life Assurance Society, Ltd. vs Commissioner of Income Tax, Bombay City(1) on the ground that the Bombay decision was a life insurance decision and although it was a mutual life insurance society, nevertheless different and special rules applied to life insurance and the rules with which the Bombay decision was concerned were rules 2 and 3 which did not apply to mutual insurance other than life. The second point of distinction, according to the High Court, was the very distinctive clauses in the memorandum of objects and articles of association of the assessee. Section 2(6C) at the relevant time defined 'income ' to include " . . profits of any business of insurance carried on by a mutual insurance association computed in accordance with Rule 9 in Schedule. " We may mention that another section 2(6C) was substituted by Act XV of 1955, and the wording substituted by this Act in (1) 20 I.T.R.189. 636 sub clause (vii) is "the profits and gains of any business of insurance carried on by a mutual insurance association or by a co operative society computed in accordance with rule 9 in the Schedule. " But nothing turns on the change of the language as far as a mutual surance association carrying on business of insurance is concerned. Rule 9 of the Schedule reads thus ' "9. These rules apply to the assessment of the profits of any business of insurance carried on by a mutual insurance association . . Rule 6 with which we are concerned reads thus: "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 Superinte ndent 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. Profits and losses on the realisation of investments and depreciation and appreciation of the value of investments shall be dealt with as provided in Rule 3 for the business of life insurance. " The Additional Solicitor General, appearing on behalf of the appellant, contends that the Bombay High Court was right in holding that "section 2(6C) imports into the definition of 'income ', which is to be found in the charging section 3, these profits which may not be profits in the ordinary sense of the term but which are made profits by reason of Rule 2 of the Schedule because Rule 2 really gives an artificial extension to the meaning of the word 'profits ' when it says that 'profits and gains shall be taken to be '. Therefore a new class of artificial income is created by this rule and that artificial income is included into the meaning of Section 3 by reason of this rule. " Mr. Sampat Ayyangar, learned counsel for the assessee, relying on the decision of the House of Lords in Arvshire Employers Mutual Insurance Association Ltd. vs Commissioner of Inland Revenue,(1) contends that the Legislature has not made its intention clear because it has used the word 'profits ' in section 2(6C) under a misapprehension that the surplus of a mutual insurance company (1) 637 carrying on insurance business is profits. He says that in Arvshire Employers Mutual Insurance Association case(1) the Legislature had proceeded on a similar misapprehension and the House of Lords held that section 31(1) of the Finance Act, 1933 (23 & 24 Geo. V.c. 19) did not succeed in making the profits of a mutual insurance company taxable. He urges that we should follow this precedent. He relies on the following passage from the speech of Lord Macmillan at p. 347: "The structure of Section 31(1) is quite simple. It assumes that a surplus arising from the transactions of an incorporated company with its members is not taxable as profits or gains. To render such a surplus taxable it enacts that the surplus, although in fact arising from transactions, of the comp any with its members, shall be deemed to be something which it is not, namely, a surplus arising from transactions of the company with non members. The hypothesis is that a surplus arising on the transaction of a mutual insurance company with non members is taxable as profits or gains of the company. But unfortunately for the Inland Revenue the hypothesis is wrong. It is not membership or non membership which determines immunity from or liability to tax, it is the nature of the transactions. If the transactions are of the nature of mutual insurance the resultant surplus is not taxable whether the transactions are with members or with non members. " He further relies on the observations of Lord Macmillan that "the Legislature has plainly missed fire. Its failure is perhaps less regrettable than it might have been, for the Sub section has not the meritorious object of preventing evasion of taxation, but the less laudable design of subjecting to tax as profit what the law has consistently and emphatically declared not to be profit." He says that similarly in this case the Legislature has plainly missed fire. In order to appreciate the scope of that decision, it is necessary to set out the relevant part of section 31 of the Finance Act, 1933. Section 31(1) enacted: "31. (1) In the application to any company or society of any provision or rule relating to profits or gains chargeable under Case I of Schedule D (which relates to trades) . any reference to profits or gains shall be deemed to include a reference to a profit or surplus arising from trans (1)T. C. 331. 638 actions of the company or society with its members which would be included in profits or gains for the purposes of that provision or rule if those transactions were transactions with non members, and the profit or surplus aforesaid shall be determined for the purposes of that provision or rule on the same principles as those on which profits or gains arising from transactions with non members would be so determined. " The Section adopted the device of a deeming provision. The profits arising from the transactions of a company or society with its members were deemed to be profits arising from transactions with non members. Parliament assumed that the latter were taxable. As this hypothesis was wrong, Parliament failed in its objective. But the Indian Legislature did not adopt any deeming device. It defined 'income ' to include profits of any business of insurance carried on by a mutual insurance association. What are those profits is then explained by reference to the Schedule. The effect of this in substance is to incorporate r. 6 into the definition. If the legislature had defined income to include profits of insurance carried on by a mutual insurance association computed according to r. 6, very little would have remained arguable. It is, however, urged that in r. 6 also the word 'profits ' means taxable profits. But r. 6 speaks of balance of profits as disclosed in the accounts submitted to the Superintendent of Insurance. The Superintendent of Insurance is not concerned with taxable profits. What he is concerned with, inter alia, is the balance of profits for the purpose of the . It is then urged that in the definition the word 'surplus ' should have been used instead of profits. But the word 'surplus ' has a technical significance in the , and it seems to us that it would have been inexpedient to use the word 'surplus '. At any rate. r. 6 would then have been drafted differently. It is finally urged that this is a taxing statute and we should give a strict construction to the definition. The definition could still operate if we interpret it in a narrow sense as to include profits from investments and other activities of a mutual insurance company. It is said that this definition was inserted to make it clear that such profits would be taxable. We cannot accede to this contention. It was well established that such profits would be taxable apart from the new definition, We cannot understand why it was necessary 639 to make it doubly clear. Moreover, r. 6 deals with balance of profits, which would include profits arising from the business of insurance of a mutual character. It deals with balance of profits as a composite thing. It is impossible to dissect this composite thing. If we were to accede to the assessee 's contention, the definition would serve no purpose whatsoever. It seems to us that the Legislature has evinced a clear intention to include the balance of profits as computed under r. 6 within 'the word 'income ' in section 3 of the Income Tax Act, and ' accordingly such balance of profits is taxable. We are unable to agree with the High Court that the Bombay case is distinguishable in principle. It is true that the Bombay High Court was concerned with r. 2, but when we go to the schedule and find out what is the balance of profits or surplus that has been made taxable, it does not make any difference to the construction of section 2(6C) whether it is r. 2 that is applied or r. 6. Therefore, disagreeing with the High Court, we answer the first question in the affirmative. This takes us to the second question. The answer to this question depends on the true interpretation of r. 6. It seems to us that on its language the Income Tax Officer is bound to accept the balance of profits disclosed by the annual accounts, copies of which have been submitted to the Superintendent of Insurance. He can only adjust this balance so as to exclude from it any expenditure other than expenditure which may under the provisions of section 10 be allowed for in computing the profits and gains of a business. We are not concerned here with the latter part of r. 6 dealing with profits and losses on the realisation of investments, and depreciation and appreciation of the value of investments. This Court examined the provisions of the in connection with the Schedule in Pandvan Insurance Company Ltd., Madurai vs The Commissioner Income Tax, Madras(1) and arrived at the conclusion that the "makes detailed provisions to ensure the true valuation of assets and the determination of the true balance of profits of an insurance business" and that r. 6 should be construed in the light of this background. Examining r. 6 in the light of this background, it seems to us that the intention of the rule is that the balance of profits as disclosed by the accounts submitted to the Superintendent of Insurance and accepted ' by him would be binding on the Income Tax Officer, 640 except that the Income Tax Officer would be entitled to exclude expenditure other than expenditure permissible under the provisions of section 10 of the Act . It is common ground in this case that these serves which were added to the balance of profits were not expenditure. Accordingly, agreeing with the High Court, we answer the second question in the affirmative . In the result, the appeals are accepted in part. Parties will bear their own costs in this Court. Appeals partly allowed .

The respondent Association was a mutual insurance concern carrying on miscellaneous insurance business. The objects of the Association included provision of help anywhere in the world in respect of expenses of accommodation and treatment in nursing homes for members and their dependents. The members were required to pay a monthly premium. In the assessments for the assessment years 1949 50 to 1953 54 the Income tax Officer taxed the reserves for payment of income tax which had been debited to the profit and loss account. The Appellate Assistant Commissioner as well as the Appellate Tribunal upheld the Income tax Officer 's order. The questions arising in the proceedings were; (1) whether the balance of profits of a mutual insurance concern were included in the definition of the word 'income ' and if so (2) whether reserves for income tax could be taxed. At the instance of the respondent a reference was made to the High Court. That Court held that the surplus, miscalled profit, arising to the company from the miscellaneous insurance transactions of mutual character was not assessable under the Indian Income tax Act and that in any event, the assessee was entitled to deduct the reserves. The Revenue appealed to this Court with certificate. HELD: (i) In section 2(6C), the Legislature has evinced a clear intention to include the balance of profits under r. 6 within the meaning of the word 'income ' in 6. 3 of the Indian Income Tax Act, and accordingly such balance of profits is taxable. [639B C] Ayrshire Employers Mutual Insurance Association Ltd. vs Commissioner of Inland Revenue, , distinguished. "Profits." in r. 6 cannot be said to mean "taxable profits". Rule 6 refers to 'balance of profits ' as disclosed in the accounts submitted to the. Superintendent of Insurance. The Superintendent of Insurance is not concerned with taxable profits. What he is concerned with is the balance of profits under the Insurance Act. [638E F] Nor can the term 'profits ' in r. 6 be interpreted in the narrow sense of including only profits from investments and other activities of a mutual insurance company. Rule 6 deals with "balance of profits" as a composite thing. It is impossible to dissect this composite thing. [639A B] Bombay Mutual Life Assurance Society Ltd. vs Commissioner of Income tax, Bombay City, , affirmed. (ii) The Insurance Act makes detailed provisions to ensure the true valuation of assets and the determination of the true "balance of profits" of an insurance business and r. 6 should be construed in the light of this background. [639G H] 633 Pandyan Insurance Company Ltd. Madurai vs The Commissioner Income tax, Madras, ; , referred to. Examining r. 6 in the light of this background. the intention of the rule seems to be that the. balance of profits as disclosed by the accounts submitted to. the Superintendent of Insurance and accepted by him would be binding on the Income Tax Officer, except that the Income Tax Officer would be entitled to exclude expenditur.e other than expenditure permissible under the provisions of section 10 of the Act. In the present case it was common ground between the parties that the reserves which were added to the balance of profits were not expenditure. The High Court rightly held that the reserve for income tax could not be taxed. [639H 640B]

vil Appeal No. 1660 (NT) of 1974. From the Judgment and Order dated 23.12.1971 of the Allahabad High Court in Income tax Reference No. 53 of 1968. H.K. Puri for the Appellants. Miss A. Subhashini and H.B. Rao for the Respondent. The Judgment of the Court was delivered by SABYASACHI MUKHARJI, J. This appeal by special leave is from the judgment and order of the Allahabad High Court dated 23rd December, 1971 in the Income Tax Reference. The assessee is a limited company under the Indian Companies Act and derived its income from the manufacture and sale of sugar and confectionery. The assessment for the assessment year 1958 59 was completed under the Indian Income Tax Act, 1922. The Income Tax Officer in the said assessment, inter alia made the following additions besides others in respect of the following items: (i) For cane cost Rs.48,500/ (ii) For shortage in cane Rs.67,500/ (iii) For salary of outstation staff Rs.21,700/ The assessee did not challenge the said assessment order passed by the Income Tax Officer in so far as the additions of the above amounts in appeal or otherwise. It was the case of the assessee that it did not appeal because it wanted to keep good relations with the revenue although, according to the assessee, the above additions made by the Income Tax Officer were totally unjustified and illegal. On 14th March, 1963 the Income Tax Officer issued notice under section 274 read with section 271 of the Income Tax Act, 1961 (hereinafter called 'the Act ') in respect of the assessment year 1958 59 for imposing penalty. The assessee company demurred. After considering the reply the 696 Inspecting Assistant Commissioner on 1st October, 1964 imposed a penalty of Rs.70,000 under section 274 read with section 271 of the Act holding inter alia that there was concealment of income to the tune of Rs.1,37,700 and the maximum penalty of Rs.1,06,317 was imposable in law but a sum of Rs.70,000 was imposed as penalty considering the facts and circumstances of the case. The assessee preferred an appeal against the said order. The Tribunal after considering the entire matter, reduced the penalty to Rs.5,000. The Tribunal referred the three following questions, two at the instance of the assessee and one at the instance of the revenue, to the High Court for determination: "1. Whether, on the facts and in the circum stances of the case, the Tribunal was correct in holding that the provisions of section 271 of the Income Tax. Act, 1961 are applicable to the present case; 2. 'Whether, there is any material to warrant the finding that the assessee company had concealed the particulars of its income or deliberately furnished inaccurate particulars thereof within the meaning of section 271(2) of the Income Tax Act, 1961; and 3. Whether, on the facts and in the circum stances of the case, the Tribunal is correct in reducing the penalty under section 271(1)(c) from Rs.70,000 to Rs.5,000?" The High Court was of the opinion that the third question did not clearly bring out the matter in dispute between the parties and as such it was reframed as follows: "Whether, on the facts and in the circum stances, the finding of the Tribunal that the assessee had not concealed income to the extent of Rs.67,500 and Rs.21,700 within the meaning of section 271(1)(c) of the Indian Income Tax Act, 1961, is correct in law?" The High Court noted that the Income Tax Officer had made certain additions and disallowed certain expenses and of the various amounts disallowed only three amounts were required to be considered by the High Court namely; (i) inflation in price of sugar cane of an amount of Rs.48,500, (ii) excess shortage claimed for cane 697 Rs.67,500 and (iii) salary of out station staff of loading contractors of Rs.21,700. So far as the first question is concerned the High Court held in favour of revenue and answered the question in the negative. The answer to this question is no longer in dispute here. So far as the second question is concerned the High Court answered the question in the nagative and in favour of the assessee. There is no dispute about that question too, in so far as there is no appeal by the revenue. As regards the third question re framed as mentioned hereinbefore, it was answered by the High Court in the affirmative and in favour of the revenue. The assessee has come up in appeal to this Court challenging the correctness of that answer. In this appeal we are con cerned with the correctness or otherwise of the answer given to this question and the appeal must be confined to the correctness of the answer given to the third question as reframed. The Income Tax Officer in his assessment order out of which this penalty proceedings arose noted that there were several disallowances in various accounts and he mentioned altogether 19 items totalling Rs.3,01,787. All these were on account of disallowances. Main item was shortage in cane and the amount was Rs.67,500. Another items was salary of out station staff and the amount was Rs.21,700. There was also addition of Rs.48,500 on account of inflation in the price of sugar cane. The Inspecting Assistant Commissioner in his order noted, inter alia three items, namely, (i) inflation in price of sugar cane Rs.48.500 (ii) excess shortage claimed for cane Rs.67,500 and (iii) salary of outstation staff of loading contractors Rs.21,700. It was found so far as the last item was concerned that the amount was disal lowed being a false debit. It was found that the assessee attempted to understate the income by debiting a false expenditure of Rs.48,500. The Inspecting Assistant Commis sioner noted that actual shortage was 21,143 Mds. valuing Rs.26,429 while the assessee had claimed Rs.1,34,661 for shortage at 2%. The excess claim was also indicative of the real position that the shortage was fictitiously claimed at a high figure. Faced with these facts the assessee eventual ly surrendered Rs.67,500. Therefore, the Inspecting Assist ant Commisioner held that the assessee was certainly reduc ing the income by debiting false claims for excess shortage and the action amounted to intentional concealment. Salary amounting to Rs.21,700 paid by the contractors to their staff working at out centres was debited in the books and while it was claimed that the staff working at these centres were actually employed by the company, on investigation the claim was found to be false. In this connec 698 tion a reference was made to the statement of one Shri Kedar Nath Kanodia. He had stated that he had employed five per sons at the out centres and there was no employee of the mill working at the centres. The mill had kept there neither any clerk not any chowkidar. He confirmed that he had paid the employees out of his own funds and had categorically denied that they were the employees of the mill or that they were paid by it. In his statement he further stated that although the staff was actually paid by him yet the compa ny 's accountant had obtained their signatures on salary sheets and thus inflated the expenses by raising false debit in the salary account. This procedure was followed in re spect of other contractors also. The salary bill was thereby inflated by Rs.21,700. The Inspecting Assistant Commissioner therefore, held that the assessee had concealed income to the extent of Rs.21,700. He had also come to the conclusion that the cane purchases noted against these last entries were false and fictitious and the quantity covered by these entries was 31, 561 Mds. valuing at Rs.48,500. This was a false debit. The assessee debited the three items of Rs.48,500, Rs.67,500 and Rs.21.700. The assessee admitted that these items represented income. It was also borne out by records that the amounts were not included in the return by the company. The offence of deliberate under statement of income was, thus clearly established according to the In specting Assistant Commissioner. He, therefore, found that the tax sought to be evaded came to Rs.70,914 and the maxi mum penalty worked out to Rs. 1,06,37 1. Having regard to the facts and circumstances of the case, he imposed a penal ty of Rs.70,000. In appeal the Income Tax Tribunal was of the view that not much turned upon the fact that the assessee agreed to the additions of the amounts in the assessment. So far as the reliance placed upon Kanodia 's statement by the Inspect ing Assistant Commissioner was concerned, it had no rele vance or bearing to the facts of the assessment year in question. He was not the contractor employed by the assessee in the year of account. He came in only for a later year. One Avinash Chand was the contractor in the year in ques tion. He had specifically stated that he was responsible for shortages. He had also admitted that there was staff main tained by the mill at the centre at which he was the loading contractor. In fact he had gone to the extent of and stated as to what staff was maintained in that centre; there was a man in charge of the centre, a weighment clerk, a cane clerk and three to four chowkidars. He had also stated that they were not his employees. According to the Tribunal in these circumstances the assessee could very well have argued against the addition of the two sums, 699 namely, Rs.67,500 and Rs.21,700. But the assessee as we have noted had agreed to the amounts being included. The Tribunal was of the view that the mere fact that the amounts were agreed to be taken into account by the assessee did not ipso facto indicate any criminality in its action to conceal any portion of the income. The Tribunal found that so far as Rs.48,500 was concerned in the inflation in the price of sugar cane, the previous history was against the assessee. It had agreed to the similar additions in the earlier years 1955 56 and 1956 57 the Tribunal noted. From the above facts, it was seen that the penalty was warranted in similar amount for this year also, the Tribunal noted. Taking into consideration that the sum involved against this year was Rs.48,500 the tribunal considered that a smaller penalty was imposable. The Tribunal accordingly imposed a total penalty of Rs. 5,000. The High Court reiterated that the onus of proving concealment was on the revenue because the proceedings for penalty were penal in character. In that view of the matter the High Court was of the opinion that so far as Rs.48,500 was concerned it was not proved that there was any deliber ate concealment. So far as the other two amounts of Rs.67,500 and Rs.21,700 were concerned, it was contended that the High Court noted the history of the order of the Inspecting Assistant Commissioner and the circumstances of the case and the High Court was of the view that the Tribu nal had not at all considered the fact that the value of the shortage was only Rs.26,429. According to the High Court, the Tribunal had brushed aside the fact that the assessee had agreed to the addition of this amount. According to the High Court, the Tribunal had not set aside the finding of the Inspecting Assistant Commissioner that the assessee surrendered the amount of Rs.67,500 when it was faced with facts which clearly established concealment. The assessee according to the Inspecting Assistant Commissioner had surrendered the amount only after the Income Tax Officer had conclusive evidence in his possession that the amount repre sented its income. In other words, what the High Court sought to state was that acceptance by the assessee was material to give proper weight to judge the criminality of the action which according to the High Court was not given. The High Court highlighted that so far as Rs.67,500 was concerned only on being faced with facts from which there could possibly be no escape from the inference that the amount represented his income, that the assessee agreed to its inclusion. The High Court was of the view that the Tribunal was in error in brushing aside consideration of these aspects while considering the question of concealment. In respect of the addition of Rs.21,700 the Inspecting Assistant 700 Commissioner had relied upon the statement of Kedar Nath Kanodia as also the fact that the assessee admitted that this item represented its income. The Tribunal did not place reliance upon the statement of Kedar Nath Kanodia. It, however, omitted to take into account the fact that the assessee had admitted that these items represented its income. The High Court was of the view that such admissions were made by the assessee but the Tribunal had not properly appreciated that aspect. Therefore in respect of these two items the High Court was of the view that the Tribunal was not right in holding that the assessee was not guilty of any concealment. So far as question No. 2 was concerned which dealt with Rs.48,500 the High Court confined itself to the disallowance in respect of purchase of cane. So far as this question was answered in favour of the assessee and there is no challenge by the revenue, it is not material any more. The High Court came to the conclusion that the finding of the Tribunal in respect of the concealment of Rs.48,500 was not justified in law. It was urged before us that as the second question which was in general form has been answered in favour of the assessee, the third question as reframed could not have been answered otherwise. We are unable to accept this contention. As evident from the discussion by the High Court, the High Court confined to second question with regard to disallowance in respect of purchase of cane that amounted to Rs.48,500. So, therefore it cannot be said that in view of the answer given to the second question, the third question was no longer open. The second question was confined to only Rs.48,500. So far as whether there was justification for the answer given to the reframed third question or was proper or not has to be judged on the basis as to how far the High Court in a reference could interfere with a finding of fact and transform the same into a question of law on the ground that there has been non consideration of all relevant facts. The law on this point is quite settled. The question was considered by this Court exhaustively in Sree Meenakshi Mills Limited vs Commissioner of Income tax, Madras, where this Court reiterated that findings on questions of pure fact arrived at by the Tribu nal were not to be disturbed by the High Court on a refer ence unless it appeared that there was no evidence before the Tribunal upon which they, as reasonable men, could come to the conclusion to which they have come; and this was so, even though the High Court would on the evidence have come to a conclusion entirely different from that of the Tribu nal. In other words, such a finding could be reviewed only on the ground that there was no evi 701 dence to support it or that it was perverse. When a conclusion had been reached on an appreciation of a number of facts established by the evidence, whether that was sound or not must be determined, not by considering the weight to be attached to each single fact in isolation, but by assessing the cumulative effect of all the facts in their setting as a whole. Where an ultimate finding on an issue was an inference to be drawn from the facts found, on the application of any principles of law, there would be a mixed question of law and fact, and the inference from the facts found was in such a case, a question of law. But where the final determination of the issue equally with the finding or ascertainment of the basic facts did not involve the appli cation of any principle of law, an inference from the facts could not be regarded as one of law. The proposition that an inference from facts was one of law was, therefore, correct in its application to mixed questions of law and fact, but not to pure questions of fact. In the case of pure questions of fact an inference from the facts was as much a question of fact as the evidence of the facts. In the instant case there is a finding of fact and unless it could be said that all the relevant facts had not been considered in a proper light, no question of law arises. In our opinion, the Tribu nal took into account all the relevant facts. The Tribunal had been accused by the High Court of not taking into con sideration the fact that the assessee had admitted these amounts in the assessment. To admit that there has been excess claim or disallowance is not the same thing as delib erate concealment or furnishing inaccurate particulars. At least in the background of the law as it stood at the rele vant time that was the position. There have been some changes subsequentiy which we have not noticed for the present purpose. In Omar Salay Mohamed Sait vs Commissioner of Income tax, Madras, 1, this Court held that the In come tax Appellate Tribunal was a fact finding tribunal and if it arrived at its own conclusions of fact after due consideration of the evidence before it the court could not interfere. It was necessary, however, that every fact for and against the assessee must have been considered with due care and the Tribunal must have given its finding in a manner which would clearly indicate what were the questions which arose for determination, what was the evidence pro and contra in regard to each one of them and what were the findings reached on the evidence on record before it. The conclusions reached by the Tribunal should not be coloured by any irrelevant considerations or matters of prejudice and if there were any circumstances which required to be ex plained by the assessee, the 702 assessee should be given an opportunity of doing so. In this case, the Tribunal had taken into consideration the fact that the assessee had admitted the additions as its income when faced with non disclosure in assessment proceedings. The High Court accused the Tribunal of not considering the time when the assessee admitted the additions. We find that it was duly considered by the Tribunal. We find that the assessee admitted that these were the income of the assessee but that was not an admission that there was deliberate concealment. From agreeing to additions it does not follow that the amount agreed to be added was concealed. There may be hundred and one reasons for such admissions, i.e., when the assessee realises the true position it does not dispute certain disallowances but that does not absolve the revenue to prove the mens rea of quasi criminal offence. In Udhavdas Kewalram vs Commissioner of Income tax, Bombay City 1, , the Court held that the Income tax Appellate Tribunal performed a judicial function under the Income tax Act and it was invested with authority to determine finally all questions of fact. The Tribunal must, in deciding an appeal, consider with due care all the material facts and record its findings on all contentions raised by the asses see and the Commissioner in the light of the evidence and the relevant law. The Tribunal was undoubtedly competent to disagree with the view of the Appellate Assistant Commis sioner, but in proceeding to do so, it had to act judicially i.e. to consider all the evidence in favour of and against the assessee. An order recorded on a review of only a part of the evidence and ignoring the remaining evidence could not be regarded as conclusively determinative of the ques tion of fact raised before the Tribunal. It is for the Income tax authority to prove that a particular receipt is taxable. If, however, the receipt is accepted and certain amount is accepted as taxable, it could be added but it was not accepted by the assessee, however, that it hard deliber ately furnished inaccurate particulars or concealed any income. In our opinion, the Tribunal has properly considered all the evidence in the instant case. In Rameshwar Prasad Bagla vs Commissioner of Income tax, U.P., , this Court again reiterated that it was for the Tribunal to decide questions of fact, and the High Court in a reference under section 66 of the Act as at that time could not go behind the Tribunal 's findings of fact. The High Court could only lay down the law applicable to the facts found by the Tribunal. The High Court in a reference under section 66 of the Act, as at that time could, however, go into the ques tion as to whether the conclusion of the Tribunal on a question of fact was based upon relevant evidence. If the High Court found that there was no such evidence to support the finding of fact of the Tribunal, those circumstances would give rise to a question of law and 703 could be agitated in a reference. Here in the instant case that is not the position. This Court again reiterated that it was also well established that when a Tribunal acted on material which was irrelevant to the enquiry or considered material which was partly relevant and partly irrelevant or based on conjectures, surmises and suspicions and partly on evidence, then in such a situation an issue of law arose and the finding of the Tribunal could be interfered with. That is not the position here. In the instant case, it is not said that the Tribunal had acted on material which was irrelevant to the enquiry or considered material which was partly relevant and partly irrelevant or based its decision partly on conjectures, surmises and suspicions. The High Court was wrong in saying that proper weight had not been given to all the evidence and admissions made by the asses see. The High Court further observed that the time of admis sion was not noted by the Tribunal and this fact had not been properly appreciated by the Tribunal. That is also not correct. The Tribunal had made additions during the assess ment proceedings. In any event that would be appreciation of evidence in a certain way, unless in such misappreciation which amounted to non appreciation no question of law would arise. Non appreciation may give rise to the question of law but not mere misappreciation even if there be any from certain angle. Change of perspective in viewing a thing does not transform a question of fact into a question of law. In the instant case we are of the opinion that in pre ferring one view to another view of factual appreciation, the High Court transgressed the limits of its jurisdiction under the Income tax reference in answering the question of law. In the premises, we are of the opinion that the High Court was in error in so far as it held that the Tribunal had acted incorrectly. We are further of the opinion that the reframed question must be answered in the affirmative and in favour of the assessee. The appeal is allowed and the judgment and order of the High Court in so far as answer to the question No. 3 is concerned is set aside. The assessee is entitled to the costs of this appeal. P.S.S. Appeal al lowed.

The assessee company, which derived its income from the manufacture and sale of sugar and confectionery, was as sessed for the years 1958 59 by the Income Tax Officer under the Income Tax Act, 1922 by making additions of Rs.48,500 for cane cost, Rs.67,500 for shortage in cane, and Rs.21,700 for salary of outstation staff. The assessee did not chal lenge the said assessment order. Later in the year 1963 the Income Tax Officer issued notice under section 274 read with section 271 of the Income Tax Act, 1961 in respect of the assessment year 1958 59 for imposing penalty. Before the Inspecting Assistant Commissioner the assessee admitted that these amounts, which were not included in the return by the compa ny, represented income. On finding that there was deliberate understatement of income he imposed a penalty of Rs.70,000. On appeal the Tribunal held that the mere fact that the amounts were agreed to be taken into account by the assessee did not ipsofacto indicate any criminality in its action to conceal any portion of the income, and that the assessee could very well have argued against the additions of the two sums, namely, Rs.67,500 and Rs.21,700. As regards the sum of Rs.48,500 it found that the assessee had agreed to similar addition in the earlier years and so the penalty was war ranted in similar amount for this year and taking into consideration that the sum involved was Rs.48,500, it con sidered that a smaller penalty of Rs.5,000 was imposable. The High Court took the view that the onus of proving concealment was on the Revenue because proceedings for penalty were penal in character, and held that so far as the sum of Rs.48,500 was concerned it was not proved that there was any deliberate concealment, that the Tribunal had not set aside the finding of the Assistant Inspecting Com 693 missioner that the assessee surrendered the amount of Rs.67,500 when it was faced with facts which clearly estab lished concealment, that the assessee in fact had surren dered the amount only after the Income Tax Officer had conclusive evidence in his possession that the amount repre sented its income, that acceptance by the assessee was material to give proper weight to judge the criminality of the action which in its opinion was not given, and that the Tribunal omitted to take into account the fact that the assessee had admitted that the amount of Rs.21,700 repre sented its income. In the appeal by special leave on the question as to how far the High Court in a reference could interfere with a finding of fact and transform the same into a question of law on the ground that there has been non consideration of all relevant facts. Allowing the appeal, HELD: 1.1 In an income tax reference a finding on a question of pure fact could be reviewed by the High Court only on the ground that there was no evidence to support it or that it was perverse. If the High Court found that there was no such evidence, those circumstances would give rise to question of law and could be agitated in a reference. [700G 701A, 702H 703A] 1.2 When a conclusion has been reached on an apprecia tion of a number of facts established by the evidence, whether that is sound or not must be determined not by considering the weight to be attached to each single fact in isolation, but by assessing the cumulative effect of all the facts in their setting as a whole. Where an ultimate finding on an issue is an inference to be drawn from the facts found, on the application of any principles of law, there would be a mixed question of law and fact, and the inference from the facts found in such a case would be a question of law. But where the final determination of the issue equally with the finding or ascertainment of the basic facts did not involve the application of any principle of law, an infer ence from the facts could not be regarded as one of law. The proposition that an inference from. facts is one of law is, therefore, correct in its application to mixed questions of law and fact, but not to pure questions of fact. In the case of pure questions of fact an inference from the facts is as much a question of fact as the evidence of the facts. [701A D] In the instant case, it is not said that the Tribunal had acted on material which was irrelevant to the enquiry or considered material 694 which was partly relevant and partly irrelevant or based its decision partly on conjectures, surmises and suspicions. It took into account all the relevant facts in a proper light in rendering a finding of fact. Therefore, no question of law arises. [703BC, 701DE] Sree Meenakshi Mills Limited vs Commissioner of Income tax, Madras, ; Omar Salay Mohamed Sait vs Com missioner of Income tax, Madras, ; Udhavdas Kewalram vs Commissioner of Income tax Bombay City 1, and Remeshwar Prasad Bagla vs Commissioner of Income tax, U.P., , referred to. 2.1 The High Court was wrong in saying that proper weight had not been given to all the evidence and admissions made by the assessee. The Tribunal had taken into considera tion the fact that the assessee had admitted the additions as its income when faced with non disclosure in assessment proceedings. The time when the assessee admitted the addi tions was also considered. But to admit that there has been excess claim or disallowance is not the same thing as delib erate concealment or furnishing inaccurate particulars. There may he hundred and one reasons for such admissions, i.e., when the assessee realises the true position it does not dispute certain disallowances but that does not absolve the Revenue to prove the mens rea of quasi criminal offence. [703BC, 702AB, 701A, 702BC] 2.2 It is for the Income tax authority to prove that a particular receipt is taxable. If however, the receipt is accepted and certain amount is accepted as taxable, it could be added. But in the instant case, it was not accepted by the assessee that it had deliberately furnished inaccurate particulars or concealed any income. [702EF] 3. The High Court observed that the time of admission was not noted by the Tribunal and this fact had not been properly appreciated by the Tribunal. That is not correct. The Tribunal had made additions during the assessment pro ceedings. In any event that would be appreciation of evi dence in a certain way, unless in such misappreciation which amounted to non appreciation no question of law would arise. Nonappreciation may give rise to the question of law but not mere misappreciation even if there he any from certain angle. Change of perspective in viewing a thing does not transform a question of fact into a question of law. [703CD] The High Court in preferring one view to another view of factual 695 appreciation in the instant case, has therefore, trans gressed the limits of its. jurisdiction under the Income Tax Reference in answering the question of law. [703F]

Civil Appeal No. 592 of 1960. Appeal by special leave from the judgment and order dated June 17, 1959, of the Commercial Tax officer, Calcutta, in case No. 54(c) of 1969 60. 277 N. a. Chatterjee and section a. Mazumdar, for the appellants. B. Sen and P. E. Bose, for respondents Nos. 1 and 2. K. N. Rajagopal Sastri and T. M. Sen, for respondent No. 3. 1961. October 31. The Judgment of the Court was delivered by SINHA, a. J. This is a direct appeal by special leave granted by this court on September 7, 1969, against the order, dated July 17, 1959, passed by the first respondent the Commercial Tax officer assessing the appellant to central sales tax amounting to Rs. 42,647 odd, for the period July 30, 1957 to March 31, 1958, under the (LXXIV of 1956) which hereinafter will be referred to as the Act. The second respondent is the State of West Bengal, and the third respondent is the Union of India. In view of the order we propose to make in this ease, it is not necessary to state in any detail the facts and circumstances leading up to this appeal. The appellant is a partnership firm, under the Indian Partnership Act, with its principal place of business at 18, Netaji Subhas Road, Calcutta, within the jurisdiction of the first respondent. The appellant alleges that he carries on business of two kinds, namely, (1) of a dealer in coal and coke, and (2) of a middleman bringing about sales of coal and coke between colliery owners and consumers. In respect of its business as a dealer, the appellant is a registered dealer under the Bengal Finance (Sales Tax) Act (Bengal Act VI of 1941). Its second business as a middleman relates mainly to sales of coal and coke in the course of interstate trade or commerce, and the tax in question relates to this second branch of its business. The Act came into operation in the State of West Bengal on July 1, 1957, when the appellant 278 applied for and obtained a certificate of registration under the Act on July 30, 1957. In May 1958, the appellant made its return under the Act in respect of the period aforesaid, showing the turnover as nil. But in spite of its showing cause against the proposed assessment, the first respondent determined Rs.9,17,196 as the appellant 's turnover in respect of the period aforesaid and assessed central sales tax thereon at Rs. 42,617.82nP. under section 8(2) of the Act, and issued Demand Notice. The appellant moved this Court and obtained the special leave to appeal from the order of the first respondent making assessment and later a demand on the basis of the assessment. From the statement of facts given above, it is clear that the appellant did not exhaust all his remedies under the Act itself; and came directly to this Court as if the order of Assessment passed by the first respondent was final. The question, therefore, arises whether this court should entertain the appeal, when even the facts have not been finally determined by the final fact finding authority under the Act, nor has the jurisdiction of the High Court been involved to exercise its power under the Act. But Mr. Chatterjee, on behalf of the appellant, has contended in the first instance that the powers of this Court are wide enough to enable him to approach this Court direct, when according to him, there had been an assessment of tax without the authority of law. There is no doubt that the powers of this Court under article 136 of the Constitution are as wide as they could be, because, unlike the preceding articles of the constitution, there is no limitation that the Judgment, decree or order should be final in the sense that the appellant in this Court has exhausted all the remedies provided by law before invoking the jurisdiction of this Court to grant "special leave to appeal from any judgment, decree determination sentence or order in any case or matter passed or 279 made by any Court or Tribunal in the territory of India. " In spite of the wide amplitude of the jurisdiction of this Court to entertain appeals by special leave, this Court has imposed certain limitations on its own powers for very good reasons, and has refused ordinarily to entertain such appeals when the litigant has not availed himself of the ordinary remedies available to him at law. But Mr. Chatterjee, on behalf of the appellant, invited our attention to the decision of this Court in Mahadayal Premchandra vs Commercial Tax officer, Calcutta (1) in which this Court interfered with the order of assessment passed by the Commercial Tax officer of Calcutta, and this Court had been moved by way of special leave to appeal against the original order of the Taxing officer. It is claimed on behalf of the appellant that decision completely covers the points in controversy in the present case also. It is contended that was also a case, like the present one of commission agents who had been charged sales tax. There are several reasons why the authority of that decision cannot be invoked in favour of the appellant on the preliminary question whether this Court should at all entertain the appeal. In that case, in the reported decision, of this Court, no such question, as we have to determine, had been raised. Apparently, counsel for both the parties were anxious to have the final determination of the controversy by this Court. Secondly, there were special circumstances in that case, which are not present in the instant case. The most outstanding feature of that case was, as pointed out by this Court, that the Assessing Authority had not exercised its own judgment in the matter of the assessment in question. The Assessing Authority had, contrary to its own judgment, taken instructions from the Assistant Commissioner and followed those directions This Court had also pointed out that even (1) 280 though the Assessing Authority was satisfied on the materials placed by the assessee that he was not liable to pay sales tax, he carried out the directions of a superior officer. This Court further pointed out that there had been complete failure of justice on account of the, fact that the assessee had been given no opportunity to meet the points made by the Assistant Commissioner, and the assessment order was made behind his back. The Court was led to make the following very significant observations: "The procedure adopted was, to say that least, unfair and was calculated to undermine the confidence of the public in the impartial and fair administration of the sales tax Department concerned. We would have, simply on this ground, set aside the assessment order made by the first respondent and remanded the matter back to him for his due consideration in accordance with law, but as the matter is old and a remand would lead to unnecessary harassment of the appellants, we have preferred to deal with the appeal on merits." (p. 560). It was in those circumstances that this Court went into the whole controversy on its merits and determined the appeal in favour of the assessee. That case, therefore, in no precedent in favour of the appellant. The next case relied upon by the counsel for the appellant is The State of Bombay vs M/s. Ratikal Vadilal(1). That was a case in which the State of Bombay had appealed to this Court on special leave against the order of the Sales Tax Tribunal, Bombay, by which the Tribunal had allowed the appeal before it and set aside the order of the Collector of Sales Tax, under the Bombay Sales Tax Act. The respondents in that case were commission agents doing business as clearing and (1) ; 281 transport contractors. They had applied to the Collector of Sales Tax, Bombay, for the determination of the question if they could be called "dealers" within the meaning of the Act after giving the facts and circumstances of their case. In that case also no steps had been taken to have a reference made to the High Court, and this Court observed that it has been frequently noticed that appeals had been filed to this court without exhausting all the remedies open to appellants and that ordinarily this Court would not allow the High Courts to be bypassed and the appropriate course for an appellant was to exhaust all his remedies before invoking the jurisdiction of this Court under article 136 of the constitution. But this Court went into the merits of this case because both the parties invited the Court to do so and did not insist upon the preliminary is an being decided. It is clear, therefore, that neither of the two cases relied upon by counsel for the appellant is an authority for the proposition that he can come up to this Court on special leave directly against the judgment of the Assessing Authority, without exhausting all his remedies under the Act. There are cases in which this Court was moved directly against the order of assessment, after ignoring the orders of the High Court refusing to have a reference made, or decision the point referred, against the assessee. In those circumstances, this Court refused to entertain the appeal and held that the appellant was not entitled to invoke the jurisdiction of this Court under article 136, without coming up in appeal from the final decision inter parties given by the High Court. The latest decision of this Court on that question is the case of Chandi Prasad Chokhani vs The State of Bihar (1). In that case, the previous decisions of the Court have all been considered on extenso. We are in entire agreement with what has been laid down by this Court in that batch of cases. other decision of a Division Bench of (1) ; 282 this Court is the case of Kanhaiyalal Lohia vs Commissioner of Income tax, West Bengal (1). In that case, this Court has taken the same view and dismissed the appeal as 'incompetent. ' The present case in a much simpler one, in which there are no special circumstances and in which the facts have not yet been finally deter mined. It may also be noted that the appellant has not challenged the vires of the Act or of any other law. We, therefore, think that we should dismiss this appeal as 'incompetent ', without expressing any opinion on the merits of the controversy. It will be open to the appellant to take such steps as it may be advised, in pursuing such remedies as may be available to it under the law. The appeal is accordingly dismissed, but in the circumstances without Costs. Appeal dismissed.

In respect of its business as a middleman relating mainly to sales of coal and coke in the course of inter State trade, the appellant firm was assessed to Central sales tax under section 8(2) of the , by the Commercial Tax officer. The appellant without availing itself of the remedies under the Act, applied for and obtained special leave to appeal under article 136 of the Constitution of India directly against the order of assessment When the appeal was taken up for hearing, the question was raised as to whether it should be entertained, when even the facts had not been finally determined by the final fact finding authority under the Act, nor had the jurisdiction of the High Court been invoked to exercise its powers under the Act. Held, that an assessee is not entitled ordinarily to come up to the Supreme Court directly against the judgment of the Assessing Authority and invoke the Court 's jurisdiction under article 136 of the Constitution without first exhausting the remedies provided by the taxing statutes. Mahadayal Premchandras vs Commercial Tax Officer Calcutta, and The State of Bombay vs M/s. Ratilal Vedilal, [1961] 2 section C. R. 367, explained. Chandi Prasad Chokhani vs The State of Bihar, [1962] 2 section G. R. 276 and Kanhaiyalal Lohia v, Commissioner of Income Tax Bengal, [1962] 2 section C. R. 839, followed. ^ Held, further, that in the present case, in which there, were no special circumstances and in which the facts had not yet been finally determined, the appeal must be considered to be incompetent.

iminal Appeal No. 46 of 1967. Appeal from the judgment and order dated November 1, 1966 of the Kerala High Court in Criminal Revision Petition No. 191 of 1966. Lily Thomas, for the appellant. W.S. Barlingay and Ganpat Rai, for respondent No. 1. A.G. Pudissery, for respondent No. 2. 693 The Judgment of the Court was delivered by Shah, J. Rathi daughter of M.C. Verghese was married to T.J. Ponnan. On July 18, 1964, July 25, 1964 and July30, 1964, Ponnan wrote from Bombay letters to Rathi who was then residing with her parents at Trivandrum which it is claimed contained defamatory imputations concerning Verghese. Verghese then filed a complaint in the Court of the District Magistrate, Trivandrum, against Ponnan charging him with offence of defamation Ponnan submitted an application raising two preliminary contentions (1) that the letters which formed the sole basis of the complaint were inadmissible in evidence as they were barred by law or expressly prohibited by law from disclosure; and (2) that uttering of a libel by a husband to his wife was not "publication" under the law of India and hence cannot support a charge for defamation, and prayed for fan order of discharge, and applied that he may be discharged. The District Magistrate held that a communication by a husband to his wife or by a wife to her husband of a matter defamatory of another ' person does not amount in law to publication, Since the husband and wife are one in the eye of the law. In so holding, he relied upon the judgment in Wennhak vs Morgan and Wife(1). He also held that the communication was privileged, and no evidence could be given in court in relation to that communication. He accordingly ordered that Ponnan be discharged under section 253 (2) Code of Criminal Procedure. In a revision application filed by Verghese before the Court of Session, the order was set aside and further enquiry into the complaint was directed. In the view of the learned Sessions Judge the doctrine of the common law of England that a communication by one spouse to another of a matter defamatory of another person does not amount to publication has no application in India, and section 122 of the Indian Evidence Act does not prohibit proof in the Court by the complainant of the letters written by Ponnan to his wife. The case was then carried to the High Court of Kerala in revision. The High Court set aside the order of the Court of Session and restored the order of the District Magistrate. The High Court held that from the averments made in paragraphs 9 to 11 of the complaint it was clear that the writing of defamatory matter by Ponnan to his wife Rathi was not in law publication, and that "if the letters written by Ponnan to his wife cannot be proved in court either by herself directly or through her father, in whose hands she had voluntarily placed them, the imputations therein fell outside the court 's cognizance and no charge under section 500 Indian Penal Code could be deemed to be made out". Against (1)[1888] 120.Q.B.D. 635. 694 the order passed by the High Court discharging Ponnan, this appeal is preferred with certificate granted by the High Court. It was assumed throughout these proceedings that the letters are defamatory of the complainant. Under the Indian penal Code in order that an offence of defamation may be committed there must be making or publication of any imputation concerning any person by words either spoken or intended to be read, or by signs or by visible representations, intending to harm, or knowing or having reason to believe that such imputation will harm, the reputation of such person. To constitute the offence of defamation there must therefore be making or publication of an imputation concerning any person and the making or publication must be with intent to harm, or knowing or having reason to believe that such imputation will harm, the reputation of such person. Unless there is publication there can be no offence of defamation committed. In England the rule appears to be well settled that except in certain well defined matters. the husband and wife ,are regarded as one and in an action for libel disclosure by the husband of the libel to his wife is not publication. In Wennhak 's case(1) Manisty, J., observed: " . the maxim and principle acted on for centuries is still in existence viz., that as regards this Case, husband and wife 'are in point of law one person." The learned Judge examined the foundation of the rule and stated that it was, after, all, a question of public policy or, social policy. But the rule that husband and wife are one in the eye of law has not been adopted in its full force under our system of law and certainly not in our criminal jurisprudence. In Queen Empress vs Butch(2) it was held that there is no presumption of law that the wife and husband constitute one person in India for the purpose of the criminal law. If the wife, removing the husband 's property from his house, does so with dishonest intention, she is guilty of theft. In Abdul Khadar vs Taib Begum(5) the Madras High Court again held that there is no presumption of law in India that a wife and husband constitute one person for the purpose of criminal law, and therefore the English common law doctrine of absolute privilege cannot prevail in India. It must be remembered that the Indian Penal Code exhaustively codifies the law relating to offences with which it deals and (1) (2) I.L.R. (3) A.T.R. 695 the rules of the common law cannot be resorted to for inventing exemptions which are not expressly enacted. In Tiruvengadda Mudali vs Tripurasundari Ammal(1) a Full Bench of the Madras High Court observed that the exceptions to section 499 I.P. Code must be regarded as exhaustive as to the cases which they purport to cover ,and recourse cannot be had to the English common law to 'add new grounds of exception to those contained in the statute. A person making libelous statements in his complaint filed in court is not absolutely protected in a criminal proceeding for defamation, for under the Eighth Exception ,and the illustration to section 499 the statements are privileged only when they are made in good faith. There is therefore authority for the proposition that in determining the criminality of an act under the Indian Penal Code the courts will not extend the scope of special exceptions by resorting to the rule peculiar to EngLish common law that the husband and wife are regarded as one. But we do not deem it necessary to record any final opinion on this question because, in our judgment. this enquiry has to be made when the complaint is tried before the Magistrate. Verghese has complained that he was defamed by the three letters which Ponnan wrote to Rathi Ponnan, however, says that the letters addressed by him to his wife are not except with his consent admissible in evidence by virtue of section 122 of the Indian Evidence Act, and since the only publication pleaded is publication to his wife and she is prohibited by law from disclosing those letters. no offence of defamation could be made out. So stated the proposition is in our judgment, not sustainable. Section 122 of the Indian Evidence Act falls in Ch. IX which deals with evidence of witnesses in proceeding before the court. That section provides: "No person who is or has been married shall be compelled to disclose any communication made to him during marriage by any person to whom he is or has been married; nor shall be permitted to disclose any such communication. unless the person who made it, or his representative in interest, consents, except in suits between married persons, or proceedings in which one married person is prosecuted for any crime committed against the other. " The section consists of two branches (1) that a married person shall not be compelled to disclose any communication made to him during marriage by his spouse; and (2) that the married person shall not except in two special classes of proceedings be permitted to disclose by giving evidence in court the communication, (1) I.L.R. 696 unless the person who made it, or his representative in interest, consents thereto. A prima facie case was set up in the complaint by Verghese. That complaint has not been tried and we do not see how, without recording any evidence, the learned District Magistrate could pass any order discharging Ponnan. Section 122 of the Evidence Act only prevents disclosure in giving evidence in court of the communication made by the husband to the wife. If Rathi appears in the witness box to give evidence 'about the communications made to her husband, prima facie the communications may not be permitted to be deposed to or disclosed unless Ponnan consents. That does not, however, mean that no other evidence which is not barred under section 122 of the Evidence Act or other provisions of the Act can be given. In a recent judgment of the House of Lords Rumping vs Director of Public Prosecutions(1), Rumping the mate of a Dutch ship was tried for murder committed on board the ship. Part of the evidence for the prosecution ,admitted at the trial consisted of a letter that Rumping had written to his wife in Holland which amounted to a confession. Rumping had written the letter on the day of the killing, and had handed the letter in a closed envelope to a member of the crew requesting him to post it as soon as the ship arrived at the port outside England. After the appellant was arrested, the member of the crew handed the envelope to the captain of the ship who handed it over to the police. The member of the crew, the captain and the translator of the letter gave evidence at the trial, but the wife was not called as witness. It was held that the letter was admissible in evidence. Lord Reid, Lord Morris of Borth Y Gest, Lord Hodson and Lord Pearce were of the view that at common law there had never been a separate principle or rule that communications between a husband and wife during marriage were inadmissible in evidence on the ground of public policy. Accordingly except where the spouse to whom the communication is made is a witness and claims privilege from disclosure under the Criminal Evidence Act. 1898, (of which the terms are similar to section 122 of the Indian Evidence Act though not identical), evidence as to communications between husband and wife during marriage is admissible in criminal proceedings. The question whether the complainant in this case is an agent of the wife because he has received the letters from the wife and may be permitted to give evidence is a matter on which no opinion at this stage can be expressed. The complainant claims that he has been defamed by the writing of the letters. The letters are in his possession and are available for being tendered in evidence. We see no reason why inquiry into that complaint should, on the (1) 697 preliminary contentions raised, be prohibited. If the complainant seeks to support his case only upon the evidence of the wife of the accused, he may be met with the bar of section 122 of the Indian Evidence Act. Whether he will be able to prove the letters in any other manner is a matter which must be left to be determined at the trial 'and cannot be made the subject matter of an enquiry at this stage. One more question which was raised by counsel for the appellant may be briefly referred to. It was urged ' that since the matter reached this Court, Rathi has obtained a decree for nullity of marriage 'against Ponnan on the ground of his impotency, and whatever bar existed during the subsistence of the marriage cannot now operate to render Rathi an incompetent witness. But the argument is plainly contrary to the terms of section 122. If the marriage was subsisting at the time when the communications were made, the bar prescribed 'by section 122 will operate. In Moss vs Moss(1), it was held that in criminal cases, subject to certain common law and statutory exceptions, a spouse is incompetent to give evidence against the other, and that incompetence continues after a decree absolute for divorce or a decree of nullity (where the marriage annulled was merely voidable) in respect of matters arising during coverture. Counsel for the appellant however urged that the rule enunciated in Moss 's case(1) has no application in India because under sections 18 & 19 of the Divorce Act no distinction is made between marriage void and voidable. By section 18 a husband or a wife may present a petition for nullity of marriage:to the appropriate court and the court has under section 19 power to make the decree on the following grounds: "(1) that the respondent was impotent at the time of the marriage 'and at the time of the institution of the suit; (2) that the parties are within the prohibited degrees of consanguinity (whether natural or legal) or affinity; (3 ) that either party was a lunatic or idiot at the time of the marriage; (4) that the former husband or wife or either party was living at the time of the marriage, and the marriage with such former husband or wife was then in force. Nothing in this section shall affect the jurisdiction of the High Court to make decrees of nullity of marriage (1.) 698 on the ground that the consent of either party was obtained by force or fraud. " Marriage with the respondent who was impotent at the time of the marriage or at the time of the institution of the suit is not ab initio void: it is voidable. As stated in Latey on Divorce, 14th Edn., at p. 194, article 353: "Where impotence is proved the ceremony of marriage is void only on the decree absolute of nullity, but then it is void ab initio to ,all intents and purposes '. Such a marriage is valid for all purposes, unless a decree of nullity is pronounced during the life time of the parties. " When the letters were written by Ponnan to Rathi, they were husband and wife. The bar to the admissibility in evidence of communications made during marriage attaches at the time when the communication is made, and its admissibility will be adjudged in the light of the status at the date and not the status at the date when evidence is sought to be given in court. We are, therefore, of the view that the appeal must be allowed and the order passed by the High Court set aside. The proceed Lugs will be remanded for trial to the District Magistrate according to law. V.P.S. Appeal allowed.

The first respondent wrote letters to his wife who is the daughter c the appellant. The letters contained defamatory imputations concerning the appellant. The letters were handed over to the appellant and he filed a complaint for defamation against the first respondent. The Magistrate held that a communication between spouses of a matter de (amatory of another did not amount to publication and that no evidence could be given of it under section 122 of the Evidence Act, 1872, against the first respondent, and discharged him. The Court of Session set aside the order but the High Court restored it. While the appeal against the order of discharge was pending in this Court a decree of nullity of marriage was passed against the first respondent on the ground of his impotency. HELD: If the appellant sought to support his case only upon the evidence of the wife of the first respondent, 8. 122 of the Evidence Act would be a bar. Further a marriage with a person important at the time of marriage and at the time of institution of proceedings for nullity is under the Indian Divorce Act not ab initio void; it is valid till the decree of nullity is pronounced. Therefore, if the defamation case were to proceed and 'the wife ' should appear as a witness to give evidence about the communication made to her by her husband (the first respondent), the communication could not be deposed to unless the first respondent consented because, if the marriage was subsisting at the time when the communication was made the bar prescribed by section 122 would operate. But the letters were in appellant 's possession and were available for being tendered in evidence, and he could prove the letters in any other manner. Therefore, the accused (first respondent) should not have been discharged. [696 H; 697 A C; 698 A B] Rumping vs Director of Public Prosecutions, applied.

il Appeal Nos. 1108 to 1110 of 1964. Appeals by special leave from the judgment and order dated August 1, 1962 of the Calcutta High Court in Income tax Reference Nos. 20 and 21 of 1959. A.K. Sen, section C. Mazumdar and J. Datta Gupta, for the appellants. R.M. Hazarnavis, R. Ganapathy Iyer and R. N. Sachthey, for the respondent. The Judgment of the Court was delivered by Sikri, J. These appeals by special leave are directed against the judgment of the High Court of Calcutta in two cases referred to it by the Income Tax Appellate Tribunal, Calcutta Bench, under section 66(1) of the Indian Income tax Act (XI of 1922) hereinafter called the Act). One of the references (Income Tax Reference No. 20 of 1959) was made at the instance of M/s Fatehchand Murlidhar, and the other (Income Tax Reference No. 21 of 1959) was made at the instance of Shri Murlidhar Himatsingka. In the former reference the question referred was "whether on the facts and in the circumstances of the case, the income of Murlidhar Himatsingka for his share in the firm of Messrs. Basantlal Ghanshyamdas for the assessment years 1952 53 and 1953 54 was rightly excluded from the income of the applicant firm". In the latter reference the question referred was "whether on the facts and circumstances of the case the income of Murlidhar Himatsingha for his share in the firm of Messrs. Basantlal Ghanshyamdas for the assessment year 1955 56 was rightly included in his personal assessment for that year". The facts and circumstances out of which these references were made are common because the real question raised by these references is whether the income of Murlidhar Himatsingka, from the firm of M/s Basantlal Ghanshyamdas, in which he was a partner, should be included in his personal assessment or in the assessment of the firm of Fatehchand Murlidhar, to which Murlidhar Himatsingka had purported to assign the profits and losses from M/s Basantlal Ghanshyamdas. It is sufficient to take the facts from the statement of the case in Income Tax Reference No. 21 of 1959, made at the instance of Murlidhar Himatsingka. Murli dhar Himatsingka was carrying on business in shellac, jute, hessian etc. under the name and style of "Fatehchand Murlidhar" at 14/ 1, Clive Row and 71, Burtolla Street, Calcutta. He was also a partner in the registered firm, Messrs Basantlal Ghanshyamdas having /2/8 share. On December 21, 1949, a deed of partnership was executed by the said Murlidhar Himatsingka and his two sons, Madanlal Himatsingka and Radhaballav Himatsingka and a grandson named Mahabir Prasad Himatsingka. The deed recited that Murlidhar Himatsingka had become too old and infirm 455 to look after the various businesses and that Madanlal and Radha Ballav were already practically managing the business and that they had signified their intention to become the partners of the said firm "Fatehchand Murlidhar" and had agreed to contribute capital, Rupees ten thousand, Rupees five thousand and Rupees five thousand respectively. The parties further agreed to become and be partners in the business mentioned in the deed. Clause 5 of this deed is important for our purpose and reads as follows: "The profits and losses for the share of the said Murlidhar Himatsingka as partner in the said partnership firm of Basantlal Ghanshyamdas shall belong to the present partnership and shall be divided and borne by the parties hereto in accordance with the shares as specified hereafter, but the capital with its assets and liabilities will belong exclusively to Murlidhar Himatsingka the party hereto of the First Part and the Parties hereto of the Second, Third and Fourth parts shall have no lien or claim upon the said share capital or assets of the party hereto of the first part in the business of the said Messrs Basantlal Ghanshyamdas". Clause 10 provides: "The Profits and losses (if any) of the partnership including the shares of the profits and losses of the said partnership firm of Basantlal Ghanshyamdas aforesaid shall be divided and borne by and between the parties in the following manner: Party hereto of the First Part Six annas (Murlidhar Himatsingka). Party hereto of the Second Part Four annas (Madanlal Himatsingka). Party hereto of the Third Part Three annas (Radhaballav Himatsingka). Party hereto of the Fourth Part Three annas (Mahabirprasad Himatsingka). Clause 11 provides that "all partnership moneys and securities for money shall as and when received be paid into and deposited to the credit of the partnership account". In clause 13 it is provided that "the party hereto of the First Part shall have the sole control and direction of the partnership business and his opinion shall prevail if there be any dispute between the parties hereto". Clause 16 provides that "the net profits of the partnership after payment of all outgoings interest on capital or loans and subject to the creation and maintenance of any reserve or other fund shall belong to the parties and the losses, if any, shall also be borne and paid by the parties in proportion to their shares as stated in Clause 10 hereof". For the assessment year 1955 56 the Income Tax Officer included the income from the share in the registered firm of 456 Basantlal Ghanshyamdas in the individual assessment of Murlidhar Himatsingka, Murlidhar Himatsingka appealed to the Appellate Assistant Commissioner. Referring to section 23(5)(a) of the Act. he held that as Murlidhar Himatsingka was a partner in the registered firm of Basantlal Ghanshyamdas, his share had to be assessed in his hands. He further held that the agreement was merely an arrangement which came into force after the profits were earned and not before they were earned. He held that this agreement being a subsequent disposition of profits, after they had been earned, had to be disregarded. Murlidhar Himatsingka appealed to the Income Tax Appellate Tribunal. The Appellate Tribunal heard this appeal together with the two appeals filed by M/s Fatehchand Murlidhar. The Appellate Tribunal, agreeing with the views of the Appellate Assistant Commissioner, dismissed the appeal. The High Court held that it was a case of diversion of in come by Murlidhar Himatsingka after it had accrued to him and it was not a diversion at the source by any overriding interest. In the result, the High Court answered the questions in the affirmative in both the references. Murlidhar Himatsingka and M/s Fatehchand Murlidhar having obtained special leave, the appeals are now before us. The learned counsel for the appellants, Mr. A. K. Sen, con tends that a partner 's share is property capable of being assigned, mortgaged, charged and dealt with as any other property, and where a partner sells his share to a stranger, though that stranger does not become a partner yet the vendor partner holds the property as trustee for the purchaser and consequently the income received by the partner is not his income but the income of the purchaser. He says that similarly if a partner assigns part of his share the same result follows. He further contends that in this case, by the agreement dated December 21, 1949, Murlidhar Himatsingka had entered into a sub partnership with his two sons and a grandson in respect of his share in the firm Basantlal Ghanshyamdas, and it is the sub partnership that is entitled to the income from the firm Basantlal Ghanshyamdas and not Murlidhar Himatsingka who must be taken to be acting on behalf of the firm Fatehchand Murlidhar. Mr. Sen further urges that the Indian Income Tax Act taxes real income and not notional income and the real income in this case belonged not to Murlidhar but to M/s Fatehchand Murlidhar. Mr. Hazarnavis, on the other hand, contends that this agree ment is a mere device for dividing income which had accrued to Murlidhar Himatsingka among his sons and grandson. In the alternative he contends that the Indian Income Tax Act does not contemplate the application of section 23(5)(a) twice. He says that the firm of Basantlal Ghanshyamdas was a registered firm and the 457 Income Tax Officer was bound. under section 23(5)(a), to assess Murlidhar in respect of the income received from this firm , he could not carry this income to the assessment of another registered firm, namely, Fatehchand Murlidhar, and then apply section 23(5)(a). The first point that arises is whether the agreement dated December 21, 1949, has succeeded in diverting the income from Murlidhu 's share in M/s Basantlal Ghanshyamdas to M/s Fatehchand Murlidhar before it reached Murlidhar. What is the effect of the agreement? In our opinion the agreement dated December 21, 1949, constituted a sub partnership in respect of Murlidhar 's share in M/s Basantlal Ghanshyamdas. The High Court in this connection observed: "At best it could be called a sub partnership entered into by Murlidhar with strangers in respect of his share of the partnership". In arriving at this conclusion we attach importance to the fact that losses were also to be shared and the right to receive profits and pay losses became an asset of the firm, Fatehchand Murlidhar. In Commissioner of lncome tax, Bombay vs Sitaldas Tirath. das,(1) Hidayatullah, J., speaking for the Court, laid down the following test for determining questions like the one posed above. After reviewing a number of authorities, he observed: "In our opinion, the true test is whether the amount sought to be deducted, in truth, never reached the assessee as his income. Obligations, no doubt, there are in every case, but it is the nature of the obligation which is the decisive fact. There is a difference between an amount which a person is obliged to apply out of his income and an amount which by the nature of the obligation cannot be said to be a part of the income of the assessee. Where by the obligation income is diverted before it reaches the assessee, it is deductible; but where the income is required to be applied to discharge an obligation after such income reaches the assessee, the same consequence, in law, does not follow. It is the first kind of payment which can truly be excused and not the second. The second payment is merely an obligation to pay another a portion of one 's own income, which has been received and is since applied. The first is a case in which the income never reaches the assessee, who even if he were to collect it, does so, not as part of his income but for and on behalf of the person to whom it is payable '. 458 This test clearly shows that it is not every obligation to apply income in a particular way that results in the diversion of income before it reaches the assessee. In its judgment in the above case (Sitaldas Tirathdas vs Commissioner of Income tax, Bombay(1) the High Court of Bombay had observed: "It is not essential that there should be a charge, it is quite sufficient if there is a legally enforceable claim". These observations must be treated as unsound. The test laid down by this Court is quite clear, though like some other tests it is not easy of application in all cases. The other cases cited before us, namely, K. A. Ramachar vs Commissioner of Income tax, Madras(1) and Provat Kumar Mitter vs Commissioner of Income tax, West Bengal(1) do not assist us in disposing of this case because the facts are not similar. Only two cases, one of the Bombay High Court and the other of the Calcutta High Court, have close resemblance to the facts of this case and we may now consider them. In Ratilal B. Daftri vs Commissioner of Income tax, Bombay(1) the assessee who was one of the sixteen partners in a registered partnership had contributed Rs. 25,000/ out of the capital of the partnership, Rs. 3,45,000/ . In order to contribute this capital of Rs. 25,000/ he had entered into an agreement with four others on the same date on which the registered partnership deed was executed, which provided for contribution of diverse sums by the four others and it was further provided in this agreement that the five parties would share the profits and losses in proportion to their individual contribution. It was also mentioned that the terms and conditions mentioned in the registered partnership were to be applicable and binding on them. The Bombay High Court held that the assessee was liable to be assessed only in respect of his share of the profits of the registered partnership. In coming to this conclusion, the High Court relied on two other decisions of the same Court, namely, Motilal Manekchand vs Commissioner of Income tax(1) and Sitaldas Tirathdas vs Commissioner of Income tax(1) As pointed out by the learned counsel for the respondent, Mr. Hazarnavis, Sitaldas Tirathdas vs Commissioner of Income tax(1) was reversed by this Court in Commissioner of Income tax vs Sitaldas Tirathdas(4) Hidayatullah, J., at p. 374 of his judgment reversing the judgment of the Bombay High Court, had also referred to Motilal Manekchand vs Commissioner of Income tax (5) but did not expressly dissent from this case. In our opinion the case of Ratilal B. Daftari vs Commis sioner of Income tax, Bombay(1) was rightly decided, although the reasoning given by the learned Judges of the High Court has to some extent not been accepted by Hidayatullah, J., in Commissioner of Income tax vs Sitaldas Tirathdas(3). We say so far the follow. (1) ,394. (2) (3) , (4) 36 I.T.B. Is. (5) (6) 459 ing reasons. Lindley on Partnership, 12th Edition, page 99, deals with sub partnerships as follows: "A sub partnership is, as it were, a partnership within a partnership, it presupposes the existence of a partnership to which it is itself subordinate. An agreement to share profits only constitutes a partnership between the parties to the agreement. If, therefore, several persons are partners and one of them agrees to share the profits derived by him with a stranger, this agreement does not make the stranger a partner in the original firm. The result of such an agreement is to constitute what is called a sub partnership, that is to say, it makes the parties to it partners inter se; but it in no way affects the other members of the principal firm". He further states: "Since the decision of the House of Lords in Cox vs Hickman ; , a sub partner could not before the Partnership Act, 1890, be held liable to the creditors of the principal firm by reason only of his participation in the profits thereof, and there is nothing in that Act to alter the law in this respect". Sub partnerships have been recognised in India and registration accorded to them under the Indian Income Tax Act. (See Commissioner of Income tax, Punjab vs Laxmi Trading Company)(1) The question then arises is whether the interest of the sub partnership in the profits received from the main partnernship is of such a nature as diverts the income from the original partner to the sub partnership. Suppose that A is carrying on a business as a sole proprietor and he takes another person B as a partner. There is no doubt that the income derived by A after the date of the partnership cannot be treated as his income; it must be treated as the income of the partnership consisting of A and B. What difference does it make in principle where A is not carrying on a business as a sole proprietor but as one of the partners in a firm? There is no doubt that there is this difference that the partners of the sub partnership do not become partners of the original partnership. This is because the Law of Partnership does not permit a partner, unless there is an agreement to the contrary, to bring strangers into the firm as partners. But as far as the partner himself is concerned, after the deed of agreement of subpartnership, he cannot treat the income as his own. Prior to the case of Cox vs Hickman(1), sub partners were even liable to the creditors of the original partnership. Be that as it may, and whether he is treated as an assignee within, section 29 of the Indian Partnership Act, as some cases do, a sub partner has definite enforceable rights to claim a share in the profits accrued to or received by the partner. (1)24 I.T.B. 173. (2) ; 460 The decision of this Court in Charandas Haridas vs Commissioner of Income tax (1) seems to support, at least by inference, this conclusion. In that case the facts were as follows. Charandas Haridas was the karta of a Hindu undivided family consisting of his wife, his three minor sons and himself. He was a partner in six managing agency firms and the share of the managing agency commission received by him as such partner was being assessed as the income of the family. By a memorandum executed by the co parceners of the family a partial portion of the income from the managing agency was brought about. The memorandum stated: "We have decided that. . in respect of the commission which accrues from 1st January, 1946 and received after that date each of us becomes absolute owner of his one fifth share and therefore from that date. these commissions cease to be the joint property of our family '. This Court held that the document effectively divided the income and the income could no longer be treated as that of the Hindu undivided family. This case shows that although the karta continued to be a partner in the managing agency firm, yet the character in which he received the income vis a vis the Hindu undivided family had changed and the Court gave effect to the change of his position. Previously he was acting as a karta on behalf of the Hindu undivided family in the managing agency firm , later he became a partner on behalf of the members of the family. It seems to us that when a sub partnership is entered into the partner changes his character vis a vis the sub partners and the Income Tax authorities, although other partners in the original partner. ship are not affected by the changes that may have taken place. In our view the Calcutta High Court decision relied on by the High Court and the learned counsel for the respondent (Mahaliram Santhalia vs Commissioner of Income tax(1) was wrongly decided. The facts in that case were these. Mahal ' Santhalia was a partner in the firm M/s Benares Steel Rolling Nills. He was also a partner in another firm named M/s Radhakissen Santhalia. By agreement dated April 3, 1944, between the partners of M/s Radhakissen Santhalia, it was provided that the partnership income from M/s Benares Steel Rolling Mills would belong not to Mahaliram Santhalia individually but to the firm of M/s Radhakissen Santhalia. The High Court of Calcutta held that the agreement amounted only to voluntary disposition by Mahaliram Santhalia of his income and there was no diversion of income to the firm M/s Radhakissen Santhalia before it became (1) ; (2) 33 I.T.& 261. 461 Mahaliram Santhalia 's income. The High Court observed at p. 272: "If. as Mr. Mitra conceded, Mahaliram was rightly taken as a partner of the Benares Steel Rolling Mills in personal capacity and if a one fourth share of the income was rightly allocated to him, any agreement bet ween him and his three partners of the firm of Radhakissen Santhalia, under which the income was to be treated as the income of the whole firm, could only be an agreement by which Mahaliram Santhalia was allowing what was really his income to be treated as the income of the firm or, in other words, as agreement by which he was applying or distributing an income which he had already himself earned and received. Such application ,or distribution would be a voluntary act of Mahaliram Santhalia in respect of a sum which it was conceded, had rightly been included in his own total, income and, therefore was his own income. If the moment the share of the income from the Benares Steel Rolling Miffs was allocated to Mahaliram Santhalia, it became his income and liable to be included in his own total income for the purpose of his personal assessment, an agreement by him with other persons regarding the rights to that income could only be a voluntary disposition of his income by him. No question of a diversion by superior tide could possibly arise. " With respect, we are unable to agree with most of this reasoning. In our view, in the case of a sub partnership the sub partnership creates a superior title and diverts the income before it becomes the income of the partner. In other words, the partner in the main firm receives the income not only on his behalf but on behalf of the partners in the sub partnership. The Calcutta High Court also seems to be, in our opinion, erroneously impressed by the argument that "It is impossible to see how, after a proportionate share of the income had thus been included in the total income of a partner for the purposes of his personal assessment, it could then go anywhere else or could be further divided between such partners and other parties. " We will deal with this aspect while dealing with the second point raised by the learned counsel for the revenue. Mr. Hazarnavis, in this connection, drew our attention to the following passage in K. A. Ramachar vs Commissioner of Income tax, Madras(1): "This, in our opinion, is neither in accordance with the law of partnership nor with the facts as we have found on the record. Under the law of partnership, it is the partner and the partner alone who is entitled to (1)42 I.T.B. 25, 29. 462 the profits. A stranger, even if he were an assignee, has and can have no direct claim to the profits. By the deeds in question, the assessee merely allowed a payment to his wife and daughters to constitute a valid discharge in favour of the firm; but what was paid was, in law, a portion of his profits, or, in other words, his income". This passage was also relied on by the High Court. In our opinion, these observations have to be read in the context of the facts found in that case. In that case it was neither urged nor found that a sub partnership came into existence between the assessee who was a partner in a firm and his wife, married daughter and minor daughter. It was a pure case of assignment of profits (and not losses) by the partner during the period of eight years. Further the fact that a sub partner can have no direct claim, to the profits vis a vis the other partners of the firm and that it is the partner alone who is entitled to profits vis a vis the other partners does not show that the changed character of the partner should not be taken into consideration for income tax purposes. This Court held in Commissioner of Income tax, Gujarat vs Abdul Rahim(1) that registration of the firm could not be refused on the ground that a partner was a benamidar and that a benamidar is a mere trustee of the real owner and he has no beneficial interest in the profits of the business of the real owner. Under the law of partnership it is the benamidar who would be entitled to receive the profits from the other partners but for income tax purposes it does not mean that it is the benamidar who alone can be assessed in respect of the income received by him. In conclusion we hold that the High Court was in error in holding that there was no question of an overriding ogligation in this case and that the income remained the income of Murlidhar Himatsingka in spite of the sub partnership created by him under the agreement dated December 21, 1949. The second contention raised by Mr. Hazarnavis was not debated in the High Court, but in our opinion, there is no substance in this contention. We have already mentioned that a benamidar can be a partner in a firm. Now if Mr. Hazarnavis 's contention is right, under section 25(5)(a) of the Act it is only he who could be assessed, but there is no warrant for this proposition. In Commissioner of Income tax, West Bengal vs Kalu Babu Lal Chand(2) this Court mentioned with approval Kaniram Hazarimull vs Commissioner of Income tax(1) where income from a partnership received by a karta was held to be assessable in the hands of Hindu Undivided famlly. This Court observed at p. 12 as follows: "If for the purpose of contribution of his share of the capital in the firm the karta brought in monies out (1) (2) (3) 463 of the till of the Hindu undivided family, then he must be regarded as having entered into the partnernship for the benefit of the Hindu undivided family and as between him and the other members of his family he would be accountable for all profits received b y him as his share out of the partnership profits and such profits would be assessable as income in the hands of the Hindu undivided family. Reference may be made to the cases of Kaniram Hazarimull vs Commissioner of Income tax(1) and Dhanwatav vs Commissioner of Income tax(1) in support of this view". The object of section 23(5)(a) is not to assess the firm itself but to apportion the income among the various partners. After the income has been apportioned, the Income Tax Officer has to find whether it is the partner who is assessable or whether the income should be taken to be the real income of some other person. If it is the real income of another firm, it is that firm which is liable to be assessed under section 23(5)(a) of the Act. This view was taken by the Bombay High Court in Ratilal B., Daftri vs Commissioner of Income tax(1). The Bombay High Court observed at p. 24 as follows: "The principle asserted in that case is that even in the case of a partner in a registered firm, when the question arises as to his individual assessment, what is to be considered is not the income allocated to his share by employing the machinery of section 23(5)(a), but his real income, and that real income is what remains after deducting the amounts which may be said to have been diverted and never constituted his real income and such amounts will have to be excluded before his real income is reached". In conclusion we hold that there is nothing in section 23(5)(a) that prevents the income from the firm Basantlal Ghanshyamdas being treated as the income of M/s Fatehchand Murlidhar and section 23(5) (a) being applied again. In the result we accept the appeals, set aside the judgment of the High Court and answer the questions in the negative. The appellants will be entitled to costs here and in the High Court. , One hearing fee. Appeals allowed. (1)27 I.T.R. 294. (2) (3)36 I.T.R. 18.

The assessee was a partner in a registered firm. In 1949 he entered into a partnership with persons who were strangers to the registered firm and a deed of partnership was executed between them. It recited that the profits and losses for the share of the assessee in the registered firm should belong to the new firm and be divided and borne by the partners of the new firm in accordance with the shares specified in the deed. On the question whether the income of the assessee from the registered firm for the years 1952 53, 1953 54 and 1955 56, should be included in his individual assessment, HELD: The income should be included in the assessment of the new firm and not in the personal assessment of the assessee, (i)The new partnership constituted a sub partnership in respect of the assessee 's share in the registered firm. (In the case of a subpartnership, it creates a superior title and diverts the income before it becomes the income of the partner, that is, the partner in the main firm receives the income not only on his own behalf but on behalf of the partners in the sub partnership,. The fact that a sub partner can have no direct claim to the profits vis a vis the other partners of the main firm and that it is the partner alone who is entitled to the profits vis a vis the other partners in the main firm, does not show that the changed character of the partner should not be taken into consideration for income tax purposes. [461E F; 462C] (ii)The object of section 23(5)(a) is not to assess the firm itself but to apportion the income among the various partners. After the income has been apportioned, the Income tax Officer has to find whether it is the partner who is assessable or whether the income should be taken to be the real income of some other person. If it is the real income of another firm, it is that firm which is liable to be assessed under the section. There is nothing in the section that prevents the income of the assessee from the registered firm being treated as the income of the sub partnership and the section being applied again. [463C, F] Charandas Haridas vs Commissioner of Income Tax, ; , and Commissioner of Income Tax, Bombay vs Sitaldas Tirathdas , followed. Commissioner of Income Tax, Punjab vs Laxmi Trading Co. and Ratilal B. Daftari vs Commissioner of Income Tax: , Bombay, , referred to. Mahaliram Santhalia vs Commissioner of Income Tax 33 I.T.R. 261, overruled.

Appeal No. 632 of 1962. Appeal by special leave from the judgment and order dated January 5, 1960 of the Allahabad High Court in Civil Revision No. 325 of 1957. G.N. Kunzru, B.C. Misra, P.K. Chakravarti and Om Prakash, for the appellants. J. P. Goyal and S.P. Singh, for the respondents. This appeal by special leave is directed against the judgment of the Allahabad High Court (Dhavan, J.) allowing the revision under section 115, C.P.C., and dismissing the suit brought by the appellants hereinafter referred to as the plaintiffs. The relevant facts for the purpose of ,appreciating the points raised before us are as follows: The four plaintiffs, out of which three are appellants before us the fourth having died, brought a suit for damages against the six defendants (one defendant had in the meantime died and four are respondents before us). The allegations in the plaint, in brief, were that the plaintiffs and the defendants were members of an ,association called Parsi Zoroastrian Anjuman; that the defendants, alongwith some other members of the association, formed a group and each of them conspired among themselves to injure and harass the plaintiffs and a few others in various ways; that at a meeting held on May 5, 1954, in connection with the election of Trustees, when defendant N.A. Guzder occupied the chair, he gave a ruling that the plaintiffs Kershasp section Gandhi and B.T.J. Shapoorji, since deceased, were unfit candidates for the office of Trustees and thus prevented them from seeking election, and contrary to the rules of the Anjuman and without taking votes declared the defendant, F.J. Gandhi, and one A.F. Cama duly elected. It was further alleged that on 961 July 3, 1954, another meeting of the Anjuman was held when the plaintiffs Khushro section Gandhi and Framroze section Gandhi were candidates for election to the office of the trustees, and defendant F.J. Gandhi gave a perverse ruling rejecting the nominations of the above plaintiffs and after taking votes declared G.T. Shappoorjee as duly elected trustee; that by the aforesaid rejections the plaintiffs had suffered an injury for which defendants Nos. 1 to 6 were jointly and severally liable and the plaintiffs were entitled to recover damages from the defendants. The plaint was filed on January 21, 1955. Before any written statement was submitted, on February 13, 1955 the sixth defendant section Rabadi, entered into a compromise with the plaintiffs. The terms of the compromise were: "1. I, Shavak Dorabjee Rabadi, defendant No. 6 have considered the subject matter of the suit and am sincerely sorry and apologise to the plaintiffs unconditionally for whatever I have done. I realise that I was m error *and was misguided. The plaintiffs above named accept the apology tendered by Shri Shavak Dorabjee Rabadi defendant No. 6 and the suit against him may be disposed of treating the aforesaid apology and its acceptance by the plaintiffs as a settlement of the dispute between the plaintiffs and the defendant No. 6. 3. The plaintiffs do not claim any costs against the defendant No. 6 and defendant No. 6 will bear his own costs. It is therefore prayed that the claim against defendant No. 6 may be disposed of in terms of the above settlement. " A decree was passed in terms of this compromise against defendant No. 6. On May 14, 1955, the other defendants filed a written statement and inter alia alleged: "That the release of defendant No. 6 Sri section Rabadi, an alleged joint tort feasor and the compromise entered into behind the back of the answering defendants with him in full settlement of their suit for damages, appears to be collusive and dishonest and the release by the plaintiffs of defendant No. 6 from his joint liability as a tort feasor has in law extinguished the plaintiffs ' rights to sue the others remaining defendants and claim damage from them." 962 It was further alleged that "the four plaintiffs could not be legally allowed to totalise the sum of their individual damage, alleged to have been suffered, and thereby procure the trial of the suit in the court of higher jurisdiction," and that the suit had been purposely over valued. In a statement dated March 17, 1956, the plaintiffs clarified that the "damages are being claimed by the plaintiffs in respect of all the facts mentioned in the plaint and particularly as a result of the facts that have been mentioned in paragraphs 17 and 19 the plaint", and further "that on account of all the facts complained of each plaintiff is entitled to claim Rs. 10,100 as damages but the plaintiffs have claimed only Rs. 10,100 and have given up rest of the claim. " Two of the issues framed by the Civil Judge, may be set out: "Issue No. 5. What is effect of the compromise between plaintiffs and defendant No. 6, as against rights of the other defendants ? Is the suit not maintainable against other defendants ? Issue No. 11. Is the court fee paid by the plaintiffs insufficient ?" By order dated September 18, 1956, the Civil, Judge held that the court fee paid by the plaintiffs was insufficient and that there was a deficiency of Rs. 905/12/ in the court fee which the plaintiffs had to make good. The plaintiffs were given 15 days time to make good the deficiency. Instead of paying the money the plaintiffs applied under O.VI, r. 17, C.P.C., for amendment of the plaint. The plaintiffs stated in this application that they would in consideration of the order of the Court split the amount of Rs. 10,100/ into two portions claiming Rs. 5,050/ each in respect of the two separate incidents dated July 3, 1955, and May 5, 1955, respectively. The defendants filed an application contending that as the plaintiffs had failed to make good the deficiency in the court fee within the time given, the plaint should be rejected in view of the provisions of the O. VII, r. 11, C.P.C. and section 6, U.P. Court Fees Act. By order dated November 28, 1956, the Civil Judge allowed the plaintiffs ' application for amendment on payment of Rs. 30/ as costs, and also rejected the defendants ' application. Against this order the defendants filed a revision. Dhavan, J., first dealt with the point whether the plaintiffs could renounce a part of the claim instead of making good the deficiency in court fee. He came to the conclusion that the suit contained four causes of action, and that the plaintiffs had to pay court fee on four separate causes of action of the value of Rs. 2,525/ each. As the learned counsel for the plaintiffs had 963 given an undertaking to make good any deficiency in court fee, Dhavan, J., directed the plaintiffs to pay court fee on the four separate causes of action valued at Rs. 2525/ each. He also directed an amendment to be made in the plaint. The learned Judge felt that it would be in the interest of justice that the question covered by issue No. 5 being one of law should be decided by him in the revision. It appears that the counsel for both parties conceded that the Court had power to decide the issue as the entire record was there, although the learned for the plaintiffs felt that the decision should be left to the Trial Court. The learned counsel for the appellants contends before us that the High Court had no jurisdiction to decide issue No. 5 in a revision. He says that the subject matter of the revision was the order of the Civil Judge dated November 28, 1956, and the High Court could not decide any other point and convert itself into an original court. The learned counsel for the respondents tried to justify the decision regarding jurisdiction of the High Court under section 24, C.P.C. This section inter alia, provides that the High Court may withdraw any suit, appeal or other proceeding pending in any Court subordinate to it and try and dispose of the same. We are unable to appreciate how the order of the learned Judge can be justified under section 24. He has not purported to withdraw 'any suit and try the same. What he has done is to try an issue arising in a suit in a revision arising out of an interlocutory order. It seems to us that the High Court, even if the parties conceded, had no power to decide the issue. But if we set aside the order of the High Court and remit the case to the Civil Judge to try it according to law, the Civil Judge would feel handicapped in deciding the case properly because he will feel bound to follow the opinion given by the learned Judge on issue No. 5. Under the circumstances we heard arguments on the issue. Dhavan J., following the English Common Law, held that the decree against Rabadi was complete accord and satisfaction and the cause of action against all the defendants being one and indivisible, the decree operated as a bar against further proceedings against the remaining joint wrong doers. Winfield on Tort (8th edn.) p. 661 states the English Law thus: "The liability of joint tort feasors is joint and several, each may be sued alone, or jointly with some or all the others in one action; each is liable for the whole damage, and judgment obtained against all of them jointly may be executed in full against any one of them. At common law, final judgment obtained against one 964 joint tort feasor released all the others, even though it was wholly unsatisfied. This was established in Brinsmead vs Harrison(1) and the reason put by Blackburn J., was Interest reipublicae ut sit finis litium. Kelly C.B. urged that if the rule were otherwise, then in a second action the second jury might assess an amount different from that in the first action and the plaintiff would not know for which sum he should levy execution. The rule was abolished by the Law Reform (Married Women and Tortfeasors) Act, 1935. It has long been settled that the release of one joint tortfeasor releases all the others, because the cause of action is one and indivisible. This rule has not been affected by the Act of 1935. It applies to a release under seal and to 'a release by way o,f accord and satisfaction, and probably to nothing else. A mere covenant or agreement not to sue, as distinguished from an actual release, does not destroy the cause of action, but merely prevents it from being enforced against the particular tortfeasor with whom it is made. " That was not the law in England in the beginning. The history of the law on this point is set out in William 's 'Joint Torts and Contributory Negligence ' (p. 35 footnote) as follows: "In Y.B. (1305) 33 35 E. 1, R.S. 7, it was apparently held that in trespass against four, a verdict against two did not of itself prevent continuance against the other two. The verdict may not, however, have been embodied in a judgment. The former rule appears more clearly from Y.B. (1342) 16 E. 3, 1 R.S. 171, where judgment against one did not bar the action against the others. That the parties were joint tortfeasors appears plainly from the note from the record, ibid, 175 n. 7. See also Y.BB, E. 3. 7b, pl. 4; (1412/ 13) H. 14 H. 4.22b, 131. 27; in the latter it is said that in trespass against two, if one be condemned and the plaintiff has execution against him with satisfaction, he shall be barred against the others thus implying that the mere judgment would not bar. Hickman vs Machin (1605) 1 Ro. 896, (F) 4, 7, from which case, however (sub. Hickman vs Payns), a different inference is drawn in Broome vs Wooton ; (1605) Yelv. 67, The first discussion of the question in the Year Books is in Y.B, (1441) M. 20 H. 6, 11a, pl. 24, where X had first sued A, B, and C in trespass and (1) 965 obtained judgment against A, who alone appeared to the writ; later X, not having levied execution under this judgment, sued B. Paston and Fulthorpe expressed opinions that he was not barred by the first judgment, but Newton C.J. thought that he was. In Y.B. (1495)M. 11 Ii. 7. 5b, pl. 23 (Bro. Trespas 428) it was said that one can release one joint tortfeasor after judgment ,against another without affecting that other; such a release would have been unnecessary if the judgment had discharged all other joint tortfeasors. Y. BB. (1474) T. 14 E. 4. 6a, pl. 2; (1475) T. 15 E. 4. 26b, pl. 3. The rule was not settled in 1584, for it was then made a question whether even satisfaction following on judgment would discharge the others (above 9 n.2); and see Cocke vs Jennor (n.d.) Hob. 66; , , where it was said that if joint tortfeasors be sued in several actions, satisfaction by one would discharge the others; it was not said that judgment against one would discharge." The common law rule was first established by the case of Broome (Brown) vs Wooton(x) and the only reason given was that transit in rem judicatam. Goldrel Foucard & Sons vs Sinclair and Russian Chamber of Commerce in London(2) Sargant, L regarded the rule in Brinsmead vs Harrison(a) highly technical. The rule was changed in England by legislation vide The Law Reform (Married Women and Tortfeasors) Act, Pt. II (25 & 26 Geo. 5, c. 30). Section 6(1)(a) and (b) of that Act read as follows: "Where damage is suffered by any person as a result of a tort (whether a crime or not) (a) judgment recovered against any tortfeasor liable in respect of that damage shall not be a bar to an action against any other person who would, if sued, have been liable as a joint tortfeasor in respect of the same damage; (b) if more than one action is brought in respect of that damage by or on behalf of the person by whom it was suffered, or for the benefit of the estate, or of the wife, husband, parent or child of that person, against tortfeasors ,liable in respect of the damage (whether as joint tortfeasors or otherwise) the sums recoverable under. the (1) ; (2) , 192, (3) , 966 judgments given in those actions by way of damages shall not in the aggregate exceed the amount of the damages awarded by the judgment first given; and in any of those actions, other than that in which judgment is first given, the plaintiff shall not be entitled to costs unless the court is opinion that there was reasonable ground for bringing the action. " This provision has been adopted in other parts of the Commonwealth. Recently in Egger vs Viscount Chelmsford(1) Lord Denning M.R., observed: "I cannot help thinking that the root of 'all the trouble is the tacit assumption that if one of the persons concerned in a joint publication is a tortfeasor, then all are joint tortfeasors. They must therefore stand or fail together. So much so that the defence of one is the defence of all; and the malice of one is the malice of all. I think this assumption rests on a fallacy. In point of law, no tortfeasors can truly be described solely as joint tortfeasors. They are always several tortfeasors as well. In any joint tort, the party injured has his choice of whom to sue. He can sue all of them together or any one or more of them separately. This has been the law for centuries. It is well stated in Serjeant Williams ' celebrated notes to Saunders ' Report (1845 ed.) of Cabell vs Vaughan ; f g. I. several persons jointly commit a tort, the plaintiff has his election to sue all or any number of the parties; because a tort is in its nature the separate act of each individual '. Therein lies the gist of the matter. Even in a joint tort, the tort is the separate act of each individual. Each is severally answerable for it; and, being severally answerable, each is severally entitled to his own defence. If he is himself innocent of malice, he is entitled to the benefit of it. He is not to be dragged down with the guilty. No one is by our English law to be pronounced a wrongdoer, or be made liable to be made to pay damages for a wrong, unless he himself has done wrong; or his agent or servant has done wrong and he is vicariously responsible for it. Save in the case where the principle respondent superior applies, the law does not impute wrongdoing to a man who is in fact innocent." (1) , 264. 967 Gatley on 'Libel and Slander ' (Sixth Edition), in a footnote at p. 367, remarks regarding the approach of Lord Denning in Egger vs Chelmsford ( 1 ): "His approach is also not easy to reconcile with the law on the release o.f joint tortfeasors". In the United States of America, in an early decision, Lovejoy vs Murray(2), the United States Supreme Court refused to follow the English Common Law. Miller J. speaking on behalf of the Court, observed, after referring to Broome (Brown) vs Wooten ( 3 ) and other cases: "The rule in that case has been defended on two grounds, and on one or both of these it must be sustained, if at 'all. The first of these is, that the uncertain claim for damages before judgment has, by the principle of transit in rem judicatam, become merged into a judgment which is of a higher nature. This principle, however, can only be applicable to parties to the judgment; for as to the other parties who may be liable, it is not true that plaintiff has acquired a security of any higher nature than he had before. Nor has he, as to them, been in anywise benefited or advanced towards procuring satisfaction for his damages, by such judgment. This is now generally admitted to be the true rule on this subject, in cases of persons jointly and severally liable on contracts; and no reason is perceived why joint trespassers should be placed in a better condition. As remarked by Lord Ellenborough, in Drake vs Mitchell, , 'A judgment recovered in any form of action, is still but a security for the original cause of action, until it be made productive in satisfaction to the party; and, therefore, till then, it can not operate to change any other collateral concurrent remedy which the party may have. ' The second ground on which the rule is defended is, that by the judgment against one joint trespasser, the title of the property concerned is vested in the defendant in that action, and therefore no suit can afterwards be maintained by the former owner for the value of that property, or for any injury done to it. This principle can have no application to trespassers against the person, nor to injuries to property, real or personal, unaccompanied by conversion or change of (1)[1965] 1Q.B.D.248, (2) 18L. ed. 129,132 132 134. (3) ; 968 possession. Nor is the principle admitted in regard to conversions of personal property. Prior to Brown vs Wootton, Cro. 73, the English doctrine seems to have been the other way, as shown by Kent, in his Commentaries, 2 Kent, Com. 388, referring to Shepherd 's Touchstone, Title, Gift; and to Jenkins, p. 109, ease 88. We have already stated the only two principles upon which it rests. We apprehend that no sound jurist would attempt, at this day, to defend it solely on the ground of transit in rem judicatam. For while this principle, as that other rule, that no man shall be twice vexed for the same cause of action, may well be applied in the case of a second suit against the same trespasser, we do not perceive its force when applied to a suit brought for the first time against another trespasser in the same matter. But in all such cases, what has the defendant in such second suit done to discharge himself from the obligation which the law imposes upon him, to make compensation ? His liability must remain, in morals and on principle, until he does this. The judgment against his co trespasser does not affect him so as to release him on any equitable consideration. It may be said that neither does the satisfaction by his co trespasser, or a release to his co trespasser do this; and that is true. But when the plaintiff has accepted satisfaction in full for the injury done him, from whatever source it may come, he is so far affected in equity and good conscience, that the law will not permit him to recover again for the same damages. But it is not easy to see how he is so affected, until he has received full satisfaction, or that which the law must consider as such. We are, therefore, of opinion that nothing short of satisfaction, or its equivalent, can make good a plea of former judgment in trespass, offered as ,a bar in an action against another joint trespasser, who was not party to the first judgment." In India the English Law has been generally followed. The learned counsel for the appellant relies on Ram Kumar Singh vs Ali Husain(1). The facts in that case in brief were as follows. The plaintiff sued several defendants jointly to recover damages (Rs. 325/ ) in respect of an alleged assault committed on him by (1) All. 173, 175, 969 and accepted Rs. 25/ representing his proportionate share of damages. The High Court held: "The fact that one of several tortfeasors in the progress of a suit 'admits his liability ' as well as that of the other defendants and agrees to pay a sum of money in satisfaction of his liability does not exonerate the other defendants, who may be rouged responsible for the acts complained of, from liability. In the case of Brinsmead vs Harrison(1), one of the tort leasors was sued for damages for trover of a piano and damages were recovered as against him. In that case it was held that a suit against the other tortfeasor could not be sustained for the same cause of action, notwithstanding the fact that the judgment already recovered remained unsatisfied. That is a very different case from the case before us. In the case before us all the tortfeasors were sued in one and the same suit and judgment was not recovered only against the party who had admitted his liability in the progress of the suit and had agreed to pay a sum of money in satisfaction of his liability. " This case was followed in Hat Krishna Lal vs Haji Qurban Ali(2). But in these cases the decree was not passed first against the tortfeasor admitting liability. The learned counsel for the respondent relies on Makhanlal Lolaram vs Panchamal Sheoprasad(5). It was held in that case that "an accord and satisfaction in favour of one joint tortfeasor operates in favour of them all. " Vivian Bose, A.J.C., observed: "An accord and satisfaction in favour of one joint tortfeasor operates in favour of them all; ; 9 QB 819, and ; , Odgers on Libel and Slander, Edn. 6, p. 521, Ratanlal on Torts, Edn. 10, p. 71. The basis of these decisions is that where the injury is one and indivisible it can give rise to but one cause of action. Consequently if satisfaction is accepted 'as full and complete and against one person it operates with respect to the entire cause of action. " In Shiva Sagar Lal vs Mata Din(4) the facts as stated in the head note, in brief, were: "Plaintiff filed a suit to recover damages for malicious prosecution 'against five defendants of whom defendant 1 was a minor. It was alleged that the other defendants had instigated defendant 1 to make a complaint against (1) (1871 72) L.R.7 C.P. 547. (2) Luck. (3) A.I.R. 1934 Nag. 226, 227. (4) A.I.R. 1949 All. 970 the plaintiff. Subsequently, the plaintiff filed an application that there had been a settlement between him and defendant 1 and he had consequently released him. The application was allowed and defendant 1 was discharged. " Following Duck vs Mayeu(1) it was held that the discharge ' of defendant 1 amounted merely to a covenant not to sue him and not to a release of all the joint tortfeasors. The English Courts adopted this line of reasoning in order to soften the rigour of the common law, but in the present case it cannot be said that the compromise amounted to a covenant not to sue, as a decree was passed. It seems to us, however, that the rule of common law prior to Brown vs Wooton(2) and the rule adopted by the United States Supreme Court is more in consonance with equity, justice and good conscience. In other words, the plaintiff must have received full satisfaction or which the law must consider as such from a tortfeasor before the other joint tortfeasors can rely on accord and satisfaction. This rule would recognise that the liability of tortleasors is joint and several. What is full satisfaction will depend on the facts and circumstances of the case. For example, the acceptance of Rs. 25/ in the case of Ram Kumar Singh vs Ali Hussain(3) would not be a case of full satisfaction. In this case an apology was received from the defendant Rabadi and accepted and embodied in 'a decree. This cannot be treated to be a full satisfaction for the tort alleged to have been committed by the respondents defendants. But this must be treated as 'an election on the part of the plaintiffs to pursue their several remedy against the defendant Rabadi. The learned counsel for the respondents urges that if a decree is passed against them for damages, the defendant Rabadi, who compromised, would be liable to contribute in accordance with the rule laid down in Dharni Dhar vs Chandra Shekhar(4) in which it was held that the rule in Merry weather vs Nixon(5) did not apply in India. It is not necessary to decide whether the Full Bench decision of the Allahabad High Court lays down the law correctly, because even if it is assumed that this is the law in India it would not affect the rights of the plaintiffs. ' In the result the appeal is allowed, the judgment ,and decree of the High Court set aside and the case remitted to the Trial Court. He shall dispose of the suit in accordance with this judgment and law. No order as to costs. V.P.S. Appeal allowed. (1) (2) ; (3) All. 173 (4) I.L.R. [1952] 1 All. 759 (F.B.).

A suit for damages was filed on the allegations that the plaintiffs and defendants were all members of an association and that the defendants committed a tort against the plaintiffs by conspiring and preventing the plaintiffs from being elected to the office of trustees of the association. One of the defendants tendered an unconditional apology which was accepted by the plaintiffs and a decree was passed in terms of the compromise. The other defendants, thereafter, filed written statements contending that the release of one of the defendants from his joint liability as a tort lessor extinguished the plaintiff 's rights against the remaining defendants and raised questions regarding valuation and court fees. The trial court took up the issue regarding court fees, held there was a deficiency and granted time to the plaintiffs to make good the deficiency. The plaintiffs, instead, applied for amendment of the plaint and the trial court allowed the application. The High Court, in revision filed by the defendants gave appropriate directions regarding payment of court fee. The High Court, also decided, with the consent of both sides, that the decree against one of the defendants namely, the compromise decree, was complete accord and satisfaction and that the cause of action against all the defendants being one and indivisible, the decree operated as a bar against further proceedings against the remaining defendants. In appeal to this Court, it was contended that the subject matter of revision before the High Court being only the order of the trial court regarding court fee, the High Court had no jurisdiction to decide any other point. HELD: (1) The High Court had no power to decide any other issue even if the parties had consented. The order of the High Court could not be justified under section 24, Civil Procedure Code, because, it was not a case of the High Court withdrawing the case to itself and trying the same. [9 '63 D E] (2) The High Court having decided the question of maintainability of the suit against the. other defendants, the trial court would feel handicapped if the matter were to be remitted to it. The appropriate procedure is for this Court to decide the question. [963 E F] (3) The rule which is in consonance with equity, justice and good conscience and which also recognises that the liability of tort feasors is joint and several, is that, before the other joint tort feasors can rely on accord and satisfaction, a plaintiff must have received full satisfaction or L6Sup. CI/69 10 960 what the law must consider as such from one of the tort feasors. What is full satisfaction would depend on the facts and circumstances of each case. [970 C E] In the present case, the apology which was embodied in a decree could not be treated as full satisfaction for the tort alleged to have been committed by the defendants. But it must be treated as an election on the part of the plaintiffs to pursue their several remedy against the defendant tendering the apology. [970 E F] Ram Kumar Singh vs Ali Husain, All. 173, Makhanlal Lolaram vs Panchamal Sheoprasad, A.I.R. ; Har Krishna Lal vs Haji Qurban Ali, Luck. 284 and Shiva Sagar Lal vs Mata Din A.I.R. 1949 All. 105; and English and American Law, referred to.

Appeal No. 490 of 1957. Appeal from the judgment and decree dated March 22,1954, of the Allahabad High Court in Civil Misc. Writ No. 7854 of 1951. G. section Pathak, section N. Andley, J. B. Dadachanji, Rameshwar Nath and P. L. Vohra, for the appellant. C. B. Agarwala, G. C Mathur and C. P. Lal, for respondents Nos. 1 and 3. March 6. The Judgment of section K. Das, M. Hidayatullah, J. C. Shah and N. Rajagopala Ayyangar, JJ. was delivered by J. C. Shah, J. K. C. Das Gupta, J. delivered a separate, Judgment. SHAH, J. In 1981, the appellant was admitted to the police force of the United Provinces and was appointed a Sub Inspector of Police. He was later promoted to the rank of Inspector, and in 1946 was transferred to the Anti corruption department. In 1947, he was appointed, while retaining his substantive rank of Inspector, to the officiating rank of Deputy Superintendent of Police. Shortly thereafter, complaints were received by the Chief Minister and Inspector General of Police ' U. P. charging the appellant with immorality, corruption and gross dereliction of duty. In a preliminary confidential enquiry, the Inspector General of Police came to the conclusion that "a prima facie case" was made out against the 20 154 appellant. He then directed that a formal enquiry be held against the appellant and passed orders reverting the appellant to his substantive rank of Inspector and placing him under suspension. An enquiry was held into the conduct of the appellant by the Superintendent of Police, Anti corruption department. The report of the Superintendent of Police was forwarded to the Government of U. P., and the Governor acting under r. 4 of the Uttar Pradesh Disciplinary Proceedings (Administrative Tribunal) Rules, 1947 herein after called the Tribunal Rules referred the case for enquiry to a Tribunal appointed under r. 3 of the Tribunal Rules on charges of corruption, personal immorality and failure to discharge duties properly. The Tribunal framed three charges against the appellant, and after a detailed survey of the evidence recommended on February 4, 1950, that the appellant be dismissed from service. The Governor then served a notice requiring the appellant to show cause why he should not be dismissed from service and after considering the explanation submitted by the appellant, the Governor ordered that the appellant be dismissed with effect from December 5, 1950. The appellant challenged this order by a petition instituted in the High Court of Judicature at Allahabad under article 226 of the Constitution for a writ of certiorari quashing the proceedings of the Tribunal and for a writ of mandamus directing the State of Uttar Pradesh to hold an enquiry under section 55 of the Civil Services (Classification, Control and Appeal) Rules. In support the order dismissing the appellant from High Court dismissing his petition, the appellant has raised three contentions: 1. that the order dismissing the appellant from the police force was unauthorised, because the Governor had no power under section 7 of the Police Act and the regulations framed thereunder to pass that order; 2. that even if the Governor was invested with power to dismiss a police officer, out of two alternative modes of enquiry, a mode prejudicial to the appellant having been adopted the proceedings of the Tribunal which enquired into the charges against him 155 were void, as the equal protection clause of the Con stitution was violated; and 3. that the proceedings of the Tribunal were vitiated because of patent irregularities which resulted in an erroneous decision as to the guilt of the appellant. To appreciate the first two contentions, it is necessary briefly to set out the relevant provisions of the laws procedural and substantive in force, having a bearing on the tenure of service of members of the police force in the State of Uttar Pradesh. The appellant was admitted to the police force constituted under Act V of 1861. By section 3 of that Act, superintendence throughout a general police district vests in and is exercised by the State Government to which such district is subordinate and except as authorised by the Act, no person, officer or court may be empowered by the State Government to supersede or control any police functionary. By section 4, the administration of the police throughout a general police district is vested in the Inspector General of Police. By section 7, it is provided that subject to the provisions of article 311 of the Constitution and to such rules as the State Government may from time to time make under the Act, the Inspector General, Deputy Inspectors General, Assistant Inspectors General and District Superintendents of Police may at any time dismiss, suspend or reduce any police officer of the subordinate rank whom they shall think remiss or negligent in the discharge of his duty, or unfit for the same, or may award any one or more of the punishments (set out therein) to any police officer of the subordinate rank who discharges his duty in a careless or negligent manner or who by any act of his own renders himself unfit for the discharge thereof. Section 46 sub section(2) authorises the State Government to make rules for giving effect to the provisions of the Act, and also to amend, add to or cancel the rules framed. The Government of Uttar Pradesh has framed rules called the Police Regulations under the Indian Police Act. Chapter 32 containing Regulations 477 to 507 deals with departmental punishment and 156 criminal prosecution of police officers and Ch.33 containing Regulations 508 to 516 deals with appeals, revisions, petitions etc. By Regulation 477, it is provided that no officer appointed under section 2 of the Police Act shall be punished by executive order otherwise than in the manner provided in the chapter. Regulation 478A provides that the punishment of dismissal or removal from the force or reduction as defined in Regulation 482 may be awarded only after departmental proceedings. By Regulation 479 cl.(a), "full power" is reserved to the Governor to punish all police officers, and by cl.(b), the Inspector General is authorised to punish Inspectors and ill police officers of "lower ranks". Regulation 489 provides for the departmental trials of police officers and Regulation 490 provides that the departmental trials of police officers must be conducted in accordance with the rules set out therein. Regulation 490 in its various clauses makes provisions about oral and documentary evidence, framing of charges, explanation of the delinquent police officer, recording of statement of defence witnesses, recording of findings by the Superintendent of Police and the making of a report by the enquiry officer if he is of the view that the delinquent Police officer should be dismissed or removed from the force. Clause (9) provides that the police officer may not be represented by counsel in any proceeding instituted against him under the rules. By Regulation 508, every police officer against whom an order of dismissal or removal is passed is entitled to prefer one appeal against an order of dismissal from the police force to the authorities prescribed in that behalf, but against the order of the Governor in exercise of authority reserved under Regulation 479 cl.(a), no appeal is provided. By section 96B of the Government of India Act,, 1915, the tenure of all civil officers including police officers was at the pleasure of the Sovereign. In exercise of the powers conferred by sub.s.(2) of section 96B, classification rules were framed by the local Governments. In the Government of India Act, 1935, ch. 2 of Part X dealt with civil services, their tenure, recruitment and 157 conditions of service. The section corresponding to section 96B of the Government of India Act, 1915, in the later Act was section 240(1) and thereunder all members of the civil service held office during the pleasure of the Sovereign. By the Government of India Act, 1935, to every civil servant a two fold protection was guaranteed by cls.(2) and (3) of section 240(1) that he shall not be dismissed from service by any authority sub.ordinate to that by which he was appointed and that he shall not be dismissed or reduced in rank until be has been given a reasonable opportunity of showing cause against the action proposed to be taken in regard to him. But these provisions did not apply to police officers for whom a special provision was enacted in section 243. That section provided: "Notwithstanding anything in the foregoing provisions of this chapter, the conditions of service of the subordinate ranks of the various police forces in India shall be such as may be determined by or under the Act relating to those forces respectively. " The conditions of service of the police force of the subordinate ranks were under the Government of India Act, 1935 therefore only such as were prescribed by rules framed under section 7 and section 46(2) of the Police Act. By the Constitution of India, the distinction between police officers and other civil servants in the matter of protection by constitutional guarantees is abolished and as from January 26, 1950, the recruitment and conditions of service of all persons serving the Union or the State are now governed by article 309 and their tenure by article 310 of the Constitution. By Article 311, the protection granted under section 240 cls.(2) and (3) of the Government of India Act is extended to members of the police force as well. By Article 309, the conditions of service of public servants are made subject to the provisions of the Constitution and the Acts of the appropriate Legislature. By Article 310, except as expressly provided by the Constitution, (i.e., except in cases where there is an express provision for dismissal of certain public servants e.g., Judges of the Supreme Court and of the High Courts, Comptroller and Auditor General of India, Chief Election Commissioner) 158 all civil servants who hold office under the Union of India hold office during the pleasure of the 'President and all civil servants who hold office under the State hold it during the pleasure of the Governor. By virtue of article 313 of the Constitution, until other provision is made, all laws in force immediately before the Constitution and applicable to any public service which continues to exist under the Union or a State shall continue in force so far as consistent with the Constitution: the power of the police functionaries to dismiss police officers is therefore preserved. On November 4, 1947, the Governor of U. P. in exercise of, the powers conferred inter alia by section 7 of the Police Act, published the Tribunal Rules. By r. 1 el.(3), these rules apply "to all Government servants under the rule making control of the Governor" and are applicable to any acts, omissions or conduct arising before the date of commencement of the rules as they are applicable to those arising after that date. Clause (e) of r. 2 defines "corruption", el.(d) defines "failure to discharge duties properly" and el.(e) defines " personal immorality". Rule 4 authorises the Governor to refer to a Tribunal constituted under r. 3, cases relating to an individual Government servant or class of Government servant or servants in a particular area only in respect of matters involving (a) corruption, (b) failure to discharge duties properly.(e) irremediable general inefficiency in a public servant of more than ten years ' standing, and (d) personal im. morality. By cl. 2, the Governor is also authorised in respect of a gazetted Government servant on his own request to refer his case to the Tribunal in respect of matters referred to in sub.r. By r. 7, the proceedings of the Tribunal are to be conducted in camera and neither the prosecution nor the defense has the right to be represented by counsel. Rule 8 prescribes the procedure to be followed by the Tribunal and r. 9 deals with the record to be maintained by the Tribunal. Rule 10 states that the Governor shall not be bound to consult the Public Service Commission on the Tribunal 's recommendations and shall paw an order of punishment in the terms recommended by the Tribunal, provided "the Governor may for 159 sufficient reasons, award a lesser punishment". Rule 1 2 provides that nothing in the rules shall be deemed to affect the conduct of disciplinary proceedings 'in ' oases other than those specifically covered by the provisions of the Tribunal Rules. Rule 13 authorises the Governor to delegate the power to refer cases to gazetted officers,in charge of districts and to pass an order of punishment under r. 10 to heads of departments. Enquiry against the appellant, though commenced before the Constitution was concluded after the Constitution, and the order dismissing him from the police force was passed in December, 1950. Under Police Regulation 479(a), the Governor had the power to dismiss a police officer. The Tribunal Rules were framed in exercise of various powers vested in the Governor including the power under section 7 of the Police Act, and by those rules, the Governor was authorised to pass appropriate orders concerning police officers. By virtue of Article 313, the Police Regulations as well as the Tribunal Rules in so far as they were not inconsistent with the provisions of the Constitution remained in operation after the Constitution. The authority vested in the Inspector General of Police and his subordinates by section 7 of the Police Act was not exclusive. It was controlled by the Government of India Act, 1935, and the Constitution which made the tenure of all civil servants of a Province during the pleasure of the Governor of that Province. The plea that the Governor had no power to dismiss the appellant from service and such power could only be exercised by the Inspector General of Police and the officers named in s.7 of the police Act is therefore without substance. But it is urged that the enquiry held by the Tribunal against the appellant and the order consequent upon that enquiry deprived the appellant of the equal protection of the laws and were therefore void as infringing article 14 of the Constitution. It is true that when proceedings were started against the appellant for an enquiry for his alleged misdemeanors, one of two distinct procedures for holding an enquiry, was open for selection by the authorities. The police 160 authorities could direct an enquiry under the Police Regulations under the procedure prescribed by Regulation 490; it was also open to the Governor to direct an enquiry against the appellant, and as the charges against him fell within r. 4 of the Tribunal Rules, the procedure for enquiry was the one prescribed by r. 8 of the Tribunal Rules. Relying upon the existence of these two sets of rules simultaneously governing enquiries against police officers either ' of which could be resorted to at the option of the authorities in respect of charges set out in r. 4 of the Tribunal Rules, it was urged that in directing an enquiry against the appellant under the Tribunal Rules, discrimination was practiced against him, and he was deprived of the guarantee of equal protection of the laws. That an enquiry against the appellant could have been made under the procedure prescribed by Regulation 490 of the Police Regulations appears to be supported by rr.1(3), 4 and 12 of the Tribunal Rules. Rule 1 subr.(3) provides that the Tribunal Rules shall apply to all Government servants under the rule making control of the Governor, and by r. 4, the Governor is authorised to refer cases to the Tribunal, but he if; not obliged to do so. By r. 12, nothing in the Tribunal Rules is to affect the conduct of disciplinary proceedings in oases other than those specifically dealt with under the rules. But the order of the Governor directing an enquiry against the appellant was passed before the Constitution, and article 14 has no retrospective operation: it does not vitiate transactions even if patently discriminatory which were completed before the commencement of the Constitution. In Syed Qasim Razvi vs The State of Hyderabad (1), this court was called upon to decide whether a trial of an offender commenced before the Constitution under the Special Tribunal Regulation promulgated by the Military Governor of the Hyderabad State was, since the Constitution, invalid in view of article 14. Mukherjea J. speaking for the majority of the court observed: (1) 161 is not to obliterate the entire operation of the inconsistent laws or to wipe them out altogether from the statute book; for to do so will be to give them retrospective effect which they do not possess. Such laws must be hold to be valid for all past transactions and for enforcing rights and liabilities accrued before the advent of the Constitution. On this principle, the order made by the Mlitary Governor referring this case to the Special Tribunal cannot be impeached and consequently the Special Tribunal must be deemed to have taken cognizance of the case quite properly, and its proceedings up to the date of the coming in of the Constitution would also have to be regarded as valid." Similarly, Das, J. in Lachhmandas Kewalram Ahuja vs The State of Bombay (1) in dealing with the validity of proceeding before a Special Judge holding a trial before the Constitution observed: "As the Act was valid in its entirety before the date of the Constitution, that part of the proceeding before the Special Judge, which, up to that date, had been regulated by this special procedure cannot be questioned, however discriminatory it may have been. . ". Selection by the authorities of one of two alternative procedures at a time when article 14 was not in operation, does not therefore enable the appellant to contest the validity of the enquiry on the plea of denial of equal protection of the laws. It was also observed in Syed Qasim Razvi 's case(2) by Mukherjea J. at p. 606: "In cases of the type (where the trial commenced before the Constitution) Which we have before us where part of the trial could not be challenged as bad and the validity of the other 'part depends on the question as to whether the accused has been deprived of equal protection in matters of procedure, it is incumbent upon the court to consider, firstly, whether the discriminatory or unequal provisions of law could be separated from the rest and even without them a fair measure of equality in the matter (2) ; (2) 162 of procedure could be secured to the accused. In the second place, it has got to consider whether the procedure actually followed did or did not proceed upon the basis of the discriminatory provisions. In our opinion, a mere threat or possibility of unequal treatment is not sufficient. If actually the accused has been discriminated against, then and then only he can complain, not otherwise. We may mention here that the impossibility of giving the accused the substance of a trial according to normal procedure at the subsequent stage may arise not only from the fact that the discriminatory provisions were not severable from the rest of the Act and the court consequently had no option to continue any other than the discriminatory procedure; or it may arise from something done at the previous stage which though not invalid at that time precludes the adoption of a different procedure subsequently." The proceedings of the Tribunal prior to the commencement of the Constitution are therefore not open to challenge except to the limited extent indicated by Mukherjea J. The question which falls to be considered is whether the procedure followed by the Tribunal after the Constitution was discriminatory and operated to the prejudice of the appellant. Regulation 490 of the Police Regulations sets out the procedure to be followed in an enquiry by the police functionaries, and rr. 8 and 9 of the Tribunal Rules set out the procedure to be followed by the Tribunal. There is no substantial difference between the procedure prescribed for the two forms of enquiry. The enquiry in its true nature is quasi judicial. It is manifest from the very nature of the enquiry that the approach to the materials placed before the enquiring body should be judicial. It is true that by Regulation 490, the oral evidence is to be direct, but even under r. 8 of the Tribunal Rules, the Tribunal is to be guided by rules of equity and natural justice and is not bound by formal rules of procedure relating to evidence. It was urged that whereas the Tribunal may admit on record evidence which is hearsay, the oral 163 evidence under the Police Regulations must be direct evidence and hearsay is excluded. We do not think that any such distinction was intended. Even though the Tribunal is not bound by formal rules relating to procedure and evidence, it cannot rely on evidence which is purely hearsay, because to do so in ' and enquiry of this nature would be contrary to rules of equity and natural justice. The provisions for maintaining the record and calling upon the delinquent public servant to submit his explanation are substantially the same under Regulation 490 of the Police Regulations and r. 8 of the Tribunal Rules. It is urged that under the Tribunal Rules, there is a departure in respect of important matters from the Police Regulations which render the Tribunal Rules prejudicial to the person against whom enquiry is held under those rules. Firstly it is submitted that there is no right of appeal under the Tribunal Rules as is given under the Police Regulations; secondly that the Governor is bound to act according to the recommendations of the Tribunal and thirdly, that under the Tribunal Rules, even if the complexity of a case under enquiry justifies engagement of counsel to assist the person charged, assistance by counsel may not be permitted at the enquiry. These three variations, it is urged, make the Tribunal Rules not only discriminatory but prejudicial as well to the person against whom enquiry is held under these Rules. In our vie," , this plea cannot be sustained. The Tribunal Rules and the Police Regulations in so far as they deal with enquiries against police officers are promulgated under section 7 of the Police Act, and neither the Tribunal Rules nor the Police Regulations provide an appeal against an order of dismissal or reduction in rank which the Governor may pass. The fact that an order made by a police authority is made appealable whereas the order passed by the Governor is not made appealable is not a ground on which the validity of the Tribunal Rules can be challenged. In either case, the final order rests with the Governor who has to decide the matter himself. Equal protection of the laws does not postulate equal treatment of all persons without 164 distinction:it merely guarantees the application of the same laws alike and without discrimination to all persons similarly situated. The power of the Legislature to make a distinction between persons or transactions based on a real differentia is not taken away by the equal protection clause. Therefore by providing a right of appeal against the order of police authorities acting under the Police Regulations imposing penalties upon a member of the police force, and by providing no such right of appeal when the order passed is by the Governor, no discrimination inviting the application of article 14 is practiced. under r. 10 of the Tribunal Rules, the Governor is enjoined to pass an order of punishment in terms recommended by the Tribunal, whereas no such obligation is cast upon the police authority who is competent to dismiss a police officer when an enquiry is held under Regulation 490 of the Police Regulations. To the extent that r. 10 requires the Governor to accept the recommendation of the Tribunal, the rule may be regarded as inconsistent with the Constitution, because every police officer holds office during the pleasure of the Governor, and is entitled under article 311(2) to a reasonable opportunity to show cause to the satisfaction of the Governor against the action proposed to be taken in regard to him. The partial invalidity of r. 10 however does not affect the remaining rules: that part of the rule which requires the Governor to accept the recommendation of the Tribunal as to the guilt of the public servant concerned is clearly severable. We may observe that in considering the case of the appellant, the Governor exercised his independent judgment and passed an order of dismissal and did not act merely on the recommendation of the Tribunal. The difference between the two sets of rules on the matter under consideration does not relate to the procedure of the enquiring bodies, but to the content of reasonable opportunity guaranteed by article 311 of the Constitution. The rules relating to appearance of lawyers at enquiries under the Police Regulations and under the Tribunal Rules are also not different. Under cl.(9) 165 of Regulation 490 of the Police Regulations, an accused police officer may not be represented by counsel in any proceeding instituted under those Regulations, ' and by r. 7 of the Tribunal Rules, neither the prosecution nor the defence have the right to be represented by counsel. Both the rules deny to the police officer the right to be represented by counsel. The procedure provided in the Police Regulations is substantially the same as the procedure prescribed by the Tribunal Rules, and by continuing the enquiry after the Constitution under the Tribunal Rules and not under the Police Regulations, a more onerous procedure prejudicial to the appellant was not adopted. The Governor appointed the Tribunal for enquiry against the appellant before the Constitution, but the order of dismissal was passed after the Constitution came into force. The appellant was entitled to the protection of article 311(2) of the Constitution. Since the Constitution was enacted, the distinction which was made between members of the police force and other civil servants under sections 240, 241 and 243 of the Government of India Act has disappeared and all civil servants including the police officers are entitled to the protection of article 311(2). The content of the guarantee was explained by this court in Khem Chand vs The Union of India (1). It was observed by "To summarise: the reasonable opportunity envisaged by the provisions under consideration includes (a)an opportunity to deny his guilt and establish his innocence which he can only do if he is told what the charges leveled against him are and the allegations on which such charges are based; (b)an opportunity to defend himself by cross examining the witnesses produced against him and by examining himself or any other witnesses in support of his defence; and finally (c)an opportunity to make his representation as to why the proposed punishment should not be inflicted on him, which he can only do if the competent authority, after the enquiry is over and after (1) ; , 1096.166 applying his mind to the gravity or otherwise of the charges proved against the government servant tentatively proposes to inflict one of the three punishments and communicates the same to the government servant". To a police officer charged with misdemeanor, opportunity in all the three branches set out in Khemchand 's case (1)is provided under the Tribunal Rules. There is opportunity to the police officer against whom an enquiry is made to deny his guilt and to establish his innocence; there is opportunity to defend himself by cross examination of witnesses produced against him and by examining himself and other witnesses in support of his defence, and there is also opportunity to make his representation as to why the proposed punishment should not be inflicted. The discrimination which is prohibited by article 4 is treatment in a manner prejudicial as compared with another person similarly circumstanced by the adoption of a law, sub stantive or procedural, different from the one applicable to that other person. In Sardar Kapur Singh vs The Union of India (1), this court held that by directing an enquiry against a member of the Indian Civil Service who was charged with misdemeanor under, the and not under r. 55 of the Civil Services (Classification, Control and Appeal) Rules when there was no substantial difference between the material provisions, discrimination was not practiced. It was observed (at p. 581): "Does the holding of an enquiry against a public servant under the , 18,50 violate the equal protection clause of the Constitution? The appellant submits that the Government is invested with authority to direct an enquiry in one of two alternative modes and by directing an enquiry under the which Act it is submitted contains more stringent provisions when against another public servant similarly circumstances an enquiry under r. 55 may be directed, article 14 of the Constitution is infringed. " After considering the ,,special protection given to (1) ; 1096 (2) ; 167 members of the Indian Civil Service and the essential characterised of the procedure for making enquiries under the public Servants (Inquiries) Act,1850, it was observed at p.584. "The primary constitutional guarantee, a member of the Indian Civil Service is entitled to is one of being afforded a reasonable opportunity of the content set out earlier, in an enquiry in exercise of powers conferred by either the or r. 55 of the Civil Services (Classifi. cation, Control and Appeal) Rules, and disorimination is not practised merely because resort is had to one of two alternative sources of authority, unless it is shown that the procedure adopted operated to the prejudice of the public servant concerned. In the case before us, the enquiry held against the appellant is not in manner different from the manner in which an enquiry may be held consistently with the procedure prescribed by r. 55, and therefore on a plea of inequality before the law, the enquiry held by the Enquiry Commissioner is not liable to be declared void because it was held in a manner though permissible in law, not in the manner, the appellant says, it might have been held. " In Syed Qasim Razvi 's case (1), it was held that if the substance of the special procedure followed after the Constitution in an enquiry or trial commenced before the Constitution is the same as in the case of a trial by the normal procedure, the plea of discrimination invalidating a trial must fail, Counsel for the appellant in support of his plea that the enquiry by the Tribunal was vitiated because it was held under a discriminatory procedure relied judgment of this Bench in the State of Orissa Dhirendranath Das (2). In that case, a lower Division Assistant in the Secretariat of the Orissa Government was found guilty of certain misdemeanor by a Tribunal appointed under rules framed by the Orissa Government after an enquiry held in that behalf and was ordered to be dismissed from service. In a petition by the public servant under article 226 of the Constitution praying for a writ declaring illegal the order (1) (2) A.LR.168 of dismissal it was held by the Orissa High Court that ad on the date on which enquiry was directed against the petitioner there were two sets of rules in operation, the Tribunal Rules and the Bihar and Orissa Subordinate Services Discipline and Appeal Rules and it was open to the Government of Orissa to select either set of rules for enquiry against any public servant against whom a charge of misdemeanor was made and that selection of one in, preference to the other set of rules was violative of the guarantee of article 14 of the Constitution. The High Court accordingly declared the order of dismissal inoperative and further declared that the disciplinary proceedings be restored to the stage which they had reached when the case was referred to the Tribunal. Against that order, the State of Orissa preferred an appeal to this court. The relevant rules were not in that case incorporated in the paper book prepared for the hearing nor did counsel for the@ State produce for our consideration those rules. Counsel also conceded that by the adoption of the procedure prescribed by the Tribunal Rules in preference to the procedure in an enquiry under the Service Rules, discrimination would be practiced because there were substantial differences in the protection to which the public servants were entitled under the Service Rules and the Tribunal Rules. The only ground pressed in support of the appeal was that the Service Rules were not in operation at the time when the enquiry in question was directed and by directing an enquiry under the Tribunal Rules, discrimination was not practiced. But this argument raised for the first time questions which were never investigated and this court declined to allow counsel to raise them. It was observed in that case: "If the two sets of rules were in operation at the material time when the enquiry was directed against the respondent and by order of the Governor, the enquiry was directed under the Tribunal Rules which are "more drastic" and prejudicial to the interest of the respondent, a clear case of discrimination arises and the order directing enquiry 169 against the respondent and the subsequent proceedings are liable to be struck down as infringing article 14 of the Constitution." Before us, counsel for the appellants has produced a printed copy of the Disciplinary Proceedings (Administrative Tribunal) Rules, 1951 published by the Government of Orissa. A perusal of these rules may apparently suggest that subject to certain minor differences, these rules are substantially the same as the Tribunal Rules framed by, the State of U. P. We have however not been supplied with a copy of the Bihar and Orissa Subordinate Services Discipline and Appeal Rules, 1935. The judgment of this court in The State of Orissa vs Dhirendranath Das can have no application to this case, because in that case, the order of the High Court was. assailed on the limited ground that the High Court erred in assuming that there were two sets of rules simultaneously in operation, and it was open to the Executive Government to select one or the other for holding an enquiry against a delinquent public servant. That contention was negatived and the judgment of the High Court was confirmed. We do not think that there is any substance in the plea that discrimination was practiced by continuing the enquiry under the Tribunal Rules after the Constitution was brought into force. This appeal is filed with a certificate under article 132 of the Constitution. By ' el.(3) of article 132 the appellant is entitled to appeal to this court only on the ground that the High Court has wrongly decided a substantial question as to the interpretation of the Constitution and unless this court grants leave to him, on no other. Counsel for the appellant has challenged the regularity of the proceedings of the Tribunal and we have heard him to assure ourselves that the proceeding of the Tribunal has not been vitiated by any serious irregularity, or that the appellant was net deprived of the protection under article 311 of the Constitution. We proceed to consider briefly the arguments advanced in support of that plea. It was urged 170 in the first instance that the appellant was not permitted to appear at the enquiry before the Tribunal by a lawyer whereas the State Government was represented by a lawyer. It was averred in paragraph 14 of the affidavit of the appellant that the case for the prosecution was conducted by Jwala Prasad, Deputy Superintendent of Police and Legal Advisor to the Anti corruption Department, and that the Tribunal was told that such a course would be contrary to the Tribunal Rules and in any case contrary to rules of equity and natural justice, because he the appellant was not permitted to appear by counsel. In reply, Hari Shankar Sharma, Deputy Superintendent of Police stated in his affidavit that it was not true that before the Tribunal prosecution was conducted by Jwala Prasad. Ho also, stated that the Tribunal had required the presence of Sri Krishna who had made enquiries, but as Sri Krishna could not remain present, Jwala Prasad attended the sitting of the .Tribunal only on one day as Deputy Superintendent of Police, C.I.D., but he did not take any part in the proceedings, and "examination of witnesses and the cross examination was all done by the members of the Tribunal" and the appellant. It does not appear that Jwala Prasad was a practicing lawyer: he was not in any case permitted to appear as a lawyer and on the affidavit of Hari Shankar Sharma, it is clear that he did not take any part in the examination of witnesses or cross examination. It was then urged that the explanation submitted by the appellant was not considered because the Governor felt bound by the recommendations of the Tribunal. But in para 25 of the affidavit, Hari Shankar Sharma stated that the explanation of the appellant was submitted to the Government by the Inspector General of Police and the Governor duly considered the explanation and was of opinion that the appellant was unable to clear his conduct and therefore under r. 10(1) of the Tribunal Rules the Governor ordered dismissal of the appellant from service after considering the merits of his defence. It was then urged that the application submitted by the appellant for summoning witnesses and 171 calling for certain records was not considered and the appellant had on that account been prejudiced. In para 15 of his affidavit, the appellant stated that the Tribunal refused to call for certain records and though he wanted to summon certain defence witnesses, his application in that behalf was also refused. In answer P to this averment, Hari Shankar Sharma stated that the appellant had given a long list of defence witnesses and the Tribunal asked him to select those witnesses whose evidence in the opinion of the appellant would be relevant and thereupon the appellant " reduced his list to a much smaller number" and all those witnesses were summoned. Then it was urged that the assessor who is required under the rules to assist the Tribunal not having remained present at the hearing, the enquiry was vitiated. In paragraph 16 of the affidavit, the appellant has stated that during the enquiry section N. Agha the assessor was absent on many days on which the case was heard and the evidence was recorded. In reply, Hari Shankar Sharma stated that the contents of paragraph 16 of the affidavit were not correct, that it was true that Agha could not attend on certain dates "due to unavoidable circumstances", but the appellant was specifically asked if he had any objection to the recording of evidence in Agha 's absence and the appellant having stated that he has no objection, the proceedings were continued with his written consent. He further stated that the assessor was explained of the proceedings held on the days on which he had remained absent. The averments made in the affidavit of Hari ShankarSharma were not controverted by the appellant. On the materials placed on record, there is no substance in any of the pleas raised by the appellant relating to the regularity of the proceedings of the Tribunal. It may be pertinent to note that even though the appellant challenged before the High Court the regularity of the proceedings of the Tribunal, no argument was, it appears, advanced before the High Court in support thereof. The judgment of the High Court which is fairly detailed does not refer to any 172 ground on which the contention was sought to be sustained. The appeal fails and is dismissed with costs. DAS GUPTA, J. I have had the advantage or reading the judgment prepared by Shah J.; but while I respectfully agree with the conclusions on all other points, I regret my inability to agree with the conclusion reached there on the main question in controversy, viz. whether the Uttar Pradesh Disciplinary Proceedings (Administrative Tribunal) Rules, 1947 are void as being in contravention of article 14 of the Constitution, in so far as they do not provide for any appeal against a decision by the Governor under Rule 10. The facts have been fully stated by my learned Brother and need not be repeated, especially as the facts in this particular case do not arise for consideration in the decision of the question of law, whether article 14 is contravened by the above provisions of the Tribunal Rules. Under these rules the Governor may refer to the Tribunal constituted in accordance with rule 3 "cases relating to an individual government servant or class of government servants or government servants in a particular area only in respect of matters involving (a) corruption; (b) failure to discharge duties properly; (c) irremediable general ineffi ciency in a public servant of more than ten year 's standing; and (d) personal immorality." Under cl. 3 of rule 1 these rules apply to all government servants under the rule making control of the Governor. It is not disputed that these rules apply to every member of the police service in Uttar Pradesh and that the Governor may refer to the Tribunal the cases relating to any individual government servant belonging to the police department in respect of any of the matters mentioned 'in cl. (1) of Rule 4. It is also not disputed that if the Governor "does not make any such refe rence, the case of any such member of the police service in respect of any of these matters may be inquired into under the Uttar Pradesh Police Regulations. The co existence of the provisions of Police Regulations on 173 the question of departmental punishment of police officers with the Tribunal Rules, thus results in the position that of two members of the police service holding the same post and rank, one may be proceeded against in respect of any of the matters mentioned in Rule 4(1) of the Tribunal Rules, under the Tribunal Rules and another may be proceeded against for the self same matter under the Police Regulations. Where the inquiry is held under the Tribunal Rules, the Tribunal has to make a record of the charges, the explanation, its own findings and the views of the assessor and where satisfied that punishment be imposed, also formulate its recommendations about punishment. Under Rule 10 the Governor will then decide the case and no appeal shall lie against the order so passed by the Governor. Where the action is taken under the Police Regulations procedure, a police officer against whom an order of dismissal, removal, suspension or reduction is passed has a right of appeal to the authority prescribed in Regulation 508. The question is whether the existence of the right of appeal under the Police Regulation Procedure and the absence of the right, appeal against the decision by the Governor in the Tribunal Rules ' procedure amounts to unequal treatment. On behalf of the respondent it has been urged that there is no unequal treatment as in one case it is the order of the Governor which is made not appealable and in the other case it is the order of a police functionary which is made appealable. The argument seems to be that only if in the Police Regulations an order made by the Governor had been made appealable while under the Tribunal Rules the order made by the Governor was not appealable there could be any scope for a complaint of unequal treatment. With great respect to my learned brethren who have taken the contrary view, I am of the opinion that this argument misses the realities of the position and is really an attempt to slur over the difficulty. The real Position that requires examination appears to me to be this: Suppose A and B are two police officers holding the same rank and post and A is proceeded against under the 174 Tribunal Rules on a charge of corruption while B is proceeded against on a similar charge of corruption under the Police Regulations procedure. In the first case if the Tribunal finds A guilty and recommends, say, dismissal; and the Governor makes an order of dismissal, against this order there is no appeal. Suppose in B 's case also the punishing authority makes an order of dismissal but against this B has a right of appeal. It is obvious that while in the latter case B has some chance of the appellate authority taking a different view either about his guilt or about the quantum of punishment and setting aside or modifying the order, A has no such chance at all. It will be little consolation to A that the order in his case has been passed by such an high authority as the Governor. He can, it seems to me, legitimately complain that there is a real difference between the way he is treated and B is treated because of this existence of B 's right of appeal against the punishing authority 's order while he has no such right. Unless one assumes that the right of appeal is only in name, I do not see how one can deny that there is a legitimate basis for this complaint. I cannot agree that the right of ap. peal is a right without substance. Whenever one authority sits in appeal over another authority there is always a chance that the appellate authority may take a different view of facts or of law and as regards the quantum of punishment requisite, from the authority whose decision is under appeal. It is this chance which is denied, if a right of appeal is taken away. I am therefore of opinion that the absence of the right of appeal under Rule 10 of the Tribunal Rules while a right of appeal is given to a police officer under the Police Regulations, results in unequal treatment in a substantial matter, as between a police officer proceeded against under the Tribunal Rules and an officer who is proceeded against under the Police Regulations procedure. Nor is it possible to discover any principle to guide the discretion of the Government to select some police officers to be proceeded against under the Tribunal Rules while leaving out other police officers to be proceeded against, in respect 175 of similar matters, under the Police Regulations procedure. I have therefore come to the conclusion that the Tribunal Rules in so far as they provide that no appeal shall lie against the decision of the Governor is ultra vires the Constitution, being in contravention of article 14 of the Constitution. As has been noticed by Shah J. a somewhat similar question fell to be considered by us in Civil Appeal No. 103 of 1959 (State of Orissa vs Dhirendranath Das). Comparing the Disciplinary Proceedings (Administrative Tribunal) Rules., 1951 of the Orissa Government under which Dhirendranath Das had been proceeded against and dismissed from service with the Bihar and Orissa Subordinate Service Discipline and Appeal Rules, 1935 this Court held that inasmuch as there was a right of appeal to the authority immediately superior to the punishing authority under the Service Rules. while there is no such appeal against the findings and recommendations of the Tribunal, the pre proeedings were substantially different. The court further pointed out that as inquiries could be directed according to procedures substantially different at the, discretion of the executive authority "exercise whereof is not governed by any principle,% having any rational relation to the purpose to be achieved by the inquiry, the order selecting a prejudicial procedure, out of the two open for selection, is hit by article 14 of the Constitution. " I cannot find anything here that would justify a revision of the view taken by us in that case. As in my judgment the U. P. Disciplinary Proceedings (Administrative Tribunal) Rules, 1947 are hit by article 14 of the Constitution I would allow the appeal and set aside the order of dismissal passed against the appellant By Court. In view of the majority Judgment of the Court, the appeal fails and is dismissed with costs. Appeal dismissed.

There were certain charges of immorality, corruption and gross dereliction of duty against the appellant who was a police officer. After an enquiry, the Governor of U. P. referred the case under section 4 Of the U. P. Disciplinary Proceedings (Administrative Tribunal) Rules, 1947, to a Tribunal. The Tribunal recommended on February 4, 1950, that the appellant be dismissed from service. The Governor then served a notice on the appellant to show cause why he should not be dismissed from service and after considering the explanation submitted by him dismissed him with effect from December 5, 1950. The appellant challenged the order of dismissal, inter alia, on the grounds: (i) that the Governor had no power under section 7 of the Police Act and the U. P. Police Regulations framed thereunder to dismiss a police officer and (ii) that the enquiry held by the Tribunal violated 152 article 14 Of the Constitution as of the two parallel procedures available under the Tribunal Rules and under the U. P. Police Regulations, the mode prejudicial to the appellant under the Tribunal Rules was adopted. Held (per Das, Hidayatullah, Shah and Ayyangar, JJ.) that the enquiry by the Tribunal and the order of dismissal passed by the Governor were legal and valid. Under para. 479(a) of the U. P. Police Regulations, framed under section 7 Of the Police Act, the Governor bad the power to dismiss a police officer. Under the Tribunal Rules also, which were framed in exercise of the various powers vested in the Governor including the power under section 7 Of the Police Act, the Governor was authorised to dismiss a police officer. By virtue of article 313 Of the Constitution these provisions remained in operation even after the coming into force of the Constitution. The authority vested in the Inspector General of Police and his subordinates by section 7 of the Police Act, was not exclusive; it was controlled by the Government of India Act, 1935, and the Constitution which made the tenure of all civil servants of a province or state during the pleasure of the Governor. The procedure adopted did not violate article 14 Of the Con stitution. Though at the time when proceedings were started against the appellant two distinct procedures for holding the enquiry were open for selection by the authorities, the order by the Governor referring the case under the Tribunal Rules having been passed before the Constitution, article 14 could have no application to it even if it was discriminatory. The procedure ire scribed in the Police Regulations is substantially the same as the procedure prescribed by the Tribunal Rules, and by continuing the enquiry after the Constitution under the Tribunal Rules and not under the Police Regulations, a more onerous procedure prejudicial to the appellant was not adopted. The fact that an order made by a police authority under the Police Regulations is made appealable whereas an order passed by the Governor under the Tribunal Rules is not made appealable does not amount to discrimination within the meaning of article 14. The Tribunal Rules provide for the giving of reasonable opportunity to a public servant in ill its aspects, viz., opportunity to deny his guilt, opportunity to defend himself and opportunity ,to make his representation against the proposed punishment. The mere existence of two sets of parallel procedures is not discriminatory unless it was shown that one set is more onerous than the other. Syed Qasim Rozvi vs The State of Hyderabad and Lackhmandas Kewalram. Abuja vs The State of Bombay, ; , applied. Khem Chand vs The Union of India and others, [1954] S.C. R. 1080 and Sardar Kapur Singh V: Union of India, (1960) 2 S.C. R. 569, referred to. 153 State Of Orissa vs Dhirendranath Das, A.I.R. 1961 S.C. 1715, distinguished. Per Das Gupta, J. The U.P., Disciplinary Proceedings (Administrative Tribunal) Rules, 1947, are hit by article 14 Of the Constitution. The absence of the right of appeal under the Tribunal Rules while a right of appeal is given to a police officer under the Police Regulations, results in unequal treatment in a substantial matter between police officers proceeded against under the two procedures. Further, there is no principle. to guide the Government in selecting which of the two procedures is to be applied in a particular case.

ions Nos. 126 and 127 of 1957. (Under Article 32 of the Constitution of India for enforcement of Fundamental Rights). N. C. Chatterjee and Nanak Chand, for the petitioners. M. C. Setalvad, Attorney General for India, B. Sen and R. H. Dhebar, for the respondents. October 31. The following Order of the Court was delivered by DAS C.J. In their respective separate petitions, the petitioners pray (1) for an order, direction or writ in the nature of certiorari and/or prohibition calling for the records in the case of the Assistant Collector of Land Customs & Central Excise, Amritsar, against the two petitioners and one Moshe Baruk, on the file of the Additional District Magistrate of Amritsar and for quashing the proceedings therein, and (2) for an order, direction or writ in the nature of habeas corpus for the production before this Court of the persons of the petitioners to be dealt with according to law. The facts appearing from the records are shortly as follows: The petitioner, Leo Roy Frey, purchased a car No. C.D. from an officer of the American Embassy in Paris. This car was sold by the petitioner Frey to the petitioner Thomas Dana, in May 1957. On transfer, the car was registered in the name of the petitioner Dana on May 18, 1957. Both the petitioners thereafter booked their passages through the, 824 American Express Company from Geneva to Bombay by s.s. ASIA. The car was also shipped by the same vessel. The two petitioners disembarked at Karachi Ion June 11, 1957, and after a brief halt at Karachi, they left together by plane for Bombay and reached Bombay on the same day. petitioners stayed together at the Ambassador Hotel at Bombay from June 11, 1957, to the afternoon of June 19, 1957. On the last mentioned date both of them left Bombay by plane and reached Delhi the same evening. They occupied room No. I at Janpath Hotel and stayed there from June 19, to June 29, 1957. After the car, which had been booked by rail from Bombay to Delhi, had arrived in Delhi, the two petitioners left Delhi and travelled together in the car from Delhi to Amritsar on June 22, 1957, and after staying the night there, they arrived at Attari Road Land Customs Station on their way out to Pakistan on June 23, 1957. The Customs officers there required the petitioners to declare in Baggage Declaration Forms supplied to them the articles which they had in their possession, including any goods which were subject to Export Trade Control and/or Foreign Exchange restrictions and/or were dutiable. Each of the petitioners completed his Baggage Declaration Form and handed it over to the Customs authorities duly signed by him. On that very day the persons of each of the petitioners were also searched and certain currency and movable property which had not been included in the baggage declaration were recovered. Amongst other things, a pocket radio and a time piece were recovered from the petitioner Dana and a pistol of 22 bore with 48 live cartridges of the same bore was recovered from the person of the petitioner Frey. Both the petitioners were put under arrest on the same day, namely, June 23, 1957. On June 30,1957, the petitioners were interrogated and the car was thoroughly searched. As a result of such intensive search and minute inspection, a secret chamber above the petrol tank was discovered. On opening the secret chamber, Indian currency to the tune of Rs. 8,50,000 and U.S. dollars amounting to 10,000 were discovered in the concealed recess and 825 seized by the police. On July 7, 1957, notice was issued to the petitioner Dana under section 167(8) of the Sea Customs Act to show cause before the Collector why under that section penalty should not be imposed on, him and why the seized articles should not be confiscated. A similar notice was served on the petitioner Frey, on July 9, 1957. The petitioners made representations in writing and were also heard in person. On July 24, 1957, the Collector of Central Excise and Land Customs made an order for the confiscation of the currency and also of the motor car with an option to the petitioner Dana to redeem the car on payment of Rs. 50,000 and also ordered confiscation of articles other than the currency recovered from the car subject to redemption on payment of Rs. 100. The Collector was also satisfied that each of the two petitioners was equally guilty of an offence under section 167(8) of the Sea Customs Act and imposed a personal penalty of Rs. 25,00,000 on each of the petitioners, to be paid within two months from the date of the order or such extended period as the adjudicating officer might allow. On August 12, 1957, the Assistant Collector of Customs and Central Excise, Amritsar, lodged a complaint against the two petitioners and one Moshe Baruk of Bombay before the Additional District Magistrate, Amritsar, under section 23 read with section 8 of the Foreign Exchange Regulations Act, 1947 and section 167 (81) of the , as amended by the Sea Customs (Amendment) Act, 1955. Subsequently, a fresh complaint was filed by the same Assistant Collector of Land Customs and Central Excise against the two petitioners and the said Moshe Baruk before the Additional District Magistrate, Amritsar, ' under section 23 read with section 8 of the Foreign Exchange Regulations Act, 1947, and section 167(81) of the and s ' 120 B of the Indian Penal Code, read with section 23/23 B, Foreign Exchange Regulations Act and section 167(81), . A case was also started against the petitioner Frey under the Indian Arms Act for being in possession of the pistol and the cartridges in contravention of the provisions of section 20 of 826 that Act. He was ordered to be let out on bail in the sum of Rs. 10,000 with one surety in the Arms Act case, which he furnished. The trial of the Arms Act case has concluded in the Court of the Additional District Magistrate but orders are pending. The petitioners, Frey and Dana, were directed to be released on bail in the sum of rupees five lakhs and ten lakhs respectively, which were finally reduced by the High Court to rupees two lakhs and five lakhs respectively. Neither of the petitioners could furnish the requisite security and they have, therefore, been in judicial custody. They have now come forward with these applications for the reliefs already mentioned. Their main contention, urged before us, is that they have been deprived of their liberty otherwise than in accordance with procedure established by law. In ordinary circumstances the production of the order or warrant for the apprehension and detention of an undertrial prisoner would be a good return to a writ of habeas corpus. But the petitioners contend that in this case there has been a violation of their fundamental right under article 20(2) of the Constitution. Relying on the observations in the decision of the Calcutta High Court in Assistant Collector vs Soorajmal (1), and in the decision of the Madras High Court in Collector of Customs vs A. H. A. Rahiman (2), it is contended that in making the order of confiscation and penalty under section 167(8) of the , the Collector was acting judicially and therefore the petitioners have already been proceeded with and punished for the offence of importation and attempted exportation of goods, the importation or exoprtation of which is for the time being prohibited or restricted by or under chap. IV of the , and consequently they cannot again be prosecuted and punished for the same offence. The argument is that the pending proceedings before the Additional District Magistrate offend against the protection given to the petitioners by article 20(2) of Constitution. That in imposing confiscation and penalties the Collector acts judicially has been held by this Court in its judgment (I) (2) A.I.R. 957 Mad. 827 pronounced on May 16, 1957, in F. N. Roy vs Collector of Customs (1). No question has been raised as to the maximum amount of penalty that can be imposed under section 167(8) and we are not called upon to express any opinion on that point. But the fact that the Collector of Customs acted judicially is not decisive and does not necessarily attract the protection guaranteed by article 20(2) and the question still remains whether the petitioners ' case comes within the provisions of article 20(2). That article protects a person from being ,prosecuted and punished for the same offence more than once". The question has to be answered as to whether the petitioners had previously been prosecuted and punished for the same offence for which they are now being prosecuted before the Additional District Magistrate. The proceedings before the Customs authorities were under section 167(8) of the . Under section 186 of that Act, the award of any confiscation, penalty or increased rate of duty under that Act by an officer of Customs does not prevent the infliction of any punishment to which the person affected thereby is liable under any other law. The offences with which the petitioners are now charged include an offence under section 120B, Indian Penal Code. Criminal conspiracy is an offence created and made punishable by the Indian Penal Code. It is not an offence under the . The offence of a conspiracy to commit a crime is a different offence from the crime that is the object of the conspiracy because the conspiracy precedes the commission of the crime and is complete before the crime is attempted or completed, equally the crime attempted or completed does not require the element of conspiracy as one of its ingredients. They are, therefore, quite separate offences. This is also the view expressed by the United States Supreme Court in United States vs Rabinowich (2). The offence of criminal conspiracy was not the subject matter of the proceedings before the Collector of Customs and therefore it cannot be said that the petitioners have already been prosecuted and punished for the "same offence". (1) Petition NO. 438 Of 1955. 105 (2) ; 828 It is true that the Collector of Customs has used the words " punishment " and " conspiracy ", but those words were used in order to bring out that each of the two petitioners was guilty of the offence under section 167(8) of the . The petitioners were not and could never be charged with criminal conspiracy before the Collector of Customs and therefore article 20(2) cannot be invoked. In this view of the matter it is not necessary for us, on the present occasion, to refer to the case of Maqbool Hussain vs The State of Bombay (1) and to discuss whether the words used in article 20 do or do not contemplate only proceedings of the nature of criminal proceedings before a court of law or a judicial tribunal as ordinarily understood. In our opinion, article 20 has no application to the facts of the present case. No other points having been urged before us, these applications must be dismissed. Applications dismissed.

The petitioners were found guilty under section 167(8) of the Sea Customs Act and the currency and other goods recovered from their possession were confiscated and heavy personal penalties imposed on them by the Collector of Central Excise and Land Customs. Complaints were thereafter lodged against them by the Customs authorities before the Additional District Magistrate under section 120B of the Indian Penal Code, read with section 23/23B of the Foreign Exchange Regulations Act, 1947, and section i67(8i) of the Sea Customs Act, as also under other sections of the two latter Acts. The Magistrate granted bail but they could not furnish the requisite security and were, therefore, kept in judicial custody. By two petitions under article 32 Of the Constitution they prayed for the issue of writs of certiorari and/or prohibition for quashing the proceedings pending against them in the Court of the Magistrate as also for the issue of writs of habeas corpus. It was contended on their behalf that in view of the provision of article 20(2) Of the Constitution they could not be prosecuted and punished twice over for the same offence and the proceedings pending before the Additional Magistrate violated the protection afforded by article 20(2) of the Constitution. Held, that the contention was without substance and the petitions must be dismissed. The fact that in imposing confiscation and penalties under section 167(8) of the Sea Customs Act, the Collector of Customs acts 823 judicially is not decisive and does not attract the protection of article 20(2) of the Constitution. Section 186 of the Act does not prevent the infliction of any other punishment to which the person concerned may be liable under any other law. F. N. Roy vs Collectoy of Customs, Petition NO. 438 Of 955, decided on May 16, 1957, referred to. Criminal conspiracy is an offence under section 120B of the Indian Penal Code but not so under the Sea Customs Act, and the petitioners were not and could not be charged with it before the Collector of Customs. It is an offence separate from the crime which it may have for its object and is complete even before the crime is attempted or completed, and even when attempted or completed, it forms no ingredient of such crime. United States vs Rabinowith, ; , referred to.

Appeal No. 1948 of 1966. Appeal from the judgment and decree dated March 22, 1965 of the Gujarat High Court in First Appeal No. 718 of 1960. Purshottam Trikamdas, M.H. Chhatrapati and A.K. Varma, for the appellant. G.L. Sanghi, Urmila Kapur and S.P. Nayar, for the respondent. The Judgment of the Court was delivered by Bachawat, J. The appellant was the owner of land bearing survey No. 910 situated on the Bhachau Rahapur Road in Kutch District. In November 1949 the Government of Kutch took possession of the land under an arrangement that the Government would give to the appellant in exchange other suitable lands of equal value. On that date Kutch was part of the territory of India and the Land Acquisition, Act, 1894 was in force there. After taking possession of the land the Government constructed thereon the State Guest House and the Court House. Thereafter the Government was neither willing to return the land nor to give other suitable land in exchange and instead it decided to acquire the land compulsorily. On February 1, 1955 the Government issued a notification under sec. 6 (1 ) of the Land Acquisition Act declaring that the land was needed for public purposes stating that possession of the land had already been taken over and directing the Collector to take action under sec. The necessary action was duly taken and in due course the Collector made his award on April 22, 1957. The appellant objected to the amount of compensation and asked the Collector to make a reference to the Court under sec. The Collector duly made the reference. At the hearing of the reference before the District Judge, Kutch, the Government conceded that the appellant was entitled to the market value of the land as on February 1, 1955. The District Judge awarded compensation accordingly. The Government filed an appeal in the High Court. At the hearing of the appeal the Government contended that in the absence of a notification under sec. 4( 1 ), no compensation could be awarded to the appellant. The High Court accepted the contention and observed that the appellant would be at liberty to contend in other proceed 62 ings that the acquisition was bad in the absence of a notification under sec. 4( 1 ). In this view of the matter the High Court allowed the appeal and set aside the order of the District Judge. The present appeal has been filed after obtaining a certificate from the High Court. The main question arising in this appeal is whether the Government can take up inconsistent positions in Court at successive stages of the same litigation to the detriment of its opponent and whether having conceded before the District Judge that the appellant was entitled to the market value of the land on February 1, 1955 it could at the appellate stage resile from that position and contend that there was no notification under sec. 4(1) on that date and that consequently its opponent was not entitled to any compensation. The scheme of the Land Acquisition Act is well known. If the Government desires to acquire land, it has to issue a preliminary notification under sec. 4( 1 ) declaring that the land is needed or is likely to be needed for any public purpose. This notification has to, be issued in order to give an opportunity to all persons interested in the land under section 5A( 1 ) to object to the acquisition within 30 days after the issue of the notification. After hearing the objections the Collector has to make a report under sec. 5A(2). On considering this report the Government may issue a notification under sec. 6 (1 ) declaring that the land is needed for a public purpose. In cases covered by see. 17(4) the Government may direct that the provisions of sec. 5A shall not apply and if it does so a declaration may be made under sec. 6( 1 ) at any time after the publication of the notification under sec. 4 (1 ). When the Collector has made an award under sec. 11, he may under see. 16 take possession of the land which thereupon vests in the Government. Section 18 requires the Collector to make a reference to Court on the application of any person interested in the land who has not accepted the award. It is the market value of the land at the date of the publication of the notification under sec. 4( 1 ) that can be awarded as compensation by the Collector under sec. 11 and by the Court under sec. These provisions show that the issue of the notification under sec. 4(1) is a condition precedent to the acquisition of the land. Where the procedure under sec. 5A has to. be followed, there must necessarily be an interval of time between the issue of the notification under sec. 4(1) and the notification under sec. But where sec. 5A does not stand in the way, the prior publication of a notification under 4( 1 ) is not a condition precedent to the publication of a notification under sec. 6( 1 ). For this reason this Court held in Somavanti vs State of Punjab(1) that where an order was passed [1963] 2, S.C.R. 775, 821 823. 63 under sec. 17(4) dispensing with the procedure Under sec. 5A, it was lawful for the Government to publish both the notifications on the same date. The procedure under sec. 5A being entirely for the benefit of the persons interested in the land they may waive it, see Toronto Vol. 36, p. 444: "A statutory right which is granted a privilege may be waived either altogether or in a particular case. " If all persons interested in the land waive the benefit of the procedure under sec. 5A the Government may lawfully issue a composite notification under secs. 4 ( 1 ) and 6 ( 1 ). In this background let us examine ,the facts of the present case. The Government having constructed buildings on the land was not in a position to restore it and had: no option but to acquire it compulsorily. With a view to make the acquisition the Government published a notification under sec. 6( 1 ) on February 1, 1955. On finding that there was no separate notification under sec. 4( 1 ) the Government had a choice between two courses of conduct. It could say that in the absence of such a notification the acquisition was invalid and that no compensation could be awarded under sec. If it did so it would be compelled to start fresh acquisition proceedings and pay a larger sum by way of compensation. The other course was to treat the notification of February 1, 1955 as. a composite one under secs. 4(1) and 6(1) with the consent of the appellant and to say that the market value of the land on that day could be awarded by way of compensation. The Government elected to choose the latter course. At the hearing of the reference, it conceded that the appellant was entitled to the market value of the land on February 1, 1955. The appellant agreed to accept compensation on that footing. Having regard to the consent of both parties, it could properly be assumed that the procedure of section 5A had1 been waived by the appellant and that the notification of February 1, 1955 could be treated as a composite one under sections 4 ( 1 ) and 6 ( 1 ). The District Judge could therefore lawfully award the market value of the land that day. Relying on the concession made by the Government, the appellant acted to its detriment. It did not challenge the acquisition and took no steps to recover the land. The result is that the Government has been in adverse possession of the land for more than 12 years since 1949 and has gained an advantage which it could not otherwise obtain. In these.circumstances the Government cannot be permitted to resile from the election which it deliberately made and to say that the appellant is not entitled to the market value of the land on February 1, 1955. A party litigant cannot be permitted to take up inconsistent positions in (1) 64 Court to the deteriment of his opponents [see Rama Charan Chakrabarty vs Nimai Mondal(1), Bigelow on Estoppel, 6th ed., page 783]. He cannot approbate or reprobate (see Halsbury 's Laws of England, 3rd, ed., vol. 15 article 340). The concession cannot now be retracted. The High Court should have disposed of the appeal before it on the footing that the appellant is entitled to the market value of the land on February 1, 1955. As the High Court did not hear the appeal on the merits, the matter must be remanded to it for final disposal. In the result, the appeal is allowed, the order of the High Court is set aside and the matter is remanded to the High Court for disposal on the merits. The respondent shall pay to the appellant the costs of the appeal in this Court. R.K.P.S. Appeal allowed. (1) 15 C.L.J. 58.

In 1949 the Government took possession of certain land belonging to the appellant under an arrangement whereby the Government was to give to the appellant in exchange other suitable lands of equal value. After the Government had constructed some buildings on the land, it decided to acquire the land compulsorily. On February 1, 1959, the .Government issued a notification under section 6(1) of the Land Acquisition Act, 1894, declaring that the land was needed for public purposes and stating that possession of the land had already been taken. The Collector made an award on April 22, 1957 but the appellant objected to the amount of compensation and the Collector, on his application, made a reference to the Court under section 18. At the hearing of the reference before the District Judge, the Government concluded that the appellant was entitled to the market value of the land as on February 1, 1955 and the District Judge awarded compensation accordingly. Thereafter the Government filed an appeal in the High Court and contended that in the absence of a notification under section 4(1); no compensation could be awarded to the appellant. The High Court allowed the appeal and set aside the order of the District Judge. On appeal to this Court, HELD: Allowing the appeal: The Government having constructed buildings on the land was not in a position to restore it and had no option but to acquire it compulsorily. With a view to make the acquisition the Government published a notification under sec. 6(1) on February 1, 1955. On finding that there was no separate notification under sec. 4(1) the Government had a choice between two courses. It could say that in the absence of such a notification the acquisition was invalid and that no compensation could be awarded under sec. If it did so it would be compelled to start fresh acquisition proceedings and pay a larger sum by way of compensation. The other course was to treat the notification of February 1, 1955 as a composite one under sections 4(1) and 6(1) with the consent of the appellant and to say that the market value of the land on that day could be awarded by way of compensation. The Government elected to choose the letter course and the appellant agreed to accept compensation on that footing. Having regard to the consent of both parties, it could properly be assumed that the procedure of section 5A had been waived by the appellant and that the notification of February 1, 1955 could be treated as a composite one under sections 4(1) and 6(1). The District Judge could therefore lawfully award the market value of the land on that day. [63 C G] Somavanti. vs State of Punjab, , 821 823 and Toronto Corpr. vs Russell, ; referred to. 61 Furthermore, relying on the concession made by the Government the appellant had acted to its detriment in that it did not challenge the acquisition and the Government had come to be in adverse possession of the land for more than 12 years. In these circumstances the Government could not be permitted to resile from the election which it deliberately made and to say that the appellant was not entitled to the market value of the land on February 1, 1955. [63 G H] Rama Charan Chakrabarty vs Nimai Mondal, 15 C.L.J. 58; referred to,

Criminal Appeal No. 17 of 1951. Appeal against a Judgment and. Order dated 22nd January, 1951, of the High Court of Judicature at Patna (Imam J.) in Criminal Revision No. 1533 of 1950 677 S.P. Sinha (P.S. Safeer and K.N. Aggarwal, with him) for the appellants. The respondent did not appear. May 24. The Judgment of the Court was delivered by PATANJALI SASTRI J. This is an appeal by special leave from an order of the High Court of Judicature at Patna setting aside an order of acquittal of the appellants by the Sessions Judge, Purnea, and directing their retrial. The appellants were prosecuted for alleged offences under sections 147, 148, 323, 324, 326, 302 and 302/149 of the Indian Penal Code at the instance of one Polai Lal Biswas who lodged a complaint against them before the po lice. The prosecution case was that, while the complainant was harvesting the paddy crop on his field at about 10 a.m. on 29th November, 1949, a mob of about fifty persons came on to the field armed with ballams, lathis and other weapons and that the first appellant Logendranath Jha, who was leading the mob, demanded a settlement of all outstanding disputes with the complainant and ,said he would not allow the paddy to be removed unless the disputes were settled. An altercation followed as a result of which Logendra or dered an assault by his men. Then Logendra and one of his men, Harihar, gave ballam blows to one of the labourers, Kangali, who fell down and died on the spot. Information was given to the police who investigated the case and submitted the charge sheet. The committing Magistrate found that a prima facie case was made out and committed the appellants to the Court of Sessions for trial. The appellants pleaded not guilty alleging inter alia, that Mohender and Debender, the brothers of Logendra (appel lants 2 and 3) were not present in the village of Dandkhora with which they had no concern, as all the lands in that village had been allotted to Logendra at a previous parti tion, that Logendra himself was not in the village at the time of the occurrence but arrived 678 soon after and was dragged to the place at the instance of his enemies in the village and was placed under arrest by the Assistant Sub Inspector of Police who had arrived there previously. It was also alleged that there were two factions in the village, one of which was led by one Harimohan, a relation of the complainant, and the other by Logendra and there had been numerous revenue and criminal proceedings and long standing enmity between the families of these leaders as a result of which this false case was foisted upon the appellants. The learned Sessions Judge examined the evidence in great detail and found that the existence of factions as alleged by the appellants was true. He found, however, that the appellants ' plea of alibi was not satisfactorily made out, "but the truth of the prosecution", he proceeded to observe, "cannot be judged by the falsehood of the defence nor can the prosecution derive its strength from the weak ness of the defence. Prosecution must stand on its own legs and must prove the story told by it at the very first stage. The manner of occurrence alleged by the prosecution must be established beyond doubt before the accused persons can be convicted". Approaching the case in this manner and seeing that the basis of the prosecution case was that Polai had batai settlement of the disputed land and had raised the paddy crop which he was harvesting when the occurrence took place, the learned Sessions Judge examined the evidence of the prosecution witnesses who belonged to the opposite faction critically and found that the story of the prosecu tion was not acceptable. Polai, who was alleged to have taken the land on batai settlement from his own maternal grandmother Parasmani who brought him up from his childhood, was only 19 years old and unmarried and was still living with his grandmother. He did not claim to be a bataidar of any other person. "In these circumstances", said the learned Judge, "it does not appear to me to be probable that Polai would have been allowed to maintain himself by running adhi cultivation of his mamu 's land in the lifetime of 679 his nani who has brought him up from his infancy like her own child. Nor does it appeal to me that the unmarried boy Polai would have undertaken upon himself the task of run ning batai cultivation of the lands of his mamu where he has been living since his childhood without any trouble, more particularly in view of the heavy expenses of cultivation brought out by the evidence of Tirthanand (P.W. 14)". He, therefore, disbelieved the whole story that Polai had taken the lands of his grandmother or his uncles as bataidar for cultivation and that he was engaged in harvesting the paddy crop on the lands at the time of the occurrence. This false story, in his opinion, "vitally affected the prosecution case regarding the alleged manner of the occurrence". He also found a number of discrepancies and contradictions in the evidence of the prosecution witnesses, which, in his view, tended to show that the prosecution was guilty of concealment of the real facts. ' 'In view of such conceal ment of real facts," the learned Judge concluded, "it does not appear to me to be possible to apportion liability and to decide which of the two parties commenced the fight and which acted in self defence. Such being the position, it is not possible at all to hold either party responsible for what took place. In such a view of the matter coupled with the fact that the manner of occurrence alleged by the prose cution has not been established to be true beyond doubt, I think that the accused persons cannot be safely convicted of any of the offences for which they have been charged. " The learned Judge accordingly acquitted the appellants of all the charges framed against them. Against that order the complainant Polai preferred a revision petition to the High Court under section 439 of the Criminal Procedure Code., The learned Judge who heard the petition reviewed the evidence at some length and came to the conclusion that the judgment of the learned Sessions Judge could not be allowed to stand as the acquittal of the appellants was "perverse ' '. In his opinion, "the entire judgment displays a lack 680 of true perspective in a case of this kind. The Sessions Judge had completely misdirected himself in looking to the minor discrepancies in the case and ignoring the essential matters so far as the case is concerned," and there was no justifiable ground for rejecting the prosecution evidence regarding the cultivation and harvesting by Polai. And he concluded with the warning "I would, however, make it per fectly clear that when the case is re tried, which I am now going to order, the Judge proceeding with the trial will not be in the least influenced by any expression of opinion which I may have given in this judgment. " On behalf of the appellants Mr. Sinha raised two conten tions. In the first place, he submitted that having regard to section 417 of the Criminal Procedure Code which provides for an appeal to the High Court from an order of acquittal only at the instance of the Government, a revision petition under section 439 at the instance of a private party was incompetent, and, secondly, that sub section (4) of section 439 clearly showed that the High Court exceeded its powers of revision in the present case in upsetting the findings of fact of the trial Judge. ' We think it is unnecessary to express any opinion on the first contention of Mr. Sinha especially as the respondent is unrepresented, as we are of opinion that his second and alternative contention must prevail. It will be seen from the judgment summarised above that the learned Judge in the High Court re appraised the evi dence in the case and disagreed with the Sessions Judge 's findings of fact on the ground that they were perverse and displayed a lack of true perspective. He went further and, by way of "expressing in very clear terms as to how perverse the judgment of the court below is", he indicated that the discrepancies in the prosecution evidence and the circum stances of the case which led the Sessions Judge to discred it the prosecution story afforded no justifiable ground for the conclusion that the prosecution failed to establish their case. We are of opinion that the learned Judge in the High Court did not properly appreciate the 681 scope of inquiry in revision against an order of acquittal. Though sub section(1) of section 439 authorises the High Court to exercise, in its discretion, any of the powers conferred on a court of appeal by section 423, sub section (4) specifically excludes the power to "convert a finding of acquittal into one. of conviction". This does not mean that in dealing with a revision petition by a private party against an order of acquittal, the High Court could in the absence of any error on a point of law re appraise the evidence and reverse the findings of facts on which the acquittal was based, provided only it stopped short of finding the accused guilty and passing sentence on him. By merely characterising the judgment of the trial Court as "perverse" and ' lacking in perspective", the High Court cannot reverse pure findings of fact based on the trial Court 's appreciation of the evidence in the case. That is what the learned Judge in the court below has done, but could not, in our opinion, properly do on an application in revision filed by a private party against acquittal. No doubt, the learned Judge formally complied with sub section (4) by directing only a retrial of the appellants without convicting them, and warned that the court retrying the case should not be influenced by any expression of opinion con tained in his judgment. But there can be little doubt that he loaded the dice against the appellants, and it might prove difficult for any subordinate judicial officer dealing with the case to put aside altogether the strong views expressed in the judgment as to the credibility of the prosecution witnesses and the circumstances of the case in general. We are of opinion that the learned Judge in the High Court exceeded his powers of revision in dealing with the case in the manner he did, and we set aside his order for retrial of the appellants and restore the order of acquittal passed by the Sessions Judge. Appeal allowed.

Though sub section (1) of section 439 of the. Criminal Procedure Code authorises the High Court to exercise in Its discretion any of the powers conferred on a court of appeal by section 423, yet sub section (4) specifically excludes the power to "convert a finding of acquittal into one of conviction. " This. does not mean that in dealing with a revision petition by a private party against an order of acquittal, the High Court can in the absence of any error on a point of law re ap praise the evidence and reverse the findings of facts on which the acquittal was based, provided only it stops short of finding the accused guilty and passing sentence on him, by ordering a re trial.

Criminal Appeal No. 467 of 1988. From the Judgment and Order dated 20th July, 1987 of the Gujarat High Court in Crl. Appeal No. 260/87 with Crl. Appeal No. 105/87 and Crl. Appeal No. 444/87. Soli J. Sorabji, Mukul Mudgal, E.K. Jose and P.H. Parekh for the Appellant. PG NO 749 G.A. Shah, M.N. Shroff, B. Datta, A.K. Srivastava, P. Pramesh and Mrs. Sushma Suri for the Respondents. The Judgment of the Court was delivered by JAGANNATHA SHETTY, J. We grant Special leave and proceed to dispose of the appeal. The appeal arises from a Judgment of the Gujarat High Court dated 20th July 1987in Criminal Appeal Nos. 260/1987, 105/1987 and 444/1987. It raises a short but not very easy point for determination. The point relates to sentencing practice as to concurrent or consecutive sentences. The essential facts can be stated in summary form as follows: Appellant Mohd. Akhtar Hussain alias Ibrahim Ahmad Bhatti is a Pakistani national. On 15 April 1982, the gold 7(NN) tolas of foreign mark of the value of Rs. 1.4 crores was seized from his possession at Ahmedabad. Later he was arrested. On 23 September, a case was filed in the Court of Chief Metropolitan Magistrate, Ahmedabad in CC No. 1674 of 1982. He was charged under section 85( I)(ii) of the Gold (Control) Act, 1968. He pleaded guilty to the charge. On 11 January, 1984 he was convicted and sentenced to imprisonment for 7 years and fine of Rs. 10 lakhs. It is the maximum punishment prescribed under the Gold (Control) Act. Upon appeal, the Bombay High Court confirmed that sentence but reduced the fine to Rs.5 lakhs. The special leave petition filed by the appellant was dismissed by this Court. That conviction and sentence became final. When the appellant was under judicial custody in the aforesaid case, there was further investigation with regard to his smuggling activities. It revealed widespread racket of smuggling gold and silver in collusion with several persons. On 6 January, 1983 he was again prosecuted along with 18 others under section 335 of the . The complaint in this case was filed before the Additional Chief Metropolitan Magistrate, Ahmedabad. It was registered as CC No. 129/1986. It was alleged in the complaint that the appellant and others had imported gold worth Rs. 12.5 crores and smuggled out of India silver worth Rs. 11.5 crores during December 1981 to February 1982. In this case also the appellant did not wait for the trial of the case. He pleaded guilty to the charge. The other 18 accused, however, did not They denied the charge and the case against them is said to be still pending for disposal. PG NO 750 On January, 1987, the trial Magistrate convicted the appellant, in the following terms: "Accused No. 1 in this case is proved guilty under Section 235 of and it is ordered that accused No. 1 is sentenced for 4 years (for four years R.I. and a fine of Rupees two lakhs (Rupees two lakhs only) and if fine not paid, further sentence of R.I. for six months more. This sentence is to be undergone on expiration of sentence in Crl. case No. 1674/82. Accused is found guilty under section 120(B) of Indian Penal Code, but no separate sentence is ordered, for the same. " The reasons given in support of the above conclusion are: "It is not proper to pass order only by taking the circumstances and difficulties of the accused. Simultaneously, midway should be found looking to the circumstances of the nation and personal circumstances of the accused. It is not possible to order sentence of both the cases of the accused, to run concurrently. When the accused in previous case, was ordered to undergo sentence of seven years R.I. then, in this case it does not seem reasonable to order sentence for similar period i.e. detain in jail for 12 to 14 years and fine and if fine not paid, to undergo further more sentence. The accused had pleaded guilty and requested for mercy. It is in the interest of justice to show slight mercy in the order of sentence by the Court. " Against this order of conviction and sentence there were appeals and counter appeals before the High Court. The appellant appealed against the sentence on the ground that the sentences should have been made concurrent. The State, on the other hand, demanded the maximum sentence again. The maximum sentence prescribed under section 135 of the is also 7 years. The State contended that in view of the enormity of the economic crime committed by the appellant, he should be given the maximum and consecutive. The High Court accepted the State appeal, enhanced the sentence from 4 years to 7 years and made it consecutive. Consequently, the High Court dismissed the appeal of the appellant. The result is that he has to serve in all 14 years imprisonment which he has challenged in this appeal. Section 427 Cr. P.C. incorporates the principles of sentencing an PG NO 751 offender who is already undergoing a sentence of imprisonment. The relevant portion of the Section reads : "427.(1) When a person already undergoing a sentence of imprisonment is sentenced on a subsequent conviction to imprisonment or imprisonment for life, such imprisonment or imprisonment for life shall commence at the expiration of the imprisonment to which he has been previously sentenced, unless the Court directs that the subsequent sentence shall run concurrently with such previous sentence. xxxxx xxxxx xxxxx " The Section relates to administration of criminal justice and provides procedure for sentencing. The sentencing court is, therefore,required to consider and make an appropriate order as to how the sentence passed in the subsequent case is to run. Whether it should be concurrent or consecutive ? The basic rule of thumb over the years has been the so called single transation rule for concurrent sentences. If a given transaction constitutes two offences under two enactments generally, it is wrong to have consecutive sentences. It is proper and legitimate to have concurrent sentences. But this rule has no application if the transaction relating to offences is not the same or the facts constituting the two offences are quite different. In this appeal, the primary challenge to the sentence is based on assumption that the two cases against the appellant, under the Gold (Control) Act, and the pertain to the same subject matter. It is alleged that the appellant was prosecuted under the two enactments in respect of seizure of 7,000 tolas of gold. On this basis, reference is also made to Section 428 Cr. P.C. claiming set off in regard to the period of imprisonment already undergone by the appellant. The submission, in our opinion, appears to be misconceived. The material produced by the State unmistakably indicates that the two offences for which the appellant was prosecuted are quite distinct and different. The case under the may, to some extent, overlap the case under the Gold (Control) Act, but it is evidently on different transactions. The complaint under the Gold (Control) Act relates to possession of 7,000 tolas of PG NO 752 primary gold prohibited under section 8 of the said Act. The complaint under the is with regard to smuggling of Gold Worth Rs. 12.5 crores and export of silver worth Rs. 11. 5 crores. On these facts, the Courts are not unjustified in directing that the sentences could be consecutive and not concurrent. The question, however, remains to be considered is whether the maximum sentence under the is warranted? Whether, in the circumstances, it is wrong in principle to sentence the same offender the another maximum imprisonment? It is argued that the High Court has failed to take into consideration the total period of sentence which the appellant has to undergo. It is also argued that since the conviction was based on the plea of guilty the appellant should have been given a credit in the sentence. The personal problems of appellant are also highlighted for reduction in the sentence. The High Court has refused to take into consideration the merciful plea of the appellant and much less the plea of guilty. The enormity of the crime committed by the appellant, according to the High Court, warranted nothing less than the maximum sentence. The High Court had this to say: "The individual hardships of the appellant and his family would be of no consequence at all. If offence was such that the maximum sentence should have been awarded, then the learned Metropolitan Magistrate should not have made an illconceived attempt to find out a via media. We, therefore, feel that the appeal filed by the State requires to be allowed. The fact that the accused had pleaded guilty is of no consequence. It is not the case of plea bargaining because the accused had pleaded guilty and yet he was given numerous opportunities to reconsider his decision. If the accused even thereafter had pleaded guilty, the fact that he was awarded a seven years ' Rigorous imprisonment sentence in the previous case would be no ground for the learned Metropolitan Magistrate to award less than the maximum sentence if the facts of the case warranted such a maximum sentence. The enormity of the crime called for nothing less than the maximum sentence. " We have carefully perused the entire material on record. It may be recalled that the appellant was given the maximum PG NO 753 sentence of 7 years in the previous case under Gold (Control) Act. The conviction thereunder was also based on the plea of guilty. The latter sentence under the was also on the plea of guilty. Generally, it is both proper and customery for Courts to give credit to an accused for pleading guilty to the charge. But no credit need be given if the plea of guilty in the circumstance is inevitable or the accused has no alternative but to plead guilty. The accused being caught red handed is one such instance. The first case under the Gold (Control) Act against the appellant falls into the latter category. 7,000 tolas of Gold of foreign mark of the value of Rs. 1.4 crores were seized from the possession of appellant. The plea of guilty in that case was inevitable. The Court was, therefore, justified in awarding the maximum sentence. But the second case under the was not of that type. Here the prosecution has to prove many things. There are 18 other accused facing the trial in the same case. The appellant, however, pleaded guilty perhaps on legal advise. He must have been told that some credit for such plea would be given by the court and if the credit is not given and the maximum sentence is awarded the appellant is surely entitled to complain for giving the maximum sentence. It is no doubt that the enormity of the crime committed by the accused is relevant for measuring the sentence. But the maximum sentence awarded in one case against the same accused is not irrelevant for consideration while giving the consecutive sentence in the second case although it is grave. The Court has to consider the totality of the sentences which the accused has to undergo if the sentences are to be consecutive. The totality principle has been accepted as correct principle for guidance. In R. vs Edward Charles French, [1982] Cr. R. (S) p. 1 (at 6), Lord Lane, C.J., observed : "We would emphasize that in the end, whether the sentences are made consecutive or concurrent the sentencing judge should try to ensure that the totality of the sentences is correct in the light of all the circumstances of the case." The trial Magistrate in this case has properly considered all aspects including the plea of guilty and given good reasons for awarding 4 years R.I. That means in all, the appellant has to undergo 11 years of imprisonment. That by itself is quite long enough in a man 's life. But the High Court took a narrow view of the whole matter with the enormity of the crime on the forefront. The broad expanse of PG NO 754 discretion left by legislation to sentencing Courts should not be narrowed only to the seriousness of the offence. No single consideration can definitively determine the proper sentence. In arriving at an appropriate sentence, the court must consider, and some times reject,many factors. The court must. `recognise, learn to control and exlcude ' many diverse data. It is a balancing act and tortuous process to ensure reasoned sentence. In consecutive sentences, in particular, the Court cannot afford to be blind to imprisonment which the accused is already undergoing. In the result, we allow the appeal, set aside the judgment of the High Court and restore that of the trial court. M.L.A. Appeal allowed.

The appellant was charged under section 95(l)(ii) of the Gold (Control) Act, 1968 pursuant to seizure of 7,000 tolas of foreign mark gold from his possession. He pleaded guilty to the charge and was convicted and sentenced to the maximum punishment of imprisonment for 7 years and fine of Rs.10 lakhs prescribed under the Act. On appeal, the High Court confirmed that sentence but reduced the fine to Rs.5 lakhs. The Supreme Court confirmed the sentence in a special Leave petition filed by the appellant. While the appellant was under judicial custody, he was again prosecuted along with 19 others under section 135 of the Customs Act for smuggling of gold and export of silver out of India. The appellant pleaded guilty to the charge and was convicted and sentenced for 4 years R.I. with fine of Rs.2 lakhs by trial court. Both sentences were ordered to run consecutively. On appeal, the High Court enhanced the sentence from 4 years to the maximum prescribed punishment of 7 years on the ground that the enormity of the crime committed by the appellant warranted nothing else than the maximum sentence. Allowing the appeal by the appellant on the question of sentence, HELD: 1. Section 427, Cr. P.C. relates to administration of criminal justice and provides procedure for sentencing. The basic rule of thumb over the years has been the so called single transaction rule for concurrent sentences. If a given transaction constitutes two offences under two enactments generally, it is wrong to have consecutive sentences. It is proper and legitimate to have concurrent sentences. But this rule has no application if the transaction relating to offences is not the same or the facts constituting the two offences are quite different.[751C,D E] PG NO 746 PG NO 747 2(i) The enormity of the crime committed by the accused is relevant for measuring the sentence. But the maximum sentence awarded in one case against the same accused is not irrelevant for consideration while giving the consecutive sentence in the second case although it is grave. The court has to consider the totality of the sentences which the accused has to under go if the sentences are to be consecutive. The totality principle has been accepted as correct principle for guidance. [753E.F] R. vs Edward Charles French, [1982] Cr. R. (S) p. 1 at 6, referred to. In the instant case, the trial court has properly considered all aspects including the plea of guilty and given good reasons for awarding 4 years R.I. That means in all, the appellant has to undergo 11 years of imprisonment. That by itself is quite Long enough in a man 's life. But the High Court took a narrow view of the whole matter with the enormity of the crime on the forefront. [753G H] 2(ii) The broad expanse of discretion left by legislation to sentencing courts should not be narrowed only to the seriousness of the offence. No single consideration can definitively determine the proper sentence. In arriving at an appropriate sentence, the court must consider, and some times reject, many factors. The court must `recognise, learn to control and exclude ' many diverse data. It is a balancing act and tortuous process to ensure reasoned sentence. In consecutive sentences, in particular, the court cannot afford to be blind to imprisonment which the accused is already undergoing. [753H ; 754A B] 3. Generally, it is both proper and customery for courts to give credit to an accused for pleading guilty to the charge. But no credit need be given if the plea of guilty in the circumstance is inevitable or the accused has no alternative but to plead guilty. The accused being caught red handed is one such instance. [753B]

ivil Appeal No. 1755 & 1756 of 1982 From the Judgment and Order dated 11.12.1981 of the Delhi High Court inC.M.P.No. 41 to 1981. P.R. Andhyarjina, D.N. Misra and M.P. Baroocha for the Appellant. G. Ramaswamy, Additional Solicitor General, V.P. Singh and Miss Sushma Relan for the Respondents. 960 The Judgment of the Court was delivered by DUTT, J. These two appeals by special leave one pre ferred by the National Agricultural Co operative Marketing Federation of India Ltd (for short 'NAFFD ') and the other by Alimenta S.A. (for short 'Alimenta '), a Swiss Company are both directed against the judgment of the Delhi High Court dated December 11, 1981 whereby the application of NAFFD under section 33 of the , has been allowed in part. A contract dated January 12, 1980 was entered into by and between the parties, namely, NAFED and Alimenta for the sale and supply of 5,000/8,000 M.T. of HPS groundnut kernels Jaras. After the usual terms as to quality, quantity, price, etc., the contract provided in clause 11 thereof as follows: "Other terms and conditions as per FOSFA 20 contract terms. " The expression 'FOSFA ' means the Federation of Oils, Seeds and Fats Association Ltd. Subsequently, another contract dated April 3, 1980 was entered into between the parties in respect of 4,000 metric tonnes of groundnut kernels. Clause 9 of this contract provided as follows: "All other terms and conditions for supply not specifically shown and covered hereinabove shall be as per previous contract signed between us for earlier supplies of H.P.S." The FOSFA 20 contract contains an arbitration clause which is as follows: "ARBITRATION: Any dispute arising cut of this contract, including any question of law arising in connection there with, shall be referred to arbitration in London (or else where if so agreed) in accordance with the Rules of Arbitra tion and Appeal of the Federation of Oils, Seeds and Fats Association Limited, in force at the date of this contract and of which both the parties hereto shall be deemed to be cognizant. Neither party hereto, nor any persons claiming under either of them shall bring any action or other legal proceedings against the other of them in respect of any such dispute 961 until such dispute shall first have been heard and deter mined by the arbitrators, umpire or Board of Appeal (as the case may be) in accordance with the Rules of Arbitration and Appeal of the Federation, and it is hereby expressly agreed and declared that the obtaining of an Award from the arbi trators, umpire, or Board of Appeal (as the case may be), shall be a condition precedent to the right of either party hereto or of any person claiming under either of them to bring any action or other legal proceedings against the other of them in respect of any such dispute. " Disputes and differences arose between the parties. Alimenta alleged that NAFED committed breach of their obli gations under both the contracts and sought to commence arbitration proceedings. On the other hand, on March 19, 1981, NAFED filed a petition in the Delhi High Court under section 33 of the alleging, inter alia, that there was no valid arbitration agreement between the parties. It was contended by NAFED that when it agreed in clause 11 of the first contract that the parties would be governed by the terms and conditions of FOSFA 20 contract, it only had in mind such terms and conditions as would govern the relationship between the parties. Further, the fact that there was an arbitration clause in FOSFA 20 con tract came as a complete surprise to NAFED. In other words, it was sought to be contended that NAFED was not at all aware of any arbitration clause in FOSFA 20 contract and, accordingly, it could not agree to incorporate any such arbitration clause in the contracts in question. The said petition under section 33 of the was opposed by Alimenta. A learned Single Judge of the High Court came to the finding that in view of the fact that NAFED had been nomi nated as the canalising agent for export of HPS groundnut under the provisions of the Export Control Order by the Central Government, it would not be unjustified to assume that the Senior Manager of NAFED was well aware of the foreign trade in groundnut and the implications of reference to FOSFA 20 contract when he put his signature to the con tract in question. The learned Judge could not believe that the Manager of NAFED was not aware of the terms of FOSFA 20 contract. Accordingly, the plea of NAFED that it was not aware of the existence of an arbitration clause in FOSFA 20 contract was overruled. The learned Judge held that the arbitration clause in FOSFA 20 contract was incorporated into the first contract dated January 12, 1980 by virtue of clause 11 thereof providing "other terms and conditions as per FOSFA 20 contract terms". 962 So far as the second contract dated April 3, 1980 is concerned, it was pointed out by the learned Judge that it did not make any mention of FOSFA 20 contract and all that was stated in clause 9 thereof was that all other terms and conditions for supply not specifically shown and covered therein should be as per previous contract signed between the parties for similar supply of HPS. The learned Judge took the view that only those terms and conditions which were referred to or connected with and germane to the sup ply, ,had been made applicable from the earlier contract that is to say, the first contract dated January 12, 1980. Further, it was observed that a term about arbitration was not incidental to supply of goods and it was difficult to read from the provisions of clause 9 of the second contract that the arbitration clause was lifted from there and made a part of the same. Upon the said findings, the learned Judge allowed the petition under section 33 of the in so far as it related to the second contract dated April 13, 1980. It was held that no arbitration agreement existed between the parties and, as such, none of them was entitled to seek reference to arbitration with regard to the first contract, and that the same was governed by the arbitration clause as having been incorporated therein from the FOSFA 20 contract. The petition under section 33 was disallowed so far as the first contract was concerned. Hence, these two appeals one by NAFED against the judgment of the learned Judge disallowing the petition under section 33 in respect of the first contract and the other by Alimenta in so far as it allowed the petition relating to the second contract. We may at first deal with the appeal preferred by the appellant NAFED relating to the first contract. The question is whether by clause 11 in the first contract, the arbitra tion clause in FOSFA 20 contract can be said to have been incorporated into the contract. It is now well established that the arbitration clause of an earlier contract can, by reference, be incorporated into a later contract provided, however, it is not repugnant to or inconsistent with the terms of the contract in which it is incorporated. Mr. G. Ramaswamy, learned Additional Solicitor General appearing on behalf of the appellant, has strenuously urged that the High Court was wrong in holding that the arbitration clause in the FOSFA 20 contract was incorporated into the first con tract by virtue of the incorporation clause. He has drawn our attention to the second illustration at page 46 of Russell on Arbitration, Twentieth Edition. The illustration refers to the decision of Lord Esher M.R. in Hamilton & Co. vs Mackie & Sons, We have looked into that decision as much reliance has been placed thereon on behalf of NAFED. In that case a bill of lading 963 contained the words "all other terms and conditions as per charterparty". The charterparty contained an arbitration clause. It was contended on behalf of the ship owners that the arbitration clause in the charterparty was incorporated into the bill of lading. In overruling the said contention Lord Esher M.R. Observed: "Where there was in a bill of lading such a condition as this, 'all other conditions as per charterparty ', it had been decided that the conditions of the charterparty must be read verbatim into the bill of lading as though they were there printed in extenso. Then if it was found that any of the conditions of the charterparty on being so read were inconsistent with the bill of lading they were insensible, and must be disregarded. The bill of lading referred to the charterparty, and therefore, when the condition was read in, 'All disputes under this charter shall be referred to arbi tration, 'it was clear that condition did not refer to disputes arising under the bill of lading, but to disputes arising under the charterparty. The condition therefore was insensible, and had no application to the present dispute, which arose under the bill of lading. " According to Lord Esher M.R., the arbitration clause in charterparty "all disputes under this charter shall be referred to arbitration", if incorporated into the bill of lading would be quite insensible because of the words "under this charter". The arbitration clause was, therefore, meant only for the charterparty and not for the bill of lading. In a Full Bench decision of the Calcutta High Court in Dwarkadas & Co. vs Daluram Gaganmull, AIR 1951 Cal 10 F.B., the said observation of Lord Esher M.R. was considered by Harries, CJ. The learned Chief Justice also took the view that if the arbitration clause in the charterparty was imported into the bill of lading it would be quite meaning less because no dispute under the charter could arise in the contract evidenced by the bill of lading. According to the learned Chief Justice, if the words of the arbitration clause in the charterparty had read "all disputes under this contract shall be referred to arbitration", then if that term was transported into the bill of lading, it would be a perfectly sensible and reasonable term, for, once it had imported the phrase "all disputes under this contract", it would refer to all disputes arising under the bill of lad ing. There would, therefore, be nothinhg inconsistent be tween such a term and the terms of the bill of 964 lading and that being so, cases similar to the case of Hamilton & Co. vs Mackie & Sons (supra) would have no appli cation to the case. This view was also taken by the other learned Judges of the Full Bench. In our opinion, Harries, C J, had taken a very reasona ble and sensible view. It is true, as pointed out by Lord Esher M.R., that the expression "all disputes under this charter", if incorporated into the bill of lading, would be quite insensible. But if, the clause had been "any dispute under this contract", then after incorporation into the bill of lading the words "this contract" would only mean the bill of lading into which it had been incorporated. In the in stant case, as has been already noticed, the arbitration clause in the FOSFA 20 contract provides "any dispute aris ing out of this contract" and, as such, there is no diffi culty in the incorporation of the arbitration clause into the first contract, for, the words "this contract" would mean the first contract into which it has been incorporated. Such incorporation would be quite intelligible and not inconsistent with the terms of the first contract. There is, therefore, no substance in the contention made on behalf of the appellant on the basis of the decision in Hamilton & Co. vs Mackie & Sons, (supra). It is next contended by the learned Additional Solicitor General that the arbitration clause in FOSFA 20 contract not being germane to the subject matter of the first contract, it cannot be said to have been incorporated therein. It is pointed by him that the FOSFA 20 contract is a CIF contract relating to cost, insurance and freight, while the first contract is a f.o.b. contract. It is, accordingly, submitted by the learned Counsel that the arbitration clause is not germane to the subject matter of the first contract. In support of his contention he has placed much reliance upon the decision of the Court of Appeal in the case of The Annefield, [1971] 1 AII.E.R. 394. In that case the question was whether the arbitration clause in the charterparty was incorporated into the bill of lading by ' virtue of the incorporation clause. Clause 39, which was the arbitration clause, contained the words "All disputes from time to time arising out of this contract". In considering the question Lord Denning M.R., referred to the decision in The N]egos, [935] AII.E.R. Rep. 863, where in the course of the discus sion, it transpired that these clauses in the charterparty and bill of lading had been in existence since 1914 and, it had always been held that the arbitration clause was not incorporated in the bill of lading. On behalf of the ship owners in that case it was argued that if the arbitration clause 39 was incorporated into the bill of lading, the expression "this contract" in clause 39 would then be the contract evidenced by the bill 965 of lading. In other words, the arbitration clause must be read in its bill of lading context. This contention was made on the basis of the observation made by Lord Esher M.R., as extracted above. The contention also finds support from the observation of Harries, C J, in Dwarka Das 's case (supra). Lord Denning M.R. took the view that a clause which is directly germane to the subject matter of the bill of lading that is, to the shipment, carriage and delivery of goods, could and should be incorporated into the bill of lading contract, even though it might involve a degree of manipula tion of the words in order to fit exactly the bill of lad ing. But, if the clause was one which was not thus directly germane, it should not be incorporated into the bill of lading contract unless it was done explicitly in clear words either in the bill of lading or in the charterparty. It was, however, held by Lord Denning M.R. that an arbitration clause was not directly germane to the shipment, carriage and delivery of goods. So, it was not incorporated by gener al words in the bill of lading. Relying upon the decision in The Annefteld, it is sub mitted on behalf of the appellant that the arbitration clause in FOSFA 20 contract is not germane to the subject matter of the first contract and, accordingly, it was not incorporated into the first contract. We are unable to accept the contention. It has already been noticed earlier that there has been a long continued practice in England that the arbitration clause is not incorporated into the bill of lading by general words, unless it is explicitly done in dear words either in the bill of lading or in the charterparty. In the instant case, we are not, however, concerned with a charterparty and a bill of lading contract. Even assuming that the subject matters of FOSFA 20 contract and the f.o.b. contract are different, we do not think that any question as to the germaneness of the arbitration clause to the subject matter would be relevant. It has been found by the learned Judge of the High Court that the Manager of NAFED, who had signed the first contract, was aware of the terms of the FOSFA 20 contract inducting the arbitration clause contained therein. It is, therefore, manifestly dear that by the incorporation of clause 11 in the tint contract, the appellant intended to incorporate into it the arbitra tion clause of FOSFA 20 contract. Thus where, as in the instant case, the parties are aware of the arbitration clause of an earlier contract, the subject matter of which is different from the contract which is being entered into by them, incorporates the terms of the earlier contract by reference by using general words, we do not think there would be any bar to such incorporation merely because the subject matters of the two contracts are different, unless, however, the incorporation of the arbitration clause will be 966 insensible or unintelligible, as was in Hamilton & Co. vs Mackie & Sons, (supra). In the instant case, the arbitration clause in FOSFA 20 contract will fit in the first contract. In other words, it will not be either insensible or unintel ligible. In our opinion, therefore, the High Court was tight in holding that the arbitration clause in FOSFA 20 contract was incorporated into the first contract. In the other appeal which has,been preferred by Alimen ta, it has been held by the High Court that there has been no incorporation of the arbitration clause into the second contract. In the second contract, clause 9 provides "all other terms and conditions for supply not specifically shown and covered hereinabove shall be as per previous contract signed between us for earlier supplies of HPS". There is a good deal of difference between clause 9 of this contract and clause 11 of the first contract. Clause 11 has been couched in general words, but clause 9 refers to all other terms and conditions for supply. The High Court has taken the view that by clause 9 the terms and conditions of the first contract which had beating on the supply of HPS were incorporated into the second contract, and the term about arbitration not being incidental to supply of goods, could not be held to have been lifted as well from the first contract into the second one. It is, however, contended on behalf of the appellant that the High Court was wrong in its view that a term about arbitration is not a term of supply of goods. We do not think that the contention is sound. It has been tightly pointed out 'by the High Court that the normal incidents of terms and conditions of supply are those which are connected with supply, such as, its mode and process, time factor, inspection and approval, if any, reliability for transit, incidental expenses etc. We are unable to accept the conten tion of the appellant that an arbitration clause is a term of supply. There is no proposition of law that when a con tract is entered into for supply of goods, the arbitration clause must form part of such a contract. The parties may choose some other method for the purpose of resolving any dispute that may arise between them. But in such a contract the incidents of supply generally form part of the terms and conditions of the contract. The first contract includes the terms and conditions of supply and as clause 9 refers to these terms and conditions of supply, it is difficult to hold that the arbitration clause is also referred to and, as such, incorporated into the second contract. When the incor poration clause refers to certain particular terms and conditions, only those terms and conditions are incorporated and not the arbitration clause. In the present case, clause 9 specifically refers to the terms and conditions of supply of the first 967 contract and, accordingly, only those terms and conditions are incorporated into the second contract and not the arbi tration clause. The High Court has taken the correct view in respect of the second contract also. In the result, the judgment of the High Court is af firmed and both these appeals are dismissed. There will, however, be no orders as to costs. M.L.A Appeals dis missed.

The appellant and the respondent entered into two con tracts on two different dates for supply of HPS groundnut Kernels jaras. After the usual terms as to quality, quanti ty, price etc., the first contract provided in clause II thereof "that other terms and conditions as per FOSFA 20 contract terms. " However, clause 9 of the second contract did not make any mention of FOSFA 20 contract and all that was stated was that all other terms and conditions for supply not specifically shown and covered therein should be as per previous contract signed between the parties for similar supply of HPS groundnut. The 'FOSFA 20 contract ' contained an arbitration clause to the effect that any dispute arising out of this contract, including any question of law arising in connection therewith, shall be referred to arbitration and neither party, hereto, nor any persons claiming under either of them shall bring any action or other legal proceedings against the other in respect of any such dispute until such dispute shall first have been heard and determined by the arbitrators. Disputes and differences arose between the parties. The appellant in Civil Appeal No. 1755/1982 alleged that the respondent therein committed breach of their obligations under both the contracts and sought to commence arbitration proceedings. The respondent on the other hand filed a peti tion in the High Court under s.33 of the alleging that there was no valid arbitration agreement between the parties and contended that when it agreed in clause 11 of the first contract that the parties would be governed by the terms and conditions of 'FOSFA 20 contract ', it only had in mind such terms and 958 conditions as would govern the relationship between the parties and the fact that there was an arbitration clause in FOSFA 20 contract came as a complete surprise to the re spondent. This petition was opposed by the appellant. A Single Judge of the High Court held that in view of the fact that the respondent had been nominated the canalis ing agent for export of HPS groundnut, it would not be unjustified to assume that the respondent was well aware of the foreign trade in groundnut and the implications of reference to 'FOSFA 20 contract ' when he put his signatures to the contract in question; that the arbitration clause in FOSFA 20 contract was incorporated into the first contract by virtue of clause 11 providing 'other terms and conditions as per FOSFA 20 contract terms '. With regard to the second contract it was held that it did not make any mention of FOSFA 20 contract and all that was stated in clause 9 there of was that all terms and conditions for supply not specifi cally shown and covered therein should be as the previous contract signed between the parties for similar supply of HPS. It was accordingly held that there existed no arbitra tion agreement between the parties and, as such, none of them was entitled to seek reference to arbitration; and that a term about arbitration was not incidental to supply of goods and it was difficult to read from the provisions of clause 9 of the contract that the arbitration clause was lifted from there and made a part of the same. The applications under s.33 of the was allowed in so far as it related to the second contract, and disallowed so far as the first contract was concerned. Both parties filed appeals to this Court. Dismissing the appeals, HELD: 1(i) The arbitration clause of an earlier contract can, by reference, be incorporated into a later contract provided however, it is not repugnant to or inconsistent with the terms of the contract in which it is incorporated. [962F G] 1(ii) Where the parties are aware of the arbitration clause of an earlier contract, the subject matter of which is different from the contract which is being entered into by them, incorporating the terms of the earlier contract by reference by using general words, there would be no bar to such incorporation merely because the subject matters of the two contracts are different, unless however, the incorpora tion of the 959 arbitration clause will be insensible or unintelligible. [965G H; 966A] 1 (iii) There is no proposition of law that when a contract is entered into for supply of goods, the arbitra tion clause must form part of such a contract. The parties may choose some other method for the purpose of resolving any dispute that may arise between them. But in such a contract the incidents of supply generally form part of the terms and conditions of the contract. [966F G] 1 (iv) When the incorporation clause refers to certain particular terms and conditions, only those terms and condi tions are incorporated and not the arbitration clause. [967A] 2. The normal incidents of terms and conditions of supply are those which are connected with supply, such as, its mode and process, time factor, inspection and approval, if any, reliability for transit, incidental expenses etc. An arbitration clause is not a term of supply. [966E F] In the instant case, there is a good deal of difference between clause 9 of the second contract and clause 11 of the first contract. Clause 11 has been couched in general words, but clause 9 refers to all other terms and conditions for supply. The first contract includes the terms and conditions of supply and as clause 9 refers to these terms and condi tions of supply, it is difficult to hold that the arbitra tion clause is also referred to and, as such, incorporated into the second contract. [966C D] Dwarkadas & Co. vs Daluram Gaganmull, AIR 1951 Cal 10 F.B., approved. Hamilton & Co. vs Mackie & Sons, ,The Annefield, & The Njegos, , held inapplicable.

Appeal No. 85 of 1956. 20 154 Appeal from the judgment and order dated January 8, 1954, of the High Court of Saurashtra, at Rajkot, in Civil Misc. Application No. 70 of 1952. R. J. Kolah and A. C. Dave, for the appellant. Porus A. Mehta and R. H. Dhebar, for respondent No. 1. 1956. November 23. The Judgment of the Court was, delivered by BHAGWATI J. This appeal with a certificate of fitness granted by the High Court of Saurashtra raises an interesting question whether the agarias working in the Salt Works at Kuda in the Rann of Cutch are workmen within the meaning of the term as defined in the , hereinafter referred to as the Act. The facts as found by the Industrial Tribunal are not in dispute and are as follows. The appellants are lessees of the Salt Works from the erstwhile State of Dharangadhara and also hold a licence for the manufacture of salt on the land. The appellants require salt for the manufacture of certain chemicals and part of the salt manufactured at the Salt Works is utilised by the appellants in the manufacturing process in the Chemical Works at Dharangadhara and the remaining salt is sold to outsiders. The appellants employ a Salt Superintendent who is in charge of the Salt Works and generally supervises the Works and the manufacture of salt carried on there. The appellants maintain a a railway line and sidings and also have arrangements for storage of drinking water. They also maintain a grocery shop near the Salt Works where the agarias can purchase their requirements on credit. The salt is manufactured not from sea water but from rain water which soaking down the surface becomes impregnated with saline matter. The operations are seasonal in character and commence sometime in October at the close of the monsoon. Then the entire area is parceled out into plots called pattas and they are in four parallel rows intersected by the railway 155 lines. Each agaria is allotted a patta and in general the same patta is allotted to the same agaria year after year. If the patta is extensive it is allotted to two agarias who work the same in partnership. At the time of such allotment, the appellants pay a sum of Rs. 400/ for each of the pattas and that is to meet the initial expenses. Then the agarias commence their work. They level the lands and enclose and sink wells in them. Then the density of the water in the wells is examined by the Salt Superintendent of the appellants and then the brine is brought to the surface and collected in the reservoirs called condensers and re tained therein until it acquires by natural process a certain amount of density. Then it is flowed into the pattas and kept there until it gets transformed 'into crystals. The pans have got to be prepared by the agarias according to certain standards and they are tested by the Salt Superintendent. When salt crystals begin to form in the pans they are again tested by the Salt Superintendent and only when they are of a particular quality the work of collecting salt is allowed to be commenced. After the crystals are collected, they are loaded into the railway wagons and transported to the depots where salt is stored. The salt is again tested there and if it is found to be of the right quality, the agarias are paid therefore at the rate of Rs. 0 5 6 per maund. Salt which is rejected belongs to the appellants and the agarias cannot either remove the salt manufactured by them or sell it. The account is made up at the end of the season when the advances which have been paid to them from time to time as also the amounts due from the agarias to the grocery shop are taken into account. On a final settlement of the accounts, the amount due by the appellants to the agarias is ascertained and such balance is paid by the appellants to the agarias. The manufacturing season comes to an end in June when the monsoon begins and then the agarias return to their villages and take up agricultural work. The agarias work themselves with their families on the pattas allotted to them. They are free to engage extra labour but it is they who make the payments to 156 these labourers and the appellants have nothing to do with the same. The appellants do not prescribe any hours of work for these agarias. No muster roll is maintained by them nor do they control how many hours in a day and for how many days in a month the agarias should work. There are no rules as regards leave or holidays. They are free to go out of the works as they like provided they make satisfactory arrangements for the manufacture of salt. In about 1950, disputes arose between the agarias and the appellants as to the conditions under which the agarias should be engaged by the appellants in the manufacture of salt. The Government of Saurashtra, by its letter of Reference dated November 5, 1951, referred the disputes for adjudication to the Industrial Tribunal, Saurashtra State, Rajkot. The appellants contested the proceedings on the ground, inter alia, that the status of the agarias was that of independent contractors and not of workmen and that the State was not competent to refer their disputes for adjudication under section 10 of the Act. This question was tried as a preliminary issue and by its order dated August 30, 1952, the Tribunal held that the agarias were workmen within the meaning of the Act and that the reference was intra vires and adjourned the matter for hearing on the merits. Against this order the appellants preferred an appeal being Appeal No. 302 of 1952, before the Labour Appellate Tribunal of India, and having failed to obtain stay of further proceedings before the Industrial Tribunal pending the appeal, they moved the High Court of Saurashtra in M.P. No. 70 of 1952 under articles 226 and 227 of the Constitution for an appropriate writ to quash the reference dated November 5, 1951, on the ground that it was without jurisdiction. Pending the disposal of this writ petition, the appellants obtained stay of further proceedings before the Industrial Tribunal and in view of the same the Labour Appellate Tribunal passed an order on September 27, 1953, dismissing the appeal leaving the question raised therein to the decision of the High Court. By their judgment dated January 8, 1954, the learned Judges 157 of the High Court agreed with the decision of the Industrial Tribunal that the agarias were workmen within section 2(.s) of the Act and, accordingly, dismissed the application for writ. They, however, granted a certificate under article 133(1) (c) of the Constitution and that is how the appeal comes before us. The sole point for determination in this appeal is whether the agarias working in the Salt Works of the appellants at Kuda are workmen within the definition of that term in section 2(s) of the Act. " Workman " has been thus defined in section 2 (s) of the Act: "(s) 'Workman ' means any person employed (including an apprentice) in any industry to do any skilled or unskilled manual or clerical work for hire or ' reward and includes, for the purposes of any proceedings under this Act in relation to an industrial dispute, a workman discharged during that dispute, but does not include any person employed in the naval, military or air service of the (Government). " The essential condition of a person being a workman within the terms of this definition is that he should be employed to do the work in that industry, that there should be, in other words, an employment of his by the employer and that there should be the relationship between the employer and him as between employer and employee or master and servant. Unless a person is thus employed there can be no question of his being a workman within the definition of the term as contained in the Act. The principles according to which the relationship as between employer and employee or master and servant has got to be determined are well settled. The test which is uniformly applied in order to determine the relationship is the existence of a right of control in respect of the manner in which the work is to be done. A distinction is also drawn between a contract for services and a contract of service and that distinction is put in this way: " In the one case the master can order or require what is to be done while in the other case he can not only order or require what is to be done 158 but how itself it ,;hall be done." (Per Hilbery, J. in Collins vs Hertfordshire County Council (1).) The test is, however, not accepted as universally correct. The following observations of Denning L.J., at pp. 110, III in Stevenson, Jordan and Harrison Ltd. vs Macdonald and Evans (2) are apposite in this context: "But in Cassidy vs Ministry of Health (3) Lord Justice Somervell, pointed out that test is not universally correct. There are many contracts of service where the master cannot control the manner in which the work is to be done as in the case of a captain of a ship. Lord Justice Somervell, went on to say: One perhaps cannot get much beyond this: 'Was the contract a contract of service within the meaning which an ordinary man would give under the words '? " I respectfully agree. As my Lord has said, it is almost impossible to give a precise definition of the distinction. It is often easy to recognize a contract of service when you see it, but difficult to say wherein the difference lies. A ship 's master, a chauffeur, and a reporter on the staff of a newspaper are all employed under a contract of service; but a ship 's pilot, a taxi man, and a newspaper contributor are employed under a contract for services. One feature which seems to run through the instances is that, under a contract of service, a man is employed as part of the business, and his work is done as an integral part of the business; whereas., under a contract for services, his work, although done for the business, is not integrated into it but is only accessory to it. " We may also refer to a pronouncement of the House of Lords in Short vs J. & W. Henderson, Ltd. (4) where Lord Thankerton recapitulated the four indicia of a contract of service which had been referred to in the judgment under appeal, viz., (a) the master 's power of selection of his servant, (b) the payment of wages or (1) , 615. (2) , Ill. (3) , 543 s.c. , 352 3. (4)(1946)62T.L.R. 427,429. 159 other remuneration, (c) the master 's right to control the method of doing the work, and (d) the master 's right of suspension or dismissal, but observed: "Modern industrial conditions have so much affected the freedom of the master in cases in which no one could reasonably suggest that the employee was thereby converted into an independent contractor that, if and when an appropriate occasion arises, it will be incumbent on this House to reconsider and to restate these indicia. For example, (a), (b) and (d) and probably also (c), are affected by the statutory provisions and ,rules which restrict the master ',% choice to men supplied by the labour bureaux, or directed to him under the Essential Work provisions, and his power of suspension or dismissal. is similarly affected. These matters are also affected by trade union rules which are atleast primarily made for the protection of wage earners. " Even in that case, the House of Lords considered the right of supervision and control retained by the employers as, the only method if occasion arose of securing the proper and efficient discharge of the cargo as sufficiently determinative of the relationship between the parties and affirmed that " the principal requirement of a contract of service is the right of master in some reasonable sense to control the method of doing the work and this factor of superintendence and control has frequently been treated as critical and decisive of the legal quality of relationship. The position in law is thus summarised in Halsburv 's Laws of England, Hailsham edition, Vol. 22, page 112, para. 191: " Whether or not, in any given case, the relation of master and servant, exists is a question of fact; but in all cases the relation imports the existence of power in the employer not only to direct what work the servant is to do, but also the manner in which the work is to be done.": and until the position is restated as contemplated in Short vs J. & W. Henderson Ltd., (supra), we may take it as the prima facie test for determining the relationship between master and servant, 160 The principle which emerges from these authorities is that the prima facie test for the determination of the relationship between master and servant is the existence of the right in the master to supervise and control the work done by the servant not only in the matter of directing what work the servant is to do but also the manner in which he shall do his work, or to borrow the words of Lord Uthwatt at page 23 in Mersey Docks and Harbour Board vs Coggins & Griffith (Liverpool) Ltd., and Another (1), " The proper test is whether or not the hirer had authority to control the manner of execution of the act in question The nature or extent of control which is requisite to establish the relationship of employer and employee must necessarily vary from business to business and is by its very nature incapable of precise definition. As has been noted above, recent pronouncements of the Court of Appeal in England have even expressed the view that it is not necessary for holding that a person is an employee, that the employer should be proved to have exercised control over his work, that the test of control was not one of universal application and that there were many contracts in which the master could not control the manner in which the work was done (Vide observations of Somervell, L.J., in Cassidy vs Ministry of Health (supra), and Denning, L.J., in Stevenson, Jordan and Harrison Ltd. vs MacDonald and Evans (supra).) The correct method of approach, therefore, would be to consider whether having regard to the nature of the work there was due control and supervision by the employer or to use the words of Fletcher Moulton, L.J., at page 549 in Simmons vs Health Laundry Company (2): " In my ' opinion it is impossible to lay down any rule of law distinguishing the one from the other. It is a question of fact to be decided by all the circumstances of the case. The greater the amount of direct control exercised over the person rendering the services by the person contracting for them the stronger the (1) ; 23. (2) [1910] 1 K.B 543, 54 550. 9 161 grounds for holding it to be a contract of service, and similarly the greater the degree of independence of such control the greater the probability that the services rendered are of the nature of professional services and that the contract is not one of service. " The Industrial Tribunal on a consideration of thes facts in the light of the principles enunciated above, came to the conclusion that though certain features which are usually to be found in a contract of service were absent, that was due to the nature of the industry and that on the whole the status of the agarias was that of workmen and not independent contractors. It was under the circumstances strenuously urged before ,us by the learned counsel for the respondents that the question as regards the relationship between the appellants and the agarias was a pure question of fact, that the Industrial Tribunal had jurisdiction to decide that question and had come to its own conclusion in regard thereto, that the High Court, exercising its jurisdiction under articles 226 and 227 of the Constitution, was not competent to set aside the finding of fact recorded by the Industrial Tribunal and that we, here, entertaining an appeal from the decision of the High Court, should also not interfere with that finding of fact. Reliance was placed on the observations of Mahajan, J., as he then was, in Ebrahim Aboobakar vs Custodian General of Evacuee Property (1) "It is plain that such a writ cannot be granted to quash the decision of an inferior court within its jurisdiction on the ground that the decision is wrong. Indeed, it must be shown before such a writ is issued that the authority which passed the 'order acted without jurisdiction or in excess of it or in violation of the principles of natural justice. But once it is held that the court has jurisdiction but while exercising it made a mistake, the wronged. party can only take the course prescribed by law for setting matters right inasmuch as a court has jurisdiction to decide rightly as well as wrongly. " (1) ; ,702. 21 162 There is considerable force in this contention of the respondents. The question whether the relationship between the parties is one as between employer and employee or between master and servant is a pure question of fact. Learned counsel for the appellants "relied upon a passage from Batt 's "Law of Master and Servant", 4th edition, at page 10: " The line between an independent contractor and a servant is often a very fine one; it is a mixed question of fact and law, and the judge has to find and select the facts which govern the true relation between the parties as to the control of the work, and then he or the jury has to say whether the person employed is a servant or a contractor. " This statement, however, rests upon a passing observation of Mc Cardie, J. in Performing Right Society Ltd. vs Mitchell and Booker (Palais de Danse)(1) and is contrary to the oaten& of authorities which lays down that whether or not in any given case the relation of master and servant exists is purely one of fact. (Vide Halsbury 's "Laws of England", Hailsham edition, Vol. 22, page 112, para. 191; Per Cozens Hardy, M.R. at page 547 and Per Fletcher Moulton, L.J. at page 549 in Simmons vs Heath Laundry Company (supra). It is equally well settled that the decision of the Tribunal on a question of fact which it has jurisdiction to determine is not liable to be questioned in proceedings under article 226 of the Constitution unless at the least it is shown to be fully unsupported by evidence. Now the argument of Mr. Kolah for the appellants is that even if all the facts found by the Tribunal are accepted they only lead to the conclusion that the agarias are independent contractors and that the finding, therefore, that they are workmen is liable to be set aside on the ground that there is no evidence to support it. We shall, therefore, proceed to determine the correctness of this contention. Apart from the facts narrated above in regard to which there is no dispute, there was the evidence of the Salt Superintendent of the appellants which was recorded before the Tribunal: (1) 163 "The panholders are allotted work on the salt pans by oral agreement. The Company has no control over the panholders in regard to the hours of work or days of work. The Company 's permission is nor sought in matter of sickness or in matter of going out to some village. The Company has no control over the panholders as to how many labourers they should engage and what wages they should pay them. The company 's supervision over the work of the panholders is limited to the proper quality as per requirements of the Company and as per standard determined by the Government in matter of salt. , The company 's supervision is limited to this extent. The Company acts in accordance with Clause 6 of the said agreement in order to get the proper quality of salt. Panholders are not the workmen of the Company, but are contractors. The men, who are entrusted with pattas, work themselves. They can engage others to help them and so they do. There is upto this day no instance that any penholder who is entrusted with a patta, has not turned up to work on it. But we do not mind whether he himself works or not. If any penholder after registering his name (for a patta) gets work done by others, we allow it to be done. We own 319 pattas. Some patta8 have two partners. In some, one man does the job. ID all the pans, mainly the panholders work with the help of their (respective) families. " Clause 6 of the agreement referred to in the course of his evidence by the Salt Superintendent provided: " 6. We bind ourselves to work as per advice and instructions of the officers appointed by them in connection with the drawing of brine or with the process of salt production in the pattas and if there is any default, negligence or slackness in executing it on our part or if we do not behave well in any way, the Managing Agent of the said Company can annul this agreement and can take possession of the patta, brine, well etc., and as a result we will not be entitled to claim any 164 sort of consideration or compensation for any half processed salt lying in our patta; or in respect of any expense incurred or labour employed in preparing kiwa patta, well bamboo lining etc. " There was also the evidence of Shiva Daya, an agaria, who was examined on behalf of the respondents: " There is work of making enclosures and then of sinking wells. The company supervises this work. While the wells are being sunk, the company measures the density of the brine of wells. In order to bring the brine of wells to the proper density, it is put in a condenser and then the Company tests this and then this brine is allowed to flow in the pattas. The bottom of a patta is prepared after it is properly crushed under feet and after the company inspects and okays that it is alright, water is allowed to flow into it. When salt begins to form at the bottom of a patta, an officer of the company comes and inspects it. At the end of 21 months, the water becomes saturated, i.e., useless, and so it is drained away under the supervision of the company. Then fresh brine is allowed to flow into the patta from the condenser. This instruction is also given by the company 's officer. " It was on a consideration of this evidence that the Industrial Tribunal came to the conclusion that the supervision and control exercised by the appellants extended to all stages of the manufacture from beginning to end. We are of opinion that far from there being no evidence to support the conclusion reached by the Industrial Tribunal there were materials on the record on the basis of which it could come to the conclusion that the agarias are not independent contractors but workmen within the meaning of the Act. Learned counsel for the appellants laid particular stress on two features in this case which, in his submission, were consistent only with the position that the agarias are independent contractors. One is that they do piece work and the other that they employ their own labour and pay for it. In our opinion neither of these two circumstances is decisive of the question. As 165 regards the first, the argument of the appellants is that as, the agaria8 are under no obligation to work for fixed hours or days and are to be paid wages not per day or hours but for the quantity of salt actually produced and passed, at a certain rate,, the very basis on which the relationship of employer and employees rests is lacking, and that they can only be regarded as independent contractors. There is, however, abundant authority in England that a person can be a workman even though he is paid not per day but by the job. The following observations of Crompton, J. in Sadler vs Henlock (1) are pertinent in this behalf : " The test here is, whether the defendant retained the power of controlling the work. No distinction can be drawn from the circumstances of the man being employed at so much a day or by the job. I think that here the relation was that of master and servant, not of contractor and contractee." (See also Blake, vs Thirst (2) and Halsbury 's " Laws of England ", Hailsham edition, Vol. 22, page 119, para. 194, wherein it is stated that if a person is a worker and not a contractor, " it makes no difference that his work is piece work ".) As regards the second feature relied on for the appellants it is contended that the agaria8 are entitled to engage other persons to do the work, that these persons are engaged by the agaria8 and are paid by them, that the appellants have no control over them and that these facts can be reconciled only with the position that the agaria8 are independent contractors. This argument, however, proceeds on a misapprehension of the true legal position. The broad distinction between a workman and an independent contractor lies in this that while the former agrees himself to work, the latter agrees to get other persons to work. Now a person who agrees himself to work and does so work and is, therefore, a workman does not cease to be such by reason merely of the fact that he gets other persons to work along (1) ; , 578 ; ; , 212. (2) (1863) 32 L.J. (Exchequer) 188. 166 with him and that those persons are controlled and paid by him. What determines whether a person is a workman or an independent contractor is whether he has agreed to work personally or not. If he has, then he is a workman and the fact that he takes assistance from other persons would not affect his status. The position is thus summarised in Halsbury 's 'Laws of England ', Vol. 14, pages 651 652: " The workman must have consented to give his personal services and not merely to get the work done, but if he is bound under his contract to work personally, he is not excluded from the definition, simply because he has assistance from others, who work under him." (See also Grainger vs Aynsley : Bromley vs Tams (1); Weaver vs Floyd (2) and Whitely vs Armitage (a).) In the instant case the agarias are professional labourers. They themselves personally work along with the members of their families in the production of salt and would, therefore, be workmen. The fact that they are free to engage others to assist them and pay for them would not,in view of the above authorities, affect their status as workmen. There are no doubt considerable difficulties that may arise if the agarias were held to be workmen within the meaning of section 2 (s) of the Act. Rules regarding hours of work etc., applicable to other workmen may not be conveniently applied to them and the nature as well as the manner and method of their work would be such as cannot be regulated by any directions given by the Industrial Tribunal. These difficulties, however, are no deterrent against holding the agarias to be workmen within the meaning of the definition if they fulfil its requirements. The Industrial Tribunal would have to very well consider what relief, if any, may possibly be granted to them having regard to all the circumstances of the case and may not be able to regulate the work to be done by the aqarias and the remuneration to be paid to them by the employer in (1) (1881) 6 Q.B.D. 182. (2) (3) 167 the manner it is used to do in the case of other industries here the conditions of employment and the work to be done by the employees is of a different character. These considerations would necessarily have to be borne in mind while the Industrial Tribunal is adjudicating upon the disputes which have been referred to it for adjudication. They do not, however, militate against the conclusion which we have come to above that the decision of the Industrial Tribunal to the effect that the agarias are workmen within the definition of the term contained in section 2 (s) of the Act was justified on the materials on the record. We accordingly see no ground for interfering with that decision and dismiss this appeal with costs. Appeal dismissed.

The appellants were lessees holding a license for the manufacture of salt on the demised lands. The salt was manufactured by a class of professional labourers known as agarias from rain water that got mixed up with saline matter in the soil. The work was seasonal in nature and commenced in October after the rains and continued till June. Thereafter the agarias left for their own villages for cultivation work. The demised lands were divided into plots called Pattas and allotted to the a arias with a sum of Rs. 400/ for each Patta to meet the initial expenses. Generally the same patta was allotted to the same aigaria every year and if a patta was extensive in area, it was allotted to two agarias working in partnership. After the manufacture of salt the agayias were paid at the rate Of 5 as. 6 pies per maund. At the end of each season the accounts were settled and the agarias paid the balance due to them. The agarias who worked themselves with the members of their families were free to engage extra labour on their own account and the appellants had no concern therewith. No hours of work were prescribed, no muster rolls maintained, nor were working hours controlled by the appellants. There were no rules as regards leave or holidays and the agarias were free to go out of the factory after making arrangements for the manufacture of salt. The question for decision was whether in such circumstances the agarias could be held to be workmen as defined by section 2(s) Of the Industrial Disputes Act of 1947, as found by the Industrial Tribunal and agreed with by the High Court or they were independent contractors and the reference for adjudication made by the Government competent under section 10 of the Act. Held, that the finding of the Industrial Tribunal that the agarias were workmen within the meaning of section 2(S) of the Industrial Disputes Act of 1947 was correct and the reference was competent. The real test whether a person was a workman was whether he had been employed by the employer and a relationship of employer and employee or master and servant subsisted between them and it was well settled that the prima facie test of such 153 relationship was the existence of the right in the employer not merely to direct what work was to be done but also to control the manner in which it was to be done, the nature or extent of such control varying in different industries and being by its nature incapable of being precisely defined. The correct approach, therefore, was to consider whether, having regard to the nature of the work, there was due control and supervision of the employer. Mersey Docks and Harbour Board vs Coggins & Griffith (Liver Pool) Ltd., and Another ; , and Simmons vs Heath Laundry Company , referred to. The question whether the relation between the parties was one as between an employer and employee or master and servant was a pure question of fact and where the Industrial Tribunal having jurisdiction to decide that question came to a finding, such finding of fact was not open to question in a proceeding under article 226 of the Constitution unless it could be shown to be wholly unwarranted by the evidence. Ebrahim Aboobakar vs Custodian General of Evacuee Property ; , referred to. Performing Right, Society Ltd. etc. vs Mitchell and Booker (Plaise De Danse) [1924] i K.B. 762, not followed. A person could be a workman even though he did piece work and was paid not per day but by the job or employed his own labour and paid for it. Sadler vs Henlock ; and Blake vs Thirst (1863) 32 L.J. (Exchequer) 188, referred to. The broad distinction between a workman and an independent contractor was that while the former would be bound by agreement to work personally and would so work the latter was to get the work done by others. A workman would not cease to be so even though lie got other persons to work with him and paid and controlled them. Grainger vs Aynsley : Bromley vs Tams (1881) 6 Q.B.D. 182, Weaver vs Floyd (1825) 21 L.H., Q.B. 151 and Whitely vs Armitage , referred to. As in the instant case the agayias, who were professional labourers and personally worked with the members of their families in manufacturing the salt, were workmen within the meaning of the Act, the fact that they were free to engage others to assist them and paid for them, could not affect their status as workmen.

Criminal Appeal No. 122 of 1967. Appeal by special leave from the judgment and order dated April 18, 1966 of the Allahabad High Court in Criminal Appeal No. 1642 of 1964. R.K. Garg, S.C.Agarwal, Sumitra Chakravarty and Uma Dutt, for the appellant. O.P. Rana, for respondent No. 2. The Judgment of the Court was delivered by Hegde J. Two contentions advanced in this appeal by special leave are (1) that the appeal filed by the Municipal Board, Saharanpur before the High Court of Allahabad under section 417(3) of the Criminal Procedure Code was not maintainable in law and (2) the accused could not have been convicted on the strength of the certificate of the Public Analyst annexed to the complaint. The High Court rejected both these contentions. The material facts relating to this appeal are these: The accused in this case is proprietor of Khalsa Tea Stall situated in Court Road, Saharanpur. Among other things, he was selling coloured sweets. On suspicion that the sweets sold by him were adulterated, the Food Inspector, Municipal Board, Saharanpur purchased from the accused for examination some coloured sweets under a Yaddasht on May 31, 1963 and sent a portion if the same to the Public Analyst of the Government of U.P. for examination. The Public Analyst submitted his report on June 24, 1963. It reads: "See Rule 7 ( 3 ) REPORT BY THE PUBLIC ANALYST Report No. 11652. I hereby certify that I, Dr. R.S. Srivastava, Public Analyst for Uttar Pradesh, duly appointed under the provisions of the , received on the 4th day of June 1963 from the 738 Food Inspector c/o Medical Officer of Health, Municipal Board, Saharanpur, a sample of coloured sweet (Patisa) prepared in Vanaspati No. 264 for analysis, properly sealed and fastened and that I found the seal intact and unbroken. I further certify that I have caused to be analysed the aforementioned sample, and declare the result of the analysis to be as follows: Test for the presence of coal tar dye : Positive. Coal tar dye identified : Metanil yellow. (colour Index No. 138) ANALYTICAL DATA IN RESPECT OF FAT OR OIL USED IN THE PREPARATION OF THE SAMPLE. Butyro refractometer reading at 40 dgree C : 50.5. Melting point : 33.80C. 3. Baudouin 's test for the presence of Til oil :Positive. Tintometer reading on Lovibond Scale 4.0 Red Units plus 0.1 yellow unit coloured with a coal tar dye namely, Metanil Yellow (Colour Index No. 138) which is not one of the coal tar dyes permitted for use in foodstuffs under rule No. 28 of the Prevention of Food Adulteration Rules, 1955. No chance had taken place in the constitutents of the sample which would have interfered with analysis. Signed this 24th day of June 1963. The sample belongs to : section DHIAN SINGH S/O JIWAN SINGH R.S. Srivastava M.Sc., LL.B. Ph.D. (Lond.) P.R.L.C. Public Analyst to Govt. of U.P. Sendor 's address: Public Analyst, Uttar Pradesh, Lucknow The Food Inspector, c/o. Medical Officer of Health, Municipal Board, Saharanpur. " 739 On the basis of that certificate, a complaint was filed in the court of City Magistrate, Saharanpur under section 7 read with section 16 of the . It is purported to have been filed by the Municipal Board, Saharanpur but it was signed by its Food Inspector. The accused pleaded not guilty. Various contentions were taken by the accused in support of his defence. The trial court acquitted him taking the view that as the report of the analyst did not contain any data, no conviction could be rounded on its basis and as the Yaddasht relating to the sale had not been attested as required by law, the seizure in question must be held to be invalid. As against that decision, the Municipal Board of Saharanpur went up in appeal to the High Court under section 417(3), Cr. P.C. the High Court allowed the appeal disagreeing with the trial court on both the questions of law referred to earlier. It came to the conclusion that the analyst had given the necessary data hence his report afforded sufficient basis for conviction. It further opined that the fact that the Yaddasht had not been attested by the witnesses of the locality, did not vitiate the seizure made. At the hearing of the appeal, no objection about the maintainability of the appeal was taken. The judgment of the High Court was rendered on April 18, 1966. The High Court convicted the appellant and sentenced him to undergo rigorous imprisonment for two months. and to pay a fine of Rs. 100/ , in default to undergo further imprisonment for a period of one, month. On April 28, 1966, the accused field an application for certificate under article 134 of the Constitution. On May 4, 1966, when the application filed under article 134 of the Constitution for certificate was still pending, the accused moved the High Court under section 561 (A), Cr. P.C. for reviewing its judgment dated April 18, 1966 principally on the ground that the appeal filed by the Municipal Board was not maintainable under section 417(3), Cr. P.C. as the complaint had been instituted by the ' Food Inspector and no.t by the Municipal Board. The application under section 561(A) was dismissed by the High Court as per its order of March 16, 1967 repelling the contention of the accused that the complaint had not been instituted by the Municipal Board. It further came to the conclusion that it had no power to review its own judgment. The certificate prayed for under article 134 of the Constitution was also refused by a separate order of the same date. Thereafter this appeal was brought after obtaining special leave. Mr. Garg, learned Counsel for the appellant strenuously contended that the appeal filed by the Municipal Board of Saharanpur before the High Court under section 417(3), Cr. P.C. was not maintainable as the complaint from which that appeal had arisen had been instituted by the Food Inspector. Section 417(3) of the Criminal Procedure Code provides that if an order of acquittal 740 is passed in any case instituted upon complaint, the High Court may grant to the complainant special leave to appeal against the order of acquittal. It is clear from that section that special leave under that provision can only be granted to the complainant and to no one else. It may be noted that in this case no appeal against acquittal had been filed by the State. Hence the essential question for consideration is whether the complainant before the Magistrate was the Municipal Board of Saharanpur ? The complainant shown in the complaint is the Municipal Board of Saharanpur but the complaint was signed by the Food Inspector. Section 20 of the prescribes that no prosecution for an offence under that Act should be instituted except by, or with the written consent of, the Central Government or the State Government or a local authority or a person authorised in this behalf, by general or special order, by the Central Government or the State Government or a local authority. There is no dispute that the Municipal Board is a local authority. Hence it was competent to file a complaint. It was also competent for that board to authorise someone else to file complaints under the on its behalf. As seen earlier, the complaint purports to have been filed by the Municipal Board. That Board could have authorised its Food Inspector to file the complaint on its behalf. Neither in the trial court, nor in the High Court at the stage of hearing of the appeal, any objection was taken by the accused as to the maintainability either of the complaint or of the appeal. Both those courts and the parties before it proceeded on the basis that the Municipal Board, Saharanpur was the complainant and its Food Inspector had filed the complaint on its behalf. It is only after the disposal of the appeal, the accused for the first time took up the contention that the Municipal Board was not the real complainant. It is true that the complaint was signed by the Food Inspector. As seen earlier it was competent for the Municipal Board to authorise him to file the Complaint. The question whether he was authorised by the Municipal Board to file the complaint was never put into issue. Both the parties to the complaint proceeded on the basis that it was a validly instituted complaint. If the Municipal Board had not authorised him to file the complaint then the complaint itself was not maintainable. If that is so, no question of the invalidity of the appeal arises for consideration. It was never the case of the accused that the complaint was invalid. In K.C. Aggarwal vs Delhi Administration(1), this Court has held that a complaint filed by one of the officers of a local authority ', at the instance of that authority is in law a complaint institut (1) Criminal Appeal No. 100 of 1966 decided on 27th May, 1969; 741 ed by that local authority. Therefore if the Complaint with which we are concerned in this case had been filed by the Food Inspector on the authority of local board, the complaint must be held to have been instituted by the local board itself. The question whether the Food Inspector had authority to file the complaint on behalf of the local board is a question of fact. Official acts must be deemed to have been done according to law. If the accused had challenged the authority of the Food Inspector to file the complaint, the trial court would have gone into that question. The accused cannot be permitted to take up that contention for the first time after the disposal of the appeal. This Court refused to entertain for the first time an objection as regards the validity of a sanction granted in Mangaldas Raghavji and Anr. vs State of Maharashtra and Anr. (1) Mr. Garg, learned Counsel for the accused urged that a permission under section 20 of the to file a complaint is a condition precedent for validly instituting a complaint under the provisions of that Act. The fulfilment of that condition must be satisfactorily proved by the complainant before a court can entertain the complaint. Without such a proof, the court will have no jurisdiction to try the case. In support of that contention of his he sought to take assistance from the decision of the Judicial Committee in Gokulchand Dwarkadas Morarka vs The King(2) and Madan Mohan Singh vs The State of U.P.(3). Both those decisions deal with the question of the validity of sanctions given for the institution of certain criminal proceedings. The provisions under which sanction was sought in those cases required the sanctioning authority to apply its mind and find out whether there was any justification for instituting the prosecutions. The Judicial Committee as well as this Court has laid down that in such cases, the court must be satisfied either from the order of sanction or from the other evidence that all the relevant facts had been placed before the sanctioning authority and that authority had granted the sanction after applying its mind to those facts. The ratio of those decisions has no bearing on the facts of this case. Under section 20 of the , no question of applying one 's mind to the facts of the case before the institution of the complaint arises as the authority to be conferred under that provision can be conferred long before a particular offence has taken place. It is a conferment of an authority to institute a particular case or even a class of cases. That section merely prescribes that persons or authorities designated in that section are alone competent to file complaints under the statute in question. (1) ; (2) 75 I.A.p. 30. (3) A.I.R. 1954 S.C. 736. 742 For the reasons mentioned above, we are unable to accept the contention of the accused that the Municipal Board of Saharanpur was not competent to file the appeal. The only other question canvassed before us is that the report of the analyst could not have afforded a valid basis for rounding the conviction as the data on the basis of which the analyst had reached his conclusion is not found in that report or otherwise made available to the court. We are unable to accept this contention 'as well. It is not correct to. say that the report does not contain the data on the basis of which the analyst came to his conclusion. The relevant data is given in the report. A report somewhat similar to the one before us was held by this Court to contain sufficient data in Mangaldas 's(1) case referred to earlier. The correct view of the law on the subject is as stated in the decision of the Allahabad High Court in Nagar Mahapalika of Kanpur vs Sri Ram(2) wherein it is observed: "that the report of the public analyst under section 13 of the need not contain the mode or particulars of analysis nor the test applied but should contain the result of analysis namely, data from which it can be inferred whether the article of food was or was not adulterated as defined in section 2 (1 ) of the Act. " In the result the appeal fails and the same is dismissed. The appellant is on bail. He should surrender to his bail and serve the sentence imposed on him. Y.P. Appeal dismissed. (1) ; (2) [1963] All. L.J. 765.

On a report of the Public Analyst that the coloured sweets sold by the appellant were adulterated a complaint was filed before the Magistrate under section 7, read with section 16 of the Prevention of Food Adulteration Act. The trial court acquitted the appellant. In appeal by the Municipal Board under section 417(3), Code of Criminal Procedure, the High Court convicted the appellant. The appellant did not raise any objection as to the maintainability of the complaint or of the appeal, either in the trial court or in the High Court before the appeal was disposed of, on the ground that the Municipal Board was shown as the complainant and the complaint was signed by its Food Inspector. In appeal to this Court, it was contended that: (i) the appeal filed by the Municipal Board in the High Court was not maintainable in law as the complaint had been instituted by the Food Inspector and not by the Municipal Board; (ii) a permission under section 20 of the Act was a condition precedent for validly instituting a complaint and the fulfilment of that condition had to be satisfactorily proved before the Court could exercise jurisdiction to try the case; and (iii) the appellant could not have been convicted on the strength of the certificate of the Public Analyst. HELD: Dismissing the appeal, (i) Under section 20 of the Prevention of Food Adulteration Act, it was competent for the Municipal Board to authorise the Food Inspector to file the complaint. If the complaint had been filed by the Food Inspector on the authority of the Board the complaint must be held to have been instituted by the Board itself. The question whether the Food Inspector was so authorised is a question of fact. This was never put into issue and both the courts below and the parties before them proceeded on the basis that the Municipal Board was the complainant and the Food Inspector filed the complaint on its behalf. The appellant could not, therefore, be permitted to take up the contention for the first time after the appeal was disposed of in the High Court. [741 A C] K.C. Aggarwal vs Delhi Administration, Cr. A. No. 100 of 1966, dt. 27 5 1969, referred to. (ii) There is no analogy between the section and those provisions requiring sanction for the institution of certain criminal proceedings. Under the section, no question of applying one 's mind to the facts of the case before the institution of complaint arises as the authority under the section can be conferred long before a particular offence has taken place. It is a conferment of an authority to institute a particular case or even a class of cases. [741 G] 737 Gokal Chand Dwarkadas vs The King, 75 I.A. 30 and Madan Mohan Singh vs State of U.P.A.I.R. , held inapplicable. (iii) It is not necessary that the report of the Public Analyst should contain the mode or particulars of analysis or the test applied. But it should contain the result of analysis, namely, data from which it can be inferred whether the article of food was of was not adulterated. In the present case. the report of analyst did contain the data on the basis of which the analyst came to his conclusion. [742 C E]

(Civil) No. 71 of 1992. WITH Writ Petition (Civil) No. 323 of 1993. Under Article 32 of the Constitution of India. J.P. Bhatacharjee, N.R. Choudhry and Somnath Mukherjee for the Petitioners in W.P.No. 71/93. S.N. Mukherjee for the Petitioners in W.P. No. 323/93. Ms. B. Sunita Rao for V.K. Verma for the Respondents. The Judgment of the Court was delivered by R.M.SAHAI,J. Casual labourers of South Eastern Railway, alleged to have been appointed between 1964 69 and retrenched between 1975 78 have approached this Court for a direction to opposite parties to include their names in the 753 live casual labourer register after due screening and give them reemployment according to their seniority. Further prayer is to restrain the opposite parties from filling vacancies from open market. Basis of their claim is two fold, one circulars issued by the Railway Board on 8th June and 18th June, 1981 laying guideline regarding recruitment, retrenchment and employment of the casual labourers, second Judgments delivered by this Court in 1985 and 1987 directing the opposite parties to prepare a scheme and absorb the casual labourers in accordance with their seniority. Issuing of circulars by the Railway Board or decisions by this Court could not and has not been disputed. Nor it is disputed that in pursuance of the orders passed by this Court the opposite parties framed a scheme in 1987 for employing retrenched casual labourers. On 2.3. 1987 a letter was issued from the Railway Establishment addressed to the General Managers for employing casual labourer retrenched before 1981 if they satisfied the requirements mentioned therein which is extracted below: "Pursuant to directions given by the Hon 'ble Supreme Court in their order dated 23.2.1987, in W.P. No. 332 of 1986, the Ministry desire that the cases of project casual labour who had worked as such before 1. 1.81 and who were discharged due to completion of work or for want of further work, may also be considered for the purpose of implementation of the scheme contained in the Ministry 's letter of even No. dated 1.6.84 and 25.6.84 as modified in the letter dated 11.9.1986. Representation along with documentary proof reaching the office mentioned above after 31.3.1987 of those which are incomplete and also those not made with reference to these instructions, will not be considered". The petitioners who claim to have been retrenched due to completion of Halda project appear to have made a representation in 1990 to the authorities. The representation runs as under "Respected sir, 1, on behalf of the Fetrenched Labour Congress Union I.O. 754 Tamluk Rly. Station. Midnaporoe, beg to humbly submit that the above quoted Circulars are not obeyed by DEN (Con). TMZ DIZHA. S.E. Rly. KGP and they do not follow the orders of they Supreme Court, High Court of Calcutta and Central Administrative Tribunal, Calcutta Bench. As a result of their indifference, the project casual labour who are retrenched from service on or before 1.1.1981 are in great difficulties and they are not getting scope of absorption. All the applications deposited in the office of the DEN (CON) KGI in terms of Memo No. PD/E/A/579/A/837 in reference to CE/ C/GRC dated 25.5.1987 are to be approved. In such circumstances, I beg to request you to intervene in the matter as expeditiously as humble. Needless to say, if your grievances are not sympathetically admitted and the retrenched labour be not absorbed. We shall have no alternative way except launching vigorous movement in the next stage. Your faithfully, (BHUDEV JALUA)" The representation does not give any detail. It is not mentioned if the scheme was given due publicity or not. No explanation is given as to why the petitioners did not approach till 1990. Nor it is stated if any of the casual labourer Not it is stated if any of the casual labourer of the project were reemployed or not. It is vague and was lacking in material particulars. Two questions arise, one, if the petitioners are entitled as a matter of law for reemployment and other if they have lost their right, if any, due to delay. Right of casual labourer employed in projects, to be reemployed in railways has been recognized both by the Railways and this Court. But unfortunately the petitioners did not take any step to enforce their claim before the Railways except sending a vague representation nor did they even care to produce any material to satisfy this Court that they were covered in the scheme framed by the Railways. It was urged by the learned counsel for petitioners that they may be permitted to produce their identify cards etc. , before opposite parties who may accept or reject the same after 755 verification. We are afraid it would be too dangerous to permit this exercise. A writ is issued by this Court in favour of a person who has some right. And not for sake of roving enquiry leaving scope for maneuvering. Delay itself deprives a person of his remedy available is law. In absence of any fresh cause of action or any legislation a person who has lost his remedy by lapse of time loses his right as well. From the date of retrenchment if it is assumed to be correct a period of more than 15 years has expired and in case we accept the prayer of petitioner we would be depriving a host of others who in the meantime have become eligible and are entitled to claim to be employed. We would have been persuaded to take a sympathetic view but in absence of any positive material to establish that these Petitioners were in fact appointed and working as alleged by them it would not be proper exercise of discretion to direct opposite parties to verify the correctness of the statement made by the petitioners that they were employed between 1964 to 1969 and retrenched between 1975 to 1979. The writ petitions accordingly fail and are dismissed. But there shall be no orders as to costs. U.R. Petitions dismissed.

The petitioners claimed to he casual labourers of the South Eastern Railway appointed between 1964 69 and retrenched between 1975 78. They prayed (1) for inclusion of their names in the live casual register and reemployment according to their seniority, and (2) for restraining the filling of vacancies from the open market. They relied on two circulars issued by the Railway Board laying down guidelines for the recruitment, retrenchment and employment of casual labourers. They also relied on two judgments of this court in 1985 and 1987 which directed the preparation of a scheme and absorption of casual labourers in accordance with their scheme. A scheme was framed in 1987 for employing casual labourers retrenched before 1981 subject to demonstrating suitability before 31st March, 1987. In 1990 the petitioners made their representation to be considered. The questions before this court were (a) whether the petitioners were entitled as a matter of law to reemployment and (b) if they had lost their right, if any, due to delay. 752 Dismissing the petitions, this court, HELD 1. Right of casual labourers employed in projects to be reemployed in railways has been recognised both by the Railways and this Court. But the petitioners only sent in a vague representation, and there was absence of positive material that they were in fact appointed and working as claimed. (754 G) 2. A writ is issued by this court in favour of a person who has some right and not. for the sake of a roving enquiry leaving scope for manoeuver. Delay itself deprives a person of big remedy available in law. In the absence of any fresh cause of action of any legislation, a person who has lost his remedy by lapse of time loses his right as well. (755 A) 4 In any event, more than 15 years have expired, and a host of others who have in the meantime become eligible and entitled to claim to be employed would he deprived if the petitioners ' claim were accepted. (755 B)

Appeal No. 560 of 1960. Appeal from the judgment and decree dated July 18, 1955, of the Patna High Court in Appeal from original decree No. 500 of 1947. S.C. Agarwal and D.P. Singh, for the appellant. P.K. Ghosh, for respondent No. 1. December 3, 1963. The Judgment of the Court was delivered by SHAH J. Rajkumar Ran Bahadur Singh hereinafter called 'the mortgagor ' was the proprietor of a five annas share in Tauzi No. 16 of Mauza Bansjora, eight annas share in Mauza Simitanr and certain interest in Mauza Bahaldih all in District Manbhum. The mortgagor had leased 200 bighas of coal bearing land out of his holding in Mauza Bahaldih to certain lessees for an annual royalty of Rs. 2,000 payable in two equal instalments, the first in the month of Aswin of the Vikram year and the second in the month of Chaitra. On June 14, 1922, the mortgagor borrowed Rs. 5,500 from one Rabindra Nath Chakravarty and executed a deed of mortgage whereby he agreed personally to repay the amount, and encum bered his share in Mauzas Bansjora and Simitanr for repayment of the amount borrowed with interest at the rate of Rs. 1/8/ per mensem, and further agreed that in default of payment, the mortgagee do recover the amount due by sale of his interest in Mauza Bansjora, Simitanr and Bahaldih. By the mortgagedeed the mortgagor also agreed that the mortgagee do receive the amount due as royalty from the tenants under mining leases in Mauza Bahaldih in the month 637 of Aswin. By another deed dated August 27, 192 the mortgagor created a mortgage in favour of Sasindranath Chakravarty and Indra Nath Chakravartyto secure payment of Rs. 5,500 advanced to him and interest thereon. The covenants of this mortgage deed were substantially the same as the covenants of the earlier mortgage deed dated June 14, 1922 and it was agreed that the mortgagees were to receive the instalment of royalty payable in Chaitra in respect of Mauza Bahaldih. Under these mortgage deeds the due date for payment was April 14, 1925. On May 17, 1927, the mortgagor assigned his interest in Mauza Bansjora to one Mahendra Nath Rai and on October 2, 1927 he assigned his interest in Mauza Simitanr to one Pushpa Moyee Devi. Thereafter in execution of a money decree obtained against the mortgagor, his right, title and interest in mauz Bahaldih was sold on January 16, 1937, and after th sale was confirmed, possession of Mauza Bahaldih was taken by the auction purchaser on April 7, 1937 By two deeds dated June 18, 1946, Manimala Devi the plaintiff in the suit out of which this appeal arises obtained assignments of the rights of the mortgagees under the two deeds dated June 14, 1922, and August 27, 1922, and filed a suit on July 12, 1946, in the Court of the Subordinate Judge at Dhanbad for a decree for enforcement of the two mortgages by sale of the mortgaged properties. To the suit were impleaded as defendants the representatives of the original mortgagees, the heirs of the mortgagor and certain alienees of the mortgaged property. The suit was filed more than twelve years after the date on which the mortgage amount because payable, and prima facie, it was barred by the law of limitation. But the plaintiff sought to bring the claim within limitation, relying upon certain part payments towards the mortgage dues made by the mortgagor. On the deed dated June 14, 1922, was recorded an endorsement dated April 1, 1937, relating to payment of Rs. 600 as interest which was signed by the mortgagor. On the mortgage deed dated 638 August 27, 1922, there was recorded an endorsement dated August 16, 1934, of payment of Rs. 100 which also was signed by the mortgagor. The plaintiff relied upon part payments evidenced by these endorsements to extend the period of limitation in respect of the two mortgage claims. The trial Judge rejected the defence raised by the contesting defendants and held that the suit in respect of the first mortgage was not barred by the law of limitation because the mortgage "was partly simple and partly usufructuary" and even though the plaintiff could not rely upon part payment of principal or interest to extend the period of limitation for the suit, she could still maintain the suit relying upon the dispossession of the mortgagee on April 7, 1937, by the auction purchaser who purchased the mortgagor 's rights in Bahaldih lands at the Court auction and that the suit to enforce that mortgage was accordingly within limitation. In respect of the mortgage dated August 27, 1922, the Judge held that the claim was within limitation both on account of part payment of principal and interest and upon the cause of action furnished by the dispossession of the mortgagees in respect of the Bahaldih property. In appeal by the fourth defendant widow of Mehandra Nath Rai the High Court of Patna reversed the decree passed by the trial Court and dismissed the plaintiff 's suit. The High Court held that as the plaintiff had in her plaint not relied upon dispossession as a ground for extension of the period of limitation, that claim should not have been permitted to be made out by the trial Court. The High Court also held that Mauza Bahaldih was not given in mortgage to the mortgagees under either of the two mortgagedeeds and dispossession of the mortgagees from Mauza Bahaldih or part payments of principal or interest after the mortgagor had parted with his interest in the mortgaged properties Mauzas Bansjora and Simitanr could not operate to extend the period of limitation for the suit. The High Court further held that in any event even if Mauza Bahaldih was 639 one of the mortgaged properties, the mortgagor having lost his interest in Mauzas Bansjora, Simitanr and Bahaldih prior to the payment of Rs. 600 by the mortgagor on April 1, 1937, as evidenced by the endorsement on the first mortgage deed, the plaintiff 's suit to enforce the mortgage dated August 27, 1922, was barred by limitation. The plaintiff has appealed to this Court with certificate granted by the High Court. The first question which falls to be considered is whether Mauza Bahaldih was mortgaged under the two mortgage deeds. The mortgagor had shortly after the two mortgage deeds transfered his interest in Mauzas Bansjora and Simitanr, and for reasons which we will presently set out, the mortgagor cannot, by making part payments, seek to extend the period of limitation against his assignee after he has lost his interest in the property mortgaged. The two part payments dated August 16, 1934, and April 1, 1937, could operate to extend the period of limitation if the mortgagor continued to remain on those dates owner of the mortgaged property or part thereof. The plaintiff could therefore avail of the extension of the period of limitation by part payments only if th mortgagor 's interest in Mauza Bahaldih stood mortgaged at the dates of those part payments, for the mortgagor 's interest in Mauzas Bansjora and Simitanr was assigned to strangers many years before those par payments were made. The terms of the two mortgage deeds are substantially the same and such differences as there are in the covenants have no bearing on the questions to be decided in this appeal. We will therefore set out the material recitals and clauses in the mortgage deed dated June 14, 1922. In the preamble clause it was recited that Tauzi No. 16 of collectorate and district Mandhum constitutes the zamindari interest and that on the death of his late father, the mortgagor acquired the said zamindari and that he was entitled to transfer encumber or sell the whole property included within the said Tauzi No. 16 at his free will. By paragraph 4 640 the mortgagor undertook to pay interest at the rate of Rs. 1/8/ (one rupee eight annas) per cent per mensem on the amount of Rs. 5,500 borrowed by him. In paragraph 5 it was stated that it was not possible for the mortgagor to pay interest every year on the amount borrowed by him and accordingly he had agreed that the tenants of the coal fields in Mauza Bahaldih with whom he had settled the coal mines in the zamindari shall continue to pay to the mortgagee Rs. 1,000 on account of one of the instalments for rent, minimum royalty and commission, due to the mortgagor according to the terms of the contracts. It was further stipulated by paragraph 7 that the mortgagor had assigned the amount due from certain tenants mentioned in the schedule under the instalments specified therein by way of interest for peaceful realisation of the annual interest of Rs. 1,000 every year, and the mortgagee was, in default of payment by the tenants, competent to realise the same. The mortgagor also undertook to issue notices to the tenants calling upon them to pay the amounts according to the assignment. By paragraph 9 it was agreed that in the event of the tenants failing to pay the amount, the mortgagor would compensate the mortgagee in respect of the amount remaining to be realised. Paragraph 12 provided that so long as all the amounts were not repaid in full, the mortgagor was not competent to gift, sell transfer or encumber, make banami or permanent settlement of the mortgaged property specified and described in Sch. (kha) i.e. Mauzas Bansjora and Simitanr with any one and that the alienations made by him would be null and void. He further declared that the said properties had not been encumbered to any person and that he was in peaceful possession of the mortgaged property described in Sch. (ka) viz., Mauza Bahaldih and that he was peacefully realising the rents. By paragraph 14 the mortgagor agreed that the properties specified and described in Sch. (kha) shall always be treated as mortgaged and security for realising the interest and principal due to the mortgagee, the amount and interest due to the mortgagee having first charge on the same, that 641 "should any cause of action arise", the mortgagee "shall be competent to realise the full amount due to" him "together with interest and costs by selling the said properties in Sch. (ka) and (kha) by action", and that should the full amount be not realised the mortgagee will be competent to realise the amount from other moveable and immoveable properties belonging to the mortgagor. By paragraph 13 the mortgagor agreed to pay the principal and the interest due on or after April 14, 1925. The mortgagor admitted receipt under each o the two deeds the amount of Rs. 5,500 advance to him by the mortgagees and agreed to pay interest at the rate of Rs. 1/8/ per cent per mensem. had also made an arrangement by which the mortgage was to recover the interest on the mortgage debt out of the instalments of Rs. 1,000 as royalty in respect of Mauza Bahaldih. There was a covenant that the event of the mortgagee being unable to recover royalty from the tenants the mortgagor would make good the same. Again by paragraph 13 in each of the two deeds there was a covenant for payment of the amount of the principal and interest personal on or after April 14, 192 5. A distinction was made paragraphs 12 and 14 between Mauzas Bansjor and Simitanr on the one hand and Mauza Bahaldih on the other. By paragraph 12 the mortgagor had undertaken not to transfer or assign Mauzas Bansjora and Simitanr to any person, and had merely assured the mortgagee that he had not assigned the rights in Mauza Bahaldih till the date of mortgage by way of any encumberance to any other person. But that distinction would, for the purpose of ascertaining the true nature of the document, be immaterial, for even in the absence of a covenant not to assign the mortgagor 's interest, so long as the mortgage remained outstanding, the transfer made by the mortgagor of Mauzas Bansjora and Simitanr would be subject to the mortgage. In paragraph 14 it way stated that as security for the realisation of the principal and interest, Mauzas Bansjora and Simitanr were to 1/SCI/64 41 642 stand mortgaged. That may prima facie suggest that those two Mauzas alone were mortgaged, but the mortgagor had in the same paragraph agreed that should "any cause of action arise " the mortgagee shall be competent to realise the full amount due to him together with interest and costs by selling Mauzas Bansjora simitanr and Bahaldih. The mort gagee could not sell the mortgagor 's interest in Mauza Bahaldih in satisfaction on his mortgage claim, unless it was mortgaged to him. The intention appearing from this covenant is therefore clearly to encumber Mauzas Bansjora, Simitanr and Bahaldih. The High Court, in our view, was in error in holding that the mortgagor 's interest in Mauzas Bansjora and Simitanr only was mortgaged. The question of limitation may now be considered in the light of the finding that Mauza Bahaldih was mortgaged under the two mortagage deeds. The later mortgage was executed on August 27,1992 and the amount due thereunder was payable on April 14, 1925. On August 16, 1934, an amount of Rs. 100/was paid by the mortgagor and an endorsement in that behalf was made on the mortgage bond under his signature, and on that date the mortgagor 's interest in Mauza Bahaldih was not extinguished. Under article 132 of the Limitation Act, Sch. 1, a suit to enforce payment of money charged upon immoveable property may be filed within twelve years from the date when the money sued for becomes due. The suit filed by the plaintiff was for enforcement of payment of money charged upon immoveable property and money sued for on the later mortgage had become due on April 14, 1925. By section 20 of the Limitation Act where payment on account of a debt or of interest on a legacy is made before the expiration of the ,prescribed period, by the person liable to pay the debt, or by his duly 'authorised agent, a fresh period of limitation will be computed from the time when the payment was made. The mortgagor had parted with his interest in Mauza Bansjora on May 17, 1927, and in Mauza Simitanr on October 2, 1927, and a 643 mortgagor whose interest in the equity of redemption is transferred by assignment, sale or otherwise to another person is not a "person liable to pay the debt" within the meaning of section 20 of the limitation Act. Part payment made by him towards principal or interest therefore does not extend the period of limitation for enforcement of the mortgage against the transferee of the equity of redemption. If by transfer or assignment of his interest the mortgagor has lost all his interest in the mortgaged property, part payment will not extend the period of limitation, for at the date of payment he is not "the person liable to pay" the mortgage debt. The High Court of Madras was right in holding in Pavavi vs Palanivela Goudan (1) that a mortgagor who has lost all interest in the mortgaged property cannot by payment of interest or principal within the meaning of section 20 bind the person on whom the interest has devolved. But the mortgagor 's interest in Mauza Bahaldih subsisted on the date of payment by him of Rs. 100 towards the principal and interest, and such payment having been made within twelve years from April 14, 1925, the plaintiff 's claim to enforce the mortgage dated August 27, 1922, was at the date of the, suit not barred by limitation. The amount due under the mortgage dated June 14, 1922, was repayable on April 14, 1925, and on April 1, 1937, Rs. 600 were paid by the mortgagor to the mortgagee and the endorsement regarding payment was made on the mortgage deed recording such payment, and on that date the period of twelve years commencing from April 14, 1925, under article 132 of the limitation Act, had not expired. But before that date the mortgagor had lost interest in all the properties mortgaged by him in Mauza Bansjora on May 17, 1927, in Mauza Simitanr on October 21, 1927, and in Mauza Bahaldih by the auction sale which became affective from January 16, 1937. The period of limitation in respect of the first mortgage could not, for reasons already set out, be extended by part (1) I.L.R. 644 payment made after the mortgagor lost all his interest in the property mortgaged. The plaintiff has not relied upon any other part payment in respect of the first mortgage before the mortgagor 's interest in the mortgaged properties was transferred, to extend the period of limitation for a suit to enforce the mortgage. But the plaintiff relied upon the sale of the mortgagor 's interest at a Court auction and his dispossession as furnishing a fresh cause of action for enforcement of the mortgage. It was urged that by the covenants in the mortgage deed dated June 14, 1922, a usufructuary mortgage was created on the mortgagor 's interest in Mauza Bahaldih, and by the attornment made pursuant to paragraph 7 of the mortgage, the mortgagor must be deemed to be in possession till the mortgagor 's interest in that property was sold, and under section 68(1) (b) of the Transfer of Property Act dispossession of the mortgagee from Mauza Bahaldih by virtue of the sale under the money decree passed against the mortgagor, a cause of action accrued to the mortgagee to enforce the mortgage and the plaintiff 's suit filed within twelve years from the date of dispossession was within time. A suit to enforce a mortgage is governed by article 132 of the limitation Act and has to be filed within twelve years from the date on which the money sued for became due, unless the period of limitation so prescribed. is extended in the manner provided by Part III of the limitation Act. Dispossession of the mortgagee is not one of the grounds prescribed by the Act for extension of the time prescribed for filing a suit. Section 68 of the Transfer of Property Act confers a right upon the mortgagee to sue for the mortgage money in four different classes of cases and no others. These classes are (a) where the mortgagor binds himself to repay the mortgage money : (b) where, by any cause other than the wrongful act or default of the mortgagor or mortgagee, the mortgaged property is wholly or partially 645 destroyed or the security is rendered insufficient within the meaning of section 66, and the mortgagee has given the mortgagor a reasonable opportunity of providing further security enough to render the whole security sufficient, and the mortgagor has failed to do so ; (c) where the mortgagee is deprived of the whole or part of his security by or in consequence of the wrongful act or default of the mortgagor ; (d) where the mortgagee being entitled to possession of the mortgaged property, the mortgagor fails to deliver the same to him, or to secure the possession thereof to him without disturbance by the mortgagor or any person claiming under a title superior to that of the mortgagor. " The section does not deal with the period of limitation for filing a suit, or extension of the period prescribed by the Limitation Act for filing a suit. The right conferred by section 68 is again not a right to enforce the mortgage but a right to sue for the mortgage money on the personal covenant or to claim compensation when the mortgagee is deprived of his security. A suit for enforcement of the personal covenant to pay the mortgage money when the mortgagor has bound himself to repay the same is governed by article 116 of the Limitation Act. Similarly the right to sue where the mortgagee is deprived of the mortgage security or where he is not secured in his possession of the mortgaged property or where possession is not delivered to him as agreed, the claim maintainable by the mortgagee is one for compensation and the period of limitation for a suit to recover the mortgage money is governed by article 120 of the Limitation Act from the date of destruction or deprivation of the mortgage security or possession and not from the date when the mortgage money is repayable : Unichaman vs Ahmed. (1) Assuming therefore that (1) I.L.R. 646 by the two deeds the mortgagees were placed in possession of the right to recover royalty in respect of Mauza Bahaldih, and that the sale of that property in enforcement of the decree of a Civil Court constituted deprivation of the security or disturbance of their possession by the creditors of the mortgagor, dispossession having taken place in 1937 the suit filed on July 12, 1946, regarded as one to enforce the claim to recover the mortgage money under section 68 of the Transfer of Property Act was barred by the law of limitation. This appeal will therefore be partially allowed. The decree passed by the High Court will be set aside and there will be a decree in favour of the plaintiff only in respect of the mortgage dated August 27, 1922. The trial Court will draw up an appropriate decree in that behalf. The plaintiff 's appeal will fail in respect of the mortgage dated June 14, 1922. The plaintiff will pay the costs of the fourth defendant who alone has defended this appeal. The plaintiff will be entitled to her costs in respect of the mortgage dated August 27, 1922, from the original mortgagor 's heirs and the transferees in interest of the property which was the subject matter of the said mortgage. Appeal partly allowed.

One Rajkumar Singh was the proprietor of three properties A,B and C. He borrowed a loan from Rabindra Nath and mort gaged properties A and B and by the deed of mortgage undertook personal liability to pay the dues and agreed that in default of payment by the due date the mortgagee do recover his dues by sale of properties A, B and C. He created a second mortgage t secure another sum borrowed from Sasindra Nath and Indra Nath stipulating that he would repay the loan on or before a fixed date, and further stipulating that the mortgagees may receive royalty from the terms of property C. Five years later he assigned his interest in property A and about three months thereafter he assigned his interest in property Subsequent to this assignment an endorsement of part payment was recorded on the first mortgage deed. The mortgagor 's right title and interest in property C were sold at a court auction and the purchaser took possession of that property. But before this date the mortgagor had made another part payment and an endorsement was made to this effect on the mortgage bond. Sometime later the appellant obtained assignments of the rights of the mortgagees under the mortgage deeds and filed a suit for a decree enforcement of the two mortgages by sale of the mortgage properties. This suit was filed more than twelve years after t date on which the mortgage amounts became payable. The trial court rejecting the pleas of limitation raised by t defendants decreed the suit. On appeal by the fourth defend the High Court reversed the decree and dismissed the suit. Held: (i) The High Court was in error in holding that t mortgagor 's interest in properties A & B only was mortgaged. (ii) A mortgagor whose interest in the equity of redemption transferred by assignment sale or otherwise to another person not a "person liable to pay the debt" within the meaning of section of the Limitation Act. Part payment in the mortgagor a transfer or assignment of his interest in the mortgaged property will not therefore extend the period of limitation under section 20 of the Limitation Act. Pavai vs Palanivela Goundan I.L.R. 636 (iii) The right conferred by section 68 of the Transfer of Property Act is not a right to enforce the mortgage but a right to sue for the mortgage money on the personal covenant or to claim compensation when the mortgagee is deprived of his security. A suit for enforcement of the personal covenant in such a case is governed by article 116 of the Limitation Act, 1908 and a suit for enforcement of a claim for compensation is governed by article 120 of the Act. Unichaman vs Ahmed, I.L.R.

: Criminal Appeal No. 90 of 1981. From the Judgment and order Dated 7th August 1980 of the High Court of Punjab and Haryana at Chandigarh in Crl. Appeal No. 909 of 1979. Prem Malhotra for the Appellant. K.G. Bhagat and R.N. Poddar for the Respondent. The Judgment of the Court was delivered by BAHARUL ISLAM, J. The question for consideration in this appeal by special leave is whether a person under 16 years of age and accused of an offence under section 302, Penal Code can get the benefit of the Haryana Children Act, 1974 (hereinafter 'the Act '). The undisputed facts are that the appellant along with three others was convicted of the offence of murder and sentenced to imprisonment of life by the Sessions Judge. The appeal was dismissed by the High Court. The appellant then filed an application for special leave to appeal under Article 136 of the Constitution. Leave was 688 granted confined to the question of the applicability of the Act to his case. It is also not disputed that the appellant was less than 16 years at the time he first appeared before the Trial Court. He was thus a 'child ' within the meaning of that term under clause (d) of section 2 of the Act. Mr. Prem Malhotra, learned counsel appearing for the appellant, submitted that in view of Section 5 of Criminal Procedure Code, 1973 (hereinafter called 'the Code '), the appellant would get the benefit of the Act; while on the other hand, Mr. Bhagat appearing for the State, relying on section 27 of the Code submitted that an offence punishable with death or imprisonment for life would not be triable under the Act. There is a decision of this Court on the point in the case of Rohtas vs State of Haryana reported in ; , that held the trial of a child under the provisions of the Act was not barred. In that case, however, it appears, section 27 of the Code was not brought to the notice of the Court. In that view of the matter, the Bench consisting of two members including one of us (Baharul Islam, J.) before whom this appeal came up for hearing referred it to a larger Bench, in order to avoid possible conflict of decisions. This is how this appeal came up for hearinbefore this Bench consisting of three members. Mr. Malhotra submits that section 5 of the Code leaves special and local laws unaffected by the provisions of the Code and that, therefore, the Act remains wholly intact. On the other hand, Mr. Bhagat 's submission is that all offences are triable under the Act by reason of the provision of section 27 of the Code so long as they fall within the category of offences "not punishable with death or imprisonment for life. In the Act, 'child ' has been defined as meaning a boy who has not attained the age of sixteen years or a girl who has not attained the age of eighteen years. 'Delinquent child ' has been defined as meaning a child who has been found to have committed an offence. Apart from procedural differences in the Act and the Code, for the trial of a child for murder, the outstanding difference is that the trial of the child under the Code may end in the sentence of death or imprisonment for life while a child cannot be sentenced to death or imprisonment for life under the Act. In order to better appre 689 ciate the differences, it is necessary to refer to some of the salient A provisions of the Act. Sub section (1) of section 4 provides for the constitution of a children 's court. It provides that notwithstanding anything contained in the Code of Criminal Procedure, 1898 (hereinafter the 'Old Code '), the State Government may constitute one or more children 's courts for exercising the powers and discharging the duties conferred or imposed on such court in relation to delinquent children under the Act. Sub section (3) of section 5 provides that a person may be appointed as a member of the Board or as a magistrate in the children 's court only where he has in the opinion of the State Government, knowledge of child psychology and child welfare. Sub section (1) of section 6 of the Act provides that where a Board or a children 's court has been constituted for any area, such Board or court shall, notwithstanding anything contained in any other law for the time being in force but save as otherwise expressly provided in the Act, have power to deal exclusively with all proceedings under the Act relating to neglected children or delinquent children, as the case may be. Section 8 provides for establishment of children 's homes, section 9 for Special Schools, section 10 for observation Homes and section 11 for the establishment of Aftercare organisations. Section 17 provides for the bail and custody of delinquent children. It provides that a child accused of any non bailable offence, notwithstanding anything contained in the old Code or in any other law for the time being in force be released on bail with or without surety unless such release defeats the purpose of the Act. Section 19 provides that the children 's court shall hold an inquiry against the child charged with an offence in accordance with the provisions of section 37 of the Act and may, subject to the provisions of the Act, make such order in relation to the child as it deems fit. Section 20, inter alia, provides that where a children 's court is satisfied on inquiry that a child has committed an offence, then notwithstanding anything to the contrary contained in any other law for the time being in force, the children 's court may, if it thinks fit, (a) allow the child to go home after advice or admonition; (b) direct the child to be released on probation of good conduct and placed under the care of any parent, guardian, or other fit person on his 690 executing a bond with or without surety as the court may require for the good behaviour and well being of the child for any period not exceeding three years; and (c) make an order directing the child to be sent to a special school. Section 21 is important. It prohibits passing of certain orders against delinquent children. It provides, inter alia, that notwithstanding anything to the contrary contained in any other law for the time being in force, no delinquent child shall be sentenced to death or imprisonment or committed to prison in default of payment of fine or in default of furnishing security. Section 23 bars the joint trial of a delinquent child with any other person who is not a child. Sub section (2) of section 23 enjoins separation of trials of a delinquent child and a person who is not a child, when they are sent up in the same case. Sub section (1) of section 65 which is important is in the following terms: "The (Central Act 8 of 1897), and sections 29B 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. " Section 29B of the old Code is equivalent to section 27 of the Code. Section 399 of the old Code provided for confinement of the delinquent children in reformatories after conviction instead of sending them to prison. It may be mentioned that there are similar provisions in the central (Act LX of 1960) which is applicable to the Union Territories only. Section 22 of this Act is in pari materia with section 21 of the Haryana . A perusal of the above and other provisions of the Act and those of the central shows that the procedure for trial, conviction and sentence under the Children Acts are simple, humane and by courts manned with persons with knowledge of child psychology and child welfare; but not so under the Criminal Procedure Codes of 1898 and 1973. The intention of the State Legislature of Haryana and of the 691 Parliament in enacting the Children Acts was to make provisions for trial of delinquent children and dealing with them in accordance with such procedures, so that the delinquent children do not come in contact with accused persons who are not children and but are hardened criminals. The purpose undoubtedly was to reclaim delinquent children and rehabilitate them in such a way that they become useful citizens later in life. It may be mentioned at this stage that the Act came into force on March 1, 1974 while the Code of Criminal Procedure, 1973 came into force on April 1, 1974. If there be any conflict between any provisions of the Act and the Code, in view of Article 254(1) of the Constitution, the provision of the Act repugnant to any provision of the Code will be void to the extent of repugnancy. It was not the contention of Mr. Bhagat appearing for the State that the Act was bad for lack of legislative competence of the State Assembly or for any other reason. The sheet anchor of his submission was section 27 of the Code of 1973. Let us now set out the relevant provisions of the Code of Criminal Procedure Code, 1973 with which we are directly concerned. Section 4 reads: "(1) All offences under the Indian Penal Code shall be investigated, inquired into, tried, and otherwise dealt with according to the provisions hereinafter contained. (2) All offences under any other law shall be investigated, inquired into, tried, and otherwise dealt with according to the same provisions, but 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. " Section 5 reads: "Nothing contained in this Code shall, in the absence of a special 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. " 692 Section 27 reads: "Any offence not punishable with death or imprisonment for life, committed by any person who at the date when he appears or is brought before the Court is under the age of sixteen years, may be tried by the Court of a Chief Judicial Magistrate, or by any Court specially empowered under the , or any other law for the time being in force providing for the treatment, training and rehabilitation of youthful offenders." Putting emphasis on the expressions, "in the absence of any specific provisions to the contrary", occurring in section 5, Mr. Bharat submits that section 27 is the specific provision to the contrary and as such this provision shall affect the Haryana which is a local law for the time being in force. We are unable to accept the submission. As it has been pointed out above, the purpose of the Haryana Legislature as well as of the Parliament in enacting the Haryana and the Central (Act LX of 1960) respectively was to give separate treatment to delinquent children in trial, conviction and punishment for offences including offences punishable with death or imprisonment for life. In our opinion, section 27 is not 'a specific provision to the contrary ' within the meaning of section 5 of the Act; the intention of the Parliament was not to exclude the trial of delinquent children for offences punishable with death or imprisonment for life, inasmuch as section 27 does not contain any expression to the effect "notwithstanding anything contained in any passed by any State Legislature". Parliament certainly was not unaware of the existence of the Haryana coming into force a month earlier or the Central coming into force nearly fourteen years earlier. What section 27 contemplates is that a child under the age of 16 years may be tried by a Chief Judicial Magistrate or any court specially empowered under the . It is an enabling provision, and, hl our opinion, has not affected the Haryana in the trial of delinquent children for offences punishable with death or imprisonment for life. Criminal Procedure appears in Item 2 of the Concurrent List of the Seventh Schedule of the Constitution. One of the circumstances under which repugnancy between the law made by the State and the law made by the Parliament may result is whether the provisions of a Central Act and a State Act in the Concurrent List 693 are fully inconsistent and are absolutely irreconcilable. In the A case in hand as we have shown that the relevant provisions of the Code and the Act can co exist. Their spheres of operation are different. Mr. Bhagat in support of his contention has relied on a Full Bench decision of the Madhya Pradesh High Court reported in The Full Bench of three judges considered the jurisdiction of the Madhya Pradesh Bal Adhiniyam, 1970 (15 of 1970) to try a juvenile offender for offences punishable with death or imprisonment for life. There was a difference of opinion. The view of the majority was that the juvenile courts constituted under the Madhya Pradesh Bal Adhiniyam has exclusive jurisdiction to try a delinquent child (a person under 16 years of age for all offences except those punishable with death or imprisonment for life even after the commencement of the Code of Criminal Procedure, 1973 (Act 2 of 1974), while the minority view of Verma J. was to the contrary. With respect, the majority view is erroneous. Verma J. has observed as follows: "The only question before us is whether the provisions of the New Code have brought about any change in this position. There can be no doubt that if there is an irreconcilable conflict between the provisions of the New Code and those of the Bal Adhiniyam, then the New Code being the later Central enactment it will supersede Bal Adhiniyam the earlier State enactment to the extent of repugnancy by virtue of Cl. (1) of article 254 of the Constitution. The real question, therefore, is whether there is any such repugnancy between the two enactments so as to attract article 254. It is equally clear that in case there is no such repugnancy and the relevant provisions of the two enactments are capable of co existence, then article 254 would not be attracted, and the provisions of the Bal Adhiniyam conferring exclusive jurisdiction on the Juvenile Courts to try all offences including those punishable with life imprisonment or death would continue to operate. Such a conclusion is supported also by the fact that the Bal Adhiniyam is a special local Act while the New Code is a general enactment applicable throughout the country on account of which the special Local Act would apply within this State in preference to the general law on the subject. It is in this light that the question has to be examined with a view 694 to determine whether there is any such irreconcilable conflict so as to attract article 254 of the Constitution. This is the real question for decision." He has held: "Applying the tests indicated by the settled principles. I have no hesitation in holding that there is no real conflict between the provisions of the New Code, particularly section 27 thereof, and the provisions of the Bal Adhiniyam. In short, the provisions of the New Code clearly save any special or local law like the Bal Adhiniyam and section 27 of the New Code is merely an enabling provision which does not express any contrary intention to undo the saving provided in section 5 of the New Code. There being thus no conflict or repugnancy, the question of article 254 of the Constitution being attracted does not arise. " With respect, Verma J. has expressed the correct opinion. As a result of the foregoing discussions, we allow the appeal, set aside the conviction and sentence imposed upon the appellant and quash the entire trial of the appellant. We direct that the appellant shall be dealt with in accordance with the provisions of the Haryana . It is a pity that the point urged before us was not urged in any of the Courts below. S.R. Appeal allowed.

Allowing the appeal, the Court. ^ HELD: 1. The trial of a chid under the provisions of the Haryana Children Act, 1974 for the offence of murder was not barred. The appellant here was a child within the meaning of that term under clause (d) of section 2 of the Act. [689 A, C] 2. A perusal of section 22 of the Central (Act LX of 1960) which is in pari materia with section 21 of the Haryana and other provisions of the State and Central Children Acts shows that the procedure for trial, conviction and sentence under the Children Acts are simple humane and by Courts manned with persons with knowledge of child psychology and child welfare; but not so under the Criminal Procedure Codes of 1898 and 1973. The intention of the State Legislature of Haryana and of the Parliament in enacting the Children Acts was to make provisions for trial of delinquent children and dealing with them in accordance with such procedure so that the delinquent children do not come in contact with accused persons who are not children and but are hardened criminals. The purpose undoubtedly was to reclaim delinquent children and rehabilitate them in such a way that they become useful citizens later in life. [691 G H, 692 A B] 3:1. The purpose of the Haryana Legislature as well as of the Parliament in enacting the Haryana and the Central respectively was to give separate treatment to delinquent children in trial, conviction and punishment for offences including offences punishable with death or imprisonment for life [693 C D] 3:2. Section 27 of the Criminal Procedure Code, 1973 is not 'a specific provision to the contrary ' within the meaning of section S of the Code the intention of the Parliament was not to exclude the trial of delinquent children for offences punishable with death or imprisonment for life, inasmuch as section 27 does not contain any expression to the effect "notwithstanding anything contained in any passed by any State Legislature". Parliament 687 certainly was not unaware of the existence of the Haryana coming into force a month earlier or the Central coming into force nearly fourteen years earlier. What section 27 contemplates is that a child under the age of 16 years may be tried by a Chief Judicial Magistrate or any court specially empowered under the . It is an enabling provision and has not affected the Haryana in the trial of delinquent children for offences punishable with death or imprisonment for life. [693 C, D G] 4:1. If there be any conflict between any provisions of the Act and the Criminal Procedure Act, in view of Article 254(1) of the Constitution, the provision of the Haryana repugnant to any provision of the Criminal Procedure Code will be void to the extent of repugnancy [692 B C] 4:2. Criminal Procedure appears in Item 2 of the Concurrent List of the Seventh Schedule of the Constitution. One of the circumstances under 'which repugnancy between the law made by the State and the law made by the Parliament may result is whether the provisions of a Central Act and a State Act in the Concurrent List are fully inconsistent and are absolutely irreconcilable. In the case in hand the relevant provisions of the Criminal Procedure Code and the Haryana can co exist. Their spheres of operation are different. [693 G H, 694 A] Dev Singh and 2 Ors. vs State of Madhya Pradesh, Madhya Pradesh, overruled.

Petition No. 7962 of 1977. (Application for Intervention) Civil Appeal No. 1347(N) of 1977 Shankar Das Ghosh, J. B. Dadachanji, K. J. John and Shri Narain for the Appellants in the Appeal and Opp. party in CMP. 7962/77. A. K. Sen, R. P. Bhatt, E. C. Agrawala, section section Khanduja and section Sahni for Respondents Nos. 1 6. 425 Niren De and section V. Tambvekar for the applicant/Interveners (Bharat Refineries). The Judgment of the Court was delivered by DESAI, J. This miscellaneous petition by Interveners raises a short but interesting question in the field of Company Law. Briefly stated, the facts leading to the present miscellaneous petition are that Company Petition. No. 85 of 1975 was filed by Jairam Das Gupta and others (for short 'Gupta Group ') in the Calcutta High Court under sections 397 398 of the , complaining of oppression by the majority, and praying for various reliefs. Respondents in this petition were Cosmosteels Private Limited (for short 'the Company ') and three others who would be referred to in this judgment as 'Jain Group. By an order made by the Company Judge on 21st April 1977 the Board of Directors of the Company was superseded and one Mr. Sachin Sinha, Advocate, was appointed as Administrator to discharge various functions set out in the order. The Court also appointed Mr. N. Chakraborty, a Chartered Accountant and Auditor to investigate into the accounts of the Company and one Mr. ' A. K. Dey, Engineer and Surveyor for valuation of the assets of the Company and further the Auditor and the Surveyor after investigation of the accounts and evaluation of the assets of the Company were to determine the break up value of the shares as on the date of the petition and on the determination of such break up value the Administrator was to call upon the Jain Group to purchase the shares belonging to the Gupta Group within a period of three months from the date of service of notice failing which the Administrator was directed to purchase the shares of the Gupta Group for the Company at the break up value determined as hereinabove mentioned. A further, ,direction was given that if the Company was required to purchase the shares of Gupta Group on the failure of the Jain Group, the capital of the Company would protanto stand reduced. There were also some other directions which are, not relevant for the purpose of this judgment. Against this Order made by the Company Judge, the Jain Group and the Company preferred an appeal under the Letters Patent and certain interim reliefs were sought. On an undertaking given on behalf of the Jain Group, the order superseding the Board of Directors and payment of Rs. 7 lacs to certain parties was stayed but the order directing valuation of the shares was not stayed and the proceeding for valuation was to go on. The Company was restrained by an injunction of the Court from creating any encumbrance on the assets of the Company and dealing with or disposing of its assets or spending any of its money except in usual course of business with a certain ceiling fixed. This, interim relief was modified by the order made on 25th April 1977 by which the Company was directed to carry out the order for payment of Rs. 7 lacs to the persons named in the order under appeal within a fortnight from the date of the order failing which the Administrator appointed by the learned trial Judge was to take over possession for the purpose of making payment of Rs. 7 lacs. The direction for investigation of the accounts of the Company was stayed and simultaneously the proceeding for evaluation was also 426 stayed. This order dated 25th April 1977 was, challenged in Special Leave Petition No. 2042 of 1977 preferred by the Company and the Jain Group. 3801/77 was moved on behalf of the appellants, for certain interim reliefs. This Court by an order dated 12th May 1977 granted stay of the, order of the Division Bench dated 25th April 1977 directing refund of Rs. 7 lacs by the Company and in default by the Administrator. The order of injunction granted by the learned trial Judge and confirmed by the Division Bench was kept alive subject to the same condition about not encumbering the assets of the ' Company. The appellants then sought liberty to amend the Special Leave Petition by including a prayer for special leave against the order of the learned Company Judge dated 21st April 1977 which was granted by the Court and also special leave to appeal was granted. The appeal came to be numbered as Civil Appeal No. 1347(N) of 1977. The parties settled the dispute as per the consent terms and requested this Court to make an order in terms of the consent terms. The Court accordingly made an order on 31st May 1977 disposing of the appeal in terms of the consent terms. The only term relevant for the present purpose is the one by which the Company was directed to purchase 1300 shares held by the Gupta Group. The price of the shares was to be determined by Messrs. Price Water House and Peet, Chartered Accountants and Auditors, as on the date of the filing of the petition under sections 397 398 on the basis of the existing as also contingent and anticipated debts, liabilities, claims, payments and receipts of the Company. The Chartered Accountants were to determine the value of the shares after examining accounts and calling for necessary explanations and after giving opportunity to both the groups to be heard in the matter and the determination of the value by the Chartered Accountants was to be final and binding and not open to any challenge by either side on any group whatsoever. On the value being so determined the Company had to purchase the shares and on such purchase, the share capital of the Company was to stand reduced protanto. After the appeal was thus disposed of on 31st May 1977, the interveners filed the present miscellaneous petition on 22nd August 1977 requesting the Court to permit them to intervene in the proceedings pending in Civil Appeal No. 1347 of 1977 and to postpone the purchase of shares by the Company until such time as the Company adopts proceedings in a competent Court by following the procedure laid down by the , and particularly sections 100 to 104 for reduction of the share capital. In the alternative there was a prayer for safeguarding the claims of interveners by modifying the order dated 31st May 1977. The interveners claim to be the creditors of the Company to the tune of Rs. 40 lacs. They say that the 'Cosmos Pioneer ', an Oil tanker belonged to the Company. By a Tanker Time Charter Party executed on 21st November 1972 between the Company on the one hand and Burmah, Shell Oil Storage and Distribution Co. of India Ltd., and ESSO Eastern Inc., on the other the vessel 'Cosmos pioneer, was chartered in Indian Coastal waters for carriage of petroleum products. Pursuant to this contract the vessel was loaded at Bombay Port on, 42 7 15th June. 1973 for carrying cargo to the port of Kandla. On the voyage the vessel ran aground and was stranded on 18th June 1973 and the vessel and the cargo were abandoned. Intervener No. 2 is the underwriter with whom the charterers had effected an insurance, covering the marine adventure of the aforesaid cargo and presumably on payment of the loss the underwriter has been subrogated. The interveners have filed two suits being Suit No. 729/74 by the inter vener/petitioners and another suit No. 933/76 by Bharat Refineries Ltd. and Hindustan Petroleum Corporation against the Company and the total amount sought to be recovered in the two suits comes to Rs. 40 lacs. Both the suits are pending. The interveners say that they are thus creditors of the Company and before any reduction in the share capital of the Company is effected, the creditors are entitled to notice because by the reduction they are likely to be adversely affected. There was some dispute before us whether there was any subs tance in the claims of the. interveners and whether they could be said to be creditors of the Company but for the purpose of this judgment we will proceed on the assumption that they are creditors of the Company. But even on this assumption, can it be said that the order of this Court dated 31st May 1977 directing the Company to purchase the shares of the Gupta Group and providing that consequent upon this purchase, the share capital of the Company would protanto be reduced, is bad for want of notice to the, interveners and other creditors of the Company ? Section 77 prohibits the Company from buying its own shares unless the consequent reduction of capital is effected and sanctioned in pursuance of sections 100 to 104 or section 402. This section places an embargo on the Company purchasing its own shares so as,, to become its own member but the embargo is lifted if the Company reduces its share capital protanto. It is clear that this section envisages that on purchase by a Company of its own shares, reduction of its share capital may be effected and sanctioned in either of two different modes : (i) according to the procedure prescribed in sections 100 to 104; or (ii) under section 402, depending upon the circumstances in which reduction becomes necessary. Sections 100 to 104 specifically prescribe the procedure for reduction of share capital where the Articles of the Company permit and the Company adopts a special resolution which can only become effective on thee Court according sanction to it. On the, other hand, reduction of share capital may have to be done pursuant to a direction of the Court requiring the Company to purchase the shares of a group of members while granting relief under section 402. Both the procedures by which reduction of Capital of a Company may be ' effected are distinct and separate and stand apart from each other. It would not, therefore, be correct to say that whenever it becomes necessary to reduce the capital of a Company the reduction can be brought about only by following the procedure prescribed in sections 100 to 104. There is another independent procedure prescribed in section 402 and recognised by section 77, by which reduction of the share capital of a Company can be effected. But both these 2 1146 SCI/77 428 procedures have one feature in common, namely, that there is Court 's intervention before the Company can reduce its share capital, and this is of vital importance from the stand point of creditors of the Company. Sections 100 to 104 provide a detailed procedure for reduction of share capital. Without being exhaustive section 100 mentions three modes of reduction of share capital, viz., (i) extinction or reduction of the liability on any of the shares in respect of share capital not paid up, (ii) cancellation of any paid up share capital which is lost or is unrepresented by available assets, and (iii) paying off any paid up share capital. Section 101 provides that a Company which has adopted a special resolution for reduction of share capital has to move the Court by a petition for an order confirming the reduction. A detailed procedure is prescribed which the Court should ordinarily follow before confirming the resolution. This procedure has to be followed where the proposed reduction of share capital involves either the dimunition of liability in respect of unpaid share capital or payment to any shareholder of any paid up share capital and in any other case if the Court so directs. But even in first mentioned two cases, sub section (3) confers a discretion on the Court to dispense with the procedure if the Court having regard to any special circumstances, thinks proper to do so. The procedure envisages a Est of creditors to be settled and a notice to be published which will enable the creditors whose names are included in the Est to object to the reduction and a provision has to be made in respect of dissenting creditors. Sections 397 and 398 enable the minority shareholders to move the Court for relief against oppression by majority shareholders. In a petition under sections 397 and 398, section 402 confers power upon the Court to grant relief against oppression, inter alia, by providing for the purchase of shares of any of the members of the Company by other members thereof or by the Company and in the case of purchase of its shares by the Company, the consequent reduction of the share capital of the Company. Rule 90 of the Companies (Court) Rules, 1959, provides that where an order under sections 397 and 398 involves reduction of capital, the provisions of the Act and the Rules relating to such matter shall apply as the Court may direct. The question is: whether when on a direction given by the Court, while granting relief against oppression to the minority shareholders of the Company, to the Company to purchase the shares of some of its members which would ipso facto bring about reduction of the share capital because a Company cannot be its own member, is it obligatory to serve a notice upon all the creditors of the Company ? It was conceded that the procedure prescribed in sections 100 to 104 is not required to be followed where reduction of share capital is necessitated by the direction given by the Court in a petition under sections 397 and 398. Section 77 leaves no room for doubt that reduction of a share capital may have to be brought about in two different situations by two different modes. Undoubtedly, where the Company has passed a resolution for reduction of its share capital and has submitted it to the Court for confirmation the procedure prescribed by sections 100 429 to 104 will have to be followed, if they are attracted. On the other hand, where the Court, while disposing of a petition under sections 397 and 398, gives a direction to the Company to purchase shares of its own members, a consequent reduction of the share capital is bound to ensue, but before granting such a direction it is not necessary to give notice of the consequent reduction of the share capital to the creditors of the company. No such requirement is laid down by the Act. Two procedures ultimately bringing about reduction of the share capital are distinct and separate and stand apart from each other and one, or the other may be resorted to according to the situation. That is the clearest effect of the disjunctive or in section 77. The scheme of sections 397 and 406 appears to constitute a code by itself for granting relief to oppressed minority shareholders and for granting appropriate relief, a power of widest amplitude, inter alia, lifting the ban on company purchasing its shares under Court 's direction, is conferred on the Court. When the Court exercises this power by directing a purchase of its shares by the Company, it would necessarily involve reduction of the capital of the Company. Is such power of the Court subject to a resolution to be adopted by the members of the Company which, when passed with statutory majority, has to be submitted to Court for confirmation ? No canon of construction would permit such an interpretation in which the statutory power of the Court for its exercise depends upon the vote of the members of the Company. This would inevitably be the situation if reduction of share capital can only be brought about by resorting to the procedure prescribed in sections 100 to 104. Additionally it would cause inordinate delay and the very purpose of granting relief against oppression would stand self defeated Viewed from a slightly different angle, it would be impossible to carry out the directions given under section 402 for reduction of share capital if the procedure under sections 100 to 104 is required to be followed. Under sections 100 to 104 the Company has to first adopt a special resolution for reduction of share ,capital if its articles so permit. After such a resolution is adopted winch, of necessity must be passed by majority, and it being a special resolution, by a statutory majority, it will have to be submitted for con firmation to the Court. Now, when minority shareholders complain of oppression by majority and seek relief against oppression from the Court under sections 397 and 398 and the Court in a petition of this nature considers it fair and just to direct the Company to purchase the shares ,of the minority shareholders to relieve oppression, if the procedure prescribed by sections 100 too 104 is required to be followed, the resolution will have to be first adopted by the members of the Company but that would be well nigh impossible because the very majority against whom relief is sought would be able to veto a at the threshold and the power conferred on the Court would be frustrated. That could never have been the intention of the Legislature Therefore, it is not conceivable that when a direction for purchase of shares is given by the Court under section 402 and consequent reduction in share capital is to be effected the Procedure, prescribed for reduction of share capital in sections 100 to 1 04 should be required to be followed in ,Order to make the direction effective. 430 A very serious apprehension was voiced by Mr. De that if the Court directs the Company to purchase the shares of some of its. members while granting relief against oppression, the Company would part with its funds which would jeopardise the security of the creditors of the Company and that if such a direction for reduction of share capital can be, given by the Court behind the back of the creditors, the Creditors would be adversely affected and therefore, it was contended that, even though, while giving direction under section 402 directing the Company to purchase the shares of its members, it is not obligatory upon the Court to give notice to the creditors, such notice ought to be given in the interests of the creditors. This apprehension is, in our opinion, unfounded. Even when the Court is moved to confirm the resolution for reduction of share capital under sections 100 to 104,. the Court may in its discretion dispense with the procedure prescribed in that group of sections [devide section 101(3)]. Undoubtedly, the Court would use the discretion only upon proof of special circumstances as contemplated by section 101(3), but when such discretion is used, the creditors would have no opportunity to object to the reduction. The opportunity to object would thus depend upon the Court exercising its discretion one way or the other. It may be noticed that until the Company submits its resolution for reduction of share capital to the Court, the creditors have no say in the matter and, therefore, the Court is empowered to ascertain the wishes of the creditors by following the procedure prescribed in sections 101 to 104. The object behind prescribed this procedure requiring save in special circumstances as contemplated in section 101,(3), the Court to give notice to the creditors is that the members of the Company may not unilaterally act to the detriment of the creditors behind 'their back. If such a procedure were not prescribed, the Court might, unaware of all the facts, be persuaded by the members to confirm the resolution and that might cause serious prejudice to the creditors. But such a situation would not be likely to arise in a petition under sections 397 and 398. In such a petition the Court would be better in a position to have all the relevant facts and circumstances before it and it would be the Court which would decide whether to direct purchase of shares of the members by the Company. Before giving such a direction the Court would certainly keep in view all the relevant facts and circumstances, including the interest of the creditors. Even I the petition is being disposed of on a compromise between the parties, yet the Court, before sanctioning the compromise, would certainly satisfy itself that the direction proposed to be given by it pursuant to the consent terms, would not adversely affect or jeopardise the interest of the creditors. Therefore, it cannot be said that merely because section 402 does not envisage consent of the creditors before the Court gives direction for reduction of share capital consequent upon purchase of shares of some of the members by the Company, there is no safeguard for the creditors. But quite apart from that, it is clear on the facts of this case that the apprehension of Mr. De is not well founded. The order of the Court dated 31st May 1977 clearly provides that the Chartered Accountants and Auditors will determine the value of the shares as on 431 the date of filing of the petition under sections 397 and 398 on the basis of the existing as also contingent and anticipated debts, liabilities claims, demands and receipts of the Company (underlining is ours) and for the purpose of determining the value, they will be at liberty to examine the accounts of the Company for the last five years. There fore, while ascertaining the break up value of the shares on the date of filing of the petition under sections 397 and 398, the Chartered Accountants and Auditors will have to take into account the assets of the Company as also the existing, contingent and anticipated debts, liabilities, claims, demands, etc. This would indisputably include the claims made by the interveners in the two suits filed by them to the extent to which they appear genuine and well founded. They need not, therefore, have the slightest apprehension that their interests are not safeguarded by the direction given by the Court. It must also be made distinctly clear that the order of the Court does not fix any minimum price at which the shares shall be purchased by the company. The order makes it clear that if the value of the shares is more than Rs. 65 per share, the Company will have to pay the balance and if it is less than Rs. 65 per share the Gupta Group who have to sell the shares, will have to refund the, difference between the price of the shares calculated at the rate of Rs. 65/ per share and the rate determined by the Chartered Accountants and Auditors within four weeks from the date of such determination. This pragmatic and flexible approach clearly safeguards the interests of the creditors including the interveners. There could have been a legitimate apprehension if some minimum price were fixed at which the company was bound to purchase the shares. Then it could have been plausibly argued that if such minimum price were higher than the real value of the shares, the company would have to part with some of its funds jeopardising the security of the creditors. Such not being the position, there is no scope for apprehension on behalf of the interveners that the reduction of share capital to be effected under the Court 's direction without reference or notice to creditors would adversely affect their interests. We may also point out that a right to notice by reason of any rule of natural justice, which a party may establish, must depend for its existence upon proof of an interest which is bound to be injured by not hearing the party claiming to be entitled to a notice and to be heard before an order is passed. If the duty to give notice and to hear a party is not mandatory, the actual order passed on a matter must be shown to have injuriously affected the interest of the party which was given no notice of the matter. The facts discussed above by us show that no interest of the interveners, on whose behalf we have heard Mr. De at length, has been injured by not hearing them before the order was passed. They have not shown us how the order could be different if they had been heard by issuing notices to them under the inherent powers of the Court under rule 9 of the Company (Court) Rules, 1959, even though there was no statutory duty to hear them. Hence, we hold that the order passed by this Court on 31st May 1977 is not vitiated on such a ground. 432 It was also urged that the Court was in error in making the order without notice to the Central Government. Section 400 provides. that the Court shall give notice of every application made to it under sections 397 or 398 to the Central Government and shall take into consideration the representation, if any, made to it by that Government before passing a final order under that section. It was urged that before this Court made the final order dated 31st May 1977, the record does not show that any notice was given to the Central Government and, therefore, also the order is vitiated. We see no merit in this contention. Undoubtedly, when a petition is made to the Court under Ss. 397 and 398 it is obligatory upon the Court to give notice of the peti tion to the Central Government and it would be open to the Central Government to make a representation and if any such representation is made, the Court would have to take it into consideration before passing the final order in the proceeding. But section 400 does not envisage afresh notice to be issued at the appellate stage. The present petition under sections 397 and 398 was made to the Calcutta High Court and it was not disputed that before the learned single Judge finally disposed of the petition inter alia directing purchase of shares of the Gupta Group by the Company, notice was issued to the Central Government. as envisaged by section 400. The Central Government apparently did not appear and make any representation. The matter came before this Court initially against the interim order made by the appellate Bench of the Calcutta High Court in the appeal against the order of the learned single Judge, but subsequently special leave was obtained for appealing against the order of the learned single Judge also and it was after this special leave was granted that this Court made the final order. Therefore, there was no question of issuing fresh notice to the Central Government under section 400 and the contention must be negatived. Accordingly, we find no merits in the Civil Miscellaneous Petition and it must be rejected. Before parting with this case we would like to point out that, unfortunately, though Suit Nos. 729/74 and 933/76 have been filed ' by the interveners in the High Court at Bombay as far back as 1974,the written statements in these suits have not been filed though more than 3 years have elapsed. The decision in the suits may have a bearing on the value of shares to be determined under the directions of this Court dated 31st May 1977. We, therefore, direct that Suit Nos. 729/74 and 933/76 may be expedited and they may be heard and disposed of without delay at any rate, within a period of six months.

In Appeal No. 1347(N) 1977 by special leave against the interlocutory orders dated 21 4 1977 of the Company Judge of the Calcutta High Court in the company petition No. 85/75, filed by the respondents sections 397/398 of the Companies Act, '1956, complaining of oppression by majority and praying for certain reliefs against the appellants and also the orders dated 25 4 1977 of the Division Bench against that order, this Court made an order on 31 5 1977, in terms of an agreement reached between the par ties. By one such term the company was directed to purchase 1300 shares held by the respondents petitioners. The price of the shares was to be determined by Messrs. Price Water House and Peet, Chartered Accountants and Auditors, as on the date of the filing of the petition sections 397 398, on the basis of the existing as also contingent and anticipated debts, liabilities, claims, payments and receipts of the ' company. The Chartered Accountants were to determine the value of the shares after examining accounts and calling for necessary explanations and after giving opportunity to both the groups to be heard in the matter and the determination of the value by the Chartered Accountants was to be final and binding and not open to any challenge by either side on any ground whatsoever. After such determination of the value the company has to purchase the shares, and, on such purchase, the share capital of the company was to stand reduced protanto. The order made it ;fear that if the value of the shares is more than Rs. 65/ per share, the company will have to pay the balance, and, if it is less than Rs. 65/ per share, the respondents who have to sell the shares, will have to refund the difference between. the price of the shares calculated at the rate of Rs. 65/ per share and the rate determined by the Chartered Accountants and Auditors within four weeks from the date of determination. After the appeal was thus disposed of, the interveners, claiming to be the creditors of the company to the extent of 40 lakhs, in their petition dated 22 8 1977 requested the Court (i) to permit them to be heard and (ii) to postpone the purchase of shares by the company until such time as the company adopts proceedings in a competent court by following the procedure laid down by the , particularly in Sections 100 to 104 for reduction of the share capital. In the alternative they prayed for safeguarding their interests by modifying the Court 's order dated 31 5 1977. Rejecting the petition to interfere with its order dated 31 5 1977, the Court, after hearing the interveners, HELD : (i) Section 77 envisages that, on the purchase by a company of its own shares, reduction of its share capital may be effected and sanctioned in either of two different modes : (i) according to the procedure prescribed in Sections 100 to 104; or (ii) under section 402, depending upon the circumstances in which reduction becomes necessary. [427E F] (ii) Section 77 of the prohibits the company from buying its own shares unless the consequent reduction of capital is effected and sanctioned in pursuance of Sections 100 to 104 or Section 402. It places an embargo on the company purchasing its own shares so as to become its own member, but the embrago is lifted, if the company reduces its share capital protanto. [427E] 423 (iii) Section 77 leaves no room for doubt that reduction of share capital may have to be brought about in two different situations by two different modes. Undoubtedly, where the company has passed a resolution for reduction of its share capital and has submitted it to the Court for confirmation, the procedure prescribed by Sections 100 to 104 will have to be followed, if they are attracted. On the other hand, where the Court, while disposing of a petition under Ss. 397 and 398, gives a direction to the company to purchase shares of its own members, consequent reduction of the share capital is bound to ensue, and, before making such a direction it is not always necessary to give notice of the consequent reduction of the share capital to the creditors of the company. No such requirement is laid down by the Act. The two procedures ultimately bringing about reduction of the share capital are distinct and separate and stand apart from each other; and one or the other may be resorted to according to the situation. That is the clearest effect of the disjunctive 'or ' in section 77. [428H, 429AB] (iv) Where the reduction of share capital is necessitated by directions given by the Court in it petition under sections 397 and 398, the procedure prescribed in Sections 100 to 104 is not required to be followed in order to make the direction effective. [428G] (v) It would not be correct to say that, whenever it becomes necessary to reduce the capital of a company, the reduction can be brought about only by following the procedure prescribed in Ss. 100 to 104. Sections 100 to 104 specifically prescribe the procedure for reduction of share capital where the Articles of the company permit and the company adopts a special resolution which can only become effective on the Court according sanction to it. Reduction of share capital may also take pursuant to a direction of the Court requiring the company to purchase the shares of a group of members while granting relief u/s 402. Both the procedures, by which reduction of capital of a company may be effected, are. distinct and separate and stand apart from each other. [427F H] (vi) The scheme of Ss. 397 to 406 is to constitute a code by itself for granting relief to oppressed minority shareholders and for granting appropriate relief, a power of widest amplitude, inter alia, lifting the ban on company purchasing its share under Court 's direction, is conferred on the Court. When the Court exercises this power by directing a purchase of its shares by the company, it would necessarily involve reduction of the capital of the company. Such a power of the Court is not subject to a resolution to be adopted by the members of the company which, when passed with, statutory majority, has to be submitted to Court for confirmation. No canon of construction would permit such an interpretation in which the statutory power of the Court for its exercise depends upon the vote of the members of the company. [428C E] (vii) If reduction of share capital can only be brought about by resorting to the procedure prescribed in Ss. 100 to 104, it would cause inordinate delay and the very purpose of granting relief against oppression would stand self defeated. [428E F] (viii) When minority shareholders complain of oppression by majority and seek relief against oppression from the Court under Ss. 397 and 398 and the Court, in a petition of this nature, considers it fair and just to direct the com pany to purchase the shares of the minority shareholders to relieve oppression, if the procedure prescribed by Ss. 100 to 104 is required to be followed, the resolution will have to be first adopted by the members of the company, but that would be well nigh impossible because the very majority against whom relief is sought would be able to veto it at the threshold and the power conferred on the Court would be frustrated. That could never have been the intention of the Legislature. [428F H] (ix) The object_behind prescribing this procedure requiring, in special circumstances as contemplated in Section 101(3), the court to give notice to the creditors is that the members of the company may not unilaterally act to the detriment of the creditors behind their back. If such a procedure were not prescribed, the Court might, unaware of all the facts, be persuaded by the members to confirm the resolution and that might cause, serious prejudice to the creditors. But such a situation would not be likely to arise in a petition 424 under Ss. 397 and 398. In such a petition the Court would be in a better position to have all the relevant facts and circumstances before it and it would be the Court which would decide whether to direct purchase of shares of the members by the company. Before giving such a direction, the Court Would certainly, keep in view all the relevant facts and circumstances, including the interest of the creditors. Even if the petition is being disposed ' of on a compromise between the parties, yet the Court, before sanctioning the compromise, would certainly satisfy itself that the direction proposed to be given by it pursuant to the consent terms, would not adversely affect or jeopardise the interest of the creditors. Therefore, it cannot be said that merely because section 402 does not envisage consent of the creditors before the Court gives direction for reduction of share capital consequent upon purchase of shares of some of the members by the company. there is no safeguard for the creditors. [430EH] In the instant case, there is no scope for apprehension on behalf of the interveners that the reduction of share capital to be effected under the Court 's direction, without reference or notice to creditors, would adversly affect their interests because : (1) As per the order of the Court dated 31st May, 1977 while ascertaining the break up value of the shares on the date of filing the petition under Sections 397 and 398, the Chartered Accountants and Auditors will have to take into account the assets of the company as also the existing, contingent and anticipated debts, liabilities, claims, and demands etc., as revealed in the accounts of the company for the last five years, which would indisputably include the claims made by the interveners in the two suits filed by them to the extent to which they appear genuine and well founded and. (ii) the order of the Court did not fix any minimum price at which the shares shall be purchased by the company. [431A C, D] (x) A right to notice by reason of any rule of natural justice, which a party may establish, must depend for its existence upon proof of an interest which is bound to be injured by not hearing the party claiming to be entitled to a notice and to be heard before an order is passed. If the duty to give notice and to hear a party is not mandatory, the actual order passed on a matter must be shown to have injuriously affected the interest of the party which was to be given no notice, of the matter. [431G] In the instant case, after hearing the intervener , it was found that no interest of theirs has been injured by not hearing them before the order was passed. The order passed by this Court on 31st May, 1977, is not vitiated on the ground of non issue of notices to them under the inherent powers of the Court under Rule 9 of the Company (Court) Rules, 1959, even though there was no statutory duty to hear them. [431H. 432A] (xi) Undoubtedly, when a petition is made to the Court under Ss. 397 and 398, it is obligatory upon the Court to give notice u/s 400 of the petition to the Central Government and it would be open to the Central Government to make a representation and if any such representation is made, the Court would have to take it into consideration before passing the final order in the proceeding. But Section 400 does not envisage a fresh notice to be issued at the appellate stage. [432C D] (The Court directed to expedite the suit Nos. 729/74 and 933/76 filed by the interveners in the Bombay High Court and dispose off within a period of six months).

tion (Civil) No. 426 of 1989 etc. (Under Article 32 of the Constitution of India). P. Chidambaram, K.K. Venugopal, Dushyant Dave, R. Karan jawala, Ms. Meenakshi Arora, Mrs. Manik Karanjawala (N.P.), C.S. Vaidyanathan and S.R. Setia for the Petitioners. Yogeshwar Prasad, R.S. Rana and Ashok Srivastava for the Respondents. The Judgment of the Court was delivered by SABYASACHI MUKHARJI, CJ. The challenge in these writ petitions and special leave petitions is basically to the order dated 18th January, 1989, passed by the District Excise Officer, Gaziabad, seeking to recover duties of excise on Homeodent under the Medicinal & Toilet Prepara tions (Excise Duties) Act, 1955 (hereinafter called 'the 1955 Act '), even though the product was classifiable under the Central Excises & Salt Act, 1944 (hereinafter called 'the 1944 Act ') and was, in 299 fact, assessed to duty under the said. Act between 1985 and 1988. Necessarily, the question arises as to whether, in the facts and circumstances of the case, the 1944 Act would apply or the 1955 Act would apply. The factual dispute is whether in the facts, as enumerated hereinafter, alcohol was present in Homeodent and further whether Homeodent was Homeopathic medicine or toilet preparation and further whether the same was dutiable under the 1944 Act. We must recapitulate the basic facts in the several matters involved herein. M/s. Dabur India Limited which is the petitioner in special leave petition No. 1610/89 arising out of judgment and order dated 20th December, 1988 in civil miscellaneous writ petition No. Nil of 1988 connected with civil miscella neous writ petition No. Nil of 1988 of the High Court of Allahabad, and also the petitioner in writ petition No. 426/89, is a public limited company engaged in manufacture of Ayurvedic medicaments and Allopathic medicaments along with cosmetics. It had agreed to manufacture for and on behalf of M/s. Sharda Boiron Laboratories Ltd. (hereinafter called 'the company ') being the petitioner in special leave petition Nos. 135 36/89, used to manufacture and/or produce a Homeopathic tooth paste called 'Homeodent ' out of the raw materials supplied by the company on job work basis. The petitioner states that it accordingly manufactured Homeodent during 1985 to 1988, duly paying duties of excise on Homeo dent under the 1944 Act at appropriate leviable rates and recovered the same from the company. According to the peti tioner, Homeodent did not contain alcohol but contained ingredients "mother tinctures" containing alcohol. It is stated that alcohol, due to various reasons, has a tendency to evaporate during the process of manufacture of Homeodent. It is further the case of the petitioner company that during the period from 1979 to 1988 it also manufactured certain other medicinal products containing alcohol which were classifiable under the 1955 Act. The petitioner company held at all material times licence as required under the 1955 Act to manufacture these products. The State Excise authorities enforcing the provisions of the Act had perma nently posted an Inspector as also a peon in the factory of the petitioner where these dutiable products were manufac tured. The bonded manufactory in which these products were manufactured was under lock and key of the said officers, according to the petitioner. The activities of the petition er, the petitioner asserts, were clearly within the knowl edge of the State excise authorities for over a considerably long period. During the period from 1985 1988, the company supplied 300 to the petitioner amongst other ingredients, "mother tinc tures" under BM 9 forms, stating clearly that such mother tinctures were intended to be used in manufacture of Homeo dent in the factory of the petitioner. These BM 9 forms, according to the petitioner, were filed with the State excise authorities regularly. Therefore, the petitioner asserts that the State excise authorities were aware of the manufacture of Homeodent by the petitioner and the activity of the company in getting the same manufactured in the factory of the petitioner out of mother tinctures. However, the State excise authorities did not object to the same nor did they call upon either the petitioner or the company to pay duty under the 1955 Act. On 1st January, 1985, the petitioner states, the peti tioner filed classification list classifying Homeodent under the Act of 1944, declaring therein the ingredients of Homeo dent. On 17th January, 1985, the classification list filed by the petitioner on 1.1. 1985 was approved finally and Homeodent was held to be classifiable under the Act of 1944. On 31st August, 1987 the Assistant Collector of Central Excise passed an order which was an appealable one classify ing Homeodent under the Act of 1944. The petitioner asserts that this order had subsequently been upheld by the Collec tor of Central Excise (Appeals), New Delhi, on an appeal filed by the company. However, on 18th January, 1989 the Superintendent of State Excise, Bulandshahr visited the factory of the petitioner and after inspecting the same, enquired about Homeodent. It is the case of the petitioner that it had explained that Homeodent was classified under the Act of 1944 in view of the orders passed by the Central Excise authorities. However, it is stated that the Superin tendent of State Excise, Bulandshahr called upon the peti tioner to furnish details in respect of Homeodent including its ingredients and total value of clearances etc. On 20th January, 1988 the petitioner addressed a detailed letter to the Superintendent of State Excise, Bulandshahr, explaining its stand, and that duty had been paid thereon. State Excise authorities, thereafter, did not take any action against the petitioner nor did they take out samples of Homeodent tooth paste to get appropriate results as required under the Act of 1955 and the rules framed thereunder. However, on 17th March, 1988 the Superintendent of State Excise, Bulandshahr passed a demand order directing the petitioner to deposit a sum of Rs.68,13,334.20 being the alleged duty payable on 'Homeodent ' manufactured and cleared between January, 1985 and January, 1988. This order was passed without issuing any notice to show cause and, according to the petitioner, without affording the petitioner any opportunity of hearing. The petitioner on the same day sent a rep 301 resentation requesting for compliance with the principles of natural justice and disputing the claim for duty. On 18th March, 1988 the Superintendent of State Excise, Bulandshahr, modified his earlier order and confirmed the demand of duty amounting to Rs.46.67 lakhs on provisional basis. Once again the petitioner was neither served with a show cause notice nor was afforded an opportunity of personal hearing, accord ing to the petitioner. While passing either of the orders, no test result, it is asserted, was obtained to establish whether Homeodent contained alcohol or not. However, on 18th March, 1988 the petitioner deposited a sum of Rs.11.66 lakhs. The petitioners also executed a bank guarantee in favour of the District Magistrate, Ghaziabad, for a sum of Rs.35 lakhs. On 6th April, 1988 the petitioners filed an appeal before the Excise Commissioner, U.P. against the illegal orders of the District Excise Officer. The petitioners also appeared for personal hearing before the Excise Commissioner through their advocate on 23rd April, 1988. On 5th May, 1988 the Excise Commissioner, U.P., passed an order dismissing the appeal of the petitioners. However, petitioner No. 1 states that copy of the order was not served upon it. The petitioner No. 1 further asserts that without serving a copy of the order on it and without intimating whether the order had been passed or not, the District Excise Officer ap proached M/s. Grindlays Bank for encashment of the bank guarantee of Rs.35 lakhs and coerced, according to the petitioners, the bankers to encash the same forthwith. Thereafter, the petitioner moved the High Court of Allahabad against the illegal actions of the respondents. The High Court directed the authorities to serve a copy of the order and restrained the respondents from encashing the bank guarantee. It is stated that while the High Court of Allaha bad was considering the writ petition of the petitioner and had granted stay as aforesaid, the respondent District Excise officer encashed the bank guarantee of Rs.35 lakhs without even calling upon the petitioner first to pay the amount. On 13th May, 1988 the High Court of Allahabad di rected the petitioner to file a revision petition with the Central Government. A revision petition was filed along with stay application on 28th May, 1988. Thereafter, the Central Government granted stay against recovery of the balance amount of Rs.21.46 lakhs. On 22nd September, 1988 the Addi tional Secretary to the Government of India in exercise of his revisional powers allowed the revision of the petition ers and declared the orders of the District Excise Officer dated 17th and 18th March, 1988 as upheld in appeal by the Excise Commissioner as null and void having been passed in violation of principles of natural justice. Thereupon it, the petitioners state, 302 called upon the District Excise Officer and the District Magistrate to refund the amount of Rs.46.67 lakhs recovered from it by way of cash payment and encashment of bank guar antee in view of the revision order. The case of the peti tioner is that the State Excise authorities failed to grant the petitioner refund as prayed for despite the order of the revisional authorities. On 2nd November, 1988 the District Excise Officer issued a show cause notice requiring the petitioner to show cause as to why an amount of Rs.68.13 lakhs be not recovered from it in respect of Homeodent manufactured and cleared during January, 1985 to January, 1988. In December, 1988 the petitioner moved the High Court of Allahabad under Article 226 of the Constitution of India, inter alia, praying for a writ of mandamus for quashing and setting aside the show cause notice dated 2.11.1988 and for refund of duty amounting to Rs.46.67 lakhs. On 20th Decem ber, 1988 the High Court of Allahabad dismissed the writ petition filed by the petitioner. It is stated that on 10th January, 1989 this Court upon special leave petitions Nos. 135 36/89 filed by the company was pleased to issue notice and directed stay of operation of the notice of demand. Thereafter, on 20th January, 1988 the District Excise Offi cer directed the petitioner to appear for personal hearing in response to the show cause notice. The petitioner ap peared before the District Excise Officer without prejudice and submitted a detailed reply to the show cause notice and also contended during personal hearing that the notice was required to be withdrawn. In its reply the petitioner cate gorically stated that the reply was being submitted without prejudice to petitioner 's right to move this Court by way of a special leave petition. Thereafter, the petitioner moved this Court on 21st January, 1989. It is, therefore, neces sary to refer to the judgment and order dated 20th December, 1988 in civil writ petition No. Nil/88 connected with civil miscellaneous writ petition No. Nil/88 in the High Court of Allahabad. It appears that M/s. Dabur India Limited had filed the said writ petition in the High Court challenging the show cause notice dated 2nd November, 1988 by the District Excise Officer. Ghaziabad. Another writ petition being writ peti tion No. 1160/88 which is the subject matter of special leave petition Nos. 135 36/89 was filed by M/s. Sharda (the company) for quashing the order of the Central Government dated 3.6.1988 which was annexure 1 to the writ petition. These two were disposed of by the said judgment. The ques tion that was mainly involved therein was that the conten tion of the petitioner that the Homeodent did not contain alcohol, though one of the ingredients of such preparation was mother tincture containing alcohol and the same was assessable under Item 14FF of the 1944 Act. The Asstt. 303 Collector of Central Excise, Ghaziabad, had taken the view that the Homeodent was classifiable Under sub heading No. 3306 02 of the Chapter 33 of the and on that duty @ 15% ad valorem was leviable. This duty computed at the said rate by the Central Excise author ities was paid, according to the petitioner, on the goods manufactured from 1.1.1986. On 18th January, 1988 the Dis trict Excise Officer made a surprise inspection of the units of the petitioner and when it was revealed that the Homeo dent tooth paste manufactured by M/s. Dabur was toilet preparation containing alcohol within the meaning of Section 2(k), read with Item 4 of the Schedule, referred to in section 3 of the 1955 Act, and was therefore assessable to duty @ 100% ad valorem. The District Excise Officer, Ghazia bad, therefore had caused a common notice dated 17.3.1988 to be served on the petitioner requiring it to pay duty aggre gating to Rs.68,13,334.20 under the provisions of the 1955 Act on such goods manufactured from 1st January, 1985 till the date of notice. As mentioned hereinbefore, against this notice some representation was made by the petitioner to the District Excise Officer and thereupon the petitioner was directed to deposit provisionally the excise duty to the tune of Rs.46,55,45 1.45 under the 1955 Act and the same was deposited by the petitioner. Such demand wad. challenged by M/s. Dabur in appeal before the Excise Commissioner. The Excise Commissioner affirmed the order of the District Excise Officer and dismissed the appeal. No appeal was filed by M/s. Sharda against the demand notice of excise duty under the 1955 Act. However, both the petitioners approached the Central Govt. in revision under Rule 128 of the 1956 Rules. The revision of M/s. Dabur was disposed of by the Central Govt. and the result was communicated by the Addi tional Secretary to the Govt. of India by the order dated 22.9.1988. The contention of M/s. Dabur that the demand was raised on it without any opportunity of being heard and in violation of principles of natural justice, was accepted and a direction was given that the case be adjudicated upon de nove after giving a show cause notice and proper opportunity of being heard to the party. The revision filed by M/s. Sharda was also not entertained by the Central Government on the ground that a right of appeal was vested in M/s. Sharda which could have been exercised upto 17.6.1988, which was not done. However, pursuant to the order of the Central Govern ment, the District Excise Officer issued the impugned show cause notice dated 2.11.1988 to the petitioners jointly, validity of which was challenged by them in the writ peti tion and the other writ petition I. as been filed by M/s. Sharda only to challenge the order of the Central Govt. refusing 304 to entertain its revision. The learned Judges in the judg ment under appeal noted that the petitioner did not advance any argument on the merits of the question; whether Homeo dent tooth paste is assessable to duty under the 1944 Act or under the 1955 Act and rightly so because that involved a factual scrutiny which could hardly be gone into by the High Court. The High Court was of the opinion that the question, whether Homeodent tooth paste is sans alcohol, cannot be adjudicated upon under the extra ordinary writ jurisdiction. On behalf of the petitioners before the High Court two contentions were raised. Firstly that the Central Govt. having set aside the order of District Excise Officer, Ghaziabad, whereunder excise duty to the tune of Rs.46,66,451.45 was paid, there was no justification for the respondents to retain that amount thereafter and a writ of mandamus be issued against the respondents directing them to refund this amount; and secondly, that under Rule 11 of the 1956 Rules when duties are short levied, a written demand by the proper officer being made within six months from the date on which the duty was paid, the short fall could be recovered. The submission was that no duty can be recovered for the period anterior to six months to be reckoned from the date of payment of duty. It was, therefore, urged that the show cause notice was invalid, inasmuch as the District Excise Officer, Ghaziabad, had exceeded the jurisdiction in having recovered the duty beyond limitation. The High Court addressed itself to the question whether Article 226 of the Constitution of India was a proper reme dy. We are not really concerned with this question. The High Court, however, came to the conclusion that both the 1944 & 1955 Acts operate in different fields and there is no over lapping between the two. If the Homeodent tooth paste is found to be assessable to duty under the 1955 Act then it will not amount to review of the order of the Central Excise authorities. It was emphasised before the High Court that adjudication by the Central Excise authorities does not stop the State Excise authorities from considering the case under the provisions of the 1955 Act. Both the Acts are mutually exclusive and the authorities thereunder are fully empowered to consider the assessability separately, according to the High Court. The High Court came to the conclusion that where the parties fully acquiesced with the matter and subjected themselves to the statutory procedure, no action should be allowed to be taken under Article 226 of the Constitution unless the case is patently without jurisdiction. The orders having been made under the statutory provisions, the Court should be loath to interfere under Article 226 of the Con stitution of India. It was emphasised by the High 305 Court that once the parties choose the statutory procedure they must to the logical end. The Central Govt. had directed the State Excise authorities to adjudicate the case de novo and, therefore, the District Excise Officer, Ghaziabad, had no option but to issue show cause notice. So the show cause notice dated 22nd November, 1988 was jointly given to the petitioner pursuant to the direction of the Central Govern ment much after the orders had been passed initially or in appeal. Therefore, the common show cause notice to the parties cannot, according to the High Court, be characte rised as a sparking point and from the backdrop of the case stated above, it is amply clear that the Excise authorities had not assumed jurisdiction to proceed against the peti tioner for the first time by way of a show cause notice dated 2nd November, 1988 rather it had been issued at much subsequent stage pursuant to the direction of the Central Government. The High Court came to the conclusion that the show cause notice having been issued in accordance with the directions of the Central Govt. in the revisional jurisdic tion which the petitioner itself subjected to, cannot be assailed under Article 226 of the Constitution. So this show cause notice dated 2nd November, 1988 cannot be equated with the showcause notice given at the initial stage to assume jurisdiction in the matter. The High Court also came to the conclusion that no writ can be issued in favour of the parties who remain sitting on the fence and took a chance of the proceedings taken up under the statutory provisions going in their favour. The High Court held the petitioner who had resorted to statutory remedies on its own could not be permitted to take recourse under Article 226 of the Constitution of India, in the event of their having become successful under the former. Coming to writ petition No. 1160/88 wherein the order of the Central Government refusing to entertain the revision had been challenged. The Central Government had refused to entertain the revision on the sole ground that the right of appeal that vested in M/s. Sharda could not be exercised thereby. The High Court, however, came to the conclusion that the case of M/s. Dabur was that it is manufacturing Homeodent tooth paste on job basis under the loan licence of M/s. Sharda as per the specifications and control and the raw material of the latter but factually both the petition ers are different entities under the law and therefore each petitioner had to pursue its own remedy. Therefore, on an analysis of the material, the High Court found that there was nothing to interfere with the order of the Central Government. Therefore, the questions that fall for determination are firstly, 306 whether the High Court was justified in dismissing the writ petition of the petitioner on the ground of alternative remedy particularly when the writ petition challenged the actions of the respondents in seeking to levy and recover duties of excise under the 1955 Act as being without juris diction and/or without authority of law. The next question that arises is whether the High Court was justified in dismissing the writ petition challenging particularly in two sets as has already been subjected to duty of excise under the 1944 Act. The next question that fails for consideration is whether the High Court was justified in dismissing the writ petition of the petitioner which had prayed for refund of duties of excise amounting to Rs.46.67 lakhs illegally recovered from the petitioner on Homeodent tooth paste under the 1955 Act in pursuance of the order which was declared null and void in revision by the Central Government. It is also necessary to consider whether the High Court was justi fied in dismissing the writ petition of the petitioner particularly when it challenged levy and recovery of duty under 12 of the 1956 Rules framed under the 1955 Act when the said rules have already been declared to be invalid and without jurisdiction by a Division Bench of the Madras High Court in the case of Citadel Fine Pharmaceuticals Pvt. Ltd. vs D.R.O., [1973] Madras Law Journal p. 99. The next main question requiring consideration is wheth er the respondents were acting within their jurisdiction while levying duty of excise on Homeodent under the 1955 Act when in the manufacture of Hemeodent alcohol had not been used as a raw material but mother tinctures containing alcohol had been used and particularly when at the final stage of manufacture Homeodent did not contain any trace of alcohol. The question that has really to be determined in this case is, whether firstly Homeodent was classifiable under the 1944 Act or 1955 Act and who will determine that; and secondly, which Act will prevail in the facts and circum stances of the case. In this connection, it may be mentioned that M/s. Sharda had applied for a licence and was granted a loan licence to manufacture tooth paste as per the provisions of Drugs & Cosmetics Act, 1944 and the Rules framed thereunder. The said licence was granted under rule 139B and was in Form 31A for manufacture of cosmetics. Subsequently, Homeodent was envisaged by the Drug authorities as a homeopathic medica ment and licence had been granted accordingly. It is the case of the petitioner that tooth pastes were manufactured by the petitioner company for and on behalf of the loan licensee from the 307 following chemicals and ingredients: "Potassium Chlorate BPC 73 Sodium Benxoate IP Sodium Flou ride BP Plantago Offionle Mt HP 1 Cochloric Armorocie MT NP 1 Cochloric Officincie MT HP 1 Phytolecca Decandra NT Methyl Parehudron Benxoate IP Prophyle Paraphydroxy Benxoate IP Calcium Carbonate IP Sodium Alginete USP NF 1980 Titenium Oxide BP Precipitate Silico USP NF Liquid Sodium Socicylate 15 381: 1972 Sodium Leuryle Sulphate (High Purity) Saccharine IP" It is further to be noted that the final product i.e. the tooth paste is a homeopathic semi solid compound in which mother tincture was completely absent or present in fractionally negligible quantity, depending upon the manu facturing conditions, vacuum and the temperature. It is the case of the petitioner that at the time the tooth paste is manufactured, packed and is ready for delivery, the alcohol would diminish completely and would not be left at all. Nor can it be so traced upon any chemical testing. In this connection, the petitioner sought to crave leave to several documents and some test examination reports. According to the Laboratory test which the petitioner produced, the alcohol content was absent in the nine samples sent by the loan licensee. It was further stated that the Govt. of India had issued instructions vide letter dated 19th December, 1957 requiring for determination of alcohol content of any product the samples must be sent to specified laboratories. Despite the said position, it is the case of the petitioner that the Excise authorities acting under the 1955 Act, had never withdrawn any sample of tooth paste manufactured by the petitioner within their knowledge between 1985 and 1988 a sufficiently long period during which their inspector in charge was physically present in the factory of M/s. Sharda and had not only access but knowledge of the activities including the manufacture of the said tooth paste. The Superintendent of Excise, Bulandshahr, visited the factory of the petitioner company on 18th January, 1988 and after inspecting the same enquired about the exciseability of Homeodent tooth paste. The petitioner 's officers explained that Homeodent was classified under the 1944 Act and the duty had been paid accordingly. Subsequently, the Superin tendent (Excise) called upon the petitioner to furnish details about the quantity and value of Homeodent manufac tured and cleared between 1985 and 1988. In pursuance there of, tile petitioner replied vide his letter dated 20th January, 1988 and in 308 details explained the reasons by Homeodent was not liable to duty under the 1955 Act. In pursuance of the reply of the petitioner no action was taken and the petitioner assumed that the matter had been closed. The petitioner has given detailed episodes of harassment. The main point that the petitioner seeks to emphasis in this case is that the High Court ought to have appreciated that the petitioner 's product Homeodent tooth paste having been subjected to duty under the provisions of the 1944 Act, the question of levying and recovering duty under the 1955 Act did not and cannot arise. Therefore, the impugned ac tions of the respondents were required to be set aside by issuing appropriate writ of mandamus. The High Court was, therefore, in error, according to the petitioner, in dis missing the writ petition without appreciating this conten tion. The High Court ought to have appreciated that the petitioner was not seeking to circumvent the alternative remedy provided under the Act but in view of the conflicting claims of the Central and State Excise authorities seeking to classify Homeodent tooth paste under the respective Acts of 1944 and 1955, the petitioner was left with no other alternative but to challenge the actions by way of writ petition under Article 226 of the Constitution. It is con tended that the High Court ought to have appreciated the actions of the State authorities were ex facie and without authority in law in so far as they sought to levy and recov er duty on Homeodent tooth paste under the 1955 Act. There fore, the petitioner was justified in challenging such actions by way of a writ petition before the High Court. It was further urged that the High Court had committed an error on the ground of alternative remedy before the High Court as also the demand raised against it could not be justified under Rule 12 beyond a period of six months as prescribed under Rule 11 particularly in view of the fact that Rule 12 as had been declared to be invalid and without jurisdiction as per the judgment of the Madras High Court. It is further contended that the High Court committed an error in dismiss ing the writ petition of the petitioner challenging the demand of duty made by the State Excise authorities amount ing to Rs.68 lakhs particularly in view of the fact that as per S.4 of the 1944 Act which is made the basis of valuation even under the Act of 1955 as per the Explanation II to the Schedule as interpreted by this Court in the cases of Union of India & Ors. vs Bombay Tyre International Ltd. etc. ; , and Asstt. Collector of Central Excise & Ors. vs Madras Rubber Factory Ltd etc. , 1 the duty liability could not exceed the sum of Rs.26 lakhs. It was further emphasised that the High Court commit ted error in not directing the State Excise authorities to refund the amount of Rs.46.67 lakhs which was recovered from 309 the petitioner under Orders dated 17/18.3. 1988 which were declared to be null and void having been passed without giving any opportunity of hearing. The Sahibabad factory of M/s. Dabur India Ltd. was set up in the year 1979. From the very beginning the petitioner had undertaken the job of manufacturing various products covered under the 1955 Act. The petitioner had obtained the necessary licence and fell under the purview of the 1955 Act. Section 6 of the 1955 Act stipulates that the Central Govt. may, by notification in the Official Gazette, provide that from such date as may be specified in the notification, no person shall engage in the production or manufacture of any dutiable goods or of any specified component parts or ingredients of such goods or of specified containers of such goods or of labels of such containers except under the authority and in accordance with the terms and conditions of a licence granted under this Act. Dutiable goods have been defined in the Act vide Clause (c) of section 2 i.e. meaning thereby the medicinal and toilet preparations specified in the Schedule as being subject to the duties of excise levied under the Act. It is stated that the State Excise authorities had posted an officer in the factory of the petitioners at Sahibabad for physical control on a part time basis. In the year 1985, an officer in the rank of an Inspector was posted at the said factory on full time basis for physical supervi sion and control. Hence, all the activities of the petition er were within the knowledge of the respondent Excise au thorities. The version of the petitioner is that on an inquiry from M/s. Sharda Bairon Laboratories Ltd. for manu facturing of Homeodent tooth paste on job work basis out of the raw material and packing materials to be supplied by the said loan licensee, M/s. Sharda, petitioner No. 1 undertook the job. The petitioner company had filed a list classifying the said Homeodent tooth paste under Tariff item 14FF of the 1944 Act as the said tooth paste did not contain any alcohol directly. The classification list was filed in the pre scribed Form and with all the particulars. It was further checked up by the Inspector Range Inspector and it was subsequently approved by the Assistant Collector, Central Excise, according to the petitioner. On 31st August, 1987 there is indeed an order of the Asstt Collector of Central Excise, Division II, Ghaziabad, stating that the tooth paste in question was classifiable under the 1944 Act and not under the 1955 Act. It has to be understood that under the 1955 Act the duties go to the State Govt. while under the 1944 Act the duties go 310 to the Central Govt. , though both these Acts are central legislations. The authorities charged with the duties under the 1944 Act are Central Govt. employees and Central Govt. authorities are different and distinct from the authorities of the State Govt. under the 1955 Act. The basic question that has to be decided is whether in such a situation who or which authority will decide if the product in question would be leviable to duty under the 1944 Act and go to the coffers of the Central Government or whether it will be leviable under the 1955 Act and the realisations go to the State Govt. In the facts and circumstances of this case, that will depend on the question whether alcohol was used as any of the ingredients in production of the product or manufacture thereof. That there was production and/or manufacture and as such excise was leviable, there is no dispute. The question is, whether in the process any ingredient was used contain ing alcohol in respect of a product which is medicinal in nature and as such would be dutiable under the 1955 Act. (Homeodent is a homeopathic preparation but it is also a tooth paste. Therefore, it is a toilet preparation. Whether or not such Homeodent would be dutiable under the 1955 Act, would depend upon whether it contained 'alcohol ' or not. The authorities charged with the duties of enforcing a particu lar Act are enjoined with the task of determining the ques tion whether alcohol is contained therein or not. It is the case of the petitioner that they had paid duties of excise on Homeodent tooth paste manufactured by it on behalf of loan licensees under the 1944 Act. The total amount of duty claimed to have been paid for the said period amounted to Rs.6,26,570.47. The petitioners rely heavily on the test certificates issued by the Homeopathic Pharmacopia Laborato ries of the Ministry of Health & Family Welfare, Govt. of India, which state that they had failed to detect any alco hol in the 9 batches of the tooth paste given to them for testing. The petitioner asserts that tooth paste is a homeo pathic semi solid compound in which mother tincture is completely absent or is present in negligible quantity with any alcohol that may be present in pheropest completely and that there are no traces of the same in the final product upon chemical testing. In January, 1988 there was an inquiry about the exciseability of Homeodent tooth paste by the Superintendent of Central Excise, under the 1955 Act. The gravamen of the charge is the order issued by the Distt. Excise Officer, Ghaziabad, on 17th March, 1988 which was issued without notice to the petitioner and without giving it any opportunity. The Distt. Excise Officer, however, on demand from the petitioner had modified the earlier order of 17th March, 1988 and had issued on 18th March, 1988 a demand notice for 311 RS.46,66,451 45 It is the grievance of the petitioner that as it was carrying on the manufacture under the 1955 Act, it had applied for licence and the respondent authorities without assigning any reason, refused to renew the licence of the petitioner company. The implication of such absence of renewal is that the petitioner was being called to pay an illegal demand It, therefore, was forced to close down 'its manufacturing operations. The petitioner avers that in the meeting which took place between the Excise Commissioner and the Managing Director of the petitioner company on 14th March, 1988 the petitioner was orally informed that the licence would be renewed upon payment of dues under the orders dated 17th and 18th March, 1988, as aforesaid. The petitioner further states that it was told by the Excise Commissioner to deposit 1/3rd of the amount forthwith and execute a bank guarantee for the remaining amount. According to the petitioner, it had deposited the sum of Rs. 11,66,000 and consequently the L I licence was renewed for a period from 25.3.1988 to 31.3.1988. Then on 1st April, 1988 the petitioner was once again forced to close down its manufac turing activity in the absence of further renewal of licence for the period from 1.4.1988 to 7.4.1988. It is stated that the petitioner company had filed an appeal before the Commissioner under rule 127 of the 1956 Rules and upon compliance with the conditions of the State authorities, the licence was renewed from 7.4.1988 on ad hoc basis for a period of 3 months upto 30th June, 1988. The case of the petitioner is that the hearing of the appeal before the Excise Commissioner was over on 23.4.1988. Howev er, no order thereupon was passed. On 7th March, 1988 M/s. Grindlays Bank, who are the bankers of the petitioner, issued a bank guarantee inquiring whether any orders had been passed by the Excise Commissioner and whether the sum covered under the bank guarantee had become due. The peti tioner was informed by the bankers that the District Excise Officers and other officers present in the bank had served an order requiring the Bank to clear the bank guarantees. The petitioner states that at that time it had no informa tion as to the order of the Excise Commissioner but later on it came to learn that the Excise Commissioner had passed an order on 5th May, 1988 but the same was not communicated to it; and the bank guarantees were enforced without giving the petitioner any opportunity of filing any revision petition. The petitioner thereafter moved a writ petition before the Allahabad High Court which directed that the said bank guarantee should not be encashed until 13th May, 1988. According to the petitioner, the bankers under coercion were compelled to encash the bank guarantee on 9th May, 1988 and issue a draft for an amount of Rs.35 lakhs. The 312 writ petition of the petitioner came up for hearing before the Allahabad High Court and it was directed to file a revision petition within two weeks from 13.5. 1988 and the same should be considered on merits. The High Court had stayed the recovery of an amount of Rs.21,46,134.20 till the disposal of the stay application. On 22nd September, 1988 the Additional Secretary to the Govt. of India allowed the revision petition of the peti tioner and set aside the orders of the District Excise Officer, dated 17 18th March. Thereupon the petitioner called upon the District Excise Officer, to refund the amount of Rs.46,47,000 but the respondents failed to refund and neglected it. The respondents had issued a show cause notice calling upon the petitioner as to why an amount of Rs.68.13 lakhs be not recovered on Homeodent tooth paste manufactured and cleared between 1985 and 1988. The High Court had dismissed the writ petition which is the subject matter of another special leave petition. Respondent No. 3 i.e. the District Excise Officer. Ghaziabad. vide his order dated 19.1. 1989 had confirmed the show cause notice issued by him on 2nd November, 1988 and also confirmed the demand for Rs.68,50,745.20. The said order dated 19th January, 1989 is the subject matter of challenge in writ petition No. 426/89. Therefore, the basic question now is, whether the au thorities under the 1955 Act were entitled and authorised to levy duties under the Act. In the orders dated 18 19th January, 1989 passed by the District Excise Officer which is in vernacular and a translation of which is given in Annex ure XIV to the writ petition, states that in reference to a confidential letter dated 13th January, 1988 of the Deputy Excise Commissioner, Meerut Division, during the surprise inspection of the premises of M/s. Dabur India Ltd. and M/s. Sharda, Ghaziabad on 18th January, 1988 by Sri Lal Ji Rai, the then Distt. Excise Officer & Excise Superintendent, Bulandshahr, it was found that M/s. Dabur India Ltd. had been manufacturing a toilet preparation i.e. Homeodent tooth paste containing, according to the said order, alcohol for M/s. Sharda Boiron. The question is, did they do so. How does one find it out? As stated in the order, there is no dispute but if it was, then calculating the duty u/s 3 of the 1955 Act a sum of Rs.68, 13,334.28 would be found due. The Officer found that there was a conspiracy and without knowledge of the officer in charge in a clandestine manner this production was carried on. This is an answer, according to the impugned order, u/s 7 of the 1955 Act. Section 7 deals with the offences and penalties under the Act and provides that if any person contravenes any of the provi sions of a notification issued u/s 6 313 or evades the payment of any duty of excise or fails to supply any information which he is required to supply, he shall for every such offence be punishable to the punishment mentioned in the section. The officer has further found that as against an outstanding sum of Rs.68, 13,334.28. Rs. 11,67,000 had been deposited. After narrating the incident and the presence of the counsel and lawyers the officer was of the opinion that nothing has been brought to his notice which required revision of the previous order. So, there fore, a break up was given and out of Rs.68,50,745.20, the actual duty payable Rs.46,67,000 has already been realised and, therefore, the balance duty is Rs.21,83,745.28 and they have failed to realise the same. In view of this Court 's order dated 10th January, 1989, whereby this Court had directed that the proceedings might go on but the demands will not be enforced, inasmuch as orders dated 18 19th January, 1989 reiterate the order of 17th March, 1988 it is necessary to refer to the order dated 17th February, 1988 passed by the District Excise Officer, Ghaziabad. Therein it stated that both the units were joint ly and severally inspected on surprise visits i.e. the units bonded laboratories, and on the basis of the information collected it was revealed that Dabur India Ltd. was manufac turing a suitable toilet preparation containing alcohol named Homeodent without obtaining necessary licence. Accord ing to the said order the product had been manufactured outside the bonded premises approved under the L I licence and the duty payable on this product had not been paid. The order further states that on the basis of the information and the stock a sum of Rs.68,13,334.20 was payable and a challan to that effect was issued. In the first letter dated 13th March, 1988, Dabur India Ltd. wrote to the Distt. Excise Officer, that the classification of Homeodent tooth paste made by the Excise Officer as toilet preparation was erroneous, as this preparation, according to Dabur India Ltd., should be classified under Item 2 of the Schedule to the 1955 Act as a Homeodent preparation and not under Item 4. Item 3 to the Schedule of 1955 Act contains the follow ing: "Homeopathic preparations containing alcohol". Item No. 4 is "Toilet preparations containing alcohol or narcotic drugs or narcotic". So the question raised here is whether the tooth paste is primarily a toilet preparation or a homeopathic preparation. Such a question really, in our opinion, must be justiciable by the authorities enjoined to enforce the provisions. On the basis that the product was a homeopathic item, a sum of Rs.6245.29 was paid. The peti tioner further stated as follows: "Assuming and not admitting that your classification is 314 correct, even then your calculation of duty of the product is erroneous on the following points: a. The total wholesale value of the goods manufactured as on 18.1.88 is Rs.65,93,91.63. b. A trade discount @ 20% has to be deducted from this wholesale price Rs. 13,26,373.27. The balance amount comes to Rs.52,67,542.36. The excise duty element in this amount comes to Rs .26,33,77 1.18. The assessable value comes to Rs.26.33.77 1.18. The calculation chart showing these calculations is attached as Annexure 'B '. Kindly note that for central Excise purpose the excise able value declared to the CE Deptt. on the total goods manufactured upto 18.1.88 is only Rs.46,66,45 1.45 and the wholesale price of these goods is Rs.66,31,866.35 only. This too is evident from Annexure 'B '. We would, therefore, request you to kindly amend your demand notice accordingly. Please note that the foregoing is without any prejudice whatsoever to any arguments that may be raised by us at the time of hearing with the Commissioner UP, Excise, Allahabad or during any legal proceedings arising out of your afore mentioned demand notice or adjudicatory order of the Commis sioner. We also reserve the right to adduce further grounds in our defence and support at any/all future occasions in this connections. " On 18th March, 1988 there was further amendment by the Distt. Excise Officer, Ghaziabad, he stated as follows: "With reference to this office 's notice No. 185/1 2 dated 18.3.88 both the units are jointly and severally informed that in the application letters dated 17.3.88 received separately from both the units, the total wholesale price of the total Homeodent tooth paste manufactured has been de clared as Rs.65,739, 15.63.1t has also been informed that 315 for the purpose of Central Excise Duty, the total assessable value of the total quantity of Homeodent tooth paste manu factured until 19.1.88 is Rs.46,66,45 1.45 and that the total wholesale price on this quantity has been declared as Rs.66,31,866.35 to the Central Excise Deptt. Based on your declaration and clarification given in your above application and. on the basis of statistics and decla rations that exciseable value on a provisional basis for the total quantities of the cosmetics homeodent tooth paste containing alcohol, which has been sold until 18.1.88 and which in stock on 18.1.88 has accepted as Rs.46,66,45 1.45 instead of Rs.6,81,334.20. This does not mean that this value has been finally accepted. One to the fore mentioned, the amount of Rs.68, 13,33 1.20 is amended to Rs.46,66,451.45 in the office 's notice No. 185/1 2 dated 18.1.88. On this partial amendment, both the units are jointly and severally ordered to provisionally deposit Rs.46,66,45 1.45 instead of Rs.68, 13,324.20 as duty in the State Treasury, Ghaziabad immediately on receipt of this notice, under the appropriate account head and to produce a copy of the receipted Treasury Challan as proof of deposit in this office. " In view of the facts alleged and found by the District Excise Officer, Ghaziabad, as mentioned hereinbefore, it appears to us that the Homeodent was a medicinal and toilet preparations and liable to excise duty. This Court in M/s `Baidyanath Ayurved Bhawan (Pvt.) Ltd., Jhansi vs The Excise Commissioner, U.P. & Ors., has held that in order to attract duty under the 1955 Act, all that is re quired is that a medicinal preparation should contain alco hol. Alcohol may be part of the preparation either because it is directly added to the solution or it came to be in cluded in it because one of the components of that prepara tion contained alcohol. It is undisputed that mother tinc ture was one of the components that was used in the prepara tion of Homeodent and it has been found that alcohol was there and mother tincture was added in the medicinal prepa ration as its component. That was not the case before any authorities in this case but being present it was found in liquid form which incidentally again was disputed because test reports were not accepted by the petitioner but accord ing to the respondent authorities, indicated the presence of alcohol. Section 3(1) of the 1955 Act was attracted. This Court in the 316 aforesaid decision further reiterated that even if the imposition of excise duty under section 3(1) of the said Act on preparations in which alcohol was indirectly introduced attracts multipoint taxation that by itself would not render the duty illegal. The provisions for rebate of duty on alcohol contained in Section 4 of the said Act show that multipoint tax on medicinal preparations containing alcohol was within the contemplation of the legislature otherwise there was no purpose in incorporating section 4 into the Act. In this connection, section 4 of the 1955 Act may be referred to which is as follows: "4. Rebate of duty on alcohol, etc., supplied for manufac ture of dutiable goods Where alcohol, narcotic drug or narcotic had been supplied to a manufacturer of any dutiable goods for use as an ingredient of such goods by, or under the authority of, the collecting Government and a duty of excise on the goods so supplied had already been recovered by such Government under any law for the time being in force, the collecting Government shall, on an application being made to it in this behalf, grant in respect of the duty of excise, leviable under this Act, a rebate to such manufacturer of the excess, if any, of the duty so recovered over the duty leviable under this Act. " In this case, however, the case of the petitioner is that duty has been recovered under the 1944 Act; if any refund has to be made, it must be made in accordance with law. There is a question of limitation for claiming refund of this duty. The provisions are not clear. In such a situa tion, it appears to us that the justice requires that provi sions should be made more clear and in the 'view of the facts and the circumstances that have happened, we would direct that if the petitioners are entitled to any refund of the duty already paid to the Central Government in view of the duty imposition now upheld against them in favour of the State Government such refund application should be enter tained and considered in accordance with law. We are con scious in giving this direction, we are not strictly follow ing the letter and the provisions of the Act. But in a case of this nature, where there is some doubt as to whether duty was payable to the Central Government under the 1944 Act or whether the item was dutiable under the 1955 Act, it would be just and proper and in consonance with justice in fiscal administration that the Central Government should consider in the light of the facts found, if an application is made under section 11B of the 1944 Act and pass appropriate order. Such application should be made within four months from the date of the judgment. In the facts 317 and the circumstances 01 ' this case, the limitation period under section 1 lB of the 1944 Act should not apply. This direction, in our opinion, must be confined in the facts and the circumstances of this case only. Our attention was drawn to the observations of this Court in Union of India & Ors. vs Bombay Tyre International Ltd. etc. , (supra) in respect of the valuation. But the point not having been taken at any stage before the authorities, it is not proper for us at this stage to go into this question. We will proceed in view of the facts and the circumstances of this case and to do justice between the parties on the basis that the duty has been correctly imposed. We have looked into the order of the District Excise Officer, Ghaziabad and we find that all relevant facts have been considered and no facts were brought before us contrary to the findings nor any conten tions of substance raised which can induce us to hold to the contrary. Reference may also be made to the observations of this Court in Mohanlal Maganlal Bhavsar & Ors. vs Union of India & Ors., for the test to determine whether an item of medicinal preparation falls under Item 1 of the Schedule to the 1955 Act. It has been determined by the authorities enjoined to enforce that Act and such finding has not been assailed on any cogent or reliable ground in any proper manner. If that is the position, then that order must be upheld but it must be upheld that Homeodent was dutiable and as such the impugned order was correctly passed by the District Excise Officer. Our attention was drawn to the observations of this Court in N.B. Sanjana, Assistant Collector of Central Ex cise, Bombay & Ors. vs The Elphinstone Spinning and Weaving Mills Co. Ltd., ; But in view of the facts on which the parties rested their case before the authori ties, it is not necessary at this stage to go into this controversy. In the aforesaid view of the matter, we are of the opinion that the impugned order dated 18th January, 1989 passed by the District Excise Officer, Ghaziabad, must be given effect to and thereafter the petitioner 's application for refund, if any, made before the authorities under sec tion 4 of the 1944 Act within the time indicated as before should be disposed of in the manner indicated above, if made. Before we part with this case, two aspects have to be adverted to one was regarding the allegation of the peti tioner that in order to compel the petitioners to pay the duties which the petitioners con 318 tended that they were not liable to pay, the licence was not being renewed for a period and the petitioners were con stantly kept under threat of closing down of their business in order to coerce them to make the payment. This is unfor tunate. We would not like to hear from a litigant in this country that the Government is coercing citizens of this Country to make payment of duties which the litigant is contending not to be leviable. Government, of course, is entitled to enforce payment and for that purpose to take all legal steps but the Government, Central or State, cannot be permitted to play dirty games with the citizens of this country to coerce them in making payments which the citizens were not legally obliged to make. If any money is due to the Government, the Government should take steps but not take extra legal steps or manoeuvre. Therefore, we direct that the right of renewal of the petitioner of licence must be judged and attended to in accordance with law and the occa sion not utilised to coerce the petitioners to a course of action not warranted by law and procedure. Secondly, in a situation of this nature, we are of the opinion that the Government should consider feasibility of setting up of a machinery under a Council to be formed under Article 263 of the Constitution to adjudicate and adjust the dues of the respective Governments. In these peculiar facts, it appears that the dispute is under two different central legislations and under one the State authorities will realise and impose the taxes on finding on certain basis and under the other the same transaction may be open to imposition by Central Government authorities on a particular view of the matter. In such a situation, how and wherein the refund should be made of any duty paid in respect of part of a transaction to one of the authorities, the State or the Centre, to be adjusted should be the subject matter of a settlement by the Council to be set up under Article 263 of the Constitution. This is a matter on which we draw the attention of the concerned authorities for examination because section 3 of the 1955 Act and section 3 of the 1944 Act may overlap similar transaction in certain cases. Writ petitions are disposed of with the aforesaid direc tions. Special leave granted in SLP (Civil) No. 1610 of 1989 (M/s. Dabur India vs State of U.P. & Ors., ) and SLP (Civil) Nos. 135 36 of 1989 (Sharde Bairon Laboratories vs State of U.P. & Ors.). Appeals are disposed of in the light of the directions given hereinbefore. Save as aforesaid all interim orders are vacated. In the facts and the circumstances of the case, the parties will pay and bear their own costs. R.S.S. Petitions disposed of.

M/s Dabur India Limited, petitioner in one set of peti tions, is a public limited company engaged in the manufac ture of Ayurvedic as well as Allopathic medicaments, along with cosmetics. It used to manufacture for and on behalf of M/s Sharda Boiren Laboratories The petitioner in the second set of petitions a Homeopathic tooth paste called 'Homeo dent ' out of the raw materials supplied by M/s Sharda, on job basis. It accordingly manufactured Homeodent during 1985 to 1988, duly paying duties of excise on Homeodent under the Central Excises & Salt Act, 1944. The Superintendent of State Excise visited the factory of M/s Dabur on 18th January, 1988 and enquired about the excisability of Homeodent under the Medicinal & Toilet Preparations (Excise Duties) Act, 1955. He was told that Homeodent had been classified under the 1944 Act in view of the orders passed by the Central Excise authorities. Howev er, when it was revealed that the Homeodent tooth paste was toilet preparation containing alcohol, within the meaning of section 2(k), read with Item 4 of the Schedule, referred to in section 3 of the 1955 Act, the District Excise Officer caused a common notice dated 17.3.1988 to be served on M/s Dabur requiring it to pay duty aggregating to Rs.68,13,334.20 under the provisions of the 1955 Act on such 295 goods manufactured and cleared between January 1985 and January 1988. This order was passed without issuing any notice to show cause, and without affording any opportunity of hearing, to the petitioner. The Petitioner sent a representation requesting for compliance with the principles of natural justice and also disputing the amount claimed as duty. On 18th March, 1988 the Superintendent of State Excise modified the earlier order and confirmed the demand of duty amounting to Rs.46.67 lakhs, on provisional basis. On that day the petitioner deposited a sum of Rs. 11.66 lakhs and further executed a bank guarantee for the balance. Simultaneously, the peti tioner appealed against the order dated 18th March, 1988. The Excise Commissioner dismissed the appeal. No appeal was filed by M/s Sharda against the demand notice of excise duty under the 1955 Act. The petitioner moved the High Court. On 13th May, 1988 the High Court directed the petitioner to file a revision petition with the Central Government. Both the petitioners then approached the Central Government in revision. On 22nd September, 1988 the Additional Secretary to the Government of India in exercise of his revisional powers allowed the revision filed by M/s Dabur and declared the orders of the District Excise Officer and the Excise Commissioner as null and void having been passed in violation of the principles of natural justice. The revision filed by M/s Sharda was not entertained by the Central Government on the ground that a right of appeal was vested in Sharda, which was not availed of. The High Court dismissed Sharda 's petition challenging the order of the Central Government declining to entertain its review. Against the order of the High Court M/s Sharda have filed the special leave petition in this Court. On the basis of the revision order, the petitioners called upon the District Excise Officer to refund the amount of Rs.46.67 lakhs recovered from it by way of cash payment and encashment of bank guarantee. The State Excise authori ties however failed to grant the refund, and instead issued a fresh show cause notice to the petitioners jointly on 2nd November, 1988. In December 1988, M/s Dabur moved the High Court under Article 226 of the Constitution for quashing and setting aside the showcase notice dated 2.11.1988 and for refund of duty amounting to Rs.46.67. The High Court dismissed the writ petition. The High Court was 296 of the opinion that the question whether Homeodent tooth paste was sans alcohol could not be adjudicated upon under the extraordinary writ jurisdiction. The High Court however came to the conclusion that both the 1944 and 1955 Acts operated in different fields and there was no overlapping between the two. The High Court further observed that where the parties fully acquiesced with the matter and subjected themselves to the statutory procedure, no action should be allowed to be taken under Article 226 of the Constitution unless the case was patently without jurisdiction. In this connection, it was emphasised by the High Court that once the parties chose the statutory procedure they must go to the logical end. It was inter alia urged before this Court on behalf of the petitioner that it was not seeking to circumvent the alternative remedy provided under the Act but in view of the conflicting claims of the Central and State Excise authori ties seeking to classify Homeodent tooth paste under the respective Acts of 1944 and 1955, the petitioner was left with no other alternative but to challenge the actions by way of writ petition under Article 226 of the Constitution. It was further contended that Homeodent did not contain alcohol but contained ingredient "mother tincture" contain ing alcohol, which had a tendency to evaporate during the process of manufacture of Homeodent; that no test result as required under the 1955 Act was obtained to establish wheth er Homeodent contained alcohol or not; and that on 31st August, 1987 the Assistant Collector of Central Excise had already passed an order classifying Homeodent under the Act of 1944 which order had been upheld by the Collector of Central Excise (Appeals). The main point that the petitioner sought to emphasis was that the High Court ought to have appreciated that Homeodent tooth paste having been subjected to duty under the provisions of the 1944 Act, the question of levying and recovering duty under the 1955 Act did not and could not arise. Dismissing the petitions, this Court, HELD: (1) Homeodent is a homeopathic preparation but it is also a tooth paste. Therefore, it is a toilet prepara tion. Whether or not such Homeodent would not be dutiable under the Medicinal & Toilet Preparations (Excise Duties) Act, 1955 would depend upon whether it contained alcohol or not. [315E] (2) It is undisputed that mother tincture was one of the components that was used in the preparation of Homeodent and it has been found that alcohol was there and mother tincture was added in the 297 medicinal preparation as its component. [315G] M/s Baidyanath Aryurved Bhawan (Pvt.) Ltd. Jhansi vs The Excise Commissioner U.P., , referred to. (3) The authorities charged with the duties of enforcing a particular Act are enjoined with the task of determining the question whether alcohol is contained therein or not. [310D] (4) It has been determined by the authorities enjoined to enforce the 1955 Act that Homeodent was a medicinal and toilet preparation and liable to excise duty, and such finding has not been assailed on any cogent ground in any proper manner. If that is the position, then it must be upheld that Homeodent was dutiable. [317D] Union of India vs Bombay Tyre International Ltd., ; ; Mohanlal Magan Lal Bhavsar vs Union of India, and N.B. Sanjana, Assistant Collector of Central Excise, Bombay vs The Elphinston Spinning and Weav ing Mills Co. Ltd.; , , referred to. (5) Provisions for rebate of duty on alcohol contained in section 4 of the 1955 Act show that multipoint tax on medicinal preparations containing alcohol was within the contemplation, otherwise there was no purpose in incorporat ing section 4 into the Act. [316B] (6) Justice requires that provisions for claiming refund of this duty should be made more clear. However, in the view of the facts and the circumstances that have happened, it is directed that if the petitioners are entitled to any refund of the duty already paid to the Central Government in view of the duty imposition now upheld against them in favour of the State Government such refund application should be entertained and considered in accordance with law. [316E F] (7) In a case of this nature, where there is some doubt as to whether duty was payable to the Central Government under the 1944 Act or whether the item was dutiable under the 1955 Act, it would be just and proper and in consonance with justice infiscal administration that the Central Gov ernment should consider in the light of the facts found, if an application is made under section 11B of the 1944 Act, and circumstances of this case, the limitation period under section 11B of the 1944 Act should not apply. This direction must be confined in the facts and the circumstances of this case only. [316G H; 317A] 298 Citadel Fine Pharmaceuticals Pvt. Ltd. vs D.R.O., [1973] Mad. Law Journal 99; Union of India vs Bombay Tyre Interna tional Ltd.; , and Assistant Collector of Central Excise vs Madras Rubber Factory Ltd., [1986] supp. SCC 751, referred to. (8) Government should consider feasibility of a machin ery under a Council to be formed under Article 263 of the Constitution to adjudicate and adjust the dues of the re spective Governments. [318D] (9) This Court would not like to hear from a litigant in this country that the Government is coercing citizens of this country to make payment which the litigant is contend ing not leviable. Government, of course, is entitled to enforce payment and for that purpose to take all legal steps but the Government, Central or State, cannot be permitted to play dirty games with the citizens to coerce them in making payments which the citizens were not legally obliged to make. If any money is due to the Government, the Government should take steps but not take extra legal steps or manoeu vre. Therefore, the right of renewal of the petitioner of licence must be judged and attended to in accordance with law and the occasion not utilised to coerce the petitioners to a course of action not warranted by law and procedure. [318A C]

Appeals Nos. 722 and 723 of 1993. From the Judgment and Order dated 13.11.92 of the Allahabad High Court in W.P. Nos. 688 & 1246 of 1992. WITH CIVIL APPEALS NOS. 386 and 387 of 1993 From the Judgment and Order dated 13.11.92 of the Allahabad High Court in W. P. Nos. 8 19 and 888 of 1992. Rajiv Dhawan, P.K. Dey and Rakesh Gosian, Ms. Rani Jethmalani, (N.P.) for the Appellants in C.A. Nos. 722 23/93. R.P. Saxena for the Appellants in C.A. Nos. 386 87/93. Yogeshwar Prasad and Ms. Rachna Gupta for the Respondent. J The appellants in Civil Appeals Nos. 722 & 723 of 1993 had been appointed as Assistant District Government Counsel (Criminal) to appear in different criminal cases, on behalf of the State, in different Courts in the District of Moradabad. They filed the connected Writ Applications before the High Court against the decision of the State Government, refusing to extend their term for a farther period of three years, which were dismissed by the High Court. It appears that the appellants. except appellant No. 3, Gopal Sharma. had been appointed by Government Order dated 25.2.91. as Assistant District Government Counsel (Criminal) in the District of Moradabad, in accordance with the provisions of Section 24 of the Criminal Procedure Code (hereinafter referred to as "the Code") and the Legal Remembrancer Manual (hereinafter referred to as "the Manual") against the substantive vacancies. Appellant No. 3, however, had been appointed on 13.12.1990. The last date of the tenure of the appellants, other than appellant No. 3, as mentioned in the aforesaid Government Order dated 25. 2.1991 was 31.12.199 1. The tenure of appellant No. 3 was up to 13.12.199 1. It is not in dispute that before the expiry of the term aforesaid, the District Judge, Moradabad, by his letter dated 27.12.1991 recommended the names of appellants for extension of their terms. The District Judge prepared two lists i.e. 'A ' and 'B '. List 'A ' contained the name of those lawyers "whose work and conduct has been approved for their extension as Government Counsel", whereas List `B ' contained the names of the remaining Government Counsel, who in the opinion of the District Judge were "average lawyers". The names of the appellants are in List 'A ' The District Judge requested the District Magistrate. Moradabad. to send his recommendation to the State Government for extension of the term of tile Government Counsel, mentioned in List 'A '. The District Magistrate. after receipt of the recommendation of the District Judge aforesaid, by a communication dated 2.1.92, did not recommended the names of the appellants, for extension of their terms, saying that on the inquiry at his level, "reputation, professional work, behaviour and conduct of the above mentioned Government Counsel was not found in accordance with public interest". It may be mentioned that on 28.12.9 1. tile State Government had extended the terms of the appellants till further orders. Ultimately, without assigning any reason, the extension recommended by the District Judge was rejected by the State Government, which decision is the subject matter of the controversy in the present appeals. In the State of U.P., the Manual is an authoritative compilation of the government orders and instructions for the conduct of legal affairs of the State Government. Para 1.00 of Chapter VII gives the details of the Law Officers of the Government which includes the Government Counsel (Civil, Revenue, Criminal) 975 along with many others like Judicial Secretary and Legislative Secretary. The Chapter VII of the contains the procedure in respect of appointment and conditions of engagements of District Government Counsel. The District Officer is required it) consider all the applications received. in consultation with the District Judge and to submit in order of preference the names of ' the legal practitioners, along with the opinion of the District Judge on tile suitability and merit of each candidate to the State Government giving due wightage to the claim of the existing incumbents, if any. After the receipt of such recommendations, the Legal Remembrancer is required is required to submit the said recommendations with his own opinion for the orders of the State Government. In Para 7.06 of the Manual, the procedure regarding the appointment and renewal has been prescribed "7.06. Appointment and renewal (1) The legal practitioner finally selected by the Government may be appointed District Government Counsel for one year from the date of his taking over charge. (2)At the end of the aforesaid periodic the District Officer after consulting the District Judge shall submit a report on his work and conduct to the legal Rememberancer together with the statement of work done in Form No. 9. Should his work or conduct be found to he unsatisfactory the matter shall be reported to the Government for orders. If the report in respect of his work and conduct is satisfac tory, he may be furnished with a deed of engagement in Form No. 1 for a term not exceeding three years. On his first engagement a copy of Form No.2 shall he supplied to him and lie shall complete and return it to the legal Remembrancer for record. (3)The appointment of any legal practitioner as a District Government Counsel is only professional engagement terminable at will on either side and is not appointment to a post under the government. Accordingly the government reserves the power to terminate the appointment of any District Government Counsel at any time without assigning any cause. " Para 7.08 contains the procedure for renewal after expiry of the original term: "7.08. Renewal of term (1) At least three months before the expiry 976 of the term of a District Government Counsel, the District Officer shall after consulting tile District Judge and considering, his past record of work, conduct and age, report to the Legal Remembrancer together with the statement of work done by him in Form No.9 whether in his opinion the term of appointment of such counsel should be renewed or not. A copy of the opinion of the District Judge should also he sent along with the recommendations of the District Officer. (2)Where recommendation for the extension of the term of a District Government Counsel is made for a specified period only the reasons therefore shall also he stated by the District Officer. (3) While forwarding, his recommendation for renewal of the term District Government Counsel (i) the District Judge shall give an estimate of the quality of the Counsel 's work from the judicial standpoint, keeping, in view the different aspects of a lawyers capacity as. it is manifested before him in conducting, State cases, and specially his professional conduct. (ii) the District Officer shall give his report about the suitability of the District Government Counsel from the administrative point of view, his public reputation in general his character. integrity and professional conduct. (4) If the Government agrees with the recommendations of the District Officer for the renewal of the term of the Government Counsel, it may pass orders for re appointing him for a period not exceeding three years. (5) If the government decides not to re appoint a Government Counsel, the Legal Remembrancer may call upon the District Office r to forward fresh recommendations in the manner laid down in para 7.03. (6) The procedure prescribed in this para shall be followed on the expiry of every successive period of renewed appointment of a 977 Dist Government Counsel. Note : The renewal beyond 60 years of age shall depend upon continuous good work, sound integarity and physical fitness of the Counsel. It was pointed out on behalf of the appellants, that any legal practitioner finally selected by the Government may be appointed as District Government Counsel for one year from the date of his taking over charge, but in view of Para 7.06 of the Manual at the end of the aforesaid period the District Magistrate after consulting the District Judge has to submit a report on his work and conduct to the Legal Remembrancer in the form prescribed. If the report in respect of his workand conduct is satisfactory, then such Counsel shall be furnished with a deed of engagement in form No. 1 for a term not exceeding three years. Para 7.08 of the Manual contains the procedure for renewal of the term of the District Government Counsel after the expiry of original term. It requires the District Officer at least three months before the expity of the term of a District Government Counsel to report to the Legal Rmembrancer after consulting the District Judge and considering the past record of work conduct and age of such District Government Counsel. If the Government agrees with the recommendation it may pass an Order re appointing him for a period not exceeding three years. The stand of the appellants is that in view of Para 7.06(2), the appointment of any legal practitioner as a District Governemnt Counsel, does not automatically come to an end rather it indicates and element of continuity and that is why Para 7.06(2) requires the District Officer at the end of period of one year to submit a report after consulting the District Judge concerned in respect of the work and conduct of such District Government Counsel to the Legal Remembrancer in a form prescribed. If the report in respect of work and conduct is satisfactory then such District Government Counsel shall be furnished with a deed of engagement in a form prescribed for a term not exceeding three years. As such after the period of one year if the engagement for a further period upto three years is not given, it amounts to a stigma. On behalf of the appellants attention of this Court was drawn to a letter addressed to the District Magistrate by Dr. Nepal Singh, M. L.C., the District President of the party then in power recommending the names of other Government Counsel for renewal/extension of their term. It was pointed out that in respect of all those persons. The District Magistrate has recommended for extension. There is however, no material before us to show that the District 978 Magistrate was influenced by the said letter in any manner. A part form that the persons so resommended by the District Magistrate were not impleded as respondents to the Writ applications. As such we are not inclined to go into this aspect. The different paragraphs of the Manual aforesaid were examined in detail in the case of Kumari Shrilekha Vidyarthi vs State of U. P. , in connection with an order dated February 6, 1990 issued by the State of U. P. terminating the appointments of all Government Counlsel ( Civil Criminal and Revenue) in all the districts of the State of U.P. with effect from February 28, 1990 and directing the preparation of fresh panels for making appointments in places of the existing incumbents. while quashing such general order it was said: Viewed in any manner the impugned circular dated February 6, 1990 is arbitrary. It terminates all the appointments of Government Counsel in the districts of the State of Uttar Pradesh by an omnibus order even though these appointments were all individual. No common reason applicable to all of them justifying their termination in one stroke on a reasonable ground has been shown. The submission on behalf of the State of UttarPradesh at the hearing that many of them were likely to be re appointed is by itself ample proof of the fact that there was total non application of mind to the individual cases before issuing the general order terminating all the appointments. This was done in spite of the clear provisions in the L. R. manual lying down detailed procedure for appointment, termination and renewal of tenure and the requirement to first consider the existiong incumbent for renewal of his tenure and to take steps for a fresh appointment in his place only if the existing incumbent is notfound suitable in comparison to more suitable persons available for appointment at the time of renewal. In the case of existing appointees a decision has to be first reached about their non suitability for renewal before deciding to take steps for making fresh appointments to replace them. None of these steps were taken and no materialhas been produced to show that any existing incumbent was found unsuitable for the office on objective assessment before the decision to replace all by fresh appointees was taken. The prescribed procedure laid down in the L.R. Manual which has to regulate exercise of this power was tatally igonered. In the present case it appears to be an admitted position that appointments of the appellants as assistant District Government Counsel (Criminal) is governed 978 979 .LM0 by Section 24 of the Code, as well different paragraphs of Chapter VII of the Manual. It was not disputed on behalf of the State, that appellants shall be deemed to be Additional Public Prosecutors within the meaning of Section 24 of the Code, although in the order of appointment they have been designated as Assistant District Government Counsel (Criminal). The procedure prescribed in the Manual can be observed and followed as supplemental to the provisions of Section 24 of the Code. Needless to say that, if there is any conflict, then Section 24 of the Code being statutory in nature will override the procedure prescribed in the Manual. The relevant part of Section 24 is as such "24. Public Prosecutors (1) For every High Court, the Central Government of the State shall, after consultation with the High Court, appoint a Public Prosecutor and may also appoint one or more Additional Public Prosecutors, for conducting in such Court, any prosecution,appeal or other proceedings on behalf of the Central Government or State Government, as the case may be. (2). . . . (3) For every district, the State Government shall appoint a Public Prosecutor and may also appoint one or more Additional Public Prosecutors for the district: Provided that the Public Prosecutor or Additional Public Prosecutor appointed for one district may he appointed also to be a Public Prosecutor as the case may be for another district. (4)The District Magistrate shall, in consultation with the Sessions Judge, prepare a panel of names of persons, who are. in his opinion, fit to he appointed as Public Prosecutors or Additional Public Prosecutors for the district. (5) No Person shall be appointed by the State Government as the Public Prosecutor or Additional Public Prosecutor for the district unless his name appears in the panel of names prepared by the District Magistrate under sub section (4). " The Code prescribes the procedure for appointment of Public Prosecutor and Additional Public Prosecutor, for the High Court and the District Courts by the State Government. The framers of the Code, were conscious of the fact, that the Public Prosecutor and the Additional Public Prosecutor have an important role, 980 while prosecuting on behalf of the State, accused persons, who are alleged to have committed one or the other offence. Because of that, provisions have been made for their selection in the Code. It is for the Sessions Judge to assessee the merit and professional conduct of the persons recommended for such appointments and the District Magistrate to express his opinion on the suitability of persons so recommended, from the administrative point of view. Sub section (5) of Section 24 provides that no person shall be appointed by the State Government as the Public prosecutor or as an Additional Public Prosecutor "unless his name appears in the panel of names prepared by the District Magistrate under sub section (4)". The aforesaid section requires an effective and real consultation between the Sessions Judge and the District Magistrate, about the merit and suitability of person it) he appointed as Public Prosecutor or as an Additional Public Prosecutor. That is why it requires, a panel of names of persons, to be prepared by the District Magistrate in consultation with the Sessions Judge. The same is the position so far the Manual is concerned. It enumerates in detail, how for purpose of initial appointment extension or renewal, the District Judge who is also the Session Judge, is to give his estimate of the quality of the work of the Counsel from the judicial Standpoint and the District Officer i.e. the District Magistrate is to report about the suitability, of such person, from administrative point of view. On behalf of the State, our attention was drawn to the expression "in his opinion" occurring in sub section (4) of Section 24 of the Code. It was urged that as the Code vests power in the District Magistrate to consider the suitability of the person concerned, for appointment, according, to his opinion, there is not much scope of judicial review by Courts, unless a clear case of malice on the part of the District Magistrate is made out. In view of the series of judgments of this Court in Barium Chemicals Ltd vs Company Law Board, ; ; State of Assam Bhatrai Kala Bhandar Ltd. AIR , Rohtas Industries Ltd. vs S.D. Agarwal; , , The Purtapur Company Ltd. vs Cane Commissioner of Bihar AIR 1970 SC 1896 and M.A. Rasheed vs The State of Kerala; , , it is almost settled that, although power has been vested in a particular authority, in subjective term:, still judicial review is permissible. In the present case the District & Session Judge strongly recommended extension for the appellants, saying that so far their work and conduct were concerned, the same had been approved. But the District Magistrate, simply said that on the inquiry at his level "reputation, professional work, behaviour and conductor the appellants as government counsel was not found in accordance with the public interest". The quality of the Counsel ' work has to be judged and assessed 981 by the District & Sessions Judge. The District Magistrate is required to consider the suitability of such person, from the administrative point of view. According to us, in view of the strong recommendation about the quality of the appellants ' professional work, the District Magistrate should have applied his mind in consultation with the Sessions Judge. in respect of each individual case. instead of making a general and identical comment against all the appellants. Apart from that the mandate of sub section (4) of Section 24 is that "the District Magistrate shall, in constitution with the Session Judge, prepare a panel of names of persons". Sub section (5) of Section 24 prescribes a statutory bar that no person shall be appointed by the State Government as the Public Prosecutor or Additional Public Prosecutor for the district "unless his name appears in the panel of names prepared by the District Magistrate under sub section (4)". When sub section (4) and sub section (5) of Section 24 of the Code, speak about preparation of a panel, out of which appointments against the posts of Prosecutor or Additional Public Prosecutor have to he made. then the Sessions Judge and the District Magistrate are required to consult and discuss the names of the persons fit to be included in the panel and to include such names in the panel. The expressions "panel of names of persons", do not mean that some names are to be suggested by the Sessions Judge and some comments are to be made, in respect of those names by the District Magistrate, without proper consultation and discussion over such names. The statutory mandate ought to have been complied with by the District Magistrate and the Sessions Judge in its true spirit. In the facts of the present case, no such panel appears to have been prepared by the District Magistrate in terms of sub section (4) of Section 24. As Section 24 of the Code does not speak about extension or renewal of the term of the person so appointed, the same procedure, as provided under sub section (4) of Section 24 of the Code, has to be followed. In the present case the District Magistrate instead of having an effective and real consultation with the District & Sessions Judge simply made some vague and general comments against the appellants, which cannot be held to he the compliance of the requirement of subsection (4) of Section 24. In the case of Kumari Shrilankha Vidyarthi (supra), this Court was not concerned with the question regarding the extension/renewal of the terms of the Government Counsel. The primary question which was examined by this Court in that case, was as to whether it was open to the State Government by the impugned circular dated February 6, 1990. to terminate appointments of all the Government Counsel in the different districts of the State, by an omnibus order, even though those appointments were all individual. It was held that any such exercise of power by the State Government cannot satisfy the test of Article 14 of the Constitution 982 and as such was unreasonable and arbitrary. In that connection reference was made to the Manual aforesaid and it was pointed out that the said Manual has laid down detailed procedure for appointment, termination and renewal of the tenure of the District Government Counsel. It was pointed out, that different paragraphs of the Manual require, first to consider the existing incumbents for extension and renewal of their tenure and to take steps for fresh appointment in their place, if the existing incumbents were not found suitable in comparison to more suitable persons available for appointment at the time of the renewal. As already mentioned above. Section 24 of the Code does not speak about the extension or renewal of the term (if the Public Prosecutor or Additional Public Prosecutor. But after the expiry of the term of the appointment of persons concerned. it requires the same statutory exercise, in which either new persons are appointed or those who have been working as Public Prosecutor or Additional Public Prosecutor. are again appointed by the State Government, for a fresh term. The procedure prescribed in the Manual to the extant it is not in conflict with the provisions of Section 24. shall he deemed to be supplementing the statutory provisions. But merely because there is a provision for extension or renewal of the term, the same cannot he claimed as a matter of right. It is true that none of the appellants can claim, as a matter of right, that their terms should have been extended or that they should be appointed against the existing vacancies but certainly they can make a grievance that either they have not received the Pair treatment by the appointing authority or that the procedure prescribed in the Code and in the Manual aforesaid. have not been followed. While exercising the power of judicial review even in respect of appointment of members of the legal profession as District Government Counsel the Court can examine whether there was any infirmity in the "decision making process. " Of course, while doing so the Court cannot substitute its own judgment over the final decision taken in respect of selection of persons for those posts. It was said in the case of Chief Constable of the North Wales Plice vs Evans.(1982) ; "The purpose of judicial review is to ensure that the individual receives fair treatment, and not to ensure that the authority, after according Pair treatment. reaches on a matter which it is authorised or enjoined by law to decide for itself a conclusion which is correct in the eyes of the court. " In the facts of the present case, the procedure prescribed by Section 24 of the Code have not been followed by the District Magistrate. There is nothing on the 983 records of the case to show that any panel as required by sub section (4) of Section 24 was prepared by the District Magistrate in consultation with the District & Sessions Judge. The District Magistrate simply made some general comment in respect of the appellants. When the District & Sessions Judge had put them in List 'A ' of his recommendation. According, to us, this shall not amount to either the compliance of 'sub section (4) of Section 24 of the Code or Para 7.06(2) of the Manual. It appears there has been no effective or real consultation between the Sessions Judge and the District Magistrate for preparation of the panel, as contemplated. by sub section (4) of Section 24 of the Code. The members of the legal profession are required to maintain high standard of legal ethics and dignity of profession. They are not supposed to solicit work or seek mandamus from courts in matters of professional engagements. We have been persuaded to interfere in these matters to a limited extent, as we are satisfied that there is patent infraction of the statutory provisions of the Code. As we are of the view that the District Magistrate has not performed his statutory duty as enjoined by law, the appeals of the appellants have to be allowed. In the result, the appeals are allowed. We direct the District Magistrate, Moradabad, to perform his statutory duty afresh. in accordance with the requirement of Section 24 of the Code read with the relevant paragraphs of Chapter VII of the Manual, which are not inconsistent with Section 24 of the Code. so far the appellants are concerned, if the vacancies are still there. The necessary steps shall be taken preferably within four months from the date of this judgment. the State Government shall thereafter perform its part in accordance with Section 24 and different paragraphs of the Manual which are applicable in the facts and circum stances of the case. We make it clear that we are not expressing any opinion on the merit of the claim of the appellants to get extension or appointment against the posts of Assistant District Government Counsel (Criminal). There will he no order as to costs. CIVIL APPEALS NOS. 386 & 387 OF 1993 So far the appellants of these appeals are concerned, their names were put under List 'B ' by the District & Sessions Judge in his recommendation saying that they were "average lawyers". Their case stands on a different footing. The District & Sessions Judge. who is required to express his opinion on the merit and the conduct of the persons recommended for appointment or extension of the period 984 as District Government Counsel, has expressed the opinion that appellants are "average lawyers" and has put them in List B. In other words, neither the District & Sessions Judge has recommended the case of the appellants of these appeals for extension nor the District Magistrate. Their case cannot be treated at par with the appellants of the other appeals. In such as situation, no useful purpose will be served by directing the District Magistrate to perform his statutory duty as required by sub section (4)of Section 24 of the Code again, even the respect of these appellants. Accordingly, these appeals are dismissed. there will be no orders as to costs. V.P.R, C.A. Nos. 722 and 723/93 allowed. C.A. Nos. 386 and 387/93 dismissed.

On 25.2.91 the appellants except appellant No. 3 were appointed as Assistant District Government Counsel (Criminal) in accordance with the provisions of Section 24 of the Criminal Procedure Code and the Legal Remembrancer Manual. The appellant No.3 was appointed on 13.12.1990. The last date of the tenure of the appellants, except appellant No.3, was 31.12.1991, where as the tenure of appellant No.3 was upto 13.12.1991. Before 970 the expiry of their terms, the District Judge, preparing two lists, 'A ' and `B ' recommended the appellants ' names for extension of their tenures. List `A ' contained the names of Lawyers (including the appellants), whose work and conduct was approved for their extension, whereas List 'B ' contained the remaining names of the lawyers (including appellants in C.A. Nos. 386, 387/ 1993) who were considered as 'average lawyers '. The District Judge requested the District Magistrate to send his recommendation to the State Government. The District Magistrate did not recommend the appellants ' names as their reputation, professional work, behaviour and conduct was not found in accordance with public interest. On 28.12.1991 the State Government extended the terms of the appellants till further orders. Later without assigning any reason, the extension recommended by the District Judge was rejected by the State Government. The appellants filed writ petitions in the High Court against the Government 's decision. The High Court dismissed their writ applications, against which the present appeals were filed by special leave before this Court. C.A. Nos. 386 & 387 OF 1993. The appellants ' names were included in the List 'B ' prepared by the District Judge. The State Government rejected the recommendation of the District Judge, without assigning any reason. The writ petitions preferred by them in the High Court were dismissed. Hence these appeals by special leave. As there was a common issue arose in these appeals, same were heard and decided together. The appellants contended that in view of Para 7.06(2) of the Legal Remembrancer Manual the appointment of any legal practitioner as a District Government Counsel did not automatically come to an end. The State submitted that as Section 24(4) of the Code of Criminal Procedure vested power in the District Magistrate to consider the suitability of the person concerned, for appointment, according to his opinion, as such there was not much scope of judicial review by Courts, unless a clear case of malice on the part of the District Magistrate was made out. 971 Allowing the Civil Appeals Nos. 722 and 723 of 1993 and dismissing the Civil Appeal Nos. 386 and 387 of 1993, this Court. HELD:1.1. When sub section (4) and sub section (5) of Section 24 of the Code of Criminal Procedure, speak about preparation of a panel, out of which appointments against the posts of Prosecutor or Additional Public Prosecutor have to be made, then the Sessions Judge and the District Magistrate are required to consult and discuss the names of the persons fit to be included in the panel and to include such names in the panel. 1.2.The expressions "panel of names of persons", do not mean that some names are to be suggested by the Sessions Judge and some comments are to be made, in respect of those names by the District Magistrate, without proper consultation and discussion over such names. The statutory mandate ought to have been complied with by the District Magistrate and the Sessions Judge in its true spirit. 1.3.Section 24 of the Code does not speak about the extension or renewal of the terms of the Public Prosecutor or Additional Public Prosecutor. But after the expiry of the term of the appointment of persons concerned, it requires the same statutory exercise, in which either new persons are appointed or those who have working as Public Prosecutor or Additional Public Prosecutor, are again appointed by the State Government, for a fresh term. The procedure prescribed in the Manual to the extent it is not in conflict with the provisions of Section 24, shall be deemed to be supplementing the statutory provisions. But merely because there is a provision for extension or renewal of the term, the same cannot be claimed as a matter of right. 1.4.While exercising the power of judicial review even_in respect of appointment of members of the legal profession as District Government Counsel, the Court can examine whether there was any infirmity in the "decision making process". Of course, while doing so, the Court cannot substitute its own judgment over the final decision taken in respect of selection of persons for those posts. Chief Constable of the North Wales Police vs Evans, [1982]3 All E.R. 141, referred to. 1.5.In the facts of the present case, the procedure prescribed by Section 24 of the Code have not been followed by the District Magistrate. There is 972 nothing on the records of the case to show that any panel, as required by sub section (4) of Section 24, was prepared by the District Magistrate in consul"on with the District & Sessions Judge. The District Magistrate simply made some general comment in respect of the appellants, when the District & Sessions Judge had put them in List 'A ' of his recommendation. This shall not amount to either the compliance of sub section (4) of Section 24 of the Code or Para 7.06(2) of the Manual. It appears there has been no effective or real consultation between the Sessions Judge and the District Magistrate for preparation of the panel, as contemplated by sub section (4) of Section 24 of the Code. 1.6.The members of the legal profession are required to maintain high standard of legal ethics and dignity of profession. They are not supposed to solicit work or seek mandamus from courts in matters of professional engagements. 1.7.In view of the strong recommendation about the quality of the appellant 's professional work, the District Magistrate should have Applied his mind in consultation with the Sessions Judge, in respect of each individual case, instead of making a general and identical comment against all the appellants. 1.8.As the District Magistrate has not performed his statutory duty as enjoined by law, the appeals of the appellants have to allowed. 1.9.The District Magistrate is directed to perform his statutory duty afresh, in accordance with the requirement of Section 24 of the Code read with the relevant paragraphs of Chapter VII of the Manual, which are not inconsistent with Section 24 of the Code, so far the appellants are concerned, if the vacancies are still there. The necessary steps shall be taken preferably within four months from the date of this judgment. The State Government shall thereafter perform its part in accordance with Section 24 and different paragraphs of the Manual which are applicable in the facts and circum stances of the case. Kumari Shrilekha Vidyarthi vs State of U.P., , referred to. 2.The District & Sessions Judge, who is required to express his opinion ton the merit and the conduct of the persons recommended for appointment or extension of the period as District Government Counsel, has expressed the 973 opinion that appellants (in C. As. 386 387 of 93) are "average lawyers", and has put them in List 'B '. In other words, neither the District & Sessions Judge has recommended the case of the appellants of these appeals for extension nor the District Magistrate. Their case cannot be treated at par with the appellants of the other appeals. In such a situation, no useful purpose will be served by directing the District Magistrate to perform his statutory duty, as required by sub section (4) of Section 24 of the Code again, even in respect of these appellants. 3.Although power has been vested in a particular authority, in subjective terms still judicial review is permissible. Barium Chemicals Ltd, vs Company Law Board, AIR ; State of Assam vs Bharat Kala Bhandar Ltd , AIR ; Rohtas Industries Ltd. vs S.D. Agarwal, AIR ; The Purtabpur Company Ltd. vs Call e Commissioner of Bihar, AIR [1970] SC 1989 and; M.A. Rasheed vs The State of Kerala, AIR , relied on.

Appeal No. 2069 of 1982. From the Judgment and Order dated 23 4 1982 of the Andhra Pradesh Administration Tribunal in Representation Petition No 508 of 1982. Mrs. C. Markandeya for the Appellants. PG NO 807 B. Kanta Rao and G.N. Rao for the Respondents. The Judgment of the Court was delivered by VENKATARAMIAH, J. This appeal by special leave is filed against the Judgment dated 23.4.1982 of the Andhra Pradesh Administrative Tribunal in Representation Petition No 508 of 1982 issuing a direction to the State Government to refrain from making any direct recruitment against temporary vacancies in the cadre of Assistant Engineers under the Andhra Pradesh Panchayat Raj Engineering Service (Special) Rules (hereinafter referred to as 'the Special Rules ') as amended by G.O. Ms. No. 227 dated 28.4.1980 and issuing certain other ancillary directions. The facts of the case are as follows. Recruitment to the Andhra Pradesh State and Subordinate Services was governed by the Andhra Pradesh State and Subordinate Services Rules, 1962 (hereinafter referred to as 'the General Rules '). Rule 6 of the General Rules which dealt with the method of recruitment provided that where the normal method of recruitment to any service, class or category was neither solely by direct recruitment nor solely by transfer but was both by direct recruitment and by transfer, the proportion or order in which the special rules concerned may require vacancies to be filled by persons recruited direct or by those recruited by transfer shall be applicable only to substantive vacancies in the permanent cadre. In those Rules the expression special rules meant the rules in Part III of the General Rules applicable to each service or class of service and included ad hoc rules applicable to temporary posts. On 23.3.1963 the Governor of Andhra Pradesh promulgated in exercise of his powers conferred by proviso to Article 3()9 of the Constitution of India the Special Rules providing for the constitution of and the method of recruitment to the Andhra Pradesh Panchayati Raj Engineering Service and the Special Rules were given retrospective effect from November 1, 1960 Under the Special Rules the Andhra Pradesh Panchayati Raj Engineering Service was to consist of four categories of officers, namely, Chief Engineer, Superintending Engineer, Executive Engineer and Assistant Engineer. The post of Assistant Engineer was required to be filled up as follows: "4 Assistant (1) By direct recruitment. Engineer or (2) By transfer from among (a) Junior Engineer ;or PG NO 808 (b)Supervisors of the Andhra Pradesh Panchayati Raj Engineering Subordinate Service . . . . . . . . . (c) Out of every 8 vacancies among Assistant Engineers, 3 shall be filled up or reserved to be filled up by direct recruits on the results of the competitive examinations and the remaining 5 by transferees. Note: Rules 6, 8(a)(i) and 29(b) of the General Rules for the Andhra Pradesh State and Subordinate Services shall not apply to the appointment of Assistant Engineers by direct recruitment in the Andhra Pradesh Panchayati Raj Engineering Service . . . . . . . . . By Notification bearing G.O.Ms. No 125 dated 28.5.1973 Explanation (c) in the Special Rules relating to the method of recruitment of Assistant Engineers was substituted by a new explanation which read as follows: "(c) Out of every 8 vacancies among Assistant Engineers the 2nd, 5th and 8th vacancies shall he filled in by direct recruits on the results of the competitive examination and the rest of the vacancies by transfer " Thus by the year 1978 the posts of Assistant Engineers (now designated as Deputy Executive Engineers) were be filled up either by direct recruitment or by transfer from among Junior Engineers or Supervisors or Draftsmen Ist Grade of Andhra Pradesh Panchayati Raj Subordinate Service and if no qualified or suitable candidates were available for recruitment as stated above by transfer from any other service or on tenure basis. Out of every eight vacancies in posts of Assistant Engineers the 2nd, 5th and 8th vacancy had to be filled in by direct recruits on the result of the competitive examination and the rest of the vacancies by transfer The Special Rules further provided that rules 6, 8(a)(i) and 29(b) of the General Rule would not apply to the appointment of Assistant Engineers by direct recruitment in the Andhra Pradesh Panchayati Raj Engineering Service and thereby it became permissible to the State Government to PG NO 809 take into consideration the number of temporary vacancies also in addition to the subqs vacancies in any year for purposes of recruitment. Three out of eight vacancies (which included both substantive and temporary vacancies) could be filled up by direct recruitment. In other words 37 1/2 per cent of the total number of vacancies (both substantive and temporary vacancies) in the cadre of Assistant Engineers could be filled by direct recruitment. The Chief Engineer of the Andhra Pradesh Panchayati Raj Engineering Service reported to the State Government in his letter dated 25.11.1979 that the total number of posts of Assistant Engineers (Permanent and Temporary) excluding the cyclone posts available were 203 by the end of May, 1979. Out of the said 203 posts the number of posts available for direct recruitment was 75 (203 x 3/8) and that out of them 38 vacancies of Assistant Engineers had either been filled in by direct recruitment or notified to the Public Service Commission for selection and that the balance number of vacancies available for direct recruitment were 37 for the years 1978 and 1979. Out of these 37 remaining vacancies, as 23 posts had been filled by Assistant Engineers selected in direct recruitment, an estimate of 15 vacancies of Assistant Engineers was furnished to the Public Service Commission on 3.6.1978. For the recruitment years 1978 and 1979 the estimate of vacancies were due with the Public Service Commission in the first week of May, 1978 and of May, 1979. In accordance with the above rule then in force the State Government took the decision in February, 1980 to notify 18 vacancies for the recruitment year 1978 and 18 vacancies for the recruitment year 1979. The Chief Engineer was informed of the decision of the State Govern ment to recruit the above said 18 plus 18, i.e., 36 vacancies in addition to the 15 vacancies already notified to the Public Service Commission and was asked to sent the zone wise break up of vacancies keeping in view the rules of special representation for Scheduled Castes, Scheduled Tribes, Backward Classes etc. After the receipt of the proposals from the Chief Engineer on 6.8.1981 the estimate of vacancies for the years 1978 and 1979 was also sent to the Public Service Commission for recruitment of Assistant Engineers. In the meanwhile the Public Service Commission had published an advertisement in or about September, 1980 inviting applications for recruitment of Assistant Engineers directly specifying 8.1.1981 as the last date for submitting the applications. In that notification the Public Service Commission had intimated that 15 vacancies were available for recruitment as per the first communication received by it from the State Government. When the process of recruitment was in progress some of the officer. who were working as In charge Assistant Engineers or Junior Engineers PG NO 810 in the Panchayati Raj Department Engineering Service made representations to the State Government raising objection to the proposed direct recruitment of 51 Assistant Engineers on the basis of the total number of substantive and temporary vacancies which had arisen in the years 1978 and 1979 relying upon an amendment which had been made to the Special Rules by G.O.Ms. No. 227 dated 28.4.1980 by which Explanation (c) and the proviso thereunder in the Special Rules had been substituted by the following explanation and proviso: "37 1/2 of the substantive vacancies arising in the category of Assistant Engineers shall be filled by direct recruitment on the results of the competitive examination and the remaining 62 l/2 by promotion or transfer as indicated under explanation (d) below . " Their contention was that the 51 vacancies which had been notified to the Public Service Commission for direct recruitment could not be filled up any longer by direct recruitment as according to them after the amendment of the Rules on 28.4.1980 only 37 1/2 per cent of the substantive vacancies could be filled up by direct recruitment They contended that the 5 1 vacancies which had been notified to the Public Service Commission had been arrived at by taking into consideration temporary vacancies also and that was not permissible after the amendment. They further urged that under the Special Rules, as amended on 28.4.1980, only 8 vacancies could be filled up by direct recruitment When the above representation made by them did not elicit any positive reply from the State Government, they instituted Representation Petition No. 508 of 1982 on the file of the Andhra Pradesh Administrative Tribunal for injunction restraining the State Government and the Public Service Commission from recruiting 51 persons as direct recruits to the cadre of Assistant Engineers The petition was opposed by the State Government It pleaded that the amendment made on 28.4 1980 to the Special Rules was only prospective in effect and had no effect on the vacancies which had arisen prior to the date on which the amendment was made and, therefore, it was open to the State Government to fill by direct recruitment 37 1/2 per cent of the total number of vacancies (substantive as well as temporary) in the cadre of Assistant Engineers which had arisen before the amendment. The Tribunal rejected the contention of the State Government and held that it was not permissible for the State Government to make recruitment to the 51 vacancies after the Special Rules were amended on 28.4.1980 irrespective of the fact that the vacancies in question had arisen prior to the PG NO 811 date of the amendment. Accordingly the Tribunal directed the State Government and the Public Service Commission to refrain from making any direct recruitment against the temporary vacancies in the Andhra Pradesh Panchayati Raj Engineering Service contrary to the Special Rules as they stood amended from 28.4.1980. Aggrieved by the decision of the Tribunal some of the candidates, who had been selected by the Public Service Commission as Assistant Engineers, filed a special leave petition in this Court under Article 136 of the Constitution of India requesting this Court to grant special leave to appeal against the judgment of the Tribunal. On 4.6.1982 this Court granted special leave to appeal against the judgment of the Tribunal and also stayed the operation of the judgment of the Tribunal. Thereafter the State Government issued a notification bearing G.O.Ms. No. 525 dated 30.10.1982 appointing the appellants, respondent No. 4 and 48 others as Assistant Engineers (now called Deputy Executive Engineers) on temporary basis under rule 10(a)(i)(1) of the General Rules. 44 of the 51 candidates so appointed joined service as Deputy Executive Engineers. All those who joined the service accordingly have continued to be in the service of the State of Andhra Pradesh till now. It is not necessary for purposes of this judgment to decide all the contentions which had been raised by the petitioners who had filed the representation petition before the Andhra Pradesh Administrative Tribunal since the Tribunal has allowed the petition only on one ground, namely, that the recruitment in question was governed by the Special Rules as amended on 28.4.1980 and not by the rules which were in force when the vacancies in question arose. It is clear from the Special Rules as they were in force prior to the amendment on 28.4.1980 that it was open to the State Government to fill 37 1/2 per cent of the vacancies (both substantive and temporary) in the cadre of Assistant Engineers by direct recruitment It is also not in dispute that during the years 1978 and 1979 the position of the vacancies was such that it was permissible for the State Government to appoint 51 Assistant Engineers by direct recruitment. The only question which has now to be considered is whether the amendment made on 28.4.1980 to the Special Rules applied only to the vacancies that arose after the date on which the amendment came into force or whether it applied to the vacancies which had arisen before the said date also. The crucial words in the Explanation which was introduced by way of amendment in the Special Rules on 28.4.1980 were "37 1/2 per cent of the substantive vacancies arising in the category of Assistant Engineers shall be PG NO 812 filled by the direct recruitment". If the above clause had read "37 1/2 per cent of the substantive vacancies in the category of Assistant Engineers shall be filled by the direct recruitment" perhaps there would not have been much room for discussion. The said clause then would have applied even to the vacancies which had arisen prior to the date of the amendment but which had not been filled up before that date. We feel that there is much force in the submission made on behalf of the appellants and the State Government that the introduction of the word 'arising ' in the above clause made it applicable only to those vacancies which came into existence subsequent to the date of amendment. In Eramma vs Verrupanna & Ors., the words "the property of a male Hindu dying intestate shall devolve according to the provisions of this Chapter" in section 8 of the came up for consideration. In that case this Court held that the words "the property of a male Hindu dying intestate shall devolve" occurring in section 8 made it very clear that the property whose devolution was provided for by that section must be the property of a person who had died after the commencement of the and it could not be the property which belonged to a Hindu male who had died before the said Act came into force The effect of the use of the word `arising ' in the Special Rules qualifying the word `vacancies ' is also the same. The clause which was introduced in the Special Rules by the amendment made on 28.4.1980 cannot, therefore, be interpreted as having any effect on the vacancies which had arisen prior to the date of the amendment. We do not find any indication in the amendment that was made on 28 4 1980 that it would be applicable to the vacancies which had arisen prior to the date of the amendment even by necessary implication In the instant case the State Government had taken the decision even before the amendment came into force to fill up the vacancies by direct recruitment according to the law prevailing then. Had it been the intention of the State Government, while promulgating the amendment that the amendment should be applicable to the vacancies which had arisen prior to the date of the amendment simultaneously the State Government would have addressed a letter to the Public Service Commission to make recruitment in accordance with the Special Rules as amended on 28 4.1980 No such action was taken by the State Government in this case. We may at this stage refer to another decision of this Court in Y. V. Rangaiah and Others etc. vs J. Sreenivasa Rao and Others, [ 1983] H 3 S.C.C. 264 in which in a similar situation this Court has observed in Paragraph 9 at page 289 thus: PG NO 813 "The vacancies which occurred prior to the amended rules would be governed by the old rules and not by the amended rules. It is admitted by counsel for both the parties that henceforth promotion to the post of Sub Registrar Grade II will be according to the new rules on the zonal basis and not on the State wide basis and, therefore, there was no question of challenging the new rules But the question is of filling the vacancies that occurred prior to the amended rules. We have not the slightest doubt that the posts which fell vacant prior to the amended rules would be governed by the old rules and not by the new rules " The facts of the case before us are in no way different from the facts involved in the above decision In view of the foregoing we are of the view that the observations made by the Tribunal to the following effect, namely: "In this case the rules for recruitment have been changed on 28.4.1980. Hence, prima facie it would not be legal to make direct recruitment against temporary vacancies, even if the vacancies were at an earlier date ear marked for direct recruits . . In these circumstances, there is, in my opinion, no scope for direct recruitment against temporary vacancies after 28.4.1980, i.e., the date on which the rules were amended as stated above." are unsustainable. We hold that the amendment made on 28 4 1980) does not apply to the vacancies which had arisen prior to the date of the amendment We accordingly set aside the judgment of the Tribunal and remand the case to it again to decide in the light of the above observations the other contentions which had been raised by the persons who had filed the Representation Petition before the Tribunal and to dispose of the case on the basis of the findings to be recorded by it on those contentions The appeal is accordingly disposed of. There is no order as to costs. R.S.S. Appeal disposed of.

The Public Service Commission invited applications for direct recruitment against 51 vacancies of Assistant Engineers in the Andhra Pradesh Panchayat Raj Engineering Service. The number of vacancies was arrived at under the provisions of the Andhra Pradesh Panchayat Raj Engineering Service (Special) Rules 1963, on the basis of the total number of substantive as well as temporary vacancies which had arisen in the years 1978 and 1979. Explanation (c) in the special Rules relating to the method of recruitment of Assistant Engineers, prior to its amendment on 28.4.1980. provided that "out of every 8 vacancies among Assistant Engineers, the 2nd, 5th and 8th vacancies shall be filled in by direct recruitment . ". The amended Explanation (c) provided that "37 1/2 of the substantive vacancies arising in the category of Assistant Engineers shall be filled by direct recruitment . " Some of the officers who were working as In charge Assistant Engineers or Junior Engineers in the Panchayat Raj Department Engineering Service made representations to the state Government raising objection to the number of vacancies notified for direct recruitment, contending that the 51 vacancies notified could not be filled up any longer by direct recruitment as, according tn them, after the amendment of the Rules on 2X.4.1980, 37 l/2 per cent of only substantive vacancies could be filled up by direct recruitment. while the vacancies notified had taken into consideration temporary vacancies also When their representation failed to elicit any positive reply from the State Government, they instituted a petition before the Andhra Pradesh Administrative Tribunal. Before the Tribunal the State Government pleaded that the amendment made on 28.4.1980 to the Special Rules was only prospective in effect and had no effect on the PG NO 805 PG NO 806 vacancies which had arisen prior to that date. The Tribunal rejected the contention of the State Government. Setting aside the judgment of the Tribunal and remanding the case to it again, this Court, HELD: (1) It is clear from the Special Rules as they were in force prior to the amendment on 28.4.1980 that it was open to the State Government to fill 37 1/2 per cent of the vacancies (both substantive and temporary) in the cadre of Assistant Engineers by direct recruitment. [811F] (2) The crucial words in the Explanation which was introduced by way of amendment in the Special Rules on 28.4.1980 were "37 1/2 per cent of the substantive vacancies arising in the category of Assistant Engineers shall be filled by direct recruitment. " The introduction of the word 'arising ' in the above clause made it applicable only to those vacancies which came into existence subsequent to the date of amendment. [811H;812A B] (3) This Court does not find any indication in the amendment that was made on 28.4.1980 that it would be applicable to the vacancies which had arisen prior to the date of the amendment even by necessary implication.[812E F] (4) The amendment made on 28.4.1980 therefore does not apply to the vacancies which had arisen prior to the date of the amendment. [813F] Eramma vs Verrupanna & Ors., and Y.V. Rangaiah and Others vs J. Sreenivasa Rao & Ors., 11983] 3 SCC 264, referred to.

Appeal No. 1527 of 1974. Appeal by Special Leave from the Judgment & Order dated the 14th December, 1973 of the Delhi High Court in Civil Writ No. 1678 of 1967. F. section Nariman, Addl. Gen. of India, D. N. Mukherjee and R. N. Sahthey, for the Appellants. N. A. Palkhiala, Ravinder Narain, J. B. Dadachanji, O. C. Mathur, K. J. John and K. R. Jhaveri, for the Respondent. 419 The Judgment of the, Court was delivered by Goswami, J. This appeal is by special leave from the judgment of the Delhi High Court in a writ application there under article, 226 of the Constitution. The respondent manufactures various other items hot rolled finished steel products in rectangular cross section of thickness varying between 1.7 mm and 6.55 mm and width varying between 16.2 mm and 311.2 mm and rolled in coils which it supplies to the, Indian Tube Company Limited at Jamshedpur for making tubes and also to others. This article is subjected to Central Excise Duty under the (hereinafter called the Act). The dispute between the respondent and the appellants is that while the former describes the said manufactured product as strip the appellants classify it as skelp. This difference in classifying the product differently results in fiscal misfortune to the respondent since skelp is subjected to a higher Central Excise Duty than strip. It may be stated that during the period from April 24, 1962 to February 28, 1964, the respondent described its product as skelp and it was subjected then to a lower rate of,duty From February 19, 1964, the respondent claimed that the aforesaid product be classified as strip since there. had been a levy of higher duty for skelp. The Assistant Collector, Central Excise, Jamshedpur, who is the primary taxing authority, the Collector of Central Excise, Patna, in appeal, and the Central Government in revision rejected the contention of the respondent by successive orders, each authority upon its own test of the definition of the product as skelp. That led to the successful writ application of the respondent in the High Court resulting in this appeal. In the forefront of his argument the learned Additional Solicitor General for the appellants relying upon two decisions of this Court, namely, The Collector of Customs, Madras vs K. Ganga Setty(1) and V. V. Iyer of Bombay vs Jasjit Singh, Collector of Customs and Another,(2) submitted that "it is primarily for the taxing authorities to determine the heads or entry under which any particular commodity fell; but that if in doing so, these authorities adopted a construction which no reasonable person could adopt i.e., if the construction was preverse then it was a case in which the Court was competent to interfere. In other worlds, if there were two constructions which an entry could reasonably bear, and, one of them which was in favour of Revenue was adopted, the Court has no jurisdiction to interfere merely because the other interpretation favourable to the subject appeals to the Court as the better one to adopt '. On the other hand with equal emphasis Mr. Palkhivala for the respondent submitted that an assessment without the application of an identifiable test is nothing but perverse and arbitrary. He submits that in the present case there was no identifiable test before the taxing authorities by which the (1) ; (2) 420 product of the, respondent could be held to be skelp and not strip subjecting the respondent to a heavier duty. According to the learned counsel there is no difference. between sklep and strip, the two items being interchangeable. It may be, noted for our purpose that under section 3 of the Act Central excise Duties are leviable on all excisable goods which are produced or manufactured in India at the rates set out in the First Schedule. Item No. 26AA in that Schedule relates to iron and steel products and mentions in sub item (iii) therein flats, skelp and strips showing the rate of duty in the third column. Under rule 8 of the Central Excise Rules, 1944, made under section 37 of the Act, the Central Government may from time to time by notification in the official gazette exempt, subject to such conditions as may be specified in the notification, any excisable goods from whole or any part of the duty leviable on such goods. In exercise of the power under this rule the Central Government has made such exemptions in the rates of duty as have made it higher on skelp than on strip. Before we proceed further we may notice how the various Excise authorities dealt with the matter at different.stages. The first order is that of the Assistant Collector of Central Excise, Jamshedpur, which was on June 17, 1964. According to him "skelp is the name used in reference to a plate of wrought iron or steel used for making pipe or tubing by rolling the skelp into shape and lap welding or brevetting ,edges together and strip is a term used to describe a flat rolled product of smaller cross section than sheet or bar." He accordingly adopted the definition given in Marymen 's Dictionary of Metallurgy. The order of the Collector of Central Excise in appeal made on October 24/29, 1964, shows that the authority noted the definition of strip as follows : "Hot or cold rolled finished steel product in rectangular cross section of thickness below 5 mm and of width below 800 mm and supplied, in straight length". This definition is substantially in. conformity with the one given by the Indian Standards Institution (ISI). The appellate authority held that "since the products have not satisfied the above specifications, they have been correctly, classified as 'skelp ' by. the Assistant Collec tor. Then comes the order in revision of the Central Government of August 18, 1967. Inter alia it was held that "the product does have bevel edge, .; peculiar to skelp and not found in strips. Under the circumstances, there is no doubt whatever that the product in question is correctly classified as skelp". From the above three orders it is clear that the authorities were not at all certain about a uniform definition of 'skelp ' distinguishing it from 'strip. Extensive arguments were advanced at the bar with regard to the definitions of there two words. We may, therefore, look 421 at the various definitions to which our attention has been drawn. Since the appellants largely upon the definitions given by the Indian Standards Institution, "an expert body", we will first note these definitions. The ISI 's definitions of strip and skelp as given in IS 1956 1962 (amended upto July 1968) are as follows Upto 1965 the ISI gave, no description of strip. It had defined skelp in 1962 as follows: Skelp. "Hot rolled narrow strip with rolled (square, slightly round or beveled) edge. Strip . A hot or cold rolled flat product, rolled in rectangular cross section of thickness 10 mm and below and supplied with mill, trimmed or sheared edge. (a) Narrow strip strip (other than hoop) of width below 600 mm and supplied in straight length or in coil form. (b) Wide Strip Strip of width 600 mm above and supplied in coil form only. " Upto 1965 the ISI gave no description of strip. It had defined skelp in 1962 as follows "Hot rolled. strip with square or slightly beveled edges, used for making welded tubes". In 1968 the ISI 's definition of skelp stands as follows "Hot rolled narrow strip with rolled (square, slightly round or beveled edge. ,, Strip was defined by the ISI for the first time in 1965 as follows: "Coiled Strip A hot or cold rolled flat product, rolled in rectangular cross section and supplied in coil form. Strip A hot or cold rolled flat product, rolled in rectangular cross section thickness below 5 mm and of width below 600mm and supplied in straight lengths". The ISI 's definition of strip given in 1968 is as follows "A hot or cold rolled flat product, rolled in rectangular cross section of thickness 10 mm and below and supplied with mill, trimmed or sheared edges. (a) Narrow strip Strip (other than hoop) of width below 600 mm and supplied in straight length or in coil form. (b) Wide strip Strip of width 600 mm and above and supplied in coil form only". Annexure 'J ' submitted by the respondent along 'with its rejoinder affidavit in the High Court at page 101 of the record, gives various 422 definitions of skelp taken. from various dictionaries and treatises such as Hornor J. G. Dictionary of Terms, page 323, year 1952; Brandt D.J.C. Manufacture of Iron & Steel, pages 318 and 319, year 1953; Henderson J.C. Metallurgical Dictionary, page 192, year 1953; Backert A.O.L. A.B.C. of Iron & Steel, page 1912, year 1925 5th edition; Chamber 's Technical Dictionary, year 1967. Similarly definition of strip is also given from these Dictionaries and books. It is also pointed out that there is no category of skelp mentioned in Brussels Nomenclature. British Standards 2094, Part 4; 1954, defines skelp as follows : "Hot rolled strip with square or slightly bevelled edges used for making welded tubes". Chamber 's Technical Dictionary Revised Edition (Reprinted 1954) defines skelp as follows "Skelp (P. 775) Mild steel strip from which tubes are made by drawing through a bell at welding temperature, to produce lap welded or butt welded tubes". We may not add to the list but are satisfied that there are a large number of definitions out of which one can be picked up to satisfy the definition of skelp according to some authority and another definition to fit in with the concept of strip according to another authority Since the duties on strip and skelp are not the same, it is absolutely necessary to define the word skelp so that there can be no doubt or confusion in the mind of either of the taxing authority or of the tax payer with regard to the tax liability qua skelp as opposed to strip. Since, however. there is no statutory definition of this controversial item different tests have naturally been resorted to by the different authorities and the same variation is discernible even in the affidavits of the appellants submitted before the High Court. The short question, therefore, that arises for consideration is whether in the above background the High Court was right in interfering with the orders under article 226 of the Constitution. It is not for the High Court nor for this Court to come to a conclusion on facts as to whether the product can truly come under the description of skelp. That undoubtedly would require some evidence be taken at the level of the taxing authority provided, however, there is an identifiable, uniform and determinate test by which skelp can be properly distinguished from strip. In the mass of documents filed before us and the extensive arguments addressed at the bar with regard to the definitions 'culled from various dictionaries, handbooks and authorities, we are not at all surprised that the three authorities came to the same conclusion by depending upon their own chosen tests. A particular type, of strip may according to certain definitions. be skelp and according to others not Skelp. however, cannot be permitted in a fiscal legislation which by all standards should adopt a clear definition of an excisable item which is incapable of giving rise to a confounding contro 423 versy as in this case unless the, matter is beyond doubt in view of the popular meaning, or meaning ascribed to the term in commercial parlance. In absence of any clear criterion to determine what is skelp. and not strip, no useful purpose would be served by even remanding, the matter to the Excise authorities for a decision after taking necessary evidence. It is only when a taxing law provides for a clear and unequivocal test for determination as to whether a particular product would fall under strip of skelp it may be possible for the authorities. to address itself to the evidence submitted by the parties in order to come to a decision on the basis of the test. This is, however, not possible in this ' case in view of the fact that there is no identifiable standard. The best way is to define the product for the purpose of excise duty in approximate terms demarcating clearly the distinction between. the two terms. The absence of any identifiable standard would, therefore, naturally give rise, to the scope for arbitrary assessment at the hands of different authorities. Whether this has happened in this case, as. ' complained by the respondent citing the instance of the Hindustan Steel Company, Rourkela, it is not necessary for us to pursue in this,, appeal. We are, therefore, unable to hold that the High Court has. gone wrong in granting the reliefs prayed for. The appellants strenuously emphasized upon the test relied upon in the Revisional order as to skelp having bevelled edges which, according to them, is peculiar to skelp and not to strip. But this does not bear scrutiny as on the counter affidavit of the Union of India in the High Court at page 57 of this record it shows that "as regards tested Hot rolled Strips the edges are never looked into, they can be bevelled, square or have Mill edge" (emphasis added). This is an admission of the appellants that strips may also have bevelled edges. The two decisions relied upon by the appellants do not come to their aid in this case since there is no identifiable standard or test to determine clearly which product can be skelp and not strip. In Ganga Setty 's case (supra) the controversy arose with regard to whether "feed oats" fell within item 42 (fodder) or within item 32 (grain) of parti cular circular. Dealing with the matter this Court observed as follows: ". any particular species of grain cannot be excluded merely because it is capable of being used as cattle or horse feeds. The decision of the Customs authorities, therefore, this Court held could not be characterized as Perverse or mala fide calling for interference. Similarly following Ganga Setty 's case (supra) in Jasjit Singh 's case (supra) the conclusion and findings of the Customs authorities were accepted a reasonable. In both the above cases there were definite tests by which the particular article could be held to fall under one item and not under the other and the construction of the authorities 424 with regard to the scope of the particular entries was, therefore, held to be reasonable and not calling for interference by the court. The ,question that arises in the instant case is of a completely different nature as pointed out above there being no identifiable test reasonably capable ,of distinguishing skelp from strip. In the result the appeal fails and is dismissed with costs. P.H.P. Appeal dismissed.

The respondent manufactures hot rolled finished steel products in rectangular cross section, of thickness varying between 16.2 mm and 311.2 mm in coils (hereinafter a referred to as the Product) product as Strip whereas the appellant classifies it as a skelp. to higher excise duty than Strip. The Assistant Collector the product as Skelp. On appeal to the Collector of and rolled The respondent describes the Sklip is subject Central Excise treated Central Excise, he confirmed it and in revision the Central Government also approved. The respondent filed a Writ Petition in the High Court. The High Court accepted the contention of the respondent. On appeal by Special Leave the appellant contended before this Court : (i) That it is primarily for the Taxing Authorities to determine the head or nature under which any particular commodity fell. (ii) The Court can interfere with the decision only if it is perverse. if there were two constructions possible and if the Taxing Authority accepts one of them the Court cannot interfere. The respondent submitted '. (i) Assessment without application of an identifiable test is perverse and arbitrary. (ii) In the present case. there was no iden tifiable test before the Taxing Authorities. There is no difference between Skelp and Strip. Dismissing the appeal, Held : There are large number of definitions out of which one can be picked up to satisfy the definition of Skelp according to some. authority and another definition to fit in with the concept of strip according to another authority. Since there is no statutory definition for Skelp and Strip, different tests have been resorted to by the different authorities. The question arises whether the High Court was right in interfering with the orders under article 226 of the: Constitution. It is not for this Court to come to the conclusion on facts. The absence of any identifiable standard naturally gives rise to the scope for arbitrary assessment at the hands of different authorities. It is not possible to hold that: the High Court has gone wrong in granting the reliefs prayed for. [422D F; 423C]

vil Appeal No. 1747 (N) of 1973. From the Judgment and Order dated 16.6.1972 of the Calcutta High Court in Appeal No. 54 of 1969. C.S. Vaidayanathan, Pravir Choudhary, K.V. Mohan, H.K. Dutt and S.R. Bhat for the Appellant. G.S. Chatterjee for the Respondent. The Judgment of the Court was delivered by KHALID, J. This is an appeal by special leave filed by the plaintiff bank against the judgment of the Calcutta High Court, arising from suit No. 547 of 1952, filed for recovery of a sum of Rs.17,091 0 1 with interest. The question in volved in this appeal is a short one, but of general impor tance to banks in the country. we have made it clear to the appellant bank that we are interested only in laying down the law in this appeal and not in giving a decree to the bank for this small amount, the claim for which originated nearly 35 years ago. The learned counsel for the appellant bank has agreed to this suggestion. The defendant in the suit was one Ramesh Chandra Roy Choudhury. The plaintiff was the United Bank of India Ltd. The defendant had an over draft account with the bank. He died on the 6th November, 1960. On the 20th Dec., 1960 the widow of the defendant, 1092 Smt. Kananbala Devi informed the Deshapriya Park Branch of the bank of the death of the defendant. The bank had several branches in Calcutta. One of the branches was the Royal Exchange Branch. It was this branch that instituted the suit in question. The applications for impleading the legal representa tives of the defendant and for setting aside abatement were made by a Chambers Summons on the 8th August, 1968 about 8 years after the death of the defendant. The delay in making these applications was attempted to be explained with the plea that the Royal Exchange Branch of the bank had no knowledge of the death of the defendant till the Deshapriya Park Branch was informed of the death. The High Court re jected the applications holding that "In our opinion it is no explanation to say that the Royal Exchange Branch of the plaintiff bank which had really instituted the suit could not and/or did not have knowledge of the death of Ramesh Chandra Roy Choudhury. An intimation of the death of Ramesh Chandra Roy Choudhury to the bank in the Deshapriya Park Branch could not be treated as no intimation to the bank which happens to be the plaintiff in this suit. In our view no sufficient cause was shown in the petition for setting aside the abatement and the learned Judge was right in dismissing the said application. The appeal, therefore, fails and is dismissed" Hence this appeal. The learned counsel for the appellant submits that it would be extremely dangerous for courts to impute knowledge of the death of a customer with all the branches of a bank, solely on the strength of information given to a particular branch of the bank. It is submitted that in these days when banking business has expanded by leaps and bounds with branches spread over large areas, it would not be possible for a particular branch to know the death of one of its customers if that branch had not been informed of the death. In the absence of highly technical modern methods or com puterised information to all the branches, of their custom ers and their details, no branch of a bank can be presumed to know whether a particular customer is alive or not unless that hank is given necessary information. The submission that all branches of a bank should be imputed with constructive knowledge of the death of a cus tomer simply because one of the branches had been informed of it would result in adverse consequences and would defeat actions by banks for recovery of dues 1093 and would work great loss to banks and would harm public interest. In this case, it is not stated or proved that the Royal Exchange Branch had information earlier about the death of the defendant. To prove this we have two letters produced by the appellant: (1) dated 3rd June, 1968 and the other dated 17th June, 1968. The two letters read as fol lows: 10 OLD POST OFFICE ST., CALCUTTA. M/s. S.N. Sen & Co. Dear Sir, 3rd June, 1968. United Bank of India Ltd. vs Ramesh Chandra Roy Choudhury. As I have not yet been able to make contact with my client until now in spite of my at tempts on that behalf, please do not mention the suit tomorrow but mention the suit some time next week. The suit was part heard about 9 or 10 years before and my client has not seen since then. I hope you will mention the suit next week on previous notice to me. Yours faithful ly, sd/ K.P. Mustaphy. M/s. S.N. Sen & Co. Dear Sir, 17th June 1968. Suit No. 547 of 1952 United Bank of India Ltd. V. Ramesh Chandra Roy Choudhury Kindly note that when the above suit will be mentioned by you before his Lordship the Hon 'ble Mr. Justice R.M. Dutt, I will submit his Lordship that as the defendant died in 1960, the suit has abated and cannot be pro ceeded with. Yours faithful ly, Sd/ K.P. Mustaphy. Both the letters are written by the counsel for the defend ant to 1094 the bank. It is evident from the first letter that even on 3rd June, 1968, the counsel for the defendant did not know about the death of the defendant. It was only thereafter that he came to know of the same. This branch of law appears to be barren of authority. A question akin to this is reported in 1918, The Times Law Reports, Volume XXXV, page 142. The brief facts are as follows: The plaintiffs ' claim in the suit was on a cheque for a 100, dated February 5, 1918 drawn by the ,defendant and made payable to the order of a Mrs. N. Try, who endorsed it to the plaintiffs. The defendant obtained leave to defend. The bank had branch at Victoria street, Westminster. of which the manager was Mr. Stephen Trott. Among their customers was Mrs. Try. The bank had a branch at the Oxford street branch of the Bank and she asked the manager to cash it. The amount was paid. The manager had no notice that the cheque had been stopped. The cheque when presented by the Victoria street Branch to the Oxford street Branch was returned marked "Ordered not to pay". The cheque was stopped by a letter from the defendant to the Oxford street Branch. That letter was undated. It was under these circumstances that the action was brought. The question was when the drawer of a cheque stops payment by a notice given only to that branch on which it is drawn and the payee afterwards endorses the cheque to anoth er branch of the same bank and the manager of that other branch advances money on the cheque in good faith and with out notice that the cheque had been stopped, whether the bank is entitled to recover against the drawer in an action on the cheque. Here it was clear that the cheque was stopped on the Oxford street Branch and that there was no notice yet at the Victoria street Branch when the cheque was pre sented. it was held that the bank was the holder of the cheque and the fact that the branch at Oxford street had notice not to pay the cheque did not affect the bank and, therefore, the bank was entitled to relief. It was observed that there was a right to a separate notice of dishonour as between the different branches of a bank. Though this judgment is not .on all fours with our case, we seek some assistance from it for our purpose and that limited purpose is that notice to one branch of a bank is no notice to the other branches. That being so the fact that the Deshapriya Park Branch had knowledge of 1095 the death, will not be sufficient to impute Royal Exchange Branch with constructive notice and reject the applications to set aside abatement and to condone delay. Of course, the law under the present Civil Procedure Code obviates this difficulty to some extent under Order 22 Rule 10 A, Under the rule, when a pleader appearing for a party to the suit comes to know of the death of that party, he shall inform the Court about it, whereupon the Court shall give notice of such death of the other party. However, this provision not being absolutely mandatory and cast a duty only on the pleader, we thought it necessary to answer the question of law involved in this appeal. For the foregoing reasons we hold that the High Court was in an error in rejecting the application to set aside abatement and to condone delay on the plea that notice to one branch will be notice to other branches. We set aside the judgment of the High Court and allow this appeal with no order as to costs, As indicated above, the matter will rest here and the bank will not be permitted to proceed against the defendant or his legal representa tives to realize the amount involved in the suit. The amount will be deemed to have been fully discharged. We have only decided the question of law for the benefit of the banks and general public. P.S.S. Appeal allowed.

The defendant had an overdraft account with a particular branch of the plaintiff bank in the city. A suit was insti tuted against him by that branch in 1952 for recovery of certain sums with interest. He died on 6th November 1960. The widow informed another branch of the bank of the death of her husband on 20th December, 1960. The applications for impleading the legal representa tives of the defendant and for setting aside abatement were made in 1968, about 8 years after the death of the defend ant. The delay in making these applications was sought to be explained with the plea that the concerned branch of the bank had no knowledge of the death of the defendant till it was informed by the other branch. The High Court rejected the applications on the ground that no sufficient cause was shown for setting aside abate ment. It held that an intimation of the death of the defend ant to the bank in the other branch could not be treated as no intimation to the branch which was the plaintiff in the suit. Allowing the appeal by special leave, the Court, HELD: The High Court was in error in rejecting the application to set aside abatement and to condone delay. [1095C] All branches of a bank could not be imputed with con structive knowledge of the death of a customer simply be cause one of the branches had been informed of it, for notice to one branch of a bank is no notice to the other branches. [1092H; 1094H] 1091 In the instant case, it is not stated or proved that the branch which had filed the suit had information earlier about the death of the defendant. It is evident from the record that even on 3rd June, 1968 the counsel for the defendant did not know about the death of the defendant. The fact that a particular branch of the plaintiff bank had knowledge of the death was not sufficient to impute the concerned branch with constructive notice. [1093A; 1094A, H; 1095A] (1918) The Times Law Reports, Vol. XXXV, p. 142 referred to. The provisions of 0. 22, R. 10 A of the Civil Procedure Code requiring a pleader appearing for a party to the suit to inform the court when he comes to know of the death of that party, whereupon the court is enjoined to give notice of such death to the other party, casts a duty only on the pleader and is not absolutely mandatory. [1095B]

N: Criminal Appeal No. 261 of 1976. Appeal by Special Leave from the Judgment and order dated 2 12 1975 of the Andhra Pradesh High Court in Criminal Misc. Petition No. 2064/75. D. V. Patel, Naunitlal and Miss Kiran Singh for the Appellants. P. P. Rao, K. Narayan Rao and G. N. Rao for the Respondent. 93 The Judgment of the Court was delivered by JASWANT SINGH, J. The appellants who are Directors of Tandur and Navandgi Stone Quarries Private Limited and holders of a mining lease for extraction of lime stones (Shahabad Stones) are being prosecuted in the Court of Munsif, Judicial Magistrate, First Class, Tandur, for the alleged violation of Rule 21 (1)(ii) of the Mineral Conservation and Development Rules, 1958 which is made punishable under Rule 27 of the said Rules in that they failed to employ a qualified geologist or a mining engineer. they made an application before the trial Magistrate urging by way of preliminary objection that the complaint against them was not maintainable in view of the fact that the 'Shahabad Stones ' Which were being extracted by them were used fol. building and construction purposes and as such were minor minerals which were specifically excluded from the purview of the Rules. The Magistrate dismissed the application holding that what was being operated by the appellants was 'a mine for the purpose of the provisions of Rule 21 of the Mineral Conservation and Development Rules, D, 1958 '. The appellants thereupon moved the High Court for quashing the aforesaid criminal proceedings pending against them reiterating that as the Shahabad Stones which they were extracting were used for building purposes and were described as minor minerals in Item 15 of Schedule I to the Andhra Pradesh Minor Mineral Concession Rules, 1966 (hereinafter referred to as M.M.C. Rules, 1966), the complaint against them was not tenable. 'The High Court dismissed the application holding that the inherent powers possessed by it under Section 482 of the Code of Criminal Procedure 1973 could be invoked and exercised only when the facts alleged in the complaint if they are accepted to be correct at their face value, do not make out an offence with which the accused is charged. The High Court further held that merely because the 'Shahabad Stones ' were included in Schedule I to Rule 10 of the M.M.C. Rules, it could not be said straightway that the Stones which were being extracted by the appellants were minor minerals and that some evidence regarding their user was necessary for determination of the question as to whether the appellants were entitled to the benefit of the provision of Rule 2 of the M.M.C. & D. Rules which Provided that the M.M.C. Rules do not apply to the minor minerals. It is this refusal of the High Court to quash the proceedings which has given rise to the present appeal. It is now well settled that the High Court does not ordinarily interfere at an interlocutory stage of a criminal proceedings pending in a subordinate Court. Bearing in mind the well recognised principles of law governing the matter and taking into consideration the nature of 94 the impugned order, we think the High Court was right in declining to grant relief to the appellants. It is also not a matter in which we may legitimately interfere in exercise of our extraordinary powers under Article 136 of the Constitution specially when the case is at its threshold and evidence has still to be adduced as to whether the minerals extracted could or could not be used as a major mineral for certain purposes. It must be realised that it is not possible to determine difficult question of the kind involved in the instant case purely in abstract without relevant evidence bearing on the matter in issue. Accordingly, we dismiss the appeal. Our order will not, however, be interpreted as barring the appellants from raising any defence or contention that may be open to them before the trial court which will dispose of the same in accordance with law uninhibited by any observations made by it earlier or by the High Court in the course of its Order dismissing the application under section 482 of the Code of Criminal Procedure, 1973. S.R. Appeal dismissed.

"Shahabad Stones" are included under Item 15 in Schedule I to Rule 10 of the Andhra Pradesh Minor Mineral Concession Rules 1966. The appellants, who are directors of Tandur and Navandgi Stone Quarries (Pvt.) Ltd. and holders of mining lease for extraction of lime stones (Shahabad Stones when being prosecuted, for the alleged violation of Rule 21(1)(ii) of the Mineral Conservation and Development Rules, 1958 which is made punishable under Rules 27 of the said rules in that they failed to employ a qualified geologist or a mining engineer, raised a preliminary objection as to the maintainability of the complaint in view of the specific exclusion of the "Shahabad Stones" from the purview of the 1958 Rules, being a minor mineral being used for building and construction purposes. The trial magistrate dismissed the application and the High Court declined to interfere under Section 48 of the Criminal Procedure Code, 1973. Dismissing the appeal by special leave the Court, ^ HELD: As the High Court does not ordinarily interfere at an interlocutory stage of a criminal proceedings pending in a subordinate Court, the A.P. High Court was right in declining to grant relief to the appellants, bearing in mind the well recognised principles of law governing the matter and taking into consideration the nature of the impugned order. It is also not a matter in which Supreme Court may legitimately interfere in exercise of their extra ordinary powers under article 136 of the Constitution especially when the case at its threshold and evidence has still to be adduced as to whether the minerals extracted could or could not be used as a major mineral for certain purposes. It is not possible to determine difficult question of the kind involved in the instant case, purely in abstract without relevant evidence bearing on the matter in issue. [93G H, 94A B]

ON: Criminal Appeal No. 114 of 1954. Appeal from the judgment and order dated July 21, 1954, of the Calcutta High Court in Reference No. 6 of 1954, under Section 307 of the Criminal Procedure Code made by the Additional Sessions Judge, 24 Parganas at Alipore on the June 7, 1954, in Sessions Trial No. 2 of May, 1954. section C. Isaacs, and section N. Mukherjee, for the appellants. A. C. Mitra, D. N. Mukherjee and P. K. Bose, for the respondent. November 19. The following Judgment of the Court was delivered by IMAM J. In this appeal by special leave the substantial question for consideration is whether the reference made to the Calcutta High Court by the 962 Additional Sessions Judge of Alipur under section 307 of the Code of Criminal Procedure (hereinafter referred to as the Code) was competent and, if not, whether the High Court acted with jurisdiction in convicting or acquitting any of the accused who were tried by the Additional sessions Judge and a jury. There were eight accused on trial in the Court of Session all of whom were charged under sections 147 and 304/149 of the Indian Penal Code. Four of them, namely, accused No. 1, Sashi Mohan Debnath, accused No. 2, Rajendra Debnath, accused No. 3, Manindra Debnath and accused No. 6, Rohini Kumar Debnath were further charged under section 201, Indian Penal Code. The trial Judge delivered a charge to the jury which was favourable to the accused. The jury returned a unanimous verdict of not guilty under section 304/149 of the Indian Penal Code, which the learned Judge accepted. He, accordingly, acquitted all the accused charged with this offence. The jury, however, with respect to charges under sections 147 and 201 of the Indian Penal Code returned a unanimous verdict of guilty against the accused charged with these offences. The trial Judge disagreed with this verdict and made a reference under section 307 of the Code to the High Court, being of the opinion that the accused were not guilty of these offences. The High Court accepted the reference in part and in agreement with the jury 's verdict of guilty under sections 147 and 201 of the Indian Penal Code convicted the accused Sashi Mohan Debnath, Rajendra Debnath, Sudbanshu Kumar Debnath, Dinesh Chandra Debnath and Bonomali Das under section 147 of the Indian Penal Code and sentenced each of them to undergo one year 's rigorous imprisonment and the accused Sashi Mohan Debnath and Rajendra Debnath under section 201 of the Indian Penal Code and sentenced each of them to undergo rigorous imprisonment for three years. The sentences with respect to the accused Sashi Mohan Debnath and Rajendra Debnath were ordered to run concurrently. The High Court did not accept the verdict of the jury with respect to the accused Manindra Debnath and Gouranga Debnath under section 147 of the Indian Penal 963 Code and under section 201 against Manindra Debnath and Rohini Kumar Debnath and acquitted them. The present appeal is by the accused Sashi Mohan, Debnath, Rajendra Debnath, Sudhanshu Kumar Debnath and Bonomali Das. When the appeal came on for hearing on September 12, 1956, it was found necessary by this Court to have the appeal heard in the presence of the accused No. 3, Manindra Debnath, accused No. 6, Rohini Kumar Debnath and accused No. 8, Gouranga Debnath. The reason for issuing notices upon them has been fully stated in the order passed that day. Accordingly, notices were issued to these accused and they were served upon Manindra Debnath and Gouranga Debnath. So far as Rohini Kumar Debnath was concerned, it was reported that he could not be traced and no one could say where he had gone after selling all his properties and that no relative of his could be found. None of these three accused have entered appearances in this Court. It is unnecessary to refer either to the facts concerning the occurrence or the case of the prosecution and the defence, as the only question for decision before us is a question of law. Indeed, no submissions were made either on behalf of the appellants or on behalf of the respondent on the facts of the present case. In order to determine whether the reference made under section 307 of the Code by the Additional Sessions Judge of Alipur was competent, it is necessary to examine the provisions of that section and consider some of the decisions of the High Courts in India in this connection. But before we do this, some general considerations concerning trials by jury and interference with their verdict by the High Court may be stated. The scheme of the Code clearly suggests that at a trial in the Court of Sessions the trial can be either with the aid of assessors or by a jury depending upon whether the offence for which the accused was,, being tried was triable with the aid of assessors or by a jury. The Code even contemplates a trial of the accused for certain offences which were triable with the aid of assessors and other offences which were triable 964 by a jury at the same trial, in which case the jurors acted as assessors for the offences which were triable with the aid of assessors. Although a trial by a jury was provided for by the Code, it did not compel the judge to accept the verdict. It permitted him to disagree with it but did not permit him to record a judgment unlike the case of a trial with the aid of assessors where the Judge could disagree with their opinion and record a judgment. The purpose of the Code was to regard the jury 's verdict as of sufficient importance to prevent the Judge in the Court of Session from recording a judgment if the Judge disagreed with it. It was considered that if the verdict of the jury was to be displaced, it must be displaced, if at all, by the High Court which must give due weight to the opinion of the jury and the Judge and after considering the entire evidence. In other words, the High Court could do what the jury did after giving due weight to the opinion of the Judge and considering the entire evidence. Ordinarily, a jury 's verdict on questions of fact would not easily be disregarded by the High Court because the basic principle of a trial by jury is that the jury are masters of fact. The verdict of the jury would not be reversed by the High Court merely because it disagreed with it. If the High Court, after considering the entire evidence, came to the conclusion that no reasonable body of men could have reached the conclusion arrived at by the jury, then the High Court would be entitled to disregard the verdict. At the time that the reference was made under section 307 by the Additional Sessions Judge, the provisions of section 307 were in the following terms: " 307. (1) If in any such case the Judge disagrees ,with the verdict of the jurors, or of a majority of the jurors, on all or any of the charges on which (any accused person) has been tried, and is clearly of the opinion that it is necessary for the ends of justice to submit the case (in respect of such accused person) to the High Court, he shall submit the case accordingly, recording the grounds of his opinion, and, when the verdict is one of acquittal, stating the offence which he considers to have been committed (and in such 965 case, if the accused is further charged under the provisions of section 310, shall proceed to try him on such charge as if such verdict had been one of conviction). (2) Whenever the Judge submits a case under this section, he shall not record judgment of acquittal or of conviction on any of the charges on which (such accused) has been tried, but he may either remand (such accused) to custody or admit him to bail. (3)In dealing with the case so submitted the High Court may exercise any of the powers which it may exercise on an appeal, and subject thereto it shall. , after considering the entire evidence and after giving due weight to the opinions of the Sessions Judge and the jury, acquit or convict (such accused) of any offence of which the jury could have convicted him upon the charge framed and placed before it; and, if it convicts him, may pass such sentence as might have been passed by the Court of Sessions ". In construing section 307 we must consider first the words "if in any such case" at the very commencement of the section. These words refer to the case mentioned in section 306(1). That case is the case which is tried before the Court of Session by a jury and therefore obviously the whole case and not a part of it. When the jury have given their verdict in the case, then the Judge has to consider whether he agrees with it and, if he does, then he must give judgment accordingly. If, however, he disagrees and is clearly of the opinion that it was necessary for the ends of justice to submit the case to the High Court he must submit the case accordingly. In our opinion, the case to be submitted to the High Court is the whole case against the accused and not a part of it. This appears to us to be clearly the effect of the provisions of sections 306 and 307 when read together. Section 307 (2) specifically prohibits the Judge, when be considers it necessary to submit the case by way of reference to the High Court, from recording any judgment of acquittal or of conviction on any of the charges on which the accused had been tried. This prohibition is mandatory and a Judge, who records a judgment of acquittal or of conviction on an of the charges on which the accused had been 966 tried, contravenes the provisions of section 307(2) and the judgment so recorded is illegal. We cannot accept the submission of the learned Counsel for the appellants that the action of the Judge in recording a judgment is a mere irregularity. Section 307(3) provides for the powers which the High Court may exercise in dealing with the case so submitted and it enjoins that although the High Court may exercise any of the powers conferred on it, when hearing an appeal, it should consider the entire evidence and after giving due weight to the opinion of the Sessions Judge and the jury, either convict or acquit the accused of any offence for which he was tried, and if it convicted him of an offence for which the jury should have convicted him, pass such sentence as might have been passed by the Court of Session. But before the High Court could exercise the powers conferred on it under section 307(3) it was necessary that the reference under section 307 should have been according to law. This was, in our opinion, a condition precedent to the exercise of such power by the High Court. The words "with the case so submitted" make it quite clear that a reference under section 307(1) must be of the whole case against the accused and not a part of it. In order that the High Court may be in a position to properly exercise its powers under section 307(3), it was necessary for it to consider the entire evidence in the case, which obviously it could not do if the trial judge had already recorded a judgment. By recording a judgment the trial Judge prevents the High Court from properly exercising its powers under section 307(3) as the reference made thereafter is not of the entire case with respect to the accused. Indeed, in the present case the Judge having accepted the jury 's verdict and having recorded a judgment of acquittal under section 304/149, Indian Penal Code, in the case of each accused, took it out of the hands of the High Court to deal with the case of each accused with re ference to the other charges framed against him. The effect of the amendments to section 307 of the Code made in 1923 and 1955 lend further support to the view that it is the whole case which must be referred and not a part of it, The provisions of section 307(1) before 967 the amendment of 1923 were so expressed as to make it possible to say that it was necessary for the trial Judge to refer the whole case concerning every accused on all the charges framed against them irrespective of the fact that the Judge was in agreement with the jury with respect to a particular accused on all the charges framed against him. The amendment of 1923 introduced the words " any accused person " in place of the words " the accused " and " in respect of such accused person " in a. 307(1). The amend ment, accordingly, enabled the Judge to accept the verdict of the jury on all the charges framed against any accused person and to record a judgment with reference to him while referring the case of another accused to the High Court where he disagreed with the verdict on any of the charges framed against him. The amendment was made to remove the necessity of referring the whole case, including the case of an accused concerning whom the Judge was in agreement with the verdict on all the charges framed against him. The amendment would have been unnecessary if section 307(1) contemplated a reference of only a part of the case and not the whole of it. The amendment of 1955 completely recast section 282 of the Code. This amendment provided for the continuance of the trial with the reduced number of jurors, in the circumstances mentioned in the section, instead of the trial re commencing with a newly selected jury. Consequently, in section 307 sub section (1)A was introduced which directed that where the jurors were equally divided on all or any of the charges on which any accused person had been tried, the Judge must submit the case in respect of such accused to the High Court recording his opinion on such charge or charges and the grounds of his opinion. This direction, in our opinion, makes it clear that the whole case had to be submitted to the High Court. In our opinion, the amendments of 1923 and 1955 to section 307 clearly indicate that Parliament itself thought that it was the whole case and not a part of it which was to be submitted to the High Court. Indeed, as already stated, section 307, even before its amend 123 968 ment in 1955, when properly construed, leads to no other reasonable conclusion. It is now necessary to consider the cases decided by some of the High Courts in India in this connection. The Patna High Court in Hazari Lal ' s case (1) expressed the opinion that having regard to the provisions of section 307 a reference made thereunder must be of the whole case against the accused and not a part of it. If only a part of it is referred then the reference made under section 307 is incompetent. That High Court reaffirmed the view taken in Hazari Lal 's case in the case of Ramjanam Tewari(2). This was the view also taken by the three Judges of the Calcutta High Court in the case of The Emperor vs Bishnu Chandra Das(3), two of whom, however, in rejecting the reference directed that the accused be acquitted. The third Judge, Mr. Justice McNair, however, confined himself to the observation that the Sessions Judge had disabled himself from making a valid reference under section 307 of the Code by accepting the verdict of the jury against the accused on some of the charges. In our opinion, the view taken by the Patna High Court was correct and in accordance with the provisions of section 307. It was, however, submitted on behalf of the appellants that in view of certain decisions of the Calcutta High Court and the Allahabad High Court, when a reference had in fact been made, it was open to the High Court to deal with it and record a judgment. Reference was made to the case of King Emperor vs Ananda Charan Ray (4). It is true that in this case the learned Judges did consider the evidence in order to ascertain whether the verdict of the jury was one which a body of reasonable men could have arrived at. The learned Judges, however, observed before considering the evidence in the case, " If the learned Officiating Additional Sessions Judge considered that the interests of justice required a reference to this Court, I should say that he would have been better advised if he had referred the whole case leaving it to this Court to consider the whole of the evidence that (1) (2) (3) (4) , 437. 969 was placed before the jury. As it is, this Court is precluded from considering whether the accused mis appropriated or had a hand in misappropriating any portion of these sums of Rs. 200 and Rs. 458. " After referring to the evidence, the learned Judges expressed the following opinion: " The real truth of the matter is that, if the learned Judge considered that this was a case that ought to be referred under section 307, Cr. P. C., he never ought to have sent up the case in this way by tying the hands of the Crown or of the Court or even the defence by agreeing with the verdict of the jury on the charges framed under sees. 406 and 477A of the Indian penal Code. As it is, he had precluded the Court from questioning or going behind that verdict and thus from considering the large body of evidence that was placed before the jury. In the result, we find it impossible in this case to accept the reference made by the learned Officiating Additional Sessions Judge and we think, having regard to the fact that the accused has been acquitted on the charges framed under secs. 406 and 477A, Indian Penal Code, we ought to accept the verdict of not guilty on the charges framed under sec. 467 read with see. 471 and sec. 474 1. P. C., and direct that the accused be acquitted. " This decision, in substance, takes the same view as that expressed by the Patna High Court in the cases of Hazari Lal and Ramjanam Tewari. In the case of Emperor vs Nawal Behari(1), the learned Judges of the Allahabad High Court held that when a Sessions Judge refers a case under section 307 of the Code, he must refer the whole case against the particular accused and not merely those charges on which there happens to be a finding by the jury with which lie disagrees. This view is substantially in keeping with the view taken by the Patna High Court in the cases mentioned above. It is true that the learned Judges them proceeded to consider the evidence and set aside the conviction and sentence under section 193 passed by the Sessions Judge and substituted in its place a conviction by the High Court under section 193. In our opinion, if the reference under section 307 of the Code had to be of (I)(1930) I.L.R. All. 970 the whole case against the accused and not merely those charges on which the trial Judge disagreed with the jury, then the reference was incompetent and the High Court could not proceed to exercise any of the powers conferred upon it under section 307(3), because the very foundation for the exercise of that power was lacking, the reference being incompetent. In the case of Emperor vs Jagmohan(1), while the learned Judges held that the reference to the High Court only of a part of the case was irregular, the High Court could consider not Only the part of the case referred to it, but the whole case. We are unable to accept this view. Whatever support this decision may give to the submission made by the learned Counsel for the appellant, we are clearly of the opinion that the decision of the Allahabad High Court in this case was erroneous in law. In Emperor vs Muktar(2) thelearned Judges were of the opinion that the reference was not in order when the trial Judge recorded a finding on some charges in respect of the very accused whose cases so far as other charges were concerned were referred, but the defect was not necessarily fatal to the reference and the High Court might entertain the same. This view cannot be sustained, having regard to the provisions of section 307. In our opinion, a reference made in the circumstances of the present case, was incompetent and the High Court should have rejected it and not proceeded to record any judgment of acquittal or conviction. We, accordingly, allow the appeal, set aside the judgment of the High Court and hold that the reference under section 307 to the High Court was incompetent. A question has arisen as to what consequential order should be passed by this Court as the result of our conclusion that the reference under section 307 to the High Court was incompetent and the appeal succeeding. The High Court should have rejected the reference as incompetent and remitted the case to the Additional Sessions Judge for disposal according to law. (1) I.L.R. (1947) All. 240. (2) 971 We emphasise the absolute need for making a competent reference under section 307 of the Code and the case being remitted to the Court making the reference as soon as possible if an incompetent reference is made in order to avoid legal complications, unnecessary waste of time and money and harassment to the accused. In this case the letter of reference is dated June 7, 1954, that is, more than three years ago. The occurrence took place on October 21, 1953. After such lapse of time we will not order that the case be returned to the Court of the Additional Sessions Judge of Alipur for disposal according to law, particularly as we are informed that the Judge who made the reference to the High Court has retired from service and it is doubtful whether, in law, his successor can at all deal with the case. In the circumstances of this particular case, therefore, the only order which we pass is that the reference being incompetent is rejected. Appeal allowed.

Sections 306 and 307 of the Code of Criminal Procedure, read together clearly indicate that where the Sessions judge disagrees with the verdict of the jury and is of the opinion that the case should be submitted to the High Court, he must submit the whole case against the accused, not a part of it. If the jury returns a verdict of guilty in respect of some charges and notguilty in 961 respect of others he cannot record his judgment of acquittal in respect of the latter charges in agreement with the jury in contravention of the mandatory provision Of section 307(2) of the Code. Such recording must have the effect of preventing the High Court from considering the entire evidence against the accused and exercising its jurisdiction under section 307(3). Hazari Lal 's case, (1932) 1. L. R.//Pat. 395 and Ramjanam Tewari, , approved. Emperor vs jagmohan, 1. L. R. (1947) Allahabad 240, and Emperor vs Muktar, , disapproved. The Emperor vs Bishnu Chandra Das, , King Emperor vs Ananda Charan Ray, , and Emperor vs Nawal Behari, , considered. Consequently, in a case where eight persons were put up for trial in the Court of Session charged under sections I47 and 304/I49 Of the Indian Penal Code and four of them were further charged under section 201 of the Indian Penal Code and the jury returned a unanimous verdict of not guilty under section 304/I49 and guilty under sections 147 and 201 and the Judge accepting the former recorded a judgment of acquittal in the case of each accused but disagreeing with the latter referred the matter to the High Court, the reference was incompetent and the High Court was in error in acting upon it and its judgment must be set aside. Held further, that although the proper order in such a case should be to remit the case to the trial court for disposal according to law, in view of the long lapse of time and peculiar circumstances of this case the reference must be rejected.

Appeal No. 224 of 1955. 665 Appeal by special leave from the judgment and order dated the 7th May 1954 of the Allahabad High Court in Civil Miscellaneous Writ No. 133 of 1952. Naunit Lal for the appellant. G. C. Mathur and C. P. Lal for respondents Nos. I & 2. 1956. September 20. The Judgment of the Court was delivered by section K. DAS J. This is an appeal by special leave from the judgment and order of the High Court of Judicature at Allahabad dated the 7th of May 1954 by which the High Court dismissed an application of the appellant for the issue of a writ of certiorari under the provisions of article 226 of the Constitution. The appeal raises the question of the validity of the assessment of a tax on the appellant for the year 1950 51 by the Town Area Committee of Karbal under the provisions of clause (f) of sub section (1) of section 14 of the United Provinces Town Areas Act, 1914 (U. P. Act II of 1914), hereinafter referred to as the Act. The appellant resides in the town of Mainpuri and carries on the business of plying a motor bus on hire. The appellant 's bus plies on. alternate days between Etawah and. Mainpuri, and the town of Karhal falls on the route between Etawah and Mainpuri. It is not now disputed that passengers travelling in the appellant 's bus used to get down or get in at a bus stand within the town area of Karhal; the appellant had a booking office situate within the Town Area and tickets were issued to passengers and an account of the business was maintained in the said booking office. The Town Area Committee of Karhal imposed a tax of Rs. 25 on the appellant for the year 1950 51 under the provisions of clause (f) of sub section (1) of section 14 of the Act, being a tax on 'circumstances and property ' and assessing the income of the appellant from his business within the 86 666 Town Area of Karhal at a sum of Rs. 800 for the year. The appellant preferred an appeal against the assessment of the tax under section 18 of the Act, and the grounds taken by the appellant were (1) that he did not reside within the limits of the Town Area and (2) that he did not carry on any trade or business within that Area. By his order dated the 20th October 1951 ' the Appeal Officer held that the appellant carried on his trade or business within the limits of the Town Area and was therefore rightly assessed to tax under clause (f) of sub section (1) of section 14 of the Act. He accordingly dismissed the appeal. It may be stated here that the appellant was asked to submit an account of his income, but no such account was submitted and the assessing officer worked out the income of the appellant at about Rs. 67 a month, that is, about Rs. 800 a year. No question about the amount of the tax has been raised before us, and it is not necessary to say anything further with regard to the quantum of assessment. The appellant then filed a writ application in the High Court of Judicature at Allahabad and the ground taken by him was that there could be no assessment under clause (f) of sub section (1) of section 14 of the Act, because he resided outside the jurisdiction of the Town Area. The learned Judge, who dealt with the. application of the appellant, took the view that the tax imposed on the appellant could clearly be imposed under clause (d) of sub section (1) of section 14 of the Act; therefore it was unnecessary to consider whether the tax could be legally imposed under clause (f) of sub section (1) of section 14. The learned Judge also expressed the view that residence within the Town Area was not a pre requisite condition for the imposition of the tax under clause (d), and it was enough if the appellant carried on a trade or business within the Town Area. On these views, the learned Judge dismissed the writ application. The main point which has been urged before us by 667 learned counsel for the appellant is that the assessment of a tax under clause (f) of sub section (1) of section 14 on the appellant was. not valid, because residence within the Town Area was a necessary condition for the assessment of a tax under clause (f). Learned counsel also argued before us that the. assessing authority having assessed a tax on the appellant under clause (f), it was not open to the High Court to say that the tax was legally valid under a 'different clause, namely clause (d) of sub section (1) of section 14. With regard to his second point, learned counsel has drawn our attention to sections 15 to 17 of the Act. He has pointed out that under section 15 of the Act a list of persons liable to pay the tax imposed under section 14 and of the amounts to be paid respectively by such persons, has to be prepared; the list may be revised by the District Magistrate and has to be submitted to him for confirmation. When so confirmed. , the list can only be altered under sub section (2) of section 15 by the District Magistrate or in pursuance of an order passed in appeal under the provisions of section 18. We think that learned counsel has rightly submitted that, so far as the present appellant is concerned, the list prepared under section 15 must have shown him as assessed to a certain amount of tax under clause (f) of sub section (1) of section 14 and the assessment must have been confirmed on that basis by the District Magistrate. Therefore, the legality of the tax imposed on the appellant must be considered with reference to the clause under which the assessment was actually made, and a different clause under which the assessment might have fallen cannot be called in aid of the assessment. We proceed therefore to consider the legality of the tax imposed on the appellant with reference to clause (f) of sub section (1) of section 14 of the Act. The short point for consideration in that context is whether residence within the Town Area is a necessary condition for the imposition of the tax under clause 668 (f). It is necessary to read here section 14 of the Act so far as it is relevant to the point in question. "14 (1) Subject to any general rules or special orders of the State Government in this behalf, the taxes which a Committee may impose are the following: (d) A tax on trades, callings or professions not exceeding such rates as may be prescribed. (f) A tax on persons assessed according to their circumstances and property not exceeding such rate and subject to such limitations and restrictions as may be prescribed: , Provided that such a person is not already assessed under clauses (a) to (e) above". It will be noticed that the power of the Town Area Committee to impose a tax under clause (f) is subject to, ' first, 'any general rules or special orders of the State Government in this behalf ' and, secondly, to (such limitations and restrictions as may be prescribed '. These restrictions and limitations are to be found in the Rules made by the State Government under section 39(2) of the Act, which are called Rules regarding the Limitations, Restrictions and Rate sub ject to which the Circumstances and Property Tax shall be levied by the Town Area Committee. These rules were notified by Notification No. 681 T/IX 79T 50 dated July 20, 1950. Two of the rules are important for our purpose, viz., rules 2 and 3. They are in these terms: "2. The tax shall be assessed on every person on whom it is imposed, in two separate parts, namely (1) on his circumstances and (2) on the property, if any, owned by him, and the aggregate of the sums so determined on both the counts shall constitute the total composite amount payable by him as circumstances and property tax: Provided that nothing shall render it irregular 669 to assess a person on only one ' of the two 'counts aforementioned if he does not fulfil the conditions for liability in respect of that count on which he is not assessed. (1) The tax assessed on the circumstances of an assessee may be imposed on any person residing or carrying on business within the limits of the town area: Provided that such person has so resided or carried on business for a total period of at least six months in the year of assessment. (2) No tax shall be imposed on any person whose total taxable income is less than Rs. 200 per annum. (3) The rate of the tax shall not exceed one anna in a. rupee on total taxable income. (4) The total amount of tax assessed on any person shall not, in any year, exceed a sum of section 250. Explanation. (1) For purposes of this rule 'taxable income ' means gross income accruing within the limits of the town area. (ii) The words 'carrying on business ' mean the carrying on of any trade, profession, calling or other practice or activity which yields or is capable of yielding income but do not include service under Government or a local body". The important point which emerges out of these Rules is that under Rule 3 the tax assessed on the circumstances of an assessee may be imposed on any person residing or carrying on business within the limits of the town area; in other words, two, conditions in the alternative are laid down in Rule 3, either the person must reside within the limits of the town area or he must be carrying on business within the limits of the said area. There is a third condition that the residence or carrying on of business must be for a total period of at least six months in the year of assessment. No question regarding the third condition has been raised in this case and it is not necessary to consider that condition here. Therefore, it is 670 clear that if Rule 3 is valid, then the imposition of the tax on the appellant under clause (f) is also valid, because on the finding not now in dispute the appellant carried on a trade or business within the limits of the Town Area of Karhal. It has been argued before us that Rule 3 is invalid because, under clause (f) of sub section (1) of section 14, residence within the Town Area of the person to be taxed under that clause is a necessary condition. We are unable to accept this argument. Clause (f) of sub section (1) of section 14 does not say in express terms that residence within the Town Area is a necessary condition for the imposition of the tax. The Rules make it quite clear that for each of the clauses of sub section (1) of section 14 there is a 'nexus ' between the territorial jurisdiction of the Town Area Committee and the imposition of the tax. So far as clause (d) is concerned, the 'nexus ' is that the trade, calling or profession must be carried on within the limits of the Town Area. So far as clause (f) is concerned, Rule 3 makes it quite clear that the 'nexus ' is either resi dence within the limits of the Town Area or carrying on business within the same limits. It is to be remembered that clause (f) was inserted by an Amending Act, namely, the Uttar Pradesh Town Areas (Validation and Amendment) Act, 1950. Section 1(2) of the Amending Act gave retrospective effect to the amendments. The proviso to clause (f) makes it quite clear that a person who is already assessed under clauses (a) to (e) cannot be assessed again under clause (f). The proviso is intended to avoid multiple taxation, but it is manifest from the proviso that ,there may be overlapping of the different clauses in sub section (1) of section 14; for example, a person may come under clause (d) as well as clause (f) if he carries on a trade within the limits of the Town Area. Therefore, the proviso was necessary to prevent the same person being taxed more than once under the different clauses of sub section (1) of section 14. If residence within the limits of the Town Area were a 671 sine qua non for the imposition of a tax under clause (f), no question of overlapping between clauses (d) and (f) would arise unless the person to be taxed resided as well as carried on a trade within the limits of the Town Area. If the argument of learned counsel for the appellant is correct, then the proviso to clause (f) is meaningless in so far as it envisages an overlapping between clause (d) and clause (f) in other cases. On a proper construction of clause (f), read with the limitations and restrictions embodied in the Rules made under section 39 of the Act, it cannot be held that residence within the Town Area of Karbal was a necessary condition for the imposition of the tax on the appellant. A reference, was made to sub.;section (4) of section 15 A of the Act. Section 15 A provides for preliminary proposals for the imposition of taxes under section 14, publication of such proposals and the submission of draft rules. Sub section (4) states: "(4) Any, inhabitant of the Town Area may, in the prescribed manner, file an objection in writing on such proposals and the committee shall take into consideration the objections so filed and finally settle its proposals." Under sub section (4) any inhabitant of the Town Area may file an objection to the preliminary proposals for the imposition of taxes under section 14. The argument before us was that if an inhabitant of the Town Area alone was entitled to file an objection to preliminary proposals for taxation, then in all the, clauses of sub section (1) of section 14 residence within the Town Area must be read as a necessary condition for the imposition of the taxes under section 14. This contention appears to us to be unsound. Firstly, the objection as, to preliminary proposals for taxation is not the same thing as objection to an assessment, and it may well be that the legislature in their wisdom thought fit to confine the filing of objections to preliminary proposals for taxation to the inhabitants of the Town Area. Secondly, there are several other 672 sections of the Act, such as section 20 and section 21, which show that the imposition of a tax on persons not resident within the Town Area. but having some other nexus within that Area, was permissible. Thirdly, the question of the validity of sub section (4) of section 15 A does not arise in this case. The appellant was assessed to a tax and he had a right to file an appeal which right he exercised. No grievance was made of the failure to exercise the right under subsection (4) of section 15 A. It is therefore un necessary for us to make any pronounce ment on the validity or otherwise of sub section (4) of section 15 A All that is necessary for us to state is that by reason of sub section (4) of section 15 A, it cannot be held that residence within the Town Area is a necessary condition for the imposition of a tax in all the clauses of sub section (1) of section 14 of the Act. Learned counsel for the appellant referred us to two decisions of 'the Allahabad High Court: District Board, Farrukhabad vs Prag Dutt(1) and District Board, Dehra Dun vs Damodar Dutt(2). The second decision, which was earlier in point of time, arose out of a suit for recovery of 'circumstances and property tax under the U. P. District Boards Act (Local Act X of 1922). The question there was whether the District Board of Dehra Dun could impose a tax on the defendants who were not residents within the area of the District Board. It is worthy of note that under section 114 of the U. P. District Boards Act, the power of a Board to impose a tax on circumstances and 'property is subject to the condition that the tax may be imposed on any person residing or carrying on business in the rural area within the District Board. The only question in that Allahabad case was whether the defendants resided within the rural area of the District Board so as to make them liable for the. tax. The finding Was that they did not reside within the rural area and therefore the imposition of (1) A.I.R. 1948 All. 382. (2) I.L.R. [1944] All. 673 the tax was illegal, and section 131 of the U. P. District Boards Act did not bar the suit. This decision does not help the appellant. If it shows anything, it shows that it was open to the District Board to impose a circumstances and property ' tax on any person residing or carrying on business in the rural area. In the 1948 Allahabad decision, the main question was whether the provisions of section 2, Professions Tax Limitation Act (20 of 1941) affected the powers conferred upon the District Board by section 108 of the U.P. District Boards Act to levy a tax on circumstances and property '. A subsidiary question was also raised, whether section 131 of the U. P. District Boards Act barred the suit. With regard to the main question, it was pointed out that the name given to a tax did not matter; what had to be considered was the pith and substance of it. It was held that in pith and substance the tax was one which attracted the provisions of section 2, Professions Tax Limitation Act (20 of 1941). A tax on 'circumstances and property ' is a composite tax and the word 'circumstances '. means a man 's financial position, his status as a whole depending, among other things, on his income from trade or business. From militating against the principle that in considering the circumstances of a person his income from trade or business within the Town Area may be taken into consideration, the decision approves of the principle. In the course of his judgment, Bind Basni Prasad J. referred to section 128, U.P. Municipalities Act, 1916, where 'taxes on circumstances and property ' appear as a head distinct from the 'taxes on trades, callings and vocations and employments ' and the argument was that the taxes being under different heads should be treated as being entirely different, one from the other It was rightly pointed out that it is no sound principle of construction to interpret expressions used in one Act with reference to their use in another Act. The meanings of words and expressions used in an Act must take their colour from the context in which 87 674 they appear. It is true that in the Act under our consideration the taxes which the Town Area Committee may impose appear under different heads in Sub section (1) of section 14. We have already stated that though the clauses are different, the words used in the section show that there may be overlapping between the different clauses, and to prevent the same person being subjected to multiple taxation, a 'proviso was incorporated in clause (f). In view of the words and expressions used in section 14 of the Act, we cannot accept the argument that clause (f) should be read as entirely independent of and unconnected with the other clauses and a different condition, namely residence within the Town Area, must be read as a necessary part of clause (f). To do so will be to read in clause (f) words which do not occur there. The limitations for the imposition of a tax under clause (f) are given in Rule 3 and 'residence 'is only one of the alternative conditions for the imposition of the tax not a line qua non as is contended by learned counsel for the appellant. In the result, we hold that the assessment of the tax on the appellant under clause (f) of subjection (1) of section 14 of the Act was legally valid. The appeal fails and is dismissed with costs.

The appellant was carrying on business, but was not residing within the Town Area of Karhal. The Town Area Committee imposed a tax of Rs. 25 on him under clause (f) of a. 14(1) of the U.P. Town Areas Act, 1914, being a tax on 'circumstances and property '. The appellant filed a writ application in the High Court on the ground that there could be no assessment under clause (f) because he resided outside the jurisdiction of the Town Are& Committee. The High Court dismissed the application taking the view that it was unnecessary to consider whether the tax could be legally imposed under clause (f) as the tax imposed could clearly be justified under clause (d) of section 14(1) which authorised the imposition of a tax on trades, callings or professions. Held, that residence was not a sine qua non for the imposition of the tax under clause (f), that the carrying on of 'business within the Town Area was a sufficient nexus for the imposition of the tax under clause (f) and that the assessment of the tax on the appellant under clause (f) was legally valid. The legality of the tax imposed must be considered with ref erence to the clause under which the assessment was actually made and a different clause under which the assessment might have fallen cannot be called in aid of the assessment. Rule 3 of the 'Rules regarding the Limitations, Restrictions and Rate subject to which the Circumstances and Property Tax shall be levied by the Town Area Committees ' framed under section 39(2) of the Act does not go beyond section 14(1)(f) and is not invalid.